REG - Sage Group PLC - Trading update for the 3 months ended 31 Dec 2023

SageAnnouncement

18/01/2024 07:00

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RNS Number : 0741A  Sage Group PLC  18 January 2024

The Sage Group plc

Trading update for the three months ended 31 December 2023

The Sage Group plc (FTSE: SGE), a leader in accounting, financial, HR and
payroll technology for small and mid-sized businesses, today issues a trading
update for the three months ended 31 December 2023 1 .

Jonathan Howell, Chief Financial Officer, commented:

"Sage has delivered a strong first quarter, sustaining good momentum and
growing in line with our plan for the year.  Small and mid-sized businesses
are continuing to digitalise despite the ongoing macroeconomic uncertainty,
and through our trusted cloud solutions and innovative, AI-powered services we
are well positioned to support them. We reiterate our guidance for the full
year, as set out in our FY23 results announcement, as we continue to focus on
delivering efficient growth."

 Underlying Revenue Performance 2       Q1 24   Q1 23   % Growth  Organic

% Growth
 Total Revenue                          £573m   £522m   +10%      +10%
      of which Sage Business Cloud      £454m   £384m   +18%      +18%

 Total Revenue by Region
 North America                          £259m   £229m   +13%      +13%
 UKIA 3                                 £162m   £151m   +8%       +8%
 Europe                                 £152m   £142m   +7%       +7%

Sage grew total revenue by 10% to £573m. Regionally, revenue in North America
increased by 13% to £259m, with a good performance from Sage Intacct together
with continuing growth in Sage 50 cloud and Sage 200 cloud. In the UKIA
region, revenue grew by 8% to £162m, driven by further success in cloud
native solutions (including Sage Intacct, Sage Accounting and Sage Payroll),
alongside growth in Sage 50 cloud. In Europe, revenue increased by 7% to
£152m, with a strong performance particularly in cloud connected solutions.

Sage Business Cloud revenue increased by 18% to £454m, driven by growth in
cloud native revenue of 25% to £174m (Q1 23: £140m) primarily through new
customer acquisition, and by growth in cloud connected revenue from both
existing and new customers.

Recurring revenue increased by 11% to £554m (Q1 23: £500m), with software
subscription revenue growth of 14% to £466m (Q1 23: £409m) resulting in
subscription penetration of 81% (Q1 23: 78%).

Foreign exchange

Sterling has strengthened against the US Dollar and other international
currencies compared with the prior period, leading to an exchange rate
headwind.

Analyst and investor conference call

Jonathan Howell will host a webcast and conference call today at 8.30am UK
time. The webcast can be accessed via the following link:
https://edge.media-server.com/mmc/p/zfks4vf3
(https://edge.media-server.com/mmc/p/zfks4vf3) . To join the conference call,
please register via:
https://register.vevent.com/register/BIc9e9e7ddbd14484d84aaa0b9fae07ae6
(https://register.vevent.com/register/BIc9e9e7ddbd14484d84aaa0b9fae07ae6) .

Enquiries

Sage +44 (0) 77721 599502

Jonathan Howell, Chief Financial Officer

James Sandford, Investor Relations

David Ginivan, Corporate PR

FGS Global +44 (0) 20 7251 3801

Conor McClafferty

Sophia Johnston

About Sage

Sage exists to knock down barriers so everyone can thrive, starting with the
millions of small and mid-sized businesses (SMBs) served by us, our partners
and accountants. Customers trust our finance, HR and payroll software to make
work and money flow. By digitising business processes and relationships with
customers, suppliers, employees, banks and governments, our digital network
connects SMBs, removing friction and delivering insights. Knocking down
barriers also means we use our time, technology and experience to tackle
digital inequality, economic inequality and the climate crisis.

 1  In line with Sage's reporting changes announced on 7 December 2023,
revenue by region, as well as Sage Business Cloud and cloud native revenue, is
now reported as total rather than recurring revenue.  All figures are
reported on an underlying basis unless otherwise stated.

 2  Underlying and organic results are presented on a constant currency basis,
while organic growth also excludes the impact of M&A. Underlying and
organic measures are defined on pages 269-270 of Sage's FY23 Annual Report.

 3  (#_ednref3) United Kingdom, Ireland, Africa and APAC.

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