Sage has reported a 10% rise in statutory revenue and a 15% jump in statutory operating profit for the first half of its financial year, driven by strong demand for its cloud products and the accelerating adoption of artificial intelligence by customers.
In unaudited results for the six months to the end of March, the Tyneside-based FTSE 100 company posted statutory revenue of £1.36bn and statutory operating profit of £293m. Annualised recurring revenue (ARR), a key metric for the group, grew 11% to £2.72bn, while underlying operating profit climbed 14% to £326m. The performance has prompted a modest upgrade in the full-year outlook, with total organic revenue growth now expected to exceed 9% and operating margins projected to trend upwards in the remainder of the financial year and beyond.
Cloud and regional growth
Cloud products were a primary engine of growth. Revenue from Sage Business Cloud rose 15% to £574m, with cloud-native revenue surging 24% to £253m. In the first quarter of the financial year, total revenue reached £674m, up 10%, with recurring revenue of £655m and software subscription revenue of £568m, giving a subscription penetration rate of 84%.
All of Sage’s regions delivered growth. North America led with a 14% revenue increase, driven by customers in the not-for-profit, construction, real estate and financial services sectors that adopted AI-powered functionality. Key products included Sage Intacct, Sage 200 and Sage 50. The UK, Ireland and Africa region reported 10% growth, supported by the rapid scaling of Sage Intacct and continued strength in small business solutions such as Sage Accounting and Sage 50. Revenue in Europe rose 7%, with good contributions from accounting, HR and payroll solutions.
AI at the core of the strategy
Sage is investing heavily in integrating artificial intelligence across its product suite, positioning AI as a key differentiator for future expansion. The company has launched new intelligent agents and expanded its flagship digital assistant, Sage Copilot, embedding it into existing products including Sage Intacct and Sage Sales Management. The aim is to provide small and mid-sized businesses with practical, accessible AI that enhances productivity and decision-making without compromising control or accountability.
Internally, Sage is using AI across its own operations, reaping benefits in engineering, customer support, sales and marketing. At its Sage Future event in San Francisco, the company unveiled new AI development tools: Sage Agent Builder and AI Gateway, designed to make it easier for partners to build and scale solutions on its platform. It also launched Sage HCM, a new human capital management solution that connects HR, payroll and finance for mid-market organisations.
Chief executive Steve Hare has stressed that while Sage embraces AI, human connection and service remain vital for its small and mid-sized business customers. The company is increasingly targeting mid-market companies with 50 to 500 employees, offering advanced financial controls and analytics, and is enhancing its developer platform with new AI tools and flexible commercial models to foster innovation within its ecosystem.
Sage operates in a competitive landscape that includes major technology firms such as Microsoft, SAP, Oracle, Epicor and Infor. For specific products like Sage Intacct, alternatives include QuickBooks Online, Oracle NetSuite and Microsoft Dynamics 365 Business Central. The company has also been active in share buybacks, with a £300m programme announced in March 2026 reportedly well underway.
CEO comment
Steve Hare, chief executive officer, said: “Sage delivered an excellent first-half performance, with double-digit revenue growth, further margin expansion and strong cash flows. This reflects the focused execution of our strategy and a deep understanding of our customers’ needs.
“Small and mid-sized businesses trust Sage to run their mission-critical finance, payroll and HR workflows, where accuracy and compliance are non-negotiable. Our intelligent agents are already helping finance teams accelerate cash flows, close the books faster, plan more effectively and turn insight into action, without compromising control or accountability.
“By embedding AI directly into our customers’ day-to-day work, we are making our solutions more valuable, reinforcing our competitive advantages, and driving efficient, sustainable growth. With our trusted scalable platform, growing agent portfolio and strong momentum supported by investment across the business, I am confident in Sage’s ability to deliver growth and long term value for all stakeholders.”
