# Sage Group recurring revenue increased by 12% to £517m - Link: https://www.directorstalkinterviews.com/sage-group-recurring-revenue-increased-by-12-to-517m/4121098590 - Published: 2023-01-19T08:18:15+00:00 - Author: Amilia Stone **[Sage Group plc](https://www.directorstalkinterviews.com/ftse-company/sage-group/sge.l)**( LON:SGE), the leader in accounting, financial, HR and payroll technology for small and mid-sized businesses, has issued a trading update for the three months ended 31 December 2022^([1]). > **Jonathan Howell, Chief Financial Officer, commented:** > _“Sage has made a strong start to the year, in line with our expectations, as > Sage Business Cloud solutions help more customers improve their productivity and > resilience. While we are mindful of the current macroeconomic environment, we > remain confident in our strategy for delivering efficient growth and we reiterate > our guidance for the full year, as set out in our FY22 results announcement.”_ | **Underlying Revenue Performance^([2])** | **Q1 23** | **Q1 22** | **% Growth** | **Organic % Growth | | |   |   |   |   | | Revenue by Category |   |   |   |   | | Recurring Revenue | £517m | £460m | _+12%_ | _+12%_ | | Other Revenue (SSRS^([3])) | £23m | £33m | _-29%_ | _-27%_ | | Total Revenue | £540m | £493m | _+10%_ | _+9%_ | |   | |   | _ _ | _ _ | | Recurring Revenue by Region |   |   | _ _ | _ _ | | North America | £235m | £198m | _+18%_ | _+16%_ | | UKIA | £151m | £135m | _+12%_ | _+10%_ | | Europe | £131m | £127m | _+3%_ | _+6%_ | |   |   |   | _ _ | _ _ | | Recurring Revenue by Portfolio |   |   | _ _ | _ _ | | Future Sage Business Cloud Opportunity | £479m | £422m | _+14%_ | _+13%_ | | _       of which Sage Business Cloud_ | _£390m_ | _£298m_ | _+31%_ | _+28%_ | | Non-Sage Business Cloud | £38m | £38m | _0%_ | _+1%_ | Recurring revenue increased by 12% to £517m, underpinned by a 31% rise in Sage Business Cloud revenue to £390m. Software subscription revenue grew by 18% to £422m (Q1 22: £357m), resulting in subscription penetration of 78% (Q1 22: 73%). Regionally, in North America recurring revenue increased by 18% to £235m, with a strong performance from Sage Intacct alongside growth in cloud connected products. In the UKIA region, recurring revenue grew by 12% to £151m, driven by continued success in cloud native solutions including Sage Intacct and Sage Accounting, together with growth in Sage 50 cloud connected. In Europe, recurring revenue increased by 3% to £131m, with growth across the Sage Business Cloud portfolio partly offset by the disposal of the Swiss business in FY22. Organic recurring revenue growth, which excludes the disposal impact, was 6%. In terms of recurring revenue by portfolio, the Future Sage Business Cloud Opportunity( products within, or to be migrated to, Sage Business Cloud) grew by 14% to £479m. This was driven by 45% growth in cloud native recurring revenue (35% on an organic basis) to £141m (Q1 22: £98m) primarily through new customer acquisition, as well as further growth in cloud connected supported by migrations. Sage Business Cloud penetration increased to 81% (Q1 22: 71%), enabling more customers to connect to Sage’s digital network. Other revenue (SSRS) decreased by 29% to £23m, in line with our strategy to transition away from licence sales and professional services implementations. Total revenue increased by 10% to £540m. On an organic basis (excluding the impact of M&A), total revenue growth was 9%. **Foreign exchange** Sterling has weakened against the US Dollar and the Euro, leading to an exchange rate tailwind. **Analyst and investor conference call** Sage Group CFO Jonathan Howell will host a webcast and conference call today at 8.30am UK time. The webcast can be accessed via the following link: [https://edge.media-server.com/mmc/p/vjzkrh3f](https://edge.media-server.com/mmc/p/vjzkrh3f). To join the conference call, please register via: [https://register.vevent.com/register/BI5f4628e0a0484ad5935bb75b71c977a2](https://register.vevent.com/register/BI5f4628e0a0484ad5935bb75b71c977a2). Share on: