Sage group revenues improve in Q1 as recurring revenues grow £31m

Software firm Sage said on Wednesday that total revenues had grown in the three months ended 31 December thanks to a £31.0m jump in recurring revenues.

Recurring revenue grew 8% to £429.0m, underpinned by a 21% rise in Sage Business Cloud revenue to £280.0m and continued strength in new customer acquisition. Software subscription revenues grew 13% to £336.0m, increasing subscription penetration from 68% to 73%.

Regionally, North America achieved growth in recurring revenue of 11% to £174.0m, while in Northern Europe, recurring revenues increased 7% to £102.0m. Rest of world recurring revenues improved 5% to £152.0m, with growth across its Sage Business Cloud unit supported by further progress in migrations.

Total group revenues increased 5% to £458.0m as improved recurring revenues were somewhat offset by a 22% drop in SSRS and processing revenues to £29.0m.

Chief financial officer Jonathan Howell said: "Sage has made a strong start to the year, accelerating growth in line with expectations. Sage Business Cloud has performed particularly well, driven by continued growth in both cloud-native and cloud-connected solutions, as we execute on our strategy to be the trusted network for small and mid-sized businesses.

"Accordingly, we reiterate our guidance for the full year, as set out in our FY21 results announcement."