The Sage Group (SGE) H2 2025 earnings summary

Executive summary

• Achieved double-digit underlying ARR growth for the fourth consecutive year, reflecting a resilient and durable business model, with disciplined cost control driving operating profit, margin, and EPS expansion.

• Accelerated innovation through AI-powered solutions, including Sage Copilot and cloud-native products, driving customer value and operational efficiency.

• Strategic focus on connecting, growing, and delivering for SMBs, underpinned by a high-quality recurring revenue model and targeted acquisitions.

Financial highlights

• Revenue grew 10% year-over-year to £2,513m, driven by the subscription-based model and recurring revenue up 10% to £2,436m.

• Operating profit margin expanded by 150 basis points to 23.9%, with operating profit up 17% to £600m.

• Profit after tax increased 14% to £423m; underlying EPS rose 18% to 43.2p, and dividend per share grew 7% to 21.85p.

• Cash conversion reached 110%, with free cash flow of £517m and strong balance sheet with £1bn in liquidity.

• EBITDA grew 15% to £694m.

Outlook and guidance

• Entering FY2026 with strong momentum; organic total revenue growth expected at 9% or above.

• Operating margins anticipated to continue trending upwards, with margin expansion at the lower end of the 50-100 basis point range as investment continues.