Sage Group plc’s earnings for the six months ended March 31, 2025, indicate continued positive momentum, building on a strong first quarter. Underlying total revenue for the half year increased by 9%, following 10% revenue growth in the first quarter. This growth translated into a 16% rise in underlying operating profit, with the margin reaching 23.2%. Underlying basic earnings per share also saw a notable increase of 17%. The company highlighted the strength of its subscription-based model, with recurring revenue growing by 10% for the half year (matching Q1 growth ) and accounting for 97% of total revenue. Software subscription revenue specifically grew by 12%, contributing to an 83% subscription penetration rate. Growth in Sage Business Cloud revenue was 13% for the half year (matching Q1 ), with cloud-native revenue increasing by 22% (matching Q1 ).
Regionally, North America delivered strong performance with underlying total revenue increasing by 11% for the half year (matching Q1 growth ) and representing 46% of Sage’s total revenue. Recurring revenue growth in North America was also strong at 11%. Key products like Sage Intacct in the US continued to perform well, with revenue of approximately $283 million for H1 2025 (45% of US revenues).
Strategic updates included the ongoing rollout of Sage Copilot, which is available in the UK, US, and Europe, with early adopter feedback being positive. Plans are in place to incorporate Sage Copilot into premium product tiers in the UK, with an anticipated average monthly installment increase of around 25% for some customers. The company also provided specifics on headcount trends; headcount fell by about 5% in FY2024, down to 11,000, a reduction attributed to careful hiring and refinement rather than large-scale redundancies, following two years of flat headcount. The cost of employment represents a significant portion of their total cost base, around 70%. Looking ahead, headcount is expected to increase in FY2025, but at a significantly slower rate than total revenue growth. Management noted a stable macroeconomic environment and no material change in the competitive landscape during the first quarter.
