Plans channel growth with cloud products and regions
Sage says its “cloud first” strategy for its accountancy software is paying off, with SME offering Sage One seeing annual recurring revenue (ARR) increase by 88% to £22m for the half year. In addition, large enterprise cloud product Sage X3 saw sales increased by 17%.
Sage said it would continue to roll out cloud accounting products in its major geographies, with 52 product launches planned for the full year, as it continues to expand its channel. For the six months ending 31 March, Sage's organic revenues (excluding acquisitions and the North American business it is holding onto for sale) were up 6.4% to £838m. Organic operating profits were up 5% to £211m.
Stephen Kelly, Sage chief executive officer, said: “These are positive results in line with market expectations and there are clear signs our strategy is working, with seven of our nine largest geographies, that collectively generate 95% of our revenues, now delivering growth in excess of our revenue guidance.
“Our cloud-enabled products are growing strongly and we have made progress in our new customer acquisition strategy, driving momentum in Q2 that will continue throughout H2 and as we exit FY17.”
John O'Brien, an analyst for TechMarketView, said: “When looking under the covers this shows a business carefully managing its transition to the cloud - subscriptions were up 31%, and recurring revenues up 10%.”
Last week, Sage bought US-based analytics and benchmarking player Compass to bolster its cloud offering to customer. Compass supports e-commerce businesses with actionable insights to help them grow and improve their performance.