REG - Sage Group PLC (The) - Results for the six months to 31 March 2026
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RNS Number : 1676F Sage Group PLC (The) 21 May 2026
The Sage Group plc
Results for the six months to 31 March 2026 (unaudited)
21 May 2026
Accelerating growth driven by execution of AI strategy
Steve Hare, Chief Executive Officer, commented:
"Sage delivered an excellent first-half performance, with double-digit revenue
growth, further margin expansion and strong cash flows. This reflects the
focused execution of our strategy and a deep understanding of our customers'
needs.
"Small and mid-sized businesses trust Sage to run their mission-critical
finance, payroll and HR workflows, where accuracy and compliance are
non-negotiable. Our intelligent agents are already helping finance teams
accelerate cash flows, close the books faster, plan more effectively and turn
insight into action, without compromising control or accountability.
"By embedding AI directly into our customers' day-to-day work, we are making
our solutions more valuable, reinforcing our competitive advantages, and
driving efficient, sustainable growth.
"With our trusted scalable platform, growing agent portfolio and strong
momentum supported by investment across the business, I am confident in Sage's
ability to deliver growth and long term value for all stakeholders."
Underlying Financial APMs 1 (#_edn1) H1 26 H1 25 2 (#_edn2) Change Organic
Change
Annualised Recurring Revenue (ARR) £2,727m £2,453m +11% +11%
Underlying Total Revenue £1,363m £1,231m +11% +10%
Underlying Operating Profit £326m £285m +15% +14%
% Underlying Operating Profit Margin 23.9% 23.1% +0.8 ppts +0.9 ppts
Underlying EBITDA £375m £331m +14%
% Underlying EBITDA Margin 27.6% 26.8% +0.8ppts
Underlying Basic EPS (p) 23.7p 20.5p +16%
Underlying Cash Conversion 116% 115% +1 ppt
Statutory Measures H1 26 H1 25 Change
Revenue £1,363m £1,242m +10%
Operating Profit £293m £255m +15%
% Operating Profit Margin 21.5% 20.5% +1.0 ppts
Basic EPS (p) 20.7p 18.2p +14%
Dividend Per Share (p) 8.05p 7.45p +8%
Please note that tables may not cast and change percentages may not calculate
precisely due to rounding.
Financial highlights
· Underlying total revenue increased by 11% to £1,363m, reflecting
broad-based growth across the business underpinned by strength in cloud
solutions.
· Underlying operating profit grew by 15% to £326m, driving a margin
increase of 80 basis points to 23.9%, with disciplined cost management
supporting increased investment.
· Underlying EBITDA increased by 14% to £375m, with margin also
increasing by 80 basis points to 27.6%.
· Statutory operating profit increased by 15% to £293m reflecting
growth in underlying operating profit.
· Underlying basic EPS increased by 16% to 23.7p, whilst statutory
basic EPS increased by 14% to 20.7p.
· Strong cash performance, with underlying cash conversion of 116%,
reflecting continued growth in revenue and good working capital management.
· Robust balance sheet, with £1.1bn of cash and available liquidity;
net debt to underlying EBITDA of 2.0x.
Shareholder returns
· Interim dividend up 8% to 8.05p, in line with our progressive
policy.
· Share buyback programme of £300m announced in March 2026 is well
underway, taking the total value of share buybacks announced in the first half
to £600m. This reflects Sage's strong cash generation, robust financial
position, and the Board's confidence in Sage's future prospects.
Strategic and operational highlights
· Underlying annualised recurring revenue (ARR) up 11% to £2,727m,
with growth across all regions balanced between new and existing customers.
· Renewal rate by value of 102%, ahead of last year (H1 25: 101%),
reflecting higher sales to existing customers, including the growing adoption
of AI-powered features, supported by strong retention rates.
· Sage Business Cloud revenue increased by 15% to £1,162m (H1 25:
£1,011m), including cloud native revenue growth of 25% to £518m (H1 25:
£416m).
· Strong growth across our cloud products, particularly Sage Intacct,
supported by investment in our product and go-to-market capabilities together
with the focused execution of our AI strategy.
· Embedding AI into core customer workflows, with the launch of
intelligent agents and the expansion of Sage Copilot delivering tangible
productivity and decision-making benefits for customers.
· Leveraging the Sage Platform to extend our ecoystem, supporting
broader innovation and scale, alongside the acquisitions of Criterion, Akao
and Doyen AI 3 (#_edn3) .
· Success in acquiring small business customers earlier in their
lifecycle through Sage Sole Trader and our embedded services partnerships with
major UK banks and fintechs.
· Accelerating productivity through the adoption of AI across our own
operations, with significant benefits in areas including engineering, customer
support, sales and marketing.
Outlook
Building on strong momentum in the first half, we now expect organic total
revenue growth for FY26 to be above 9%. We continue to expect operating
margins to trend upwards in FY26 and beyond, as we focus on efficiently
scaling the Group.
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 digitalising business processes and relationships with
customers, suppliers, employees, banks and governments, our AI-powered 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.
Enquiries: Sage: +44 (0) 7341 479956 FGS Global: +44 (0) 20 7251 3801
James Sandford, Investor Relations Conor McClafferty
David Ginivan, Corporate PR Sophia Johnston
A presentation for investors and analysts will be held at 8.30am UK time. The
webcast can be accessed via sage.com/investors or directly via the following
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.
Business Review
Sage performed strongly in H1 26, with good levels of growth in revenue,
profits and cash flow. This was underpinned by focused execution, as we embed
AI into trusted, mission‑critical finance, payroll and HR workflows,
enhancing the value of our solutions and deepening customer relationships. By
deploying AI across our business, we are reinforcing our growth, efficiency
and the durability of our business model.
Overview of results
The Group increased underlying revenue by 11% to £1,363m (H1 25: £1,231m),
with all regions contributing to growth. In North America, revenue grew by
14%, with strong performance from Sage Intacct together with continued growth
in Sage 50 and Sage 200. In the UKIA 4 (#_edn4) region, revenue increased by
10% driven by Sage Intacct together with cloud solutions for small businesses
including Sage 50. In Europe, revenue increased by 7%, with growth across our
accounting, HR and payroll solutions.
Our aim is to efficiently grow revenues across all products and services by
attracting new customers and delivering more value to existing customers. Sage
Business Cloud, comprising our cloud native 5 (#_edn5) and cloud connected 6
(#_edn6) solutions, helps customers benefit from a growing range of cloud and
AI-powered services via the Sage Platform, leading to deeper customer
relationships and higher lifetime values.
As a result, Sage Business Cloud total revenue increased by 15% to £1,162m
(H1 25: £1,011m), driven by growth in cloud native revenue of 25% to £518m
(H1 25: £416m) primarily through new customer acquisition, and by growth in
cloud connected revenue from both existing and new customers.
Underlying recurring revenue increased by 11% to £1,323m (H1 25: £1,192m),
with software subscription revenue up 12% to £1,150m (H1 25: £1,022m)
leading to subscription penetration of 84% (H1 25: 83%). As a result, 97% of
the Group's revenue is recurring.
On an organic basis, total revenue grew by 10% to £1,360m (H1 25: £1,235m),
while recurring revenue increased by 10% to £1,321m (H1 25: £1,195m).
ARR growth
ARR increased by 11% to £2,727m (H1 25: £2,453m) on an underlying basis,
reflecting growth balanced between new and existing customers. On an organic
basis, ARR grew by 11% to £2,721m (H1 25: £2,461m).
Renewal rate by value of 102% is ahead of last year (H1 25: 101%) reflecting
increased sales to existing customers, including the growing adoption of
AI-powered features and targeted price rises, supported by strong retention
rates. In total, Sage has added £200m of ARR through new customer acquisition
on an organic basis over the last 12 months, up from £190m 7 (#_edn7) a year
earlier.
Performance by region
North America H1 26 H1 25 Change Organic change
US £541m £472m 15% 13%
Canada £75m £68m 9% 9%
Underlying total revenue £616m £540m 14% 13%
In North America, underlying total revenue increased by 14% to £616m, with
growth across Sage's key accounting solutions, particularly among mid-sized
businesses. Recurring revenue grew by 14% to £600m (H1 25: £527m), while
subscription penetration increased to 83%, up from 82% in the prior period.
In the US, total revenue increased by 15% to £541m. Sage Intacct, which now
represents about half of US revenue, grew by 26% to £267m (H1 25: £211m).
This was driven by continued success from our vertical-focused go-to-market
approach, including strong momentum across not-for-profit, construction &
real estate and financial services, and supported by customers adopting
AI-powered functionality. In addition, Sage Intacct benefited from good
progress in Sage Intacct Advisory, enabling accounting firms to deliver
outsourced financial and advisory services and helping drive further scale.
US revenue was also driven by a strong performance in Sage 50, reflecting
momentum in migrations to a cloud-native environment, together with growth in
HR and payroll following the acquisition of Criterion, and a continued
contribution from Sage 200.
In Canada, total revenue grew by 9% to £75m, driven by a strong performance
in Sage Intacct, now the largest growth driver in the region, while Sage 50
also contributed strongly, supported by good renewal rates.
Adjusting for the acquisitions of Criterion in H1 26 and Fyle in FY25, organic
total revenue grew by 13% in the US, and by 13% in North America as a whole.
UKIA H1 26 H1 25 Change Organic change
UK & Ireland £297m £271m 10% 10%
Africa & APAC £98m £89m 10% 10%
Underlying total revenue £395m £360m 10% 10%
In the UKIA region, underlying total revenue increased by 10% to £395m, with
strength across accounting, HR and payroll solutions. Recurring revenue grew
by 10% to £389m (H1 25: £352m), while subscription penetration was 90%, up
from 89% in the prior period.
In the UK & Ireland, total revenue grew by 10% to £297m. Sage Intacct
continued to perform well, driven by new customer acquisition reflecting
strong demand and effective execution through the partner channel, with good
renewal rates supported by customer add-ons. Sage 50 was a significant
contributor to growth, with momentum driven by our bundling approach, as
customers move into higher-value solutions with expanded capabilities,
including AI-powered features.
Sage's cloud native solutions for small businesses, including Sage Accounting,
Sage Payroll and Sage HR, also continued to deliver good growth. Sage
Accounting benefited from strong renewal rates and upselling to our integrated
small business suite, which includes AI capabilities including Sage Copilot.
In Africa and APAC, total revenue grew by 10% to £98m, driven by growth in
Sage Accounting and Sage Payroll across new and existing customers. Sage
Intacct also performed well and is rapidly scaling through new customers. Sage
X3 and local products within the Sage 50 franchise also contributed to growth.
Europe H1 26 H1 25 Change Organic Change
France £176m £165m 7% 7%
Iberia £93m £85m 9% 8%
Central Europe £83m £81m 4% 4%
Underlying total revenue £352m £331m 7% 6%
Europe delivered underlying total revenue growth of 7% to £352m, mainly
reflecting a strong performance across Sage 200, Sage X3, and HR and payroll
solutions. Recurring revenue increased by 7% to £334m (H1 25: £313m), while
subscription penetration rose to 81% from 79% in the prior period.
In France, total revenue grew by 7% to £176m, driven primarily by accounting
solutions. Sage X3 made a significant contribution, supported by continued
execution and momentum in customer demand. Performance in Sage 200 was also
strong, reflecting good renewals across existing customers. Growth was further
supported by Sage Intacct, which saw increasing traction as the solution
starts to scale.
Iberia achieved a total revenue increase of 9% to £93m, driven by Sage 200,
together with solutions for accountants which benefited from compliance
tailwinds in the region. Sage 50 also contributed to growth largely through
higher pricing and strong retention.
In Central Europe, total revenue grew by 4% to £83m. Cloud HR and payroll,
which represents a significant proportion of the business, delivered solid
growth, complemented by Sage 200. In addition, Sage Intacct has started to
build early traction from a small base.
Adjusting for the impact of the ForceManager acquisition in FY25, organic
total revenue grew by 8% in Iberia, and by 6% in Europe as a whole.
Strategic progress
Sage grows by consistently enhancing the value we deliver to existing and new
customers. By innovating to provide better ways for SMBs to run their finance,
HR and payroll processes, we make our products more attractive and more
valuable. Our focus on improving customer outcomes is accelerating with the
adoption of AI and agentic tools, enabling us to deliver more powerful
solutions that automate decisions, surface insights and orchestrate complex
processes.
Leveraging our competitive advantages
Building on our trusted system-of-record status, we are leveraging our
competitive advantages - including extensive, proprietary data sets, deep
domain expertise gained over decades and our scaled ecosystem of accountants,
developers and resellers - to embed enterprise-grade AI directly into
customers' mission-critical workflows and transform the way they work.
Importantly, our AI is designed with guardrails that aim to ensure reliable
and transparent results, building customer confidence, control and
accountability, and placing trust at the centre of our customer proposition.
Scaling AI through the Sage Platform
The Sage Platform provides a secure, scalable foundation for our solutions,
connecting customers, products and partners in an intelligent ecosystem, where
every connection and every transaction make the system smarter. Designed to
accelerate innovation and efficient product development, the platform has
enabled the rapid rollout of Sage Copilot, our digital assistant, and the
deployment of multiple AI agents including our Accounts Payable Agent, Close
Agent and Finance Intelligence Agent, resulting in significant productivity
and decision-making benefits to customers.
Expanding our ecosystem
We have also introduced new agentic capabilities and pricing models to enable
partner-developed agents to operate on the platform, giving customers faster
access to new functionality, and we have expanded our relationship with AWS to
accelerate the migration of connected products such as Sage 50 to a cloud
native environment. In addition, in partnership with PwC and supported by our
recent acquisition of Doyen AI, a data migration specialist, we are launching
AI-powered implementations to accelerate time-to-value.
Growing our cloud solutions
By broadening our offering across more financial tasks, reaching further into
operational workflows, and embedding agentic AI, we are strengthening our
competitive position and driving growth. During the period we scaled services
such as accounts payable, accounts receivable and payments. In the mid-market,
we grew Sage Intacct strongly, with ARR growth of over 20% in the US and
around 50% internationally. We also strengthened our mid-market HR &
payroll capabilities through the acquisition of Criterion. In addition, we
launched Sage X3 as a fully managed cloud service and introduced Sales
Intelligence Agent to proactively alert teams to risks such as overdue orders
or delayed shipments. In the small segment, we have made strong progress with
Sage Sole Trader, and partnered with leading UK banks and fintechs including
HSBC, Monzo, Tide and SumUp to deliver embedded accounting and tax services,
helping us win new customers earlier in their lifecycle. Growth has been
supported by regulatory changes including Making Tax Digital for Income Tax in
the UK, anti-fraud legislation in Spain and e-invoicing in France.
Transforming our operations
We are also delivering productivity through our own AI transformation. In
engineering, third-party coding tools have significantly increased developer
productivity, saving hundreds of thousands of work hours. In customer support,
AI is driving strong resolution rates with high levels of customer
satisfaction. In go-to-market, AI is helping to improve demand generation by
personalising and automating outbound campaigns, while also supporting inbound
lead qualification. In addition, we are executing comprehensive upskilling
programmes across the Group to help colleagues confidently apply AI in their
day-to-day work.
Sustainability and Society
Sage has, in recent months, continued to be recognised among the World's Most
Sustainable Companies by TIME Magazine and Statista, maintained a Gold rating
from EcoVadis, achieved an 'A' leadership score from CDP, retained an 'AAA'
ESG rating from MSCI, and won the edie 2026 award for Sustainability Reporting
& Communications for the second consecutive year. Alongside making good
progress across our sustainability priorities, including the Sage Impact
Entrepreneurship programme, we also advanced our Responsible AI programme,
underpinned by the adoption of the NIST AI Risk Management Framework and the
AI Trust Label, to support the responsible development and use of AI across
the business.
Financial Review
The financial review provides a summary of the Group's results on a statutory
and underlying basis, alongside its organic performance. Underlying measures
allow management and investors to understand the Group's financial performance
adjusted for the impact of foreign exchange movements and recurring and
non-recurring items, while organic measures also adjust for the impact of
acquisitions and disposals 8 (#_edn8) .
Statutory and underlying financial results
Financial results Statutory Underlying
H1 26 H1 25 Change H1 26 H1 25 Change
North America £616m £568m +8% £616m £540m +14%
UKIA £395m £358m +11% £395m £360m +10%
Europe £352m £316m +11% £352m £331m +7%
Total revenue £1,363m £1,242m +10% £1,363m £1,231m +11%
Operating profit £293m £255m +15% £326m £285m +15%
% Operating profit margin 21.5% 20.5% +1.0 ppts 23.9% 23.1% +0.8 ppts
Profit before tax £262m £236m +11% £295m £267m +11%
Profit after tax £196m £180m +9% £224m £203m +10%
Basic EPS 20.7p 18.2p +14% 23.7p 20.5p +16%
The Group achieved statutory and underlying total revenue of £1,363m in H1
26. Statutory total revenue increased by 10%, reflecting underlying total
revenue growth of 11% offset by a one percentage point foreign exchange
headwind, with US dollar depreciation partly offset by a strengthening euro.
Statutory and underlying operating profit increased by 15%, to £293m and
£326m, respectively, reflecting revenue growth combined with operating
efficiencies.
Statutory basic EPS increased by 14% to 20.7p, and underlying basic EPS
increased by 16% to 23.7p, mainly reflecting higher underlying profit, with an
increase in net finance costs offset by a reduction in the weighted average
number of shares as a result of recent share buybacks.
Revenue - underlying and organic reconciliation to statutory
Total revenue bridge H1 26 H1 25 Change
Statutory £1,363m £1,242m +10%
Recurring items - -
Impact of FX - (£11m)
Underlying £1,363m £1,231m +11%
Disposals - -
Acquisitions (£3m) £4m
Organic £1,360m £1,235m +10%
Statutory and underlying revenue was £1,363m in H1 26. Underlying revenue in
H1 25 of £1,231m reflects statutory revenue of £1,242m retranslated at
current year exchange rates, resulting in a foreign exchange headwind of
£11m. Organic revenue in H1 26 was £1,360m, reflecting underlying revenue of
£1,363m adjusted for £3m of revenue from the acquisition of Criterion during
the period. Organic revenue in H1 25 of £1,235m reflects underlying revenue
of £1,231m, adjusted for £3m of revenue from Fyle, and £1m of revenue from
ForceManager, which were acquired in FY25.
Operating profit
The Group increased underlying operating profit by 15% to £326m (H1 25:
£285m), resulting in an increase in underlying operating margin of 80bps to
23.9% (H1 25: 23.1%). This was driven by revenue growth and operating
efficiencies, with disciplined cost management supporting increased
investment. On an organic basis, adjusting for the impact of acquisitions in
FY25 and H1 26, operating profit increased by 14% to £325m (H1 25: £285m)
while organic operating margin was broadly in line with underlying.
Operating profit - underlying and organic reconciliation to statutory
Operating profit bridge H1 26 H1 25
Operating profit Operating margin Operating profit Operating margin
Statutory £293m 21.5% £255m 20.5%
Recurring items 9 (#_edn9) £33m - £35m -
Non-recurring items:
· Reversal of property restructuring costs - - (£2m) -
Impact of FX - - (£3m) -
Underlying £326m 23.9% £285m 23.1%
Disposals - - - -
Acquisitions (£1m) - - -
Organic £325m 23.9% £285m 23.0%
The Group achieved a statutory operating profit in H1 26 of £293m (H1 25:
£255m). Underlying operating profit of £326m in H1 26 reflects statutory
operating profit adjusted for recurring and non-recurring items. Organic
operating profit of £325m in H1 26 reflects underlying operating profit
adjusted for £1m of operating profit from the acquisition of Criterion during
the period.
Recurring items of £33m (H1 25: £35m) comprise £22m of amortisation of
acquisition-related intangibles (H1 25: £22m) and £11m of M&A related
charges (H1 25: £13m). In H1 25, non-recurring items comprised a £2m
reversal of property restructuring costs. Recurring and non-recurring items
together were unchanged compared to the prior period, at £33m.
In addition, the retranslation of H1 25 operating profit at current year
exchange rates has resulted in an operating profit headwind of £3m. This has
led to a 10-basis point margin headwind from foreign exchange to 23.1% (H1 25
underlying as reported: 23.2%).
Underlying EBITDA
Underlying EBITDA was £375m (H1 25: £331m) representing a margin of 27.6%.
The increase in underlying EBITDA principally reflects growth in underlying
operating profit.
H1 26 H1 25 Margin
Underlying operating profit £326m £285m 23.9%
Depreciation & amortisation £24m £24m
Share based payments £25m £22m
Underlying EBITDA £375m £331m 27.6%
Net finance cost
The underlying net finance cost for the period increased to £31m (H1 25:
£18m), mainly reflecting lower interest income on deposits, as well as higher
finance costs including new debt issuance. This was consistent with the
statutory net finance cost of £31m (H1 25: £19m).
Taxation
The underlying tax expense for H1 26 was £71m (H1 25: £64m), resulting in an
underlying effective tax rate of 24% (H1 25: 24%). The statutory income tax
expense for H1 26 was £66m (H1 25: £56m), resulting in a statutory effective
tax rate of 25% (H1 25: 24%). The difference between the statutory and
underlying rates in H1 26, and the increase in the statutory rate year on
year, largely reflects M&A‑related charges.
Earnings per share (EPS)
H1 26 H1 25 Change
Statutory basic EPS 20.7p 18.2p +14%
Recurring items 3.0p 2.8p
Non-recurring items - (0.2)p
Impact of foreign exchange - (0.3)p
Underlying basic EPS 23.7p 20.5p +16%
Underlying basic EPS increased by 16% to 23.7p, mainly reflecting the increase
in underlying operating profit. Statutory basic EPS increased by 14%, mainly
reflecting the increase in underlying basic EPS partly offset by the post-tax
impact of non-recurring items and a slight foreign exchange headwind.
Cash flow
Sage remains highly cash generative with underlying cash flow from operations
increasing by 15% to £378m (H1 25: £330m), representing underlying cash
conversion of 116% (H1 25: 115%). This strong cash performance reflects
revenue growth and continued good working capital management. Free cash flow
of £241m (H1 25: £246m) reflects robust cash conversion, offset by income
tax which increased due to the timing of tax payments in prior periods, and
net interest which increased due to new debt issuance together with lower
interest income on deposits.
Cash flow APMs H1 26 H1 25 (as reported)
Underlying operating profit £326m £288m
Depreciation, amortisation and non-cash items in profit £23m £23m
Share based payments £25m £22m
Net changes in working capital £26m £29m
Net capital expenditure (£22m) (£32m)
Underlying cash flow from operations £378m £330m
Underlying cash conversion % 116% 115%
Non-recurring cash items (£1m) (£6m)
Net interest paid (£56m) (£36m)
Income tax paid (£80m) (£38m)
Profit and loss foreign exchange movements - (£4m)
Free cash flow £241m £246m
Statutory reconciliation of cash flow from operations H1 26 H1 25 (as reported)
Statutory cash flow from operations £390m £330m
Recurring and non-recurring items £9m £28m
Net capital expenditure (£27m) (£32m)
Other adjustments including foreign exchange translations £6m £4m
Underlying cash flow from operations £378m £330m
Net debt and liquidity
Group net debt was £1,504m at 31 March 2026 (30 September 2025: £1,189m),
comprising cash and cash equivalents of £518m (30 September 2025: £390m) and
total debt of £2,022m (30 September 2025: £1,579m). The Group had £1,148m
of cash and available liquidity at 31 March 2026 (30 September 2025:
£1,020m).
The increase in net debt in the period is summarised in the table below.
H1 26 H1 25 (as reported)
Net debt at 1 October (£1,189m) (£738m)
Free cash flow £241m £246m
New leases less disposals (£18m) (£6m)
Acquisition of businesses (£44m) (£33m)
M&A and equity investments (£9m) (£22m)
Dividends paid (£136m) (£135m)
Share buyback (£353m) (£293m)
FX movement and other £4m £5m
Net debt at 31 March (£1,504m) (£976m)
The Group's debt is sourced from sterling and euro denominated notes, together
with a syndicated multi-currency Revolving Credit Facility (RCF).
In February 2026, the Group issued €500m 7-year notes with a coupon of
3.821% as part of the Group's Euro Medium Term Note (EMTN) programme. Sage's
notes also include £300m 12-year notes issued in March 2025 with a coupon of
5.625%, €500m 5-year notes in February 2023 with a coupon of 3.82%, £400m
12-year notes issued in February 2022 with a coupon of 2.875%, and £350m
10-year notes issued in February 2021 with a coupon of 1.625%.
The Group's RCF of £630m expires in December 2029 and was undrawn at 31 March
2026 (H1 25: undrawn). Sage has an investment grade issuer credit rating
assigned by Standard and Poor's of BBB+ (stable outlook).
Capital allocation
Sage's disciplined capital allocation policy is focused on accelerating
strategic execution through organic and inorganic investment, and delivering
shareholder returns. During the period, Sage completed the acquisition of
Criterion, a human capital management (HCM) platform which enhances Sage's
offering to mid-sized businesses, and Akao, a specialist in digitalisation and
automation solutions.
Sage has a progressive dividend policy, intending to grow the dividend over
time while considering the future capital requirements of the Group.
Reflecting Sage's strong performance and cash generation during the first
half, we have increased the interim dividend by 8% to 8.05p per share (H1 25:
7.45p).
The Group also considers returning surplus capital to shareholders. On 5
February 2026, Sage completed a share buyback programme, commenced on 19
November 2025, under which a total of 29.4m shares were purchased for an
aggregate consideration of £300m and subsequently cancelled.
On 2 March 2026, we commenced a further share buyback programme of up to
£300m, under which, as at 18 May 2026, a total of 30.0m shares had been
purchased for an aggregate consideration of £258m and subsequently cancelled.
This programme is expected to complete no later than 5 June 2026.
These share buybacks reflect Sage's strong cash generation, robust financial
position, and the Board's confidence in the Group's future prospects. Sage
continues to have considerable financial flexibility to drive the execution of
its growth strategy.
H1 26 H1 25 (as reported)
Net debt £1,504m £976m
Underlying EBITDA (Last Twelve Months) £742m £655m
Net debt/underlying EBITDA ratio 2.0x 1.5x
The Group's underlying EBITDA over the last 12 months was £742m, resulting in
a net debt to underlying EBITDA leverage ratio of 2.0x, up from 1.5x in the
prior year. Sage intends to operate in a broad range of 1x to 2x net debt to
underlying EBITDA over the medium term, with flexibility to move outside this
range as business needs require.
Return on capital employed (ROCE) for H1 26 was 33% (H1 25 as reported: 29%).
A reconciliation of ROCE to our reported measures is set out in Appendix 1 on
page 12.
Foreign exchange
The Group does not hedge foreign currency profit and loss translation
exposure, and therefore the statutory results are impacted by movements in
exchange rates. The average rates used to translate the consolidated income
statement and to normalise prior year underlying and organic figures are as
follows:
Average exchange rates (equal to GBP) H1 26 H1 25 Change
Euro (€) 1.15 1.20 -4%
US Dollar ($) 1.34 1.27 +5%
Canadian Dollar (C$) 1.85 1.80 +3%
South African Rand (ZAR) 22.40 23.12 -3%
Appendix 1 - Alternative Performance Measures
Alternative Performance Measures are used by the Group to understand and
manage performance. These are not defined under International Financial
Reporting Standards (IFRS) or UK-adopted International Accounting Standards
(UK-IFRS) and are not intended to be a substitute for any IFRS or UK-IFRS
measures of performance but have been included as management considers them to
be important measures, alongside the comparable GAAP financial measures, in
assessing underlying performance. Wherever appropriate and practical, we
provide reconciliations to relevant GAAP measures. The table below sets out
the basis of calculation of the Alternative Performance Measures and the
rationale for their use.
MEASURE DESCRIPTION RATIONALE
Underlying (revenue and profit) measures Underlying measures are adjusted to exclude items which in management's Underlying measures allow management and investors to compare performance
judgement need to be disclosed separately by virtue of their size, nature or without the effects of foreign exchange movements or recurring or
frequency to aid understanding of the performance for the year or non-recurring items.
comparability between periods:
By including part-period contributions from acquisitions, discontinued
· Recurring items include purchase price adjustments including operations, disposals and assets held for sale of standalone businesses in the
amortisation of acquired intangible assets and adjustments made to reduce current and/or prior periods, the impact of M&A decisions on earnings per
deferred income arising on acquisitions, acquisition-related items and share growth can be evaluated.
unhedged FX on intercompany balances; and
· Non-recurring items that management judge to be one-off or
non-operational, such as gains and losses on the disposal of assets,
impairment charges and reversals, and restructuring related costs.
Recurring items are adjusted each period irrespective of materiality to ensure
consistent treatment.
Underlying basic EPS is also adjusted for the tax impact of recurring and
non-recurring items.
All prior period underlying measures (revenue and profit) are retranslated at
the current year exchange rates to neutralise the effect of currency
fluctuations.
Organic (revenue and profit) measures In addition to the adjustments made for Underlying measures, Organic measures: Organic measures allow management and investors to understand the like for
like revenue and current period margin performance of the continuing business.
· Exclude the contribution from discontinued operations, disposals
and assets held for sale of standalone businesses in the current and prior
period; and
· Exclude the contribution from acquired businesses until the year
following the year of acquisition; and
· Adjust the comparative period to present prior period acquired
businesses as if they had been part of the Group throughout the prior period.
Acquisitions and disposals where the revenue and contribution impact would be
immaterial are not adjusted.
Underlying Cash Flow from Operations Underlying Cash Flow from Operations is Underlying Operating Profit adjusted To show the cash flow generated by the operations and calculate underlying
for non-cash items, net capital expenditure (excluding business combinations cash conversion.
and similar items) and changes in working capital.
Underlying Cash Conversion Underlying Cash Flow from Operations divided by Underlying (as reported) Cash conversion informs management and investors about the cash operating
Operating Profit. cycle of the business and how efficiently operating profit is converted into
cash.
Underlying EBITDA Underlying EBITDA is Underlying Operating Profit excluding underlying To calculate the Net Debt to Underlying EBITDA leverage ratio and to show
depreciation, amortisation and share-based payments. profitability before the impact of major non-cash charges.
Underlying depreciation and amortisation is the statutory equivalent measure,
adjusted for the amortisation of acquired intangibles. Underlying share-based
payments is the statutory equivalent measure, adjusted for M&A-related
share-based payment charges included within other M&A activity related
items.
Annualised recurring revenue Annualised recurring revenue ("ARR") is the normalised recurring revenue in ARR represents the annualised value of the recurring revenue base that is
the last month of the reporting period, adjusted consistently period to expected to be carried into future periods, and its growth is a
period, multiplied by twelve. Adjustments to normalise reported recurring forward-looking indicator of reporting recurring revenue growth.
revenue involve adjusting for certain components (such as non‑refundable
contract sign‑up fees) to ensure the measure reflects that part of the
revenue base which (subject to ongoing use and renewal) can reasonably be
expected to repeat in future periods.
Renewal Rate by Value The ARR from renewals, migrations, upsell and cross-sell of active customers As an indicator of our ability to retain and generate additional revenue from
at the start of the year, divided by the opening ARR for the year. our existing customer base through up and cross sell.
Free Cash Flow Free Cash Flow is Underlying Cash Flow from Operations minus net interest To measure the cash generated by the operating activities during the period
paid, derivative financial instruments and income tax paid, and adjusted for that is available to repay debt, undertake acquisitions or distribute to
non-recurring cash items (which excludes net proceeds on disposals of shareholders.
subsidiaries) and profit and loss foreign exchange movements.
% Subscription Penetration Underlying software subscription revenue as a percentage of underlying total To measure the migration of our customer base from licence and maintenance to
revenue. a subscription relationship.
Net debt Net debt is cash and cash equivalents less current and non-current borrowings. To calculate the Net Debt to Underlying EBITDA leverage ratio and an indicator
of our indebtedness.
Return on Capital Employed (ROCE) ROCE is calculated as underlying Operating Profit, minus amortisation of As an indicator of the financial return on the capital invested in the
acquired intangibles, the result being divided by capital employed, which is Company. ROCE is used as an underpin in the FY24, FY25 and FY26 PSP awards.
the average (of the opening and closing balance for the period) total net
assets excluding net debt, derivative financial instruments, provisions for
non-recurring costs, financial liability for the purchase of own shares and
tax assets or liabilities. A reconciliation of ROCE to our reported measures
is set out in the table below.
Reconciliation of Return on Capital Employed (ROCE) H1 26 H1 25
(as reported)
Underlying operating profit net of amortisation of acquired intangibles £608m £532m
Net assets less borrowings and cash £1,725m £1,776m
Less:
· Derivative financial instruments (£24m) (£2m)
· Provisions for non-recurring costs £5m £9m
· Financial liability for the purchase of own shares £257m £115m
· Tax assets or liabilities (£63m) (£52m)
Adjusted net assets £1,900m £1,846m
Average adjusted net assets £1,871m £1,813m
Return on capital employed 33% 29%
Consolidated income statement
For the six months ended 31 March 2026
Six months Six months
ended ended
31 March 31 March
2026 2025
(Unaudited) Note £m £m
Revenue 2 1,363 1,242
Cost of sales (103) (90)
Gross profit 1,260 1,152
Selling and administrative expenses (967) (897)
Operating profit 2 293 255
Finance income 4 7
Finance costs (35) (26)
Profit before income tax 262 236
Income tax expense 4 (66) (56)
Profit for the period 196 180
Profit attributable to:
Owners of the parent 196 180
Earnings per share attributable to the owners of the parent (pence)
Basic 6 20.68p 18.16p
Diluted 6 20.41p 17.86p
All operations in the period relate to continuing operations.
The notes on pages 19 to 35 form an integral part of these condensed
consolidated half-yearly financial statements.
Consolidated statement of comprehensive income
For the six months ended 31 March 2026
(Unaudited) Six months Six months
ended
ended
31 March
31 March
2026
2025
£m £m
Profit for the period 196 180
Items of other comprehensive income that will not be reclassified to profit or
loss, net of tax:
Fair value reassessment of equity investments - (2)
- (2)
Items of other comprehensive income that may be reclassified to profit or
loss, net of tax:
Exchange differences on translating foreign operations and net investment 16 33
hedges
Changes in fair value of foreign currency basis of hedge relationships (1) (2)
Amortisation of foreign currency basis of hedge relationships - 1
Cash flow hedges (1) 2
14 34
Other comprehensive income for the period, net of tax 14 32
Total comprehensive income for the period 210 212
Consolidated balance sheet
As at 31 March 2026
Note 31 March 31 March 30 September
2026
2025 (Restated*)
2025
£m
£m
£m
(Unaudited)
Non-current assets
Goodwill 7 2,276 2,201 2,213
Other intangible assets 7 213 213 212
Property, plant and equipment 7 163 123 144
Equity investments 4 4 4
Trade and other receivables 147 139 144
Deferred income tax assets 106 99 101
Derivative financial instruments 24 14 32
2,933 2,793 2,850
Current assets
Trade and other receivables 520 451 471
Current income tax asset 16 10 2
Cash and cash equivalents 9 518 574 390
1,054 1,035 863
Total Assets 3,987 3,828 3,713
Current liabilities
Trade and other payables (650) (464) (433)
Current income tax liabilities (43) (40) (39)
Borrowings 9 (15) (15) (17)
Provisions (18) (17) (21)
Deferred income (962) (870) (845)
(1,688) (1,406) (1,355)
Non-current liabilities
Borrowings 9 (2,007) (1,535) (1,562)
Post-employment benefits (25) (23) (25)
Deferred income tax liabilities (16) (18) (15)
Provisions (24) (23) (23)
Trade and other payables (2) (6) (8)
Deferred income (5) (6) (5)
Derivative financial instruments - (12) -
(2,079) (1,623) (1,638)
Total liabilities (3,767) (3,029) (2,993)
Net assets 220 799 720
Equity attributable to owners of the parent
Ordinary shares 8 10 11 11
Share premium 8 548 548 548
Other reserves 8 (311) (357) (369)
Retained earnings (27) 597 530
Total equity 220 799 720
*Other reserves and retained earnings have been restated to present the
treasury share reserve and capital redemption reserve within other reserves
(see note 1).
Consolidated statement of changes in equity
For the six months ended 31 March 2026
Attributable to owners of the parent
(Unaudited) Ordinary Share Other reserves Retained Total
shares
premium
earnings
equity
£m
£m £m
£m
£m
At 1 October 2025 11 548 (369) 530 720
Profit for the period - - - 196 196
Other comprehensive income/(expense), net of tax
Exchange differences on translating foreign operations and net investment - - 16 - 16
hedges
Changes in fair value of foreign currency basis of hedge relationships - - (1) - (1)
Cash flow hedges - - (1) - (1)
Total comprehensive income - - 14 196 210
for the period ended 31 March 2026
Transactions with owners
Employee share option scheme - value of employee services including deferred - - - 26 26
tax
Vesting of share awards and exercise of share options - - 43 (41) 2
Cancellation of ordinary shares (1) - 1 - -
Share buyback programme - - - (602) (602)
Dividends paid to owners of the parent - - - (136) (136)
Total transactions with owners (1) - 44 (753) (710)
for the period ended 31 March 2026
At 31 March 2026 10 548 (311) (27) 220
Consolidated statement of changes in equity
For the six months ended 31 March 2025
Attributable to owners of the parent
(Unaudited) Ordinary Share Other reserves Retained Total
shares
premium
earnings
equity
£m
£m (restated*)
£m
£m (restated*)
£m
At 1 October 2024 11 548 (428) 962 1,093
Profit for the period - - - 180 180
Other comprehensive income/(expense), net of tax
Exchange differences on translating foreign operations and net investment - - 33 - 33
hedges
Changes in fair value of foreign currency basis of hedge relationships - - (2) - (2)
Amortisation of foreign currency basis of hedge relationships - - 1 - 1
Cash flow hedges - - 2 - 2
Fair value reassessment of equity investments - - - (2) (2)
Total comprehensive income - - 34 178 212
for the period ended 31 March 2025
Transactions with owners
Employee share option scheme - value of employee services including deferred - - - 33 33
tax
Vesting of share awards and exercise of share options - - 37 (34) 3
Share buyback programme - - - (407) (407)
Dividends paid to owners of the parent - - - (135) (135)
Total transactions with owners - - 37 (543) (506)
for the period ended 31 March 2025
At 31 March 2025 11 548 (357) 597 799
*Other reserves and retained earnings have been restated to present the
treasury share reserve and capital redemption reserve within other reserves
(see note 1).
Consolidated statement of cash flows
For the six months ended 31 March 2026
(Unaudited) Note Six months Six months
ended
ended
31 March
31 March
2026
2025
£m
£m
Cash flows from operating activities
Cash generated from continuing operations 9 390 330
Interest paid (58) (42)
Income tax paid (80) (38)
Net cash generated from operating activities 252 250
Cash flows from investing activities
Acquisition of subsidiaries, net of cash acquired 11 (38) (28)
Purchases of intangible assets 7 (12) (10)
Purchases of property, plant and equipment 7 (15) (25)
Interest received 4 7
Net cash used in investing activities (61) (56)
Cash flows from financing activities
Proceeds from borrowings 9 584 297
Repayments of borrowings 9 (150) (2)
Borrowing costs (1) (1)
Capital element of lease payments (10) (9)
Receipt of lease incentive - 6
Proceeds from issuance of treasury shares 2 3
Share buyback programme 8 (353) (296)
Dividends paid to owners of the parent 5 (136) (135)
Net cash used in financing activities (64) (137)
Net increase in cash and cash equivalents 57
(before exchange rate movement)
127
Effects of exchange rate movement 9 1 9
Net increase in cash and cash equivalents 128 66
Cash and cash equivalents at 1 October 9 390 508
Cash and cash equivalents at period end 9 518 574
Notes to the financial information
For the six months ended 31 March 2026
1. Group accounting policies
General information
The Sage Group plc ("the Company") and its subsidiaries (together "the Group")
is a leader in finance, HR and payroll software for small and mid-sized
businesses.
These condensed consolidated half-yearly financial statements were approved
for issue by the Board of Directors on 20 May 2026.
The financial information set out above does not constitute the Company's
annual financial statements. Annual financial statements for the year ended 30
September 2025 have been delivered to the Registrar of Companies. The
auditor's report was unqualified, did not include a reference to any matters
to which the auditor drew attention by way of emphasis without qualifying
their report and did not contain statements under section 498 (2) and (3) of
the Companies Act 2006.
The financial information has been prepared on the basis of the accounting
policies and critical accounting estimates and judgements as set out in the
annual financial statements for the year ended 30 September 2025, unless
otherwise stated.
These condensed consolidated half-yearly financial statements have been
reviewed, not audited.
The Company is a limited liability company incorporated and domiciled in the
UK. The address of its registered office is C23 - 5 & 6 Cobalt Park Way,
Cobalt Park, Newcastle upon Tyne, NE28 9EJ. The Company is listed on the
London Stock Exchange.
All figures presented are rounded to the nearest £m, unless otherwise stated.
Basis of preparation
The financial information for the six months ended 31 March 2026 has been
prepared in accordance with the Disclosure and Transparency Rules of the
Financial Conduct Authority and with IAS 34, 'Interim Financial Reporting' as
issued by the International Accounting Standards Board ("IASB") and as adopted
for use in the UK.
These condensed consolidated half-yearly financial statements should be read
in conjunction with the annual financial statements for the year ended 30
September 2025, which have been prepared in accordance with UK-adopted
International Accounting Standards ("UK-IFRS") and International Financial
Reporting Standards ("IFRS") as issued by the IASB.
In the annual financial statements for the year ended 30 September 2025, the
Group presented the treasury share reserve and capital redemption reserve
separately within other reserves, rather than within retained earnings, to
improve clarity. Prior period comparatives as at 31 March 2025 have been
restated to reflect this presentation change.
Going concern
As at 31 March 2026, the Group had a strong liquidity position with cash and
available liquidity of £1.1bn, supported by underlying cash conversion of
116% reflecting the robust subscription-based business model. The Group's
position is further supported by a well-diversified customer base amongst
small and mid-sized businesses with high quality recurring revenue and strong
retention rates.
In reaching its assessment on going concern, the Directors have reviewed
liquidity forecasts for the Group for a period of at least 12 months from the
date of the approval of these financial statements (the going concern
assessment period), which reflect the expected impact of economic conditions
on trading.
Scenario-specific stress testing has been performed, with the level of churn
assumptions increased by 75%, and a significant reduction in the level of new
customer acquisition and sales to existing customers. In these severe stress
scenarios, the Group continues to have sufficient resources to continue in
operational existence, without the need to drawdown the revolving credit
facility or seek additional financing. If more severe impacts occur,
controllable mitigating actions to protect liquidity, including the reduction
of discretionary spend, are available to the Group should they be required.
The Directors also reviewed the results of reverse stress testing to provide
an illustration of the level of churn and deterioration in new customer
acquisition which would be required to exhaust liquidity down to minimum
working capital requirements. The result of the reverse stress testing has
highlighted that such a scenario would only arise following a significant
deterioration in performance, well in excess of the assumptions considered in
the stress testing scenarios. The probability of these factors occurring is
deemed to be remote given the resilient nature of the subscription business
model, robust balance sheet, and continued strong cash conversion.
After making enquiries, the Directors have a reasonable expectation that Sage
has adequate resources to continue in operation throughout the going concern
assessment period. Accordingly, these condensed consolidated half-yearly
financial statements have been prepared on a going concern basis.
Adoption of new and revised IFRSs
No standards, interpretations and amendments effective in the current
financial period have had a material impact on the Group. No standards have
been early adopted during the period.
The impact of the following standards, interpretations or amendments that have
been issued but are not yet effective are under assessment:
· IFRS 18 "Presentation and Disclosure in Financial Statements",
which will be effective for annual reporting periods beginning on or after 1
January 2027. IFRS 18 will not impact the recognition or measurement of items
in the financial statements but is expected to change how Sage presents
certain information.
Other standards, interpretations and amendments issued but not yet effective
are not expected to have a material impact on the Group.
Accounting estimates and judgements
Accounting estimates and judgements are consistent with those included in the
Company's annual financial statements for the year ended 30 September 2025,
except for business combinations which has been updated to reflect the
acquisition of Criterion Inc. ("Criterion").
Business combinations (judgement and estimate)
When the Group completes a business combination, the consideration transferred
for the acquisition and the identifiable assets and liabilities are recognised
at their fair values. The amount by which the consideration exceeds the net
assets acquired is recognised as goodwill. The application of accounting
policies to business combinations involves judgement and the use of estimates.
In the period, the Group finalised the purchase price accounting for the
acquisitions of Criterion (see note 11). As part of finalising the purchase
price accounting, external independent valuation experts were engaged to
support with the identification and valuation of acquired intangible assets:
Judgement was required with respect to the identification of acquired
intangible assets, with only technology being identified. Subsequently, the
valuation of those acquired intangible assets involved key estimates.
Valuation techniques being the multi-period excess earnings method was used to
value the technology. The key estimates requiring consideration as part of the
valuations included the application of a discount rate and the use of an
appropriate royalty rate.
Website
This condensed consolidated half-yearly financial report for the six months
ended 31 March 2026 can also be found on our website:
www.sage.com/investors/financial-information/results
(http://www.sage.com/investors/investor-downloads)
2. Segment information
In accordance with IFRS 8 (Operating Segments) information for the Group's
operating segments has been derived using the information used by the Chief
Operating Decision Maker ("CODM"). The Group's Executive Leadership Team
("ELT") has been identified as the CODM, in accordance with their designated
responsibility for the allocation of resources to operating segments and
assessing their performance through the Monthly Business Reviews. The ELT uses
organic and underlying data to monitor business performance. Operating
segments are reported in a manner which is consistent with the operating
segments produced for internal management reporting.
The Group is organised into three key operating segments:
· North America
· United Kingdom, Ireland, Africa and APAC ("UKIA")
· Europe
For reporting under IFRS 8 each of the three operating segments above
represents a reportable segment.
The revenue analysis in the table below is based on the location of the
customer, which is not materially different from the location where the order
is received and where the assets are located.
Category Examples
Recurring revenue Software subscription revenue
Other subscription revenue
Other recurring revenue
Other revenue Perpetual software licences
Upgrades to perpetual licences
Professional services
Training
Revenue by segment
Six months ended 31 March 2026 Change
Statutory and Underlying Organic Organic Statutory Underlying Organic
£m
£m
Adjustments*
£m
Recurring revenue by segment
North America 600 (2) 598 8% 14% 13%
UKIA 389 - 389 11% 10% 10%
Europe 334 - 334 12% 7% 7%
Recurring revenue 1,323 (2) 1,321 10% 11% 10%
Other revenue by segment
North America 16 (1) 15 13% 19% 12%
UKIA 6 - 6 (23%) (24%) (24%)
Europe 18 - 18 8% 3% 3%
Other revenue 40 (1) 39 3% 3% 1%
Total revenue by segment
North America 616 (3) 613 8% 14% 13%
UKIA 395 - 395 11% 10% 10%
Europe 352 - 352 11% 7% 6%
Total revenue 1,363 (3) 1,360 10% 11% 10%
* Adjustments relate to the acquisition of Criterion Inc.
Six months ended 31 March 2026 Change
Statutory and Underlying £m Organic Organic Statutory Underlying Organic
£m
Adjustments*
£m
Total revenue by type
Software subscription revenue
1,150 (2) 1,148 12% 12% 12%
Other recurring revenue 173 - 173 1% 2% 2%
Recurring revenue 1,323 (2) 1,321 10% 11% 10%
Other revenue 40 (1) 39 3% 3% 1%
Total revenue 1,363 (3) 1,360 10% 11% 10%
* Adjustments relate to the acquisition of Criterion.
Six months ended 31 March 2025
Statutory and Underlying as reported Impact of foreign exchange Underlying Organic Organic
£m
£m
£m
adjustments*
£m
£m
Recurring revenue by segment
North America 554 (27) 527 3 530
UKIA 350 2 352 - 352
Europe 299 14 313 - 313
Recurring revenue 1,203 (11) 1,192 3 1,195
Other revenue by segment
North America 14 (1) 13 1 14
UKIA 8 - 8 - 8
Europe 17 1 18 - 18
Other revenue 39 - 39 1 40
Total revenue by segment
North America 568 (28) 540 4 544
UKIA 358 2 360 - 360
Europe 316 15 331 - 331
Total revenue 1,242 (11) 1,231 4 1,235
* Adjustments relate to the acquisition of Tritium Software, S.L. ("Tritium
Software") and Fyle Technologies Private Limited ("Fyle") in the previous
year.
Six months ended 31 March 2025
Statutory and Underlying as reported Impact of foreign Underlying Organic Organic
£m
exchange
£m
adjustments*
£m
£m
£m
Total revenue by type
Software subscription revenue 1,031 (9) 1,022 3 1,025
Other recurring revenue 172 (2) 170 - 170
Recurring revenue 1,203 (11) 1,192 3 1,195
Other revenue 39 - 39 1 40
Total revenue 1,242 (11) 1,231 4 1,235
* Adjustments relate to the acquisition of Tritium Software and Fyle in the
previous year.
Operating profit by segment
Six months ended 31 March 2026 Change
Statutory Underlying Underlying Organic Statutory Underlying Organic
£m
adjustments*
£m
£m
£m Organic adjustments **
£m
Operating profit by segment
North America 119 15 134 (1) 133 1% 8% 6%
UKIA 104 11 115 - 115 20% 17% 17%
Europe 70 7 77 - 77 39% 25% 24%
Total operating profit 293 33 326 (1) 325 15% 15% 14%
* Adjustments are detailed in note 3.
** Adjustments relate to the acquisition of Criterion.
Six months ended 31 March 2025
Statutory £m Underlying adjustments* £m Underlying as reported Impact of foreign exchange Underlying Organic adjustments** Organic
£m
£m
£m
£m £m
Operating profit by segment
North America 117 14 131 (6) 125 - 125
UKIA 87 11 98 - 98 - 98
Europe 51 8 59 3 62 - 62
Total operating profit 255 33 288 (3) 285 - 285
* Adjustments are detailed in note 3.
** Adjustments relate to the acquisition of Tritium Software and Fyle in the
previous year.
3. Adjustments between underlying and statutory profit
Six months ended 31 March 2026 Six months ended 31 March 2025
Operating Profit Operating Profit
profit before tax profit before tax
£m
£m
£m
£m
Statutory measures 293 262 255 236
Recurring items
· Amortisation of acquired intangibles 22 22 22 22
· Other M&A activity-related items 11 11 13 13
· Foreign currency movements on intercompany balances - - - 1
Non-recurring items:
· Reversal of property restructuring costs - - (2) (2)
Underlying (as reported) measures 326 295 288 270
Impact of foreign exchange - - (3) (3)
Underlying measures 326 295 285 267
Recurring items
Recurring items impacting operating profit (reported within selling and
administrative costs) and profit before tax comprise:
· Amortisation of acquired intangibles £22m (six months ended 31
March 2025: £22m) which have previously been recognised as part of business
combinations or similar transactions.
· Other M&A activity-related items £11m (six months ended 31
March 2025: £13m) which include advisory, legal, accounting, valuation and
other professional or consulting services which are related to M&A
activity, as well as acquisition-related remuneration and directly
attributable integration costs. £3m (six months ended 31 March 2025: £6m) of
these costs have been paid in the period, while the remainder are expected to
be paid in subsequent periods.
Non-recurring items
Non-recurring items impacting operating profit in the prior year (reported
within selling and administrative costs) and profit before tax comprise:
· Reversal of property restructuring costs of £2m relates to a
sub-lease entered into for a property site in North America, which had
previously been exited.
In total for the six months ended 31 March 2026, cash paid in respect of
recurring and non-recurring items of £9m, comprised £8m of other M&A
activity-related items and £1m of property-related costs. (For the six months
ended 31 March 2025, cash paid in respect of recurring and non-recurring items
of £28m comprised £22m of other M&A activity-related items and £6m of
employee-related costs).
The tax impact of recurring and non-recurring adjustments between statutory
and underlying profit before tax is £5m, of which £5m relates to recurring
items and £nil relates to non-recurring items (for the six months ended 31
March 2025, the tax impact is £8m, of which £8m relates to recurring items
and £nil relates to non-recurring items). For the impact of these on the
effective tax rates, see note 4.
4. Income tax expense
The effective tax rate on statutory profit before tax was 25% (six months
ended 31 March 2025: 24%) whilst the effective tax rate on underlying profit
before tax for continuing operations was 24% (six months ended 31 March 2025:
24%). The effective income tax rate represents the best estimate of the
Group's average effective income tax rate expected for the full year, applied
to the profit before income tax for the six months ended 31 March 2026.
The effective tax rate for the period is consistent with (2025: lower than)
the rate of UK corporation tax applicable to the Group of 25% (2025: 25%).
The Group is in scope of the OECD's Pillar Two global tax reform for the
financial year ended 30 September 2026. Pillar Two is not expected to
materially impact the Group's effective tax rate.
For the period to 31 March 2026, the Group has continued to apply the
mandatory exception to recognising and disclosing information about deferred
tax assets and liabilities related to Pillar Two income taxes.
5. Dividends
Six months ended Six months ended Year
31 March 2026
ended
£m 31 March
30 September
2025
2025
£m
£m
Final dividend paid for the year ended 30 September 2024 of 13.50p per share - 135 135
Interim dividend paid for the year ended 30 September 2025 of 7.45p per share - - 72
Final dividend paid for the year ended 30 September 2025 of 14.40p per share 136 - -
136 135 207
The interim dividend of 8.05 pence per share will be paid on 3 July 2026 to
shareholders on the register at the close of business on 5 June 2026. The
Company's distributable reserves are sufficient to support the payment of this
dividend. These condensed consolidated half-yearly financial statements do not
reflect this proposed dividend payable.
6. Earnings per share
Basic earnings per share is calculated by dividing the profit for the period
attributable to owners of the parent by the weighted average number of
ordinary shares in issue during the period, excluding those held as treasury
shares and held by the Employee Benefit Trust, which are treated as cancelled,
until reissued.
For diluted earnings per share, the weighted average number of ordinary shares
in issue is adjusted to assume conversion of all potentially dilutive ordinary
shares, exercisable at the end of the period.
Underlying Underlying Underlying Statutory Statutory
Six months ended
as reported* Six months ended
Six months ended
Six months ended
Six months ended
31 March
31 March
31 March
31 March
2026
2025
2025
2026 31 March
2025
Earnings attributable to owners of the parent** (£m)
Profit for the period 224 206 203 196 180
Number of shares (millions)
Weighted average number of shares for basic earnings per share 946 993 993 946 993
Dilutive effects of shares 12 16 16 12 16
Weighted average number of shares for diluted earnings per share 958 1,009 1,009 958 1,009
Earnings per share attributable to owners of the parent (pence)
Basic earnings per share 23.74 20.81 20.48 20.68 18.16
Diluted earnings per share 23.43 20.47 20.14 20.41 17.86
* Underlying as reported is at 31 March 2025 reported exchange rates.
** All operations in the years relate to continuing operations.
Reconciliation of earnings Six months ended Six months ended
31 March
31 March
2026
2025
£m
£m
Statutory profit for the period attributable to owners of the parent 196 180
Adjustments:
· Recurring items 33 36
· Non-recurring items - (2)
Taxation on adjustments between statutory and underlying profit before tax (5) (8)
Underlying profit for the period attributable to owners of the parent (as 224 206
reported)
Impact of movement in foreign currency exchange rates - (3)
Underlying profit for the period (after exchange movement) attributable to 224 203
owners of the parent
7. Non-current assets
Goodwill Other Property, Total
intangible
plant and equipment
£m
assets
£m £m
£m
Opening net book amount at 1 October 2025 2,213 212 144 2,569
Additions - 13 34 47
Acquisitions 36 17 - 53
Depreciation, amortisation and other movements - (30) (16) (46)
Exchange movement 27 1 1 29
Closing net book amount at 31 March 2026 2,276 213 163 2,652
Goodwill Other Property, Total
£m
intangible
plant and
£m
assets
equipment
£m
£m
Opening net book amount at 1 October 2024 2,122 228 108 2,458
Additions - 7 31 38
Acquisitions 25 6 - 31
Depreciation, amortisation and other movements - (31) (16) (47)
Exchange movement 54 3 - 57
Closing net book amount at 31 March 2025 2,201 213 123 2,537
8. Equity
Ordinary shares and share premium
Number of Ordinary Share premium Total
shares*
Shares
£m
£m
£m
At 1 October 2025 1,023,290,127 11 548 559
Cancellation of shares (35,360,327) (1) - (1)
At 31 March 2026 987,929,800 10 548 558
* Issued and fully paid ordinary shares of 14/77 pence each.
Number of Ordinary Share premium Total
shares*
Shares
£m
£m
£m
At 1 October 2024 1,071,499,517 11 548 559
Cancellation of shares** (22,188,837) - - -
At 31 March 2025 1,049,310,680 11 548 559
* Issued and fully paid ordinary shares of 14/77 pence each.
** Cancellation of shares in the six months ended 31 March 2025 resulted in a
reduction of the nominal value of ordinary shares of less than £1m.
As at 31 March 2026 the Group held 55,085,354 treasury shares (31 March 2025:
61,472,220). During the period, the Group satisfied the vesting of certain
share awards utilising 4,784,153 treasury shares (six months ended 31 March
2025: 5,252,787).
On 18 November 2025, the Group entered into a non-discretionary share buyback
programme to purchase up to £300m of its own shares for a total consideration
of £300m plus expected associated taxes. The programme completed on 5
February 2026 and the Group repurchased a total of 29,399,854 ordinary shares
as part of this programme.
On 27 February 2026, the Group entered into a non-discretionary share buyback
programme to purchase up to £300m of its own shares. The programme is
expected to end no later than 5 June 2026, for a total consideration of £300m
plus expected associated taxes. As at 31 March 2026 the Group has repurchased
a total of 5,960,473 ordinary shares as part of this programme.
For both programmes, £610m (gross of tax) was recognised through retained
earnings at the balance sheet date, of which £353m was paid in the period.
At 31 March 2026, a liability of £257m is recorded within trade and other
payables representing the remaining amount to be paid under the share buyback
programmes.
Employee Benefit Trust
The Employee Benefit Trust ("EBT") holds shares in the Company and was set up
for the benefit of Group employees. The EBT purchases the Company's shares in
the market or is gifted these by the Company for use in connection with the
Group's share-based payments arrangements. These shares are accounted for as
treasury shares. Once purchased, shares are not sold back into the market
unless required to settle employee tax liabilities in respect of their share
awards.
As at 31 March 2026 the EBT held 6,772,356 ordinary shares in the Company (31
March 2025: 8,211,546) with £nil of shares purchased during the year (six
months ended 31 March 2025: £nil), funded by the Company, and a nominal value
of £nil (six months ended 31 March 2025: £nil). During the period, the EBT
satisfied the vesting of certain share awards utilising 1,292,492 ordinary
shares (six months ended 31 March 2025: 263,336).
The costs of funding and administering the EBT are charged to the profit and
loss account of the Company in the period to which they relate. The market
value of the shares of the Company held by the EBT at 31 March 2026 was £57m
(31 March 2025: £89m).
Other Reserves
All components of other reserves are presented on a consolidated basis on the
face of the consolidated statement of changes in equity.
Translation reserve Cash flow hedging Reserve Cost of hedging reserve Merger Reserve Treasury share Reserve Capital redemption Reserve Total
£m £m £m £m £m £m £m
At 1 October 2025 36 5 (4) 61 (470) 3 (369)
Exchange differences on translating foreign operations and net investment 16 - - - - - 16
hedges
Changes in fair value of foreign currency basis of hedge relationships - - (1) - - - (1)
Vesting of share awards and exercise of share options - - - - 43 - 43
Cancellation of ordinary shares - - - - - 1 1
Cash flow hedges - (1) - - - - (1)
At 31 March 2026 52 4 (5) 61 (427) 4 (311)
Translation reserve Cash flow hedging Reserve Cost of hedging reserve Merger Reserve Treasury share Reserve* Capital redemption Reserve* Total
£m £m £m £m £m £m £m
At 1 October 2024 26 5 (3) 61 (520) 3 (428)
Exchange differences on translating foreign operations and net investment 33 - - - - - 33
hedges
Changes in fair value of foreign currency basis of hedge relationships - - (2) - - - (2)
Amortisation of foreign currency basis of hedge relationships - - 1 - - - 1
Vesting of share awards and exercise of share options - - - - 37 - 37
Cash flow hedges - 2 - - - - 2
At 31 March 2025 59 7 (4) 61 (483) 3 (357)
*The comparatives at 31 March 2025 have been restated as discussed within
'Basis of preparation' (see note 1)
9. Cash flow and net debt
Reconciliation of profit for the year to cash generated from continuing Six months ended Six months ended
operations
31 March
31 March
2026
2025
£m
£m
Profit for the period 196 180
Adjustments for:
Income tax 66 56
Finance income (4) (7)
Finance costs 35 26
Amortisation of intangible assets 30 31
Depreciation of property, plant and equipment 16 15
R&D tax credits (1) (1)
Equity-settled share-based transactions 27 25
Exchange movement - (4)
Changes in working capital:
Increase in trade and other receivables (47) (43)
Decrease in trade and other payables and provisions (31) (47)
Increase in deferred income 103 99
Cash generated from continuing operations 390 330
Reconciliation of net cash flow to movement in net debt Six months ended Six months ended
31 March
31 March
2026
2025
£m
£m
Cash inflows in the year (pre-exchange movements) 126 56
Cash inflows from loans and lease liabilities (423) (290)
Change in net debt resulting from cash flows (297) (234)
Cash and lease liabilities recognised from acquisitions of subsidiaries or 1 (1)
similar transactions
Other non-cash movements (20) (8)
Exchange movement 1 5
Movement in net debt in the year (315) (238)
Net debt at 1 October (1,189) (738)
Net debt at 31 March (1,504) (976)
Analysis of change in net debt At Cash flow £m Non-cash movements £m Exchange movement £m At
1 October 2025 31 March 2026
£m Acquisitions £m £m
Cash, cash equivalents 390 126 1 - 1 518
Loans due after more than one year (1,476) (434) - (1) - (1,911)
Lease liabilities due within one year (17) 11 - (9) - (15)
Lease liabilities after more than one year (86) - - (10) - (96)
(1,579) (423) - (20) - (2,022)
Total (1,189) (297) 1 (20) 1 (1,504)
Analysis of change in net debt At Cash flow £m Non-cash movements £m Exchange movement At
1 October 2024 £m 31 March 2025
£m Acquisitions £m
£m
Cash, cash equivalents 508 56 1 - 9 574
Loans due after more than one year (1,156) (295) (2) (2) (2) (1,457)
Lease liabilities due within one year (15) 5 - (5) - (15)
Lease liabilities after more than one year (75) - - (1) (2) (78)
(1,246) (290) (2) (8) (4) (1,550)
Total (738) (234) (1) (8) 5 (976)
The Group's debt is sourced from sterling and euro denominated bond notes,
with a syndicated Revolving Credit Facility (RCF) of £630m available up to
December 2029.
Year Issued Interest coupon* Maturity At 31 March 2026 At 31 March 2025
£m £m
Bonds:
· GBP 350m bond notes 2021 1.63% 25-Feb-31 350 350
· GBP 400m bond notes 2022 2.88% 8-Feb-34 400 400
· EUR 500m bond notes 2023 3.82% 15-Feb-28 437 419
· GBP 300m bond notes 2025 5.63% 5-Mar-37 300 300
· EUR 500m bond notes 2026 3.82% 25-Feb-33 437 -
· Unamortised issue and discount costs N/A N/A N/A (12) (11)
Unamortised RCF loan costs N/A N/A N/A (1) (1)
Total 1,911 1,457
* This does not include the impact of cross currency interest rate swaps
entered into in relation to the GBP 350m bond notes and EUR 500m bond notes.
At 31 March 2026, £nil of the RCF was drawn down (31 March 2025: £nil).
During the period, the Group issued Euro denominated bond notes for a nominal
amount of EUR500m with a maturity date of 25 February 2033. Net cash proceeds
from the issuance were £434m.
During the prior period, the Group issued sterling denominated bond notes for
a nominal amount of £300m with a maturity date of 5 March 2037. Net cash
proceeds from the issuance were £297m.
10. Financial instruments
The carrying amounts of the following financial assets and liabilities
approximate to their fair values: trade and other payables excluding tax and
social security, trade and other receivables excluding prepayments and accrued
income, lease liabilities, and short-term bank deposits, and cash at bank and
in hand.
The fair value of the sterling and euro denominated bond notes are determined
by reference to quoted market prices and therefore can be considered as a
level 1 fair value as defined within IFRS 13.
The fair value of the cross-currency interest rate swaps held by the Group is
determined using a discounted cash flow valuation technique at market rates
and therefore can be considered as a level 2 fair value as defined within IFRS
13.
The fair value of the swaps held by the Group as at 31 March 2026 was a £24m
net asset, comprised of £24m assets offset by £nil liabilities (31 March
2025: £2m net asset, comprised of £14m assets offset by £12 liabilities).
The Group does not hold any financial liabilities whose fair value would be
considered as a level 3 fair value as defined within IFRS 13.
The respective book and fair values of bond notes and loan notes are included
in the table below.
At 31 March 2026 At 31 March 2025 At 30 September 2025
Book Value Fair Value Book Value Fair Value Book Value Fair Value
£m
£m
£m
£m
£m
£m
Long term-borrowings (excluding lease liabilities) (1,911) (1,765) (1,457) (1,332) (1,476) (1,400)
11. Acquisitions and disposals
Acquisitions made during the current period
On 2 October 2025, the Group acquired a 100% controlling interest in Criterion
Inc. ("Criterion"). Criterion serves mid-sized business and provides a HR and
payroll platform with an existing customer base in the United States.
Summary of acquisition Total
£m
Cash consideration 33
Contingent consideration 16
Acquisition-date fair value of consideration 49
Fair value of identifiable net assets (13)
Goodwill 36
Fair value of identifiable net assets acquired Total
£m
Acquired intangible assets 17
Deferred tax liability (4)
Fair value of identifiable net assets acquired 13
A summary of the acquired intangible assets is set out below:
Valuation Useful economic life
Acquired intangible assets £m (years)
Technology 17 8
Acquired intangible assets 17
Acquired goodwill of £36m comprises the fair value of the acquired control
premium, workforce in place and the expected synergies. The goodwill has been
allocated to the North America CGU where the underlying benefit arising from
the acquisition is expected to be realised. No goodwill is expected to be
deductible for tax purposes. The results of the business are allocated to the
North America operating segment in line with the underlying operations.
The outflow of cash and cash equivalents on the acquisition is as follows:
Total
£m
Cash consideration (33)
Cash and cash equivalents acquired 1
Net cash outflow (32)
The contingent consideration arrangement requires the acquired business to
achieve a target level of annualised recurring revenue. The potential
undiscounted amount of all future payments under the contingent consideration
arrangement is up to £16m. The initial fair value of the contingent
consideration arrangement of £16m was estimated by applying a predicted
growth rate to Criterion's annualised recurring revenue prior to acquisition.
Transaction costs of £3m relating to the acquisition have been included in
selling and administrative expenses, classified as other M&A
activity-related items within recurring adjustments between underlying and
statutory results. These costs relate to advisory, legal and other
professional services. See note 3.
Arrangements have been put in place for retention payments to remunerate
employees of Criterion for future services, classified as other M&A
activity-related items. The total cost of these arrangements will be
recognised in future periods over the retention period, contingent on
employment.
The consolidated income statement includes revenue and profit after tax
relating to Criterion for the period since the acquisition date, of which both
are immaterial. On both a statutory and underlying basis, there would have
been no material change in revenue or profit after tax if Criterion had been
acquired at the start of the financial year and included in the Group's
results for the six month period ended 31 March 2026.
12. Related party transactions
The Group's related parties are its subsidiary undertakings and its key
management personnel, which comprises the Group's Executive Leadership Team
members and the Non-executive Directors. Transactions and outstanding balances
between the parent and its subsidiaries within the Group, and between those
subsidiaries, have been eliminated on consolidation and are not disclosed in
this note.
Key management compensation Six months ended Six months ended
31 March
31 March
2026
2025
£m
£m
Salaries and short-term employee benefits 6 5
Share-based payments 4 4
10 9
Key management personnel are deemed to be members of the Executive Leadership
Team, as defined in the Group's Annual Report and Accounts 2025 and the
Non-executive Directors. Since the signing of the Group's Annual Report and
Accounts 2025, the following changes to the Executive Leadership Team and the
Non-executive Directors have taken place:
· Jonathan Howell has left his role as Chief Financial Officer with
effect from 31 December 2025.
· Jacqui Cartin was appointed as Chief Financial Officer with effect
from 1 January 2026.
· Simon Longbottom was appointed as Chief Growth Officer with effect
from 1 March 2026.
· Walid Abu-Hadba stepped down as Chief Product Officer with effect
from 31 March 2026.
· Krish Vitaldevara was appointed as Chief Product Officer with
effect from 18 May 2026.
· Anand Swaminathan was appointed as Chief Strategy Officer with
effect from 15 June 2026.
13. Events after the balance sheet date
Acquisition of Doyen AI, Corp
On 17 April 2026, the Group acquired 100% equity capital and voting rights of
Doyen AI, Corp ("Doyen"), a company based in the United States, for fixed
initial consideration of £11m.
Due to the timing of the acquisition being after 31 March 2026, the results of
Doyen are not included in our condensed consolidated half-yearly financial
statements for the period ended 31 March 2026 and the acquisition accounting
has not yet been completed. In line with IFRS 3, the purchase price accounting
for the acquisition will be finalised within 12 months of the acquisition
date.
Managing Risk
Our Enterprise Risk Management Framework helps us to manage a wide range of
risks, enabling a consistent approach to identifying, managing, and overseeing
risks to support effective decision making and enhance long-term resilience.
The Board has overall responsibility for risk management and internal control,
including setting the Group's risk appetite and ensuring appropriate
governance arrangements are in place. It promotes a strong risk culture and
monitors the internal and external risk environment to ensure the Group's
Principal Risks remain relevant and aligned with strategic objectives.
We monitor Principal Risks against our risk appetite targets using measures
and tolerances, which we evaluate throughout the year to ensure they align
with our strategic objectives.
By tracking these measures, risk owners are able to identify both current and
emerging risks and take timely mitigating action. The Principal Risks outlined
below reflect our strategic priorities and build on the management actions
reported in the Annual Report and Accounts 2025, demonstrating ongoing
progress in strengthening our risk management capabilities.
Key - Stakeholder groups Risk exposure change
Customers Colleagues Partners Shareholders Society Stable Decreasing Increasing
Principal Risk Risk context Management and mitigation
1. Customer Experience We must maintain a sharp focus on the relationship we have with our customers, · Brand-health surveys to provide an understanding of the customer
offering the products, services and experiences they need for success. perception of the Sage brand and its products, used to inform and enhance our
If we meet or exceed their expectations, customers will stay with Sage, market offerings.
increasing lifetime value and becoming our greatest advocates. By aligning our
If we fail to deliver ongoing value to our customers by focusing on their people, processes and technology with this focus in mind, all Sage colleagues · Our Global Customer Insight & Experience team provides
needs over the lifetime of their customer journey, we will not be able to help our customers be successful and in turn improve financial performance. insights that guide our strategy and support our growth.
achieve sustainable growth through renewal.
· Proactive analysis of customer activity and churn data, to
improve customer experience.
Trend · Customer Advisory Boards, call listening, and closed-loop
feedback to constantly gather information on customer needs.
· Continuous Net Promoter Score (NPS) surveying to identify
customer challenges and respond in a timely manner to emerging trends.
Stakeholder alignment
2. Execution of product strategy Sage needs to adapt continuously its approach to new technologies · Robust product organisation and governance model, supported by
and challenges. This requires a clear direction and strategic guardrails to strategic interlock with our Growth and Go-To-Market teams, aligning the way
support our go-to-market offerings. By expanding our portfolio of cloud-based we deliver product to meet the needs of SMBs.
solutions and AI-powered services and partnering with the right
If we fail to deliver the capabilities and experiences outlined in our product businesses, we can enhance our products and drive success. · Migration Framework in key countries to support our customers as
strategy, we will not meet the needs of our customers or commercial goals.
they move to the cloud.
· Continued expansion of Sage Intacct outside North America and
for additional product verticals.
Trend
· Enhancing accessibility of Sage cloud products to meet Web
Content Accessibility Guidelines.
· Focus on accountants through a tailored Sage for Accountants
Stakeholder alignment proposition.
· Ongoing deployment of Sage Copilot AI-powered assistant into
existing Sage products, including Sage Intacct and integration into Sage Sales
Management.
· Continued scaling of agentic AI with multiple agents now in
General Availability (GA) across our core products for real world use cases
including the Sage Making Tax Digital (MTD) Agent for Income Tax.
3. Developing and exploiting new business models Sage must be able to identify, design and deploy new innovations to create new · Business unit focused on the Sage Platform to realise the
or enhance existing products and capabilities. Unlocking the ability to do opportunities associated with automation of accounting processes (like
this at pace will enable access to new markets and/or customers early, driving Accounts Payable and Accounts Receivable).
new revenue and opportunities for the business.
Sage is unable to develop, commercialise, and scale new business models to
· Sage Platform integrating Sage's products with AI and digital
diversify from traditional Software as a Service (SaaS), especially services to enhance workflows, improve customer experiences, and accelerate
consumption-based services and those that leverage data. innovation.
· Enhanced, consistent digital experience for all Sage Business
Cloud users through the Sage Experience Platform.
Trend
· A team focused on the product strategy and assessing new business
opportunities in emerging ecosystems, to identify those that may align with
our vision.
Stakeholder alignment · Sage is partnering with innovative banks and fintechs through
Sage Embedded Services, including strategic collaborations with Barclays,
HSBC, SumUp, Monzo and Tide.
· Managed growth of the API estate, including enhanced product
development that enables access by third-party API developers and optimisation
of API integrations to improve efficiency.
4. Route to market We have a blend of channels to communicate with our current and potential · Our Global Growth team drives a consistent approach to taking
customers and ensure our customers receive the right information, on the right Sage's products to market.
products and services, at the right time. Our sales channels include selling
directly to customers through digital and telephone channels, via our · Deployment of an enhanced reporting tool to track go-to-market
If we fail to deliver a globally consistent blend of route to market channels accountant network and through partners, and we will adapt our approach to metrics using standard definitions across geographies.
in each market, Sage will miss the opportunity to efficiently deliver the target customers in our key verticals. We use these channels to maximise our
right capabilities and experiences to our current and future customers. marketing and customer engagement activities. This can shorten our sales cycle · Continued acceleration of strategic partnerships to strengthen
and ensure we improve customer retention, maximising our market opportunity. the Sage Platform.
· Three strategic pillars focused on delivery to the market to
Trend align priorities across Sage.
· Centre of Excellence to support our indirect sales and
third-party approach.
Stakeholder alignment · Sage Discovery Centre at our North American headquarters in
Atlanta reaffirms our commitment to helping entrepreneurs, communities, and
customers to thrive in the age of AI.
5. People and performance As we evolve our priorities, the capacity, knowledge, and leadership skills we · Focus on hiring channels to ensure we are attractive in the
need will continue to change. Sage will not only need to attract the right market through our enhanced employee value proposition and enhanced presence
talent to navigate change but will also need to provide an environment where through social media such as Glassdoor, Comparably, X, LinkedIn, and Facebook.
colleagues can develop to meet these new expectations.
If we fail to ensure we have engaged colleagues with the critical skills,
· Reward mechanisms to incentivise and encourage the right
capabilities, and capacity we need to deliver on our strategy, we will not behaviour, with a focus on ensuring fair and equitable pay in all markets.
be successful.
By empowering colleagues and leaders to make decisions, be innovative, and be · Series of Leadership Academies and talent programmes to support
bold in meeting our commitments, Sage will be able to create an attractive the development of internal talent.
working environment. By addressing what causes colleague voluntary attrition,
Trend and embracing the Values of successful technology companies, Sage can increase · OKR Framework defines measurable goals and tracks outcomes of
colleague engagement and create aligned high-performing teams. colleague success.
· Enhancing the skills and talent ecosystem to identify
capabilities and skills gaps, talent pipeline, development, and career
pathways and mentoring.
Stakeholder alignment · Strategic Workforce Planning Framework across the business.
6. Culture The development of a shared behavioural competency that encourages colleagues · Integration of values and behaviours into all colleague
to always do the right thing, put customers at the heart of business and priorities including talent attraction, selection, and onboarding as well as
improve innovation is critical to Sage's success. Devolution of decision OKRs.
making, and the acceptance of accountability for those decisions, will need to
If we do not define, shape and proactively manage our culture in line with our go hand in hand as the organisation develops and sustains its shared values · All colleagues encouraged to take up to five paid Sage Foundation
brand values, we will be challenged to deliver our strategic priorities and and Behaviours, and fosters a culture that provides customers with a rich days each year, to support charities and provide philanthropic support to the
purpose; we will risk disengaging colleagues, increasing attrition, and digital environment. community.
impacting our ability to attract and retain diverse talent.
· DEI strategy focused on building diverse teams, an equitable
culture, and fostering inclusive leadership. This is supported by strategic
We will also need to create a culture of empowered leaders that supports the plans to track progress, ensuring we meet our commitments, including
Trend development of ideas, and that provides colleagues with a safe environment no tolerance of discrimination and equal chances for everyone.
allowing for honest disclosures and discussions. A trusting and empowered
environment can help sustain innovation, enhance customer success, and · Code of Conduct training for all colleagues (including
encourage the engagement that results in increased market share. anti-bribery and corruption requirements) delivered as snippets, so we can
signpost relevant training at colleagues' point of need.
Stakeholder alignment
· Core e-learning modules, with regular refresher training.
· Whistleblowing and incident-reporting mechanisms so issues can be
formally reported and investigated.
· Scaling Sage culture initiatives, including target culture
measurement framework, leadership assessments, and alignment of people
processes.
7. Cyber security Stakeholder trust is central to Sage's growth and cyber security is an · Multi-year cyber security programmes in IT and Product to ensure
essential component of that. Failure to safeguard customer and colleague data we are continuously improving, and reduce cyber risk across technology,
and ensure the availability of our products and critical services could have business processes, and culture.
severe reputational, legal, and financial consequences. This means we must be
If we fail to ensure an appropriate standard of cyber security across the confident our cyber security controls, and the culture and awareness of our · Accountability within both IT and Product for internal and
business, we will not be able to combat cyber threats and will fail to meet colleagues are sufficient to mitigate the dynamic and evolving cyber risk external data being processed by Sage.
our regulatory obligations and lose the trust of our stakeholders. environment, while also supporting the agility and innovation of the business.
· Formal certification schemes maintained across the business
include internal and external validation of compliance.
Trend · All colleagues are required to undertake regular awareness
training for cyber security and information management.
· A Cyber Security Risk Management Methodology and standards are
deployed to provide clear requirements and objective risk information on our
Stakeholder alignment assets and systems.
· Sage Security Champions help amplify and embed a secure culture.
· An in-house Cyber Defence Operations team to proactively detect,
respond to, and prevent cyber threats 24/7.
· Continued investment in strengthening business resilience and
elevating crisis management capabilities.
8. Data and AI governance Data is central to the Sage strategy and our ambition to deliver sustainable · Our AI and Data Ethics Principles ensure the responsible use of
growth by leveraging AI and expanding the Sage Platform. Our strategy is customer data in support of our strategy, with an ethics checklist in place to
underpinned by our ability to innovate customer propositions, improve insight assess adherence to these principles.
and decision making, and create new business models and ecosystems. The
If Sage fails to collect, process, store, and use data in a way that is successful ability to use data will accelerate our growth and will be key · Governance policies, processes and tooling to enhance and manage
compliant with regulation, internal policy, and our ethical principles, we in helping customers transform how they run and build their businesses, data quality, trust, and privacy.
will lose the trust of our stakeholders. and we must do this in a way that is compliant with laws and regulations,
and in line with our values. · The implementation of our AI Governance Framework, supported by
an AI Inventory and AI assurance process, to ensure that the development and
use of AI align with our risk appetite and meet legal, regulatory, ethical,
If we fail to recognise the value of our data and deliver effective data and security requirements.
foundations, we will be unable to realise the full potential of our data
assets. · Data protection policies, processes, and controls governing the
processing and protection of personal data in accordance with applicable data
protection laws and regulations.
Trend · Our Sustainability, AI, and Data Ethics Committee, which includes
members from the Executive Leadership Team and Sage Board, governs activities
relating to data and AI ethics.
· We require all colleagues to undertake awareness training for
Stakeholder alignment data protection, with a focus on all relevant data privacy laws and
regulations.
· Our Trust and Security Hub supports our customers and their
understanding of cyber security, data privacy, and AI and data ethics in Sage
products.
9. Readiness to scale As Sage continues to build sustainable growth, we continue to focus on scaling · Cost optimisation of cloud native products and continued
our platform services environment in a rigorous, agile, and speedy manner to migration of legacy footprint to public cloud.
ensure we provide a consistent and healthy cloud platform and associated
network. We must provide the right infrastructure and operations for all our · Accountability across product owners, underpinned by ongoing risk
As Sage's ambition grows, if it fails to ensure its cloud products can build customer products, and a hosting platform together with the governance to assessments and continuous improvement projects.
and operate at an industrial, global scale it will erode its competitive ensure optimal service availability, performance, security protection, and
advantage. restoration (if required). · Formal onboarding process through ongoing portfolio management.
· Incident and problem management change processes adhered to for
all products and services, with new acquisitions onboarded in less than 90
The hosting of its products must achieve economies of scale, aligned to days.
ambition, in parallel with the ability to accelerate to market with quality.
Both must be achieved with reduced environmental impact and zero customer · Service-level objectives including uptime, responsiveness, and
impact. mean time to repair.
· Defined real-time demand-management processes and controls, and
disaster-recovery capability and operational-resilience models.
If not addressed, Sage's cloud products would be less resilient and less able
to respond to its customer expectations. · A governance framework to optimise operational cost base in line
with key metrics.
· All new acquisitions required to adopt Sage cloud operation
Trend standards.
Stakeholder alignment
10. Environmental, social, and governance We invest in education, technology, and the environment to give individuals, · Sage's Sustainability and Society strategy, informed by a
SMBs, and our planet the opportunity to thrive. rigorous double materiality assessment, focusing on three pillars: Protect the
Planet, Tech for Good, and Human by Design.
If Sage is unable to respond to evolving stakeholder expectations and ESG
· Ensuring adequate executive oversight through
regulation, Sage could face fines and potential legal action, damaging Sage's Internally, it is essential that Sage understands the potential impact the Sustainability, AI, and Data Ethics Committee.
reputation and brand, and diminishing stakeholder trust and credibility. of climate change on its strategy and operations and considers appropriate
mitigations. · Enabling accountability through integration of ESG measures
within long-term incentive plans.
In addition, if Sage fails to respond to the range of opportunities and
· An integrated framework to manage ESG-related risk and physical
risks associated with Sustainability and Sage Foundation, it would be less Societal and governance-related issues are integral to Sage's purpose and and transitional climate risks, as detailed by TCFD.
resilient, less competitive, and could put its licence to operate at risk. values and to the achievement of Sage's strategy.
· External limited assurance obtained over selected metrics to
ensure accuracy of sustainability data and claims.
Trend
Stakeholder alignment
1 (#_ednref1) See Appendix 1 for full definitions and guidance on the usage
of the Alternative Performance Measures.
2 (#_ednref2) To aid comparability, underlying and organic measures for the
prior period have been retranslated at current period exchange rates and
exclude recurring and non-recurring items, while organic measures also adjust
for the impact of acquisitions and disposals. A reconciliation of underlying
and organic measures to statutory measures is set out on pages 6 and 7.
Underlying and organic measures are defined in Appendix 1.
All references to revenue, profit and margin are on an underlying basis unless
otherwise stated.
3 (#_ednref3) Criterion was acquired in October 2025, Akao in January 2026,
and Doyen AI in April 2026.
4 (#_ednref4) United Kingdom, Ireland, Africa and APAC.
5 (#_ednref5) Cloud native solutions run in a cloud environment enabling
access to up-to-date functionality at any time, from any location, via the
internet.
6 (#_ednref6) Cloud connected solutions are deployed on premise with
significant functionality delivered through the cloud.
7 (#_ednref7) Retranslated at current year exchange rates.
8 (#_ednref8) Underlying and organic revenue and profit measures are defined
in Appendix 1.
9 (#_ednref9) Recurring and non-recurring items are defined in Appendix 1
and detailed in note 3 of the financial statements.
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