Sage Group enjoys ‘strong start’ to 2019 as Q1 revenues reach £465m
The Sage Group plc has increased quarterly revenues 7.6% as it continues to focus on a subscription-based business model.
The Newcastle-headquartered software giant recorded a group organic revenue of £465m for the three months to December 31 2018.
Sage’s Q1 recurring revenue came in at £387m, a year-on-year increase of 10.5%.
The uptick, reported this morning (January 17), was underpinned by software subscription growth of 27.7% to £237m.
Sales from software and software-related services fell 5.8% to £65m, but the dip reflects a managed decline in licences as Sage Group transitions to subscription.
Revenues from products in, or due to be migrated to, Sage Business Cloud grew 9.3% to £380m. Products with no current path to Sage Business Cloud generated a slight increase of 0.6%, at £85m.
The North American market delivered revenue growth of 10.4% to £154m, while the UK and Ireland showed signs of recovery with 5.9% revenue growth generating £96m.
Earlier this week, Sage announced an agreement to sell Sage Payroll Solutions, its US-based payroll outsourcing business, for £78m.
Steve Hare, the firm’s new chief executive officer, said of the quarterly results: “We have been encouraged by the strong start to FY19, reflecting the renewed focus on high-quality subscription and recurring revenue as we continue the journey to becoming a great SaaS business.
“Looking ahead we reiterate our full year guidance for FY19 as outlined at the FY18 results announcement.”