Sage Group’s Strategic Focus Fuels Sustainable Growth

The Sage Group plc (LON: SGE) delivered a robust performance for the year ended September 30, 2025, showcasing the effectiveness of its strategic focus on sustainable growth.

The financial results revealed strong broad-based revenue growth and significant margin expansion.

Underlying total revenue increased by 10% to £2,513 million, surpassing last year's £2,290 million. This growth reflects Sage's high-quality, subscription-based recurring revenue model.

Underlying operating profit surged by 17% to £600 million, up from £513 million in the prior year. This drove a substantial 150 basis point margin increase to 23.9%, supported by disciplined cost management. Underlying basic earnings per share (EPS) also saw an 18% increase, reaching 43.2p.

The company's strong cash performance is reflected in an underlying cash conversion rate of 110%. Sage's balance sheet remains robust, holding £1.0 billion of cash and available liquidity, with a net debt to underlying EBITDA ratio of 1.7x.

Sage is increasing its focus on shareholder returns, announcing a proposed final dividend of 14.4p, bringing the full-year dividend to 21.85p, a 7% increase. A share buyback program of up to £300 million was also announced, underscoring the Board's confidence in Sage's future prospects.

Driver Breakdown:

• Annualised Recurring Revenue (ARR): Increased by 11% to £2,574 million, showing growth across all regions, balanced between new and existing customers.
• Sage Business Cloud: Revenue grew by 13% to £2,083 million, including cloud-native revenue growth of 23%.
• Subscription Penetration: Increased to 83%, driven by subscription revenue growth of 12%.

CEO Steve Hare commented, “Sage delivered another good performance in FY25. Strong, broad-based revenue growth and significant margin expansion reflect our focus on strategic execution, our resilient business model, and continuing investment in our products, our platform and our people.”

Hare emphasized the company's excitement about technological change, stating that AI is opening up new possibilities for businesses and creating a significant opportunity for Sage. He highlighted Sage Copilot and AI agents as examples of how the company is delivering intelligent solutions.

Sage's outlook for FY26 is positive, expecting organic total revenue growth to be 9% or above. Operating margins are expected to continue trending upwards.