Sage accelerates AI expansion as revenue grows
Sage said it is accelerating the roll-out of AI across its product lines on Wednesday as it reported another quarter of double-digit revenue growth, fuelled by a boost in demand for its cloud accounting software.
The FTSE 100 software company said revenue rose 11 per cent to £2.06bn in the nine months to 30 June, with third-quarter growth accelerating to 12 per cent.
Cloud revenue increased 15 per cent to £1.76bn, while recurring subscription revenue rose 11 per cent to more than £2bn. Subscription products now account for 84 per cent of Sage’s total revenue.
The update comes after shares in software companies, including Sage, came under pressure earlier this year as investors questioned whether rapid advances in AI, following Anthropic’s recent model launch, could threaten established software providers.
Sage shares remain around 13 per cent lower than a year ago.
Cloud business continues to drive growth
Chief financial officer Jacqui Cartin said Sage had delivered “nine months of accelerating revenue growth”, which reflected “focused execution as we deepen AI capabilities across our platform”.
The company maintained its full-year guidance, forecasting organic revenue growth of more than nine per cent and further improvements in operating margins.
North America remained Sage’s fastest-growing market, with revenue rising 14 per cent to £932m. Revenue in the UK and Ireland increased 10 per cent to £602m, while Europe grew seven per cent to £528m.
Sage said cloud-native products, which are built specifically for the cloud rather than adapted from older software, grew 25 per cent to £794m during the period.
The company added that customer retention remained high, helping support steady growth in recurring subscription revenue.