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(Alliance News) - Sage Group PLC on Tuesday reported a strong performance for the third quarter of its financial year, citing sales of Business Cloud solutions, as it expects annual revenue growth to top prior guidance.
The FTSE-100 Newcastle, England-based accounting software firm said that for the nine months that ended on June 30, total group revenue increased by 6.0% to GBP1.41 billion from GBP1.33 billion a year earlier.
Recurring revenue increased by 9.0% to GBP1.33 billion compared from GBP1.22 billion a year earlier, driven by a 20% rise in Sage Business Cloud revenue to GBP886 million from GBP736 million.
Sage said software subscription revenue grew by 14% to GBP1.05 billion from GBP922 million, which resulted in a subscription penetration of 75%, compared to 69% a year earlier.
Chief Executive Officer Jonathan Howell said: "Sage has performed strongly in the first nine months of the year, with momentum continuing to build, as more businesses choose Sage Business Cloud solutions to support their digital transformation. While we are mindful of broader macroeconomic trends, I am confident that continued delivery against our strategic priorities will ensure Sage remains well-positioned for the future."
On a regional basis, Sage said North America saw recurring revenue growth of 13% to GBP557 million from GBP493 million the year earlier, "with a strong performance from Sage Intacct alongside growth in cloud connected products," it added. In Northern Europe, recurring revenue grew by 7.0% to GBP311 million from GBP291 million.
And lastly, in International, recurring revenue rose by 5.0% to GBP462 million from GBP439 million a year earlier, with growth across the Sage Business Cloud portfolio.
Looking ahead, Sage said it expects organic recurring revenue growth for financial year that ended September 30 to be towards the top end of its guidance range of 8% to 9%.
Shares were down 0.3% at 705.00 pence each on Tuesday morning in London, having initially risen to 722.60p.
By Xindi Wei; xindiwei@alliancenews.com
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