Sage Steps Up AI Investment as Revenues Pass £2bn
Sage is putting artificial intelligence at the heart of its product development as more businesses explore how AI can improve everyday financial and accounting tasks.
The FTSE 100 software company has reported an 11% rise in total revenue to more than £2bn for the nine months to the end of June. The latest trading update also highlighted continued strong demand across Sage’s range of accounting, HR and payroll products.
Speaking to investors and analysts, Sage CEO Steve Hare said customers were becoming increasingly interested in using AI within their finance teams. This includes applying AI to accounts payable processes and using the technology to identify unusual or potentially suspicious transactions.
Sage believes wider changes in the way businesses manage their finances are also helping to drive demand. The introduction of Making Tax Digital in the UK, together with the growing use of e-invoicing across Europe, is creating further opportunities for accounting software providers.
Strong growth across key markets
Sage’s performance was particularly strong in North America, where revenue increased by 14% to £932m. Growth was supported by continued demand for products including Sage Intacct, Sage 50 and Sage 200.
In the UK, Ireland and Africa, revenue rose by 10% to £602m. Sage said this was driven largely by the rapid growth of Sage Intacct, alongside strong performances from Sage 50 and its cloud-based solutions for small businesses.
European revenue also increased, rising 7% to £528m. Sage attributed the growth to products such as Sage X3 and Sage 200, supported by its wider accounting, HR and payroll software.
Cloud and AI continue to drive growth
One of the biggest areas of growth was Sage Business Cloud, where revenue increased by 15% to more than £1.7bn. The company said growing adoption of its cloud products, combined with the expansion of its AI capabilities, helped drive this performance.
Within Sage Business Cloud, cloud-native revenue rose an impressive 25% to £794m.
The strong results contributed to a 12% increase in third-quarter revenue, which reached £699m. Software subscription revenue also continued to climb, increasing by 13% to more than £1.7bn.
Sage remains confident about the year ahead and continues to expect organic revenue growth of more than 9% for the full financial year.
AI becoming a bigger part of accounting software
For Sage, the latest figures show that AI is becoming more than just a talking point. Businesses are increasingly looking at practical ways to use the technology to automate financial processes, identify anomalies and make everyday accounting tasks more efficient.
Sage CFO Jacqui Cartin said the company had seen accelerating revenue growth over the first nine months of the year, with momentum strengthening during the third quarter. She also highlighted the continued investment in AI, the growth of products such as Sage Intacct and the increasing value customers are getting from Sage’s platform.
With small and medium-sized businesses continuing to rely on cloud-based tools for finance, HR and payroll, Sage appears well positioned to benefit from the shift towards smarter, more automated business software.
The company’s latest results suggest that as businesses become more comfortable with AI, demand for accounting platforms that can combine traditional financial tools with intelligent automation could continue to grow.