The Sage Group (SGE) Q3 2024 TU earnings summary

Executive summary

• Revenue grew 9% year-over-year to over £1.7 billion for the first nine months, maintaining strong momentum across all regions and product lines despite macroeconomic uncertainty.

• North America led with 12% revenue growth, followed by UKIA at 8% and Europe at 6%, driven by demand for cloud solutions.

• Cloud-native revenue grew 23% to £539 million, now representing a third of total revenue.

• Recurring revenue increased 10% to £1,680 million, making up 97% of total revenue.

• Full-year guidance reiterated, supported by ongoing innovation and investment in AI.

Financial highlights

• Q3 standalone revenue rose 9% to £585 million, maintaining growth across Sage Business Cloud.

• Sage Business Cloud revenue up 16% to £1,387 million.

• Subscription revenue grew 13% to £1,419 million, with penetration rising to 82% from 79% year-over-year.

Outlook and guidance

• Full-year guidance reiterated, expecting organic total revenue growth broadly in line with H1.

• Operating margins projected to trend upwards in FY 2024 and beyond.

• Confident in Q4 momentum and consensus revenue growth of about 9.3%.