Sage grows revenues and profits on cloud products as more customers adopt AI

The six months performance has led to a modest upgrade in full year outlook

Accounting and payroll software giant Sage has posted double-digit revenue and profit growth in what its CEO has labelled an excellent first half.

The Tyneside-based FTSE100 firm indicated that cloud products had driven much of the growth, with customers also making increased use of its AI systems. In unaudited results for the six months to the end of March, Sage reported 10% growth in statutory revenue to £1.36bn and a 15% leap in statutory operating profit to £293m, while annualised recurring revenue – a key measure for the group – grew 11% to £2.72bn and underlying operating profit was up 14% to £326m.

All of Sage’s markets delivered growth, led by North America with 14% revenue growth, where customers in the not-for-profit, construction, real estate and financial services sectors contributed and more adopted AI-powered functionality. Meanwhile in the UK, Ireland and Africa reported 10% growth and revenue was up 7% in Europe.

The performance prompted a modest rise in outlook with full-year total organic revenue growth expected to be above 9%.

Bosses said they had made progress in embedding AI into customer work with the launch of new agents and the expansion of its flagship digital assistant, Copilot. That has meant integrating Copilot into existing products such as Sage Intacct and Sage Sales Management. The firm has also been making more use of AI in its own work, with benefits across its engineering, customer support, sales and marketing functions.

Steve Hare, chief executive officer, said: “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.”