The Sage Group (SGE) Q1 2025 TU earnings summary

Executive summary

• Q1 revenue grew 10% year-over-year to £612 million, with broad-based growth across all regions and continued innovation in platform and AI-powered solutions for SMBs.

• North America led with 11% revenue growth to £279 million, driven by Sage Intacct and continued momentum in Sage 200 and Sage 50.

• UKIA revenue rose 9% to £176 million, supported by strong performance in Sage Intacct, Accounting, Payroll, and Sage 50.

• Europe saw 8% revenue growth to £157 million, with strength in Accounting, HR, and Payroll solutions.

• Reiterated full-year guidance as set out in FY24 results, with broad-based revenue growth in line with expectations despite macroeconomic uncertainty.

Financial highlights

• Platform revenue increased 13% to over £500 million, reflecting strategic expansion in global cloud solutions.

• Cloud-native revenue surged 22% to £208 million.

• Recurring revenue rose 10% to £595 million, with subscription revenue up 12% to £509 million and penetration at 83%.

• Organic total revenue grew 9% to £611 million.

• Sage Business Cloud revenue increased 13% to £502 million.

Outlook and guidance

• Organic total revenue growth for FY 2025 expected at 9% or above, with operating margins anticipated to trend upwards.

• Management remains confident in full-year guidance, supported by strong Q1 performance and pipeline, focusing on efficient scaling and continued growth.