Half year 2025 results

15 May 2025

Download the full press release (PDF)

Continued strong growth driven by consistent strategic execution

Steve Hare, Chief Executive Officer, commented :

“Sage delivered strong results in the first half of the year, extending our track record of broad-based growth and significant margin expansion. Our performance reflects the strength of our accounting, HR and payroll solutions, underpinned by ongoing investment in our network platform.”

“We continue to focus on innovation, transforming customer workflows through AI-powered services. Just one year after launch, Sage Copilot is delivering enhanced productivity and insights to thousands of customers across our portfolio, whilst paving the way for the next generation of AI accounting, powered by agentic workflows.

“Amid a more volatile and uncertain macroeconomic environment, Sage remains resilient and diversified.  Small and mid-sized businesses continue to adopt digital technologies to become more productive and efficient. I am confident that our proven strategy will deliver further long-term value to all our stakeholders.”

_{Please note that tables may not cast and change percentages may not calculate precisely due to rounding.}

Financial highlights

• Underlying total revenue increased by 9 % to £1,242m, reflecting our high-quality subscription-based recurring revenue model.  
• Underlying operating profit increased by 16 % to £288m, driving a strong margin increase of 140 basis points to 23.2 %, with disciplined cost management supporting ongoing investment.
• Underlying EBITDA increased by 14 % to £334m, with margin increasing by 110 basis points to 26.9 %.
• Statutory operating profit increased by 18 % to £255m reflecting growth in underlying operating profit together with lower acquisition-related expenses.
• Underlying basic EPS increased by 17 % to 20.8p, whilst statutory basic EPS increased by 19 % to 18.2p.
• Strong cash performance, with underlying cash conversion of 115 %, reflecting continued growth in subscription revenue and good working capital management.
• Robust balance sheet, with £1.2bn of cash and available liquidity, and net debt to underlying EBITDA of 1.5x.

Shareholder returns

• Interim dividend up 7 % to 7.45p, in line with our progressive policy.
• Share buyback programme extended by up to £200m, as announced separately today, reflecting Sage’s strong cash generation, robust financial position, and the Board’s confidence in Sage’s future prospects.

Strategic and operational highlights

• Underlying annualised recurring revenue (ARR) up 11 % to £2,454m, with growth across all regions balanced between new and existing customers. 
• Renewal rate by value of 101 % (H1 24 : 102 %), reflecting strong retention rates and a good level of sales to existing customers.
• Sage Business Cloud revenue increased by 13 % to £1,020m (H1 24 : £901m), including cloud native revenue growth of 22 % to £425m (H1 24 : £349m).
• Subscription penetration increased to 83 % (H1 24 : 81 %) driven by growth in subscription revenue of 12 % to £1,031m (H1 24 : £923m).
• Strong strategic progress as we continue to enhance and expand our global cloud solutions and deepen our vertical-specific capabilities, complemented by the recent acquisition of ForceManager.
• Rapidly scaling Sage Copilot, our generative AI-powered assistant ; now available with key products in the UK, US and Europe, delivering enhanced productivity and insights to customers.

Outlook

Against the background of a more volatile and uncertain macroeconomic environment, we currently continue to expect organic total revenue growth in FY25 to be 9 % or above. Operating margins are expected to trend upwards in FY25 and beyond, as we focus on efficiently scaling the Group.

About Sage

Sage exists to knock down barriers so everyone can thrive, starting with the millions of small and mid-sized businesses (SMBs) served by us, our partners and accountants. Customers trust our finance, HR and payroll software to make work and money flow. By digitising business processes and relationships with customers, suppliers, employees, banks and governments, our digital network connects SMBs, removing friction and delivering insights. Knocking down barriers also means we use our time, technology and experience to tackle digital inequality, economic inequality and the climate crisis.

A presentation for investors and analysts will be held at 8.30am UK time. The webcast can be accessed via sage.com/investors or directly via the following link : https://edge.media-server.com/mmc/p/p333t4ss. To join the conference call, please register via https://register-conf.media-server.com/register/BI0dc9341f066f446d96b7c1637dc01236.

¹See Appendix 1 for full definitions and guidance on the usage of the Alternative Performance Measures.

² To aid comparability, underlying and organic measures for the prior period have been retranslated at current period exchange rates and exclude recurring and non-recurring items, while organic measures also adjust for the impact of acquisitions and disposals. A reconciliation of underlying and organic measures to statutory measures is set out on pages 6 and 7. Underlying and organic measures are defined in Appendix 1. 

All references to revenue, profit and margin are on an underlying basis unless otherwise stated.