Sage reports growth in all regions as cloud business soars

Software firm Sage has reported revenue growth in all its regions as its cloud business continues to attract demand.

Software firm Sage has reported revenue growth in all its regions as its cloud business continues to attract demand.

In an update to markets on Thursday, the FTSE 100 company said its total revenue increased 10 per cent in its first quarter to £573m, up from £522m in the same period last year.

This was mostly driven by Sage’s business cloud product, which grew 18 per cent to generate revenue of £454m.

Across its regions, revenue grew most in North America, rising 13 per cent, although the UK, Ireland and Africa saw an eight per cent uptick, with European revenue also growing seven per cent.

Its software subscription revenue grew 14 per cent to £466m, up from £409m in its first quarter of last year.

Jefferies analysts have rated Sage a ‘buy’ as it continues to expect around 10 per cent organic total revenue growth for the full financial year ahead.

“The statement notes this is supported by AI-led services and we expect the AI theme to be in focus ahead of a Sage Intacct event in Feb where more AI services are likely to be launched,” Jefferies said in note to investors.

But shares dropped 2.3 per cent on Thursday morning.

Sage, which helps small and mid-sized businesses with their technology, is currently focused on scaling.

“Small and mid-sized businesses are continuing to digitalise despite the ongoing macroeconomic uncertainty,” said Sage chief financial officer, Jonathan Howell, “and through our trusted cloud solutions and innovative, AI-powered services we are well positioned to support them.”

Late last year, the Newcastle-headquartered company announced a share buyback programme of “up to £350m”, sending shares up.