Sage Group PLC

Report Publication Announcement • Dec 7, 2023

National Storage Mechanism | Additional information

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 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

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[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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