RNS Number : 9418V

Sage Group PLC

07 December 2023

Update on financial reporting

7 December 2023

As announced in Sage's FY23 results on 22 November 2023, The Sage Group plc. ("Sage" or the "Group") intends to simplify its revenue reporting to enable continued, clear understanding of progress and performance given the recent evolution of the Group, as set out below. These changes will be introduced in Sage's Q1 24 trading update, and will apply to Sage's future financial reporting.

Move from recurring to total revenue

Sage has previously provided revenue metrics and analysis based primarily on recurring revenue. Going forward, Sage will focus its reporting on total revenue, as total and recurring revenue growth rates increasingly converge as a result of the reduction in other revenue (SSRS), in line with the Group's strategy [1] . To facilitate comparison with prior periods, the appendix to this announcement sets out key total revenue figures for FY22 and FY23. Annualised Recurring Revenue (ARR) growth will continue to be provided as a strategic KPI.

Focus on revenue performance by region

Previously Sage has reported revenue performance by region, by portfolio and by type. Reflecting the strong progress made in Sage's transition to subscription and the cloud, revenue analysis by portfolio and by type, together with cloud native ARR and Sage Business Cloud penetration [2] , will no longer be provided. In future, Sage will principally report total revenue performance, including commentary on the drivers of growth, on a regional basis. In addition, certain metrics including cloud native total revenue, Sage Business Cloud total revenue and subscription revenue, will be disclosed on a Group basis.

Sage's primary annual and interim financial statements and notes to the accounts will not be impacted by these changes.

Enquiries:    Sage:    +44 (0) 7341 479956   FGS Global:   +44 (0) 20 7251 3801 
  James Sandford, Investor                   Conor McClafferty 
  David Ginivan , Corporate                  Sophia Johnston 

APPENDIX - Underlying Total Revenue [3]

 FY23 - Underlying total revenue    Q1 23   H1 23   Q3 23   FY 23 
  (GBPm)                                              YTD 
 North America                        242     483     724     973 
 US [4]                                       420             846 
 Canada                                        63             127 
 UKIA                                 155     311     468     627 
 UK & Ireland                                 233             471 
 Africa & APAC                                 78             156 
 Europe                               143     293     438     584 
 France                                       148             295 
 Central Europe                                71             142 
 Iberia                                        74             147 
 Total revenue                        540   1,087   1,630   2,184 
 Sage Business Cloud                  397     802   1,222   1,657 
      of which cloud native           146     293     449     612 
 FY22 - Underlying total revenue    Q1 22   H1 22   Q3 22   FY 22 
  (GBPm)                                              YTD 
 North America                        210     420     633     849 
 US                                           363             734 
 Canada                                        57             115 
 UKIA                                 140     284     426     575 
 UK & Ireland                                 213             435 
 Africa & APAC                                 71             140 
 Europe                               143     285     422     558 
 France                                       142             280 
 Central Europe                                73             141 
 Iberia                                        70             137 
 Total revenue                        493     989   1,481   1,982 
 Sage Business Cloud                  304     621     947   1,324 
      of which cloud native           101     212     331     459 

[1] Recurring revenue represented 96% and other revenue (SSRS) represented 4% of total Group revenue in FY23.

[2] Sage's other strategic KPIs, including ARR growth, renewal rate by value and subscription penetration, will continue to be provided.

[3] The above figures are provided at FY23 exchange rates. In line with Sage's APM definitions, FY23 figures will be retranslated at current period exchange rates when reported as comparator figures in FY24, to enable performance to be assessed on a constant currency basis.

[4] Sage Intacct revenue performance will be included in the narrative going forward and will no longer be tabulated.

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December 07, 2023 02:00 ET (07:00 GMT)

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