Update on financial reporting

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 Relations

Conor McClafferty


David Ginivan, Corporate PR

Sophia Johnston


 

APPENDIX - Underlying Total Revenue[3]

 

FY23 - Underlying total revenue (£m)

Q1 23

H1 23

Q3 23 YTD

FY 23






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 (£m)

Q1 22

H1 22

Q3 22 YTD

FY 22






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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