Looking ahead, Sage anticipates organic total revenue growth of 9% or more in FY25, with expectations for improving operating margins as it continues to execute its strategic priorities.
Sage has announced its year-end results with a robust rise in operating profit. The small and mid-sized businesses-focused provider of finance, HR and payroll software shared its successful year of broad-based revenue growth with higher profits and cash flows, along with its further investments in products and strategic priorities.
CEO Steve Hare attributed the success to the acquisition of new customers and existing ones investing in more products and services. North America became the fastest-growing region where the company’s Intacct business saw robust demand from the non-profit, construction and real estate sectors.
The CEO said: “Our high pace of innovation continues, as we enhance existing products and expand key cloud solutions throughout our markets. The Sage Network platform is enabling us to accelerate the delivery of new services, and we’ve made good progress with Sage Copilot, our generative AI-based digital assistant, now available with selected products across our portfolio.”
Discussing the larger business environment, Hare added: “Small and mid-sized businesses remain resilient, despite the ongoing macroeconomic uncertainty and they continue to choose Sage to help them become more productive and efficient. Building on our progress to date, we look forward to delivering further sustainable growth in the year ahead.”
Sage’s underlying total revenue for the year increased by 9 percent to £2,332m, reflecting the strength of its subscription-based recurring revenue model. Its underlying operating profit also increased by 21 percent to £529m, driving a strong margin increase of 220 basis points to 22.7 percent, with cost management supporting ongoing investment.
In the first half of the fiscal year to 31 March 2023, Sage’s underlying annualized recurring revenue soared from £1.8bn to £2.1bn, with underlying total revenue increasing from £989m to £1bn.
Looking ahead into the prospects of the company, Sage shared that it is entering FY25 with good momentum driven by consistent strategic execution. “Looking ahead, we expect organic total revenue growth in FY25 to be 9 percent or above. Operating margins are expected to trend upwards in FY25 and beyond, as we focus on efficiently scaling the group”.
