Annual Report (ESEF) • Dec 2, 2025
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Annual Report and Accounts 2025 EMPOWERING BUSINESSES STRENGTHENING TRUST Contents Strategic Report 1 Financial highlights 2 Sage at a glance 4 Our solutions 6 Market review 8 Our business model 10 Chair’s statement 12 CEO’s review 15 Our strategy 19 Empowering our customers 22 Our key performance indicators 24 Our people and culture 30 Sustainability and Society 35 TCFD 45 Non-financial and sustainability information statement 46 Section 172(1) statement 48 Financial review 56 Risk management 61 Principal Risks and uncertainties 67 Viability Statement Supplementary reporting Non-Financial Statement Impact Book Governance Report 70 Corporate governance report 71 Governance highlights 72 Chair’s introduction to governance 74 Our leadership 80 Governance framework 90 Stakeholder engagement 102 Nomination Committee Report 109 Audit and Risk Committee Report 117 Directors’ Remuneration Report 152 Directors’ Report Financial Statements 160 Independent Auditor’s Report to the members of The Sage Group plc. 174 Consolidated financial statements 180 Notes to the consolidated financial statements 252 Company financial statements Additional Information 261 Glossary 264 Shareholder information Driving a high- performance mindset Our purpose drives our day-to-day actions and our culture defines how we operate, behave, interact, make decisions, and get things done. Customer success stories We’re focused on delighting our customers with strong products and human support, which builds loyalty, encouraging them to grow with Sage. Our solutions—focused on customer needs Our products are mission-critical for our customers, providing accounting, HR, and payroll solutions that are vital to business operations. Sage is a leader in accounting, financial, HR, and payroll technology for small and mid-sized businesses (SMBs), enabling them to streamline operations, make more informed decisions, and be more productive. Read about this in action on pages 4 and5 Read about this in action on pages 19 to21 Read about this in action on pages 24 to29 EMPOWERING BUSINESSES STRENGTHENING TRUST Financial highlights Our year in numbers About our non-GAAP measures and why we use them Throughout this Strategic Report, we quote two kinds of non-GAAP measure: underlying and organic. Underlying measures are adjusted to exclude items that inmanagement’s judgement need to be disclosed separately by virtue of their size, nature, or frequency to aid understanding of the performance for the year or comparability between periods. Organic measures allow management and investors to understand the like-for-like performance of the business. Prior year underlying and organic measures (revenue and profit) are retranslated at the current year exchange rates to neutralise the effect of currency fluctuations. Full definitions of underlying and organic are in note 2 of the financial statements. Reconciliations of statutory revenue, operating profit and basic EPS totheir underlying and organic equivalents are included in the Financial review starting on page 48. Underlying total revenue £2,513m FY24: £2,290m Underlying total revenue of £2,513m increased by 10%, drivenbybroad-based growth in cloud solutions. Statutory revenue £2,513m FY24: £2,332m Statutory revenue of £2,513m grew by 8%, reflecting underlying growth in all regions, offset partly by a foreign exchange headwind. Underlying operating profit £600m FY24: £513m Underlying operating profit grew by 17% to £600m, driven by revenue growth and an increase in underlying operating profit margin of 150 basis points (bps) to 23.9%. Statutory operating profit £530m FY24: £452m Statutory operating profit increased by 17% to £530m, reflectinggrowth in underlying operating profit together withloweracquisition related expenses. Underlying basic earnings per share (EPS) 43.2p FY24: 36.7p Underlying basic EPS increased by 18% to 43.2p. Statutory basic EPS 37.7p FY24: 32.1p Statutory basic EPS increased by 18% to 37.7p. Dividend 21.85p FY24: 20.45p Total dividend proposed for the year increased by 7% to 21.85p. Net cash from operating activities £660m FY24: £649m Net cash generated from operating activities increased by 2% to £660m, reflecting underlying cash conversion of 110%. Strategic Report Governance Report Financial Statements Additional Information THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 1 Sage at a glance What we do Sage exists to knock down barriers so everyone canthrive, starting with the millions of small and mid-sized businesses (SMBs) served by us, our partners, and accountants. Customers trust our finance, HR, and payroll software to make work and moneyflow. How we do it By digitalising business processes and relationships with customers, suppliers, employees, banks and governments, our AI-powered platform connects SMBs, removing friction and delivering insights. Knocking down barriers alsomeans we use our time, technology, andexperience to tackle digital inequality, economicinequality, and theclimate crisis. Our strategy comprises three key focus areas that help us achieve our ambition and fulfil our purpose by guiding our operational and investment decisions. Grow Winning new customers and delightingourexisting ones. Connect Connecting SMBs through our trustedand thriving network. Deliver Delivering productivity and insights driven by AI. See pages15 to 18 1. Split of total underlying revenue of £2,513m. 2. United Kingdom, Ireland, Africa, and Asia-Pacific. Our ambition is to create the world’s most trusted, thriving network for SMBs, powered by AI. Our purpose is to knock down barriers so everyone can thrive. Our strategic framework Our global reach 1 45% North America 26%29% EuropeUKIA 2 Sustainability and Society Sage’s role in society is a vital part of the equation. We seek to integrate sustainability intooureverydayoperations,helpingtoensure Sage makes a positive societal impact throughourthreesustainability pillars. Enabling high performance 2 THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 Our stakeholders are central to our business and we seek to align all our activities with their interests. Customers We build every experience with human insightandingenuity. Colleagues We are committed to creating an environment where colleaguesfeel energised to contribute tothesuccess of SMBs. Partners We collaborate with partners throughoutour ecosystemtohelpdeliver our ambition. Shareholders We target sustainable growth in shareholder value. Society We tackle digital inequality, economic inequality, and the climatecrisis, using our time, technology, and experience. See pages90 to 97 See pages24 to 29 Business highlights Non-financial highlights 11% ARR growth 97% recurring revenue 76 eSAT 1 45% internal fill rate 2 AAA MSCI ESG rating 17 countries where weoperate 80,036 volunteer hours spent helping our communities 4 11,170 colleagues globally 3 1. eSAT is Sage’s Group wide employee satisfaction score as at 12 September 2025. 2. Internal fill rate of 45% reflects percentage of roles filled by existing colleagues rather than external hires. 3. Headcount data of 11,170 including 84 contractors and excluding eight Non-executive Directors as at 30 September 2025. 4. Volunteer hours measured during working hours in FY25. In FY24 we reported on total volunteering hours, including those outside of work. Our Values underpin our culture and driveourways of working. We do the right thing. Human We make connections withcustomers,partners, andcolleagues, through empathyand care. Bold We are curious, courageous, ambitious, and creative. Trust We deliver our promises to customers, partners, colleagues, society, and shareholders. Simplify We strip away complexity. See pages30 to 34 for more about Sage’s sustainability approach and progress Protect the Planet Tech for Good Human by Design Strategic Report Governance Report Financial Statements Additional Information THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 3 Our solutions Sage serves millions of small and mid-sized businesses around the world Ourproducts are mission-critical for our customers, enabling them to manage accounting, payroll, HR and core business operations seamlessly. By automating workflows, reducing manual admin, and delivering actionable insights, our solutions save our customers time and help them make better decisions. Small businesses Owner-led businesses, where small teams or individuals manage bothfinancial and HR responsibilities, often need smart, scalable tools to simplify accounting and stay compliant. We build our small business solutions to support their needs by helping businesses control costs, manage cash flow efficiently, and stay focused on growth while navigating changing regulations. Mid-sized businesses Our solutions for mid-sized businesses empower finance and HRteams with intelligent automation and real-time insights by streamlining workflows, improving forecasting accuracy, and enabling strategic decision making. As these organisations evolve and scale, we help them achieve greater efficiency and resilience while supporting their growth. Integrated suites Our integrated product suites combine core accounting capabilities with HR, payroll, and business management toolstailored to client specific needs. For mid-market companies, we offer industry-specific solutions to meet different sector requirements. These suites feature seamless functional integration, enabling smooth workflows and delivering the automation, insights, and compliance mid-market businesses require. Sage Platform The Sage Platform is our foundational technology infrastructure, enabling rapid deployment of innovations such as Sage Copilot and AI agents across multiple products. It provides a unified interface for intelligent assistance within workflows, while AI helps automate complex, end-to-end processes. For developers, it offers shared tools, frameworks, and built-in security guardrails to accelerate delivery. The platform ensures scalability, security, and compliance, supporting trusted, human-first AI experiences. Focused on customer needs Sage Copilot is our AI-powered productivity assistant embedded across our products–streamlining tasks, automating administrative processes, and delivering accurate, actionable insights. • For small businesses using Sage Accounting, Sage Active, and Sage 50, Sage Copilot helps automates invoicing, payments, and reporting, while monitoring real-time data to flag anomalies and track profitability. Customers report saving up to five hours per week and getting paid seven days faster, while improving cash flow. • For accounting professionals, Sage Copilot generates client insights, automates communications, and streamlines practice management, to deliver greater strategic value. • For mid-sized businesses using Sage Intacct, Sage Copilot helps automates month end close and subledger reconciliation processes and provides real-time variance analysis, enabling finance teams to focus on strategic insights. ForSage X3 customers, Sage Copilot delivers operational intelligence, surfacing real-time insights such as fulfilment issues, churn risk, and inventory delays. With natural language chat and a unified 360° view across operations, it empowers users to make faster, smarter decisions. Sage Ai is our intelligence engine; a proprietary layer of AI services that powers Sage Copilot and our AI agents. Built ondeep domain expertise and trained on trusted data, it delivers reliable outcomes for customers. Increasingly, specialist AI agents operate behind the scenes,taking action on the customer’s behalf within permissioned boundaries, whether surfaced through SageCopilot or embedded into product workflows or partner systems. Eachagent is purpose-built for a specificprocess, freeingfinance teams to focus on higher value work. Recentlaunches include Sage’s Finance Intelligence Agent,as well as other agents, that help accelerate coretasks such as the month end close. Our philosophy: authentic intelligence Our guiding philosophy is to build AI that is ethical, transparent, and human-first. We seek to create innovative solutions thatare secure and reliable, with customers remaining in control of their data and decisions, underpinned by our commitment to transparency. We believe this authentic approach helps to strengthen customers’ trust in our AItechnology, in the decisions they take, and in their broader business relationships. Sage for Accountants Sage for Accountants enables accountants toefficiently manage client data, accounts and compliance within a single solution. It streamlines practice management—from data capture to tax filing—helping accountants boost efficiency, and remain compliant. Further information 4 THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 1. The Sage 200 product family includes solutions branded Sage 100, Sage200, and Sage 300. Sage Accounting Sage Accounting is designed to enable small businesses operating inanyindustry, as well as accountants and bookkeepers, to manage theircustomer data, accounts, andpeople in a single solution. Further information Sage Active Sage Active is an intuitive and multi-legislation solution for smallbusinesses in Europe to automate accounting, sales, andpurchasingprocesses. Further information Sage 50 and Sage 200 1 Our Sage 50 cloud and Sage 200 cloud franchises enable customers to control their business and gain improved visibility over their finances andoperations. Sage 50 is designed for small businesses, while Sage 200 offers customisable solutions to meet the needs of mid-sized businesses. Further information Sage Intacct Sage Intacct helps growing mid-sized organisations thrive in today’s digital world with proven solutions across accounting, planning, and analytics. The powerful platform offers deep multi-dimensional insight and AI-powered automation for organisational agility. Further information Sage X3 Sage X3 provides fast, intuitive, and tailored business management capabilities forproduct-centric organisations, transforming how theymanage people, processes, and operations with multi-language, multi-legislation, and multi-currency capabilities. Further information Sage Payroll Sage Payroll is an intuitive solution that helps small businesses to run their payrollreliably and flexibly, including capabilities such as pensions filing, taxsubmissions, and compliance. Further information Sage HR Sage HR is designed to make people management easier and help teams perform attheir best. Sage HR is best suited to small and mid-sized businesses on site or on-the-go. For businesses that require a turnkey, modular, low-cost, and easy-to-install solution, Sage HR offers core record management, leave management, staffscheduling, and expenses services. Further information Sage People Sage People is an HR and people management solution formid-sized businesses. It uses powerful automation, comprehensive analytics and flexibleworkflows to ensure global workforces can adapt and thrive. Further information Strategic Report Governance Report Financial Statements Additional Information THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 5 We have a strong global footprint, serving a diverse base of small and mid-sized businesses (SMBs) across North America, Europe, Africa, Middle East and Asia-Pacific. Our broad geographic reach and customer diversity provide a powerful vantage point for us to anticipate and respond to evolving business needs. As digital mega-trends and regulatory tailwinds reshape the business landscape, we are well positioned to empower SMBs through innovation, compliance, and productivity-enhancing solutions. Market review Our market opportunity Strategic outlook SMBs represent an estimated 99% 1 of firms in our key markets and they play a vital role in the global economy. Despite ongoing macroeconomic and geopolitical challenges, SMBs remain agile and continue to invest in technology tohelp them thrive. Amid a complex regulatory landscape and accelerating digital transformation, we support SMBs withour trusted portfolio of accounting, HR, and payroll solutions. Through compliance capabilities, AI-powered innovation, and a connected ecosystem, we continue to unlock new opportunities for growth, productivity, and competitive advantage. Our addressable market The addressable market for Sage (including organisations with up to 2,000 employees in all countries where we sell our solutions) is forecast to be £44bn in 2026 and to continue growing. This market includes accounting and financial £44bn 2026 £50bn 2027 Our addressable market 2 management, human capital management, enterprise resource planning, payroll, accountant taxation and compliance, and accounting practice management software across both cloud and on-premise deployments. Digitalisation through the ecosystem SMBs are seeking to digitally transform workflows across their business ecosystem, reducing their administrative burden, and improving their working capital. This presents us with a significant opportunity, as businesses look to automate financial processes through services suchas Accounts Receivable (AR) and Accounts Payable (AP) automation, integrated payments, and third-party applications. Our strategic partnerships with fintech andbanking providers further extend ourreach and enableusto deliver morepersonalised, scalable, andconnected solutions. 2025 £39bn 1. OECD estimates. 2. Company estimates based on external sources. 6 THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 ” Generative AI continues to reshape the technology landscape and influence the global economic agenda, with its impact accelerating. AI is advancing more rapidly than previous technology shifts, driven by greater accessibility, declining costs, and significant improvements in model capabilities. These developments are enabling the development of AI agents capable of executing complex, end-to-end workflow automation, and marking a transformative shift in how businesses operate and compete. This AI evolution is strengthened by the rise of domain-specific large language models (LLMs), which allow businesses to differentiate at scale andat a competitive cost. We are capitalising on this opportunity by combining deep subject-matter expertise with rich proprietary datasets to train LLMsthat power intelligent, embedded solutions. Manyofour customers are already realising the benefits of Sage’s AI capabilities, which align withourtechnology vision of ending monthly cycles and delivering continuous accounting, assurance, and insights. This helps SMBs work smarter, faster, and with greater confidence. At the same time, AI introduces new challenges around data accuracy, privacy, security, and intellectual property management. We embrace new technologies in a secure and ethical manner, ensuring customers remain in control of their data and decisions. Our commitment to responsible innovation is reflected in our AI and Data Ethics Principles, which guide the development and deployment of AI across our products. By embedding trust our AI strategy, Sage aims to build long-term confidence in our solutions and ensure that innovation is aligned with customer values and regulatory expectations. Trusted AI is driving transformation Enabling responsible growth Technology companies play a critical role in creating a moresustainable future, by driving innovation, enhancing efficiency, and providing tools and solutions that enable businesses to operate sustainably. We are committed to bringing powerful AI-based products to SMBs and underrepresented groups, ensuring they don’t get left behindin the technology revolution, while helping them growin an environmentally and socially responsible way. Regulatory tailwinds Governments across Sage’s key geographies are mandating digitalisation to drive growth and improve compliance. These mandates promote interoperability by encouraging the use of standardised digital formats and Application Programming Interface (API) driven ecosystems, while enabling seamless integration across platforms. We expect this regulatory momentum will drive widespread software adoption among SMBs. The UK’s roll out of Making Tax Digital (MTD) for Income Tax is expected to transform tax administration by digitalising quarterly reporting for over 1.7 million taxpayers by 2028, improving visibility of tax liabilities. Starting in April 2026, the mandate applies to self-employed individuals and landlords, expanding to lower income thresholds over time. Thisshift is accelerating demand for compliant software solutions and presents a strategic opportunity to support adiverse, underserved market segment. The EU’s VAT in the Digital Age (ViDA) legislation introduces mandatory e-invoicing, real-time reporting, and single VAT registration across member states. Phased from 2025 to 2035, ViDA simplifies compliance and is expected to generate substantial economic benefits, including an estimated €51 billion in savings for businesses. For Sage, ViDA presents asignificant opportunity to support customers through this transition by delivering compliant, scalable solutions that automate invoicing, reporting, and VAT workflows. “ With a presence across four continents, we help SMBs stay ahead of the curve as digital trends reshape the future of work. In parallel, the emergence of Digital ID frameworks for individuals and businesses across the UK and EU presents anopportunity for Sage to embed trust and verification intoeveryday workflows. With Sage ID already used across our portfolio, Sage is well positioned to unify fragmented identity signals, such as VAT numbers and payroll IDs, into asecure, seamless experience. Strategic Report Governance Report Financial Statements Additional Information THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 7 Our business model Creating value for our stakeholders Creating value for our stakeholders Inputs Customer base The breadth of our customer base around the world gives us a unique insight into theneeds of SMBs. Trusted advisor Sage is a trusted brand,providing award-winning customer service, which generates loyalty andadvocacy among customers. People Caring and engaged colleagues are committed to drivingsuccess forourcustomers. Platform The Sage Platform is our foundational technology infrastructure that accelerates the delivery of AI-powered innovation. Ecosystem We expand Sage’s scale and reach through our ecosystemof accountants, resellers, and technology partners. How we attract and retain customers 1. Awareness and land Attract new customers to Sage through brand awareness, targeted campaigns, the sage.com website, referrals and partners. Offer guides and trials to prospective customers. 2. Adopt Sign up new customers to Sage products on subscription. For some solutions, Sageorour partners provide training and onboarding to get customers started. 3. Service Provide digital and human customer support to enhance customer experience, offering regular check-ins and conducting feedback surveys. 4. Expand Enable Sage customers to benefit from our expanding portfolio ofcloud-based solutions andAI-powered services. This increases the value of our product portfolio and enables Sageto deepen customer relationships. 5. Renew Create a seamless experience for customers that drives higher satisfaction, helps toretain customers, and increases adoption of Sage solutions. Recommendations also help attract new customers to the network. Customers A d o p t S e r v i c e E x p a n d 4 . 5 . R e n e w A w a r e n e s s a n d l a n d 1 . 2. 3. S a g e P l a t f o r m 8 THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 Outputs Customers 101% renewal by value Colleagues 76 employee satisfaction (eSAT) Community 80,036 Sage Foundation volunteer hoursspent helping our communities Shareholders 18% underlying basic EPS growth 21.85p total dividend for the year £300m share buyback announced See pages90 to 97 tolearn more about our stakeholders Our enablers More customers Adding customers, end users, and ecosystem participants drives the networkeffect and allows us to scale new value propositions. Ecosystem participants (attracted by customer volumes) amplify the network effect. More data With more data and data types from network participants, we can capture dataflows and transactions both within and outside the network. More insight Data drives the development of AI-powered solutions through a combination of understanding customer problems and deploying data science capabilities. This is enabled by our culture of experimentation and innovation. More value These solutions enhance the customer experience and create value for customers and Sage. A culture of innovation and experimentation Our relentless ambition to help SMBs thrive drives continuous innovation. Weencourage our colleagues to adopt an experimental mindset, helping to ensure our workforce remains fit for to an evolving technological landscape. See pages24 to 29 to learn more about our culture Our Values Wedo the right thingand deliver on our promises. • Being Human through empathy, care, and strong connections. • Being Boldby being curious, courageous, ambitious, and creative. • Creating Trust by delivering our promises. • Simplifying by stripping away complexity. See pages24 to 29 to learn more about our Values Strategic Report Governance Report Financial Statements Additional Information THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 9 Chair’s statement Introduction FY25 saw Sage achieve another year of strong progress anddelivery against our strategy. Acontinued, sharp focus ongrowth and operational efficiency has resulted in further significant revenue andearnings expansion. Over thelast three years, Sage has delivered total underlying revenue growth of over 30%, while underlying earnings per share (EPS) hasincreased by an impressive 75%, on a constant currency basis. At the same time, we have substantially increased investment in our platform, our products, and oursales channels. In doing so, I believe we have laid a strong foundation for theGroup’s future success. Executing our strategy Sage is a business that is driven by its purpose: to knock down barriers so everyone can thrive. Rapid advances in Artificial Intelligence have provided the means for us to deliver this for SMBs more effectively than ever before. Theinvestment we’ve made in our infrastructure and our platform over recent years makes us exceptionally well positioned to do so. Our ambition is to build the world’s most trusted and thriving network for SMBs, powered by AI. Importantly, webrought Sage Copilot, our generative AI-based digital assistant, to market in selected products and geographies, and thousands of customers are already using it to guide their decisions and streamline their work. Increasingly, our next-generation AI agents are automating tasks intelligently, but always with the customerin control. Over time, AI will become the foundation of every experience we deliver. Consistent with our Values, our focus is on delivering practical, safe, human-first AI that empowers our customers and their businesses, rather than replacing them—automating their workflows, removing administrative tasks, and creating more time for growth and innovation. SMBs make up 99% of all businesses. They are the “beating heart” of developed economies and are significant employers and wealth creators. In contributing to their success, Sage is also helping to power the global economy, providing benefits toall our stakeholders while also supporting the long-term sustainability of the Group. Empowering our customers ” “ FY25 saw Sage achieve another year of strong progress and delivery against our strategy. Andrew Duff Chair 10 THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 Financial performance Sage delivered a good financial performance for the year, aswe continued to execute on our strategy and focus on efficient growth. Underlying revenue increased by 10% to£2.5bn 1 , while underlying operating margin improved by150 basis points to 23.9%, thanks to continued strong costcontrol. With underlying earnings per share growing by 18% to 43.2 pence, Sage has now delivered three consecutive years of annual EPS growth in excess of 15%. Cash generation remains a core strength of Sage, with 97% ofrevenues recurring and a strong working capital profile. We continue to carefully allocate our capital, including acquiring complementary technology and expertise through M&A. Recent acquisitions include ForceManager, a mobile workforce management solution, Fyle, an AI-enabled expense management platform, and Criterion, a provider of unified HCM software—broadening our capabilities and reach. In line with our progressive dividend policy, the Board is proposing a final dividend of 14.40p per share, representing a total dividend of 21.85p per share, anincrease of 7%. Since FY20, Sage has returned £2.8bn toshareholders via dividends and share buybacks, and alongside our FY25 results we are announcing the return ofafurther £300m via share buybacks in FY26. Colleagues and culture Sage values its people above all, and the culture theyembody is the driving force behind everything Sage does. Our culture and Values guide our decisions and shape our behaviours. Westrive to create an environment where colleagues feel empowered to deliver exceptional outcomes, by fostering aculture of high performance, driven by strong, human leadership. Sage is committed to building a diverse and inclusive workforce, and I am proud that in 2025 we were named both as a European Diversity Leader and as one of theUK’s Best Employers by theFinancial Times. Governance and the Board Our philosophy is that strong corporate governance underpins long-term success, and we seek to maintain thehighest standards. In February, we welcomed Lori Mitchell-Keller as a Non- executive Director. Lori brings a wealth of experience totherole, strongly complementing the wider Board’s capabilities. Sangeeta Anand stepped down from the Boardin February 2025 and did not stand for re-election atthe 2025 Annual General Meeting. In March, we announced that Jonathan Howell would step downas Chief Financial Officer and leave the Board at theend of the calendar year. I would like to thank Jonathan forhis outstanding dedication and leadership during his tenure asboth an executive and non-executive director overthe past 12 years. He has played a pivotal role in shapingSage’sstrategic transformation, and we wish himallthebestfor thefuture. Jonathan will be succeeded by Jacqui Cartin, who currently serves as our Group Financial Controller, from January 2026. Jacqui has exceptional leadership qualities and a deep understanding of Sage’s business and its success drivers, and I am looking forward to welcoming her to the Board. OurBoard Associate programme helps to ensure that the voice ofcolleagues is consistently heard in the Boardroom. Our current Board Associate, Amy Cosgrove, is coming to theendof her term in the role. We are in the process of appointing our next Board Associate, and I look forward tosharing details next year. Sustainability and Society Our Sustainability and Society strategy supports our purpose, and underscores our commitment to serve allofourstakeholders, including our colleagues and communities. Our performance continues to be recognised externally. In the last year, Sage was ranked among the World’s Most Sustainable Companies by TIME magazine, recognised as one of the World’s Greenest Companies byNewsweek, and awarded CDP A List for both Climate Leadership and Supplier Engagement. Colleague commitment to sustainability through Sage Foundation—which mobilises colleagues, partners, and customers through impactful programmes—is nothing shortof extraordinary. This is a source of pride to colleagues and contributes to our positive culture. We celebrated 10years of Sage Foundation this year, and during this time it has raised over$5m globally and facilitated 1.4 million hours ofvolunteering to support local causes and communities. Wecontinue to focus on how we can use our unique skills, resources and experience to deliver impact in areas where wecan make the greatest difference. Looking forward to FY26 Sage has made remarkable progress over the last few years, with the pace of innovation and change only accelerating. Onbehalf of the Board, I want to thank all our stakeholders— including our shareholders, customers, partners, and, most ofall, our colleagues—for your continued support. I am confident that we will celebrate many more achievements inthe coming year, as we enter FY26 well positioned for further growth and success. Andrew Duff Chair 18 November 2025 1. Statutory revenue increased by 8% to £2.5bn, reflecting growth inunderlying revenue of 10% offset by a 2 percentage point foreignexchange headwind. Strategic Report Governance Report Financial Statements Additional Information THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 11 ” Introduction Sage delivered another good performance in FY25, extendingour track record of strong, profitable growth andmaking significant strategic progress. Guided by our purpose—to knock down barriers so everyone can thrive— we’re driving innovation across our portfolio, enhancing andaccelerating customer benefits, particularly through AI. As digital transformation changes the business landscape, our role in supporting small and mid-sized businesses (SMBs) is becoming more vital than ever—we’re shaping afuture where Sage eliminates the burden of admin for SMBsto unlock productivity and power growth. Over the last three years, we have increased underlying revenue at a 10% compound annual growth rate—testament tothe ongoing strength of our offering, and evidence that our growth is durable, despite macroeconomic uncertainty. We have also significantly expanded our operating margin and cash flows, enhancing flexibility and driving shareholder returns. Our operational performance is supported by our strong balance sheet, providing the strategic agility to invest in both organic and inorganic growth. Organic investment isfocused on enhancing our products and platform, optimising our go-to-market motion and developing our people. M&A is also an important driver of technology and talent, and during FY25 we enhanced our portfolio with two acquisitions: ForceManager, a mobile sales force management tool; and Fyle, an expense management platform. Since year end, wealso welcomed Criterion, a unified HCM software provider, to our platform. Beyond our core products and services, we are committed tosupporting SMBs with the issues they face more broadly. We advocate on their behalf with policy makers and champion initiatives such as simplifying carbon reporting. As vital contributors to the global economy, SMBs drive prosperity, and Sage is equipping them with tools to lead the way in a rapidly evolving landscape. As ever, the constant force behind our achievements is our people. I would like to extend sincere thanks to our colleagues at Sage, and to the partners and accountants we work with, for their continued dedication as we build on our momentum and shape the future together. Financial performance Sage increased underlying total revenue in FY25 by 10%to£2,513m. In North America, revenue grew by 12% to£1,138m, with a strong performance from Sage Intacct together with continued growth in Sage 200, Sage X3, andSage 50. In the UKIA region,revenue increased by 9%, driven by Sage Intacct, andsupported by further growth incloud solutions for smallbusinesses. In Europe, revenue increased by 7%, withgrowth across the portfolio. Underlying operating profit grew by 17% to £600m, driving a strong margin increase of 150 basis points to 23.9%. This was driven by operating efficiencies together with disciplined cost management, supporting ongoing investment in the business. Reflecting this progress and the benefit of recent share buybacks, underlying basic EPS increased by 18% to 43.2p. CEO’s review “ We’re shaping a future where Sage eliminates the burden of admin forSMBs, freeing up time for themtogrow their businesses. Steve Hare Chief Executive Officer Unlocking productivity andpowering growth 12 THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 Investment case Building shareholder value Growth was broad-based across the portfolio, driven bycontinued success in our cloud accounting, payroll, andHRsolutions. Sage Intacct continued to perform particularly well, while other cloud native solutions, including Sage Accounting, Sage Payroll, and Sage HR, alsoperformed strongly. In addition, Sage 200, Sage 50 andSage X3 contributed significantly to growth. As a result, Sage grew underlying annualised recurring revenue (ARR) by 11% in line with the prior year, to £2,574m. Our organic ARR growth rate of 10%, while slightly below lastyear’s figure of 11%, still reflects a strong performance, with continued growth balanced between new and existing customers. In total, Sage added £200m of ARR through new customer acquisition in FY25. Our renewal rate by value of 101% was driven by strong retention rates and a good level of sales to existing customers, including customer add-ons and targeted price rises. Our strategy for growth Our performance in FY25 reflects strong progress in delivering our strategy for growth, which aims to deepen customer relationships, expand our reach, and enhance the value we provide to customers. Our strategic framework includes three key focus areas: connecting SMBs through ourtrusted and thriving network, growing by winning new and delighting existing customers, and delivering productivity and insights driven through AI. • Connect: The Sage Platform is the foundation for our trusted and thriving network for SMBs, connecting products, partners, and customers in an intelligent ecosystem. As we connect more customers to the platform, weare expanding the scale and scope of our services, delivering value and transforming customer workflows. Wemade good progress, expanding our offering to automate workflows across theOffice of the CFO, including accounts payable and accounts receivable, expense management, payments, HR, and payroll. • Grow: Our aim is to expand revenues across all products and services, with a focus on the greatest growth opportunities. We continue to drive new customer wins, led by Sage Intacct, where ARR grew by over 20% in the US and by around 50% in other markets, and supported by the rest of the portfolio. We also drove value through the expansion of specialist suites, while targeting the “in-life” growth of existing customers through focused cross-sell and upsell. • Deliver: AI is enabling Sage to significantly accelerate customer benefits. During the year, we scaled Sage Copilot, our generative AI-powered assistant, in availability and usage across core products, enabling customers to streamline tasks and make better decisions. We are further developing our proposition with the introduction of AI agents to automate complex tasks across compliance, reconciliation, accounts payable, and tax. We are also leveraging AI to drive productivity internally, with benefits across business areas including engineering and customer support. You can read more about our progress towards ourstrategic objectives, on pages 15 to 18 Diversified and differentiated • Serving a wide range of SMBs across diverse geographies, with deep expertise across financials, payroll, and HR. • Broad ecosystem of partners, accountants, resellers, andindependent software vendors (ISVs) who enrich andexpand the reach of our offering. • Solutions backed by business advice and human customersupport. 17 countries Focused on innovation • Expanding global cloud solutions across ourmarkets,ledby Sage Intacct. • Scaling and leveraging our AI-powered platform totransformtheworkflows of SMBs. • Launching AI agents to deliver enhanced levels ofautomation for customers. • Boosting productivity for SMBs by streamlining processes and delivering trusted business insights. £379m R&D spend in FY25 Delivering efficient, sustainable growth • Focused on scaling the business, with growth creating headroom to increase investment and expand margins. • Growth supported by favourable SMB drivers, including the need to raise productivity through digitalisation andcompliance. • Strong commitment to sustainability supporting the long-term performance of Sage. ARR growth 11% in FY25 Robust financial model • High-quality revenue base, which is 97% recurring,with 83% from software subscription. • Highly cash generative, low capital intensity business, withunderlying cash conversion consistently over 100%. • Organic and inorganic investment balanced bydividendsandadditional capital returns toshareholderswhereappropriate. Cash conversion 110% in FY25 Strategic Report Governance Report Financial Statements Additional Information THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 13 Focusing on our customers Building long-lasting and trusted relationships with customers and partners is crucial to the success of our business. Reflecting our commitment to customer success, Sage Intacct was again ranked first for customer satisfaction in the G2 Fall 2025 report for accounting software, while Sage was ranked Best Software Company for 2025 in the UKand in the top 25 globally, based on G2 user reviews. We place significant focus on enhancing the customer experience, measuring sentiment and generating insights todeliver improvements across our platform. As a result, weincreased our transactional Net Promoter Score (tNPS) from 73 in FY24 to 79 in FY25, while also improving our overall customer satisfaction (cSAT) score. Contributing to customer experience is excellence in customer support. In FY25, AI-powered virtual agents handled more than 200,000 customer interactions, with aconsistently high resolution rate. These agents not only streamline query routing, but also free up our human agents to focus on more complex cases. This is helping us deliver faster, smarter support while maintaining a strong focus on overall satisfaction. Driving customer perception and brand awareness enhances our market presence while supporting both new customer wins and existing customer retention. During the year, we elevated existing relationships while forging new, high-impact partnerships, such as with the English Football League (EFL)and the Ladies Professional Golf Association (LGPA). Engaging and developing our colleagues Colleagues drive the success of Sage, and at the heart of thatsuccess is our culture. High levels of motivation and engagement are key to delivering our goals, and I am proud that our employee satisfaction score remains high, in the upper quartile of the global benchmark. During the year, we continued to support colleagues inbuilding core skills, including investing in both ourLeadership Academy and our Professional Skills Academy. More than 1,800 colleagues took part in culture enablement sessions designed to boost engagement, helpingthem build positive habits and take practical action toenhance performance. The strong uptake across these programmes reflects the curiosity, ambition, and drive of ourworkforce—qualities that are recognised and celebrated. We aim to attract exceptional individuals to Sage. Knocking down barriers extends to expanding entry routes into the workplace and, in FY25, we welcomed nearly 400 graduates, apprentices, and interns. Through our Pathways programme, we also provide opportunities to those facing employment challenges, including people with disabilities, returning professionals, and military veterans. We remain committed to building a workforce that reflects the diversity of communities in which we live and work. Doing business sustainably Growing sustainably is vital to the long-term success of Sage, as we seek to deliver extraordinary outcomes for all ofour stakeholders. In FY25, we made good progress across our three pillars—Protect the Planet, Tech for Good and Human by Design—and embedded sustainability across ouroperations, products, and culture. We are proud of our continued recognition, including being ranked among the World’s Most Sustainable Companies 2025 by TIME Magazine for the second consecutive year, as well as one of the World’s Greenest Companies by Newsweek. We are targeting net zero emissions by 2040, with an interim target of halving our emissions by 2030, against a 2019 baseline, and we continue to make good progress against these targets. However, our goal goes beyond our own footprint. We are also championing the role of SMBs in theglobal energy transition, advocating for simplified standards and providing the data and insights to help themmanage their own sustainability journeys. Underscoring our commitment to create equal access to skills and growth, we launched our biggest single social impact initiative to date—the Sage Impact Entrepreneurship programme. Delivered in partnership with Village Capital, this programme aims to empower 165 purpose-driven entrepreneurs over three years with access to funding, mentorship, training, and Sage products. Summary and outlook Sage delivered a good performance in FY25. With our global platform, trusted brand, and focused innovation strategy, Sage is exceptionally well positioned to support small and mid-sized businesses as they adopt AI-enabled services. This drives confidence in our ability to deliver strong, sustainable growth and long-term value for all stakeholders. In FY26, we expect organic total revenue growth to be 9% orabove. Operating margins are expected to continue trending upwards in FY26 and beyond, as we focus on efficiently scaling the Group. Strategic Report Our Strategic Report on pages 1 to 68 has been reviewed and approved by the Board. Steve Hare Chief Executive Officer 18 November 2025 CEO’s review continued 14 THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 Connect Connecting SMBs throughour trusted and thriving network Grow Winning new customers and delighting our existing ones Deliver Delivering productivity andinsights driven by AI Our strategy for sustainable growth S u s t a i n a b i l i t y a n d S o c i e t y S t r a t e g y C u l t u r e P u r p o s e Sage Strategic Report Governance Report Financial Statements Additional Information THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 15 The Sage Platform is the foundation for our trusted and thriving network for small and mid-sized businesses, connecting our apps, APIs, developer tools and infrastructure into a unified experience. The platform simplifies and streamlines work, integrating third-party solutions such as payments together with Sage’s own capabilities across areas such as Accounts Payable (AP) automation, Accounts Receivable (AR) automation and expense management, to address key customer challenges around cash flow, compliance and workflow automation. Italso powers embedded services, extending Sage’s core capabilities into external platforms through banking, lending and fintech partners, unlocking new monetisation models and partner routes to market. Every connection, transaction and data point makes the system smarter, creating network effects that scale AI innovation consistently across all Sage products and workflows. Progress in 2025 • Expanded our AP automation service, withthe monthly value of invoices processed tripling overthe past 12 months to $2.3bn. • Recognised as a “Major Player” by IDC for Accounts Receivable automation for SMBs. • Formed strategic partnerships with MineralTree to strengthen our AP automation offering. • Rolled out Tap to Pay in Sage Accounting across the UK and Canada, deepening our partnership with Stripe. • Acquired Fyle, an AI-enabled expense management software. • Sage Sales Management integrated with Sage Copilot andis now available to Sage 50 customers in Spain, theUK,andFrance, and Sage 200 customers in Spain. • Launched the Sage e-Invoicing portal in France, preparingover 150,000 customers for e-invoicing. • Strengthened our embedded services proposition includingTide (basic accounting), Monzo (MTD), andArtisTrade (US lending). Success measures • Availability and adoption of platform services • Sage Business Cloud revenue growth Focus for 2026 By accelerating adoption across the portfolio, we will drive customer value and unlock the network scale effect, creating a strategic advantage for Sage through smarter, more connected services. Greenidge streamlines AP with AI-powered automation ” Greenidge, a Nasdaq-listed energy and cryptocurrency company, has transformed its finance operations using Sage Intacct’s AI-powered Accounts Payable automation service. Previously reliant on manual invoice processing, the Greenidge team faced inefficiencies and errors that slowed operations and strained resources. Invoices are now processed by AI, where the system matches them to purchase orders, applies correct coding, and initiates workflows automatically. AI also enhances internal controls through outlier detection, flagging unusual transactions before they escalate. With streamlined operations and AI-enhanced controls, Greenidge’s finance team doubled productivity while maintaining a lean structure. Byusing Sage Intacct, Greenidge is empowered tonavigate market volatility and support multi- entity growth confidently. “ We’re now handling more than twice the volume without expanding the team. And, more importantly, AI ensures that everything is consistent, traceable, and easy to audit. Christian Mulvihill, CFO at Greenidge Generation Holdings For more information scan or click the QR code Our strategy continued Connect Case study 16 THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 ” Ensuring Sage maximises its market opportunity and continues to deliver strong growth is fundamental to our strategy. Our overarching aim is to expand revenues across all products and services, throughout our geographical endmarkets. Key initiatives include scaling Sage Intacct inNorth America and UKIA, establishing Sage Intacct and Sage Active in Europe, growing our small business solutions (particularly through accountants) and accelerating growth through targeted cross-sell and upsell to existing customers. A key feature of our growth strategy is the shift towards selling more integrated suite propositions, simplifying the customer experience and increasing overall lifetime value. We’re alsoadvancing our vertical strategy, tailoring solutions toindustry-specific needs across both the medium and smallbusiness segments, powered by the Sage Platform andsupported by ecosystem partners. Progress in 2025 • Sage Intacct continued its strong momentum, with ARR growth of over 20% in the US and c.50% in international markets. • Replatformed Sage X3, to deliver a full cloud-native experience. • Sage Active continues to accelerate in Europe. • Sage Distribution and Manufacturing Operations (SDMO) launched in France, serving the distribution andmanufacturing industries. • Sage 50 and Sage 200 grew across all regions. • Enhanced the commercial proposition for Sage Intacct through the expansion of specialist industry suites andintroduction of multi-year contracts. • Sage Intacct is scaling rapidly in the UK, with over 1,600 customers, and is gaining early traction in Franceand Germany. • Expanded Sage Intacct Construction to the UK, following its success in US, Canada, and Australia. • Launched Sage Intacct Accountants in Canada to support client advisory. • Driving cross-sell and upsell through add-ons anddeeper functionality across the portfolio. Success measures •ARR growth • Renewal rate by value • Customer experience metrics Focus for 2026 Drive further momentum with new and existing customers and improve access to products and services through suites. As Ansell Lighting expanded into new markets and outgrew its legacy systems, the company needed a modern cloud solution to streamline operations and support continued growth. Ansell Lighting implemented Sage Distribution and Manufacturing Operations (SDMO), seamlessly integrating it with the existing Sage Intacct financial system. The results included faster processing, improved remote access, and more efficient bill of materials (BOM) management. Teams can now multi-task within the system, accelerating product development and decision making. With SDMO, Ansell Lighting is not only operating more efficiently today but is also well positioned to scale and innovate for the future. “ Our technical department andtheteam raising the bill of materials are seeing the mostsignificant improvement. Their day-to-day experience has been materially improved. Chris Squire IT Project Manager at Ansell Lighting For more information, scan or click the QR code How Ansell Lighting transformed operations with SDMO Grow Case study Strategic Report Governance Report Financial Statements Additional Information THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 17 AI is reshaping how businesses operate, and we are transforming SMB workflows with practical, accessible AI-powered solutionsbuilt for real-world needs. Through SageCopilot, customers are using generative AI to discover insights and analyse financial information, speeding up processes such asthe month-end close and improving confidence in financial data. We are also rapidly growing our portfolio of AI agents, each one purpose-built for a specific domain and process. This expanding network tackles specialised tasks, operating autonomously for our customers. Internally, we’re adopting a strategic approach to AI across theorganisation that empowers colleagues and drives transformation. Progress in 2025 • Sage Copilot is now available to customers across Sage Accounting, Sage 50, Sage for Accountants, Sage Active, Sage Intacct, and Sage X3. • Launched agents including Sage’s MTD for Income Tax Agent and Finance Intelligence Agent. • Every Sage Accounting plan includes Sage Copilot and Sage Earth Carbon Accounting, alongside HR and payroll. • Launched customer support AI agent, with a consistently high resolutionrate. Haneker, a high-end architectural joinery firm inLondon, turned to Sage Copilot to simplify financialoversight asthe business scaled. With disconnected systems and growing complexity, Haneker needed real-time insights without the burdenof manual reporting. Sage Copilot now delivers instant visibility into cashflow, margins, and project spend, surfacing anomalies such as supplier cost increases before theyescalate. Beyond numbers, Sage Copilot empowers theHaneker teamwith shared visibility, enabling faster, more confident decisions. For more information, scan or click the QR code Haneker gains clarity and control with ” “ I use it for visibility. I can check how we’retracking, what’s outstanding, and where things look off. It helps me ask the right questions early. I don’t need to chase numbers or waitforsomeone else to run a report. I can check in quickly and understand what’s going on. It’s not about replacing people, it’s about making smarter decisions with confidence. Margaret Sadzynska Managing Director, Haneker • Partnered with the CPA.com, a subsidiary of the American Institute of Certified Public Accountants (AICPA), to explore licensing AICPA resources to train Sage Copilot. • Payroll Salary Variance Detection launched in Sage Copilot for UK Small Business Suites and Accountants. • Enhanced Sage 50 with AI-powered features such as natural language search for reporting, data extraction and classification and fraud detection. • Sage People includes new tools such as Workforce Intelligence for AI-powered insights, and access to personalised learning and wellbeing through Uptime. • Powered by Sage Copilot, Sage Intacct launched in the AI Agents and Tools category of the AWS Marketplace. Success measures • Sage Copilot availability and engagement • Internal adoption of AI tools to drive efficiency Focus for 2026 We will unlock the potential of intelligent autonomous agents in awave of innovation, grounded intrust, transparency, and customer empowerment. Readmoreonpages 19 to 21. Our strategy continued Deliver Case study 18 THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 Empowering our customers The agentic AI era for CFOs Our Chief Technology Officer discusses how Sage is now positioned to bring the potential of agentic AI and autonomous agents to SMBs in a wave of innovation. Where are we currently in our journey toward agenticAIat Sage? We’ve embedded AI into our products for over seven years,sowe’re not at the beginning ofthis journey. Today, we’re operating at scale with over 40,000 models in production, generating 3.5 billion predictions annually, and processing over 40 million documents over the past year. That depth matters: we’re building on real use,not starting from zero. We describe our AI journey in three waves. First was taskautomation, which we’ve done at scale for years toremove manual, repetitive work. Second is generative AI, already livethrough Sage Copilot. And the third—the wave we’re in now—is agentic AI: autonomous agents thattake insight-driven action on a customer’s behalf. We’re focused on leading the agentic AI wave by building trusted agents for finance workflows and preparing our platform to integrate with the wider agent ecosystem. Ascustomers adopt enterprise agents, we’re standardising on Model Context Protocol (MCP) agent servers and putting governance in place to keep our products secure,scalable, and future-ready. Can you talk about the use cases we’ve identified foragentic AI? We’re focusing on areas that free up capacity and givefinance leaders more flexibility, such as invoice coding, reconciliation, and cash flow forecasting. Theseare routine but critical to giving finance teams confidence in their numbers and the decisions that follow. Equally valuable, they free finance teams to focus on more important work. From there, we’re expanding into areas uniquely suited to the power of agents, such asautomating the monthly close, preparing Making Tax Digital (MTD) returns, and monitoring business performance to identify unseen opportunities and risks. AsCFOs take on broader advisory roles, agentic AI powers forward- looking analysis and scenario planning, so finance canguide the business—not just report on it. 40,000 models in production 3.5bn predictions annually 40m documents processed Strategic Report Governance Report Financial Statements Additional Information THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 19 Which products have already launched withAIagents? We’ve already started embedding AI agents into live products, with a growing set now operating across finance and tax workflows. They work within clear boundaries, so teams getoutcomes they can trust while staying in control. Every agent follows user-defined permissions, with full transparency and approvals. Oneexample is ourFinance Intelligence Agent. It allows customers to ask questions in natural language and get instant data, analysis, predictions and recommendations they can act on. By eliminating the need to run reports or analyse data externally, it simplifies decision-making and accelerates outcomes. Across our products, we’re rolling out agents to take care ofcorefinance tasks. From managing compliance and reducingerrors to accelerating the close and cutting outmanual entry in accounts payable and expenses, theseagents are arriving quickly across markets to helpfinance leaders do more with less effort. How does Sage Copilot workwithAIagents? Sage Copilot is the experience layer, the way customers interact with AI in natural language across Sage products. Itprovides a single, consistent interface, while the intelligence and execution happen behind the scenes. At its core is Sage Ai, our proprietary models, trained on trusted financial data, powering predictions and insights. Collaborating with it are our AI agents, acting on the customer’s behalf within permissioned boundaries and withfull customer transparency. Sometimes they’re visible, surfaced through Sage Copilot when a customer requests a task. Othertimes they run quietly in the background or in partnerenvironments, keeping critical workflows movingwithout human input. Together, this creates a seamless system: customers interactwith Sage Copilot, agents deliver, and the whole experience is explainable, secure, and designed for the demands of finance. Our AI Trust Label brings that to life, giving customers visibility into the principles on which our products are builtand governed, from the data they draw on to the logic behind their decisions. It’s a visible part of our authentic approach, and a reminder that while we’re moving fast, we’re doing it responsibly, withtransparency and control at the centre. And how do AI agents fit withinthe SagePlatform? The Sage Platform is the foundation for all Sage Ai. It combines the financial data our customers already trust, with the infrastructure needed to build, deploy, and operate AI responsibly, and the reach to connect those capabilities across Sage products and the wider ecosystem. At the heart of this platform is the Sage Ai Factory, ourscalable infrastructure for developing models withinasecure trust fabric. To support agentic AI, we’veevolved thisfoundation into an Agentic AI core, poweredby our LLM-backed proprietary reasoning engine and built on Model Context Protocol (MCP) agentservers. This core allows agents to draw on Sage-specific skills, tapping into product APIs and intelligence services, all underpinned by our Data Hub and Experience Services to maintain accuracy, control, andsecurity, while creating a consistent experience acrossproducts. Together, these elements power aunified agent library, enabling agents to deliver consistent, precise responses across products. But the platform is more than tech—it’s a long-term strategic moat. It connects businesses, accountants, andpartners through a governed ecosystem that supports secure datasharing, regulatory compliance, and embedded AI services. Every transaction and integration strengthens the system, creating network effects that scale AI innovationacross workflows. Anchored in domain-specific data and extended throughour partner network, the platform creates a durable competitive advantage and positions Sage to deliver agentic AI at scale with real business impact. Empowering our customers continued 20 THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 What sets Sage apart from others intheAImarket? Over 40 years of experience, trust, and deep domain expertise, with extensive, proprietary datasets, are justafew of Sage’s strongest differentiators. Businesses want AI from providers they already rely on, and we have earned that position over decades. It’s also what makes us anattractive partner. Our collaboration with the American Institute of CPAs (AICPA), for example, seeks toalign Sage Ai with professional standards in the US, toproduce accuracy that others can’t match. Building that level oftrust takes years, which is why it’sout of reach for most challengers. Equally important is how we build our AI. Guided by our authentic intelligence philosophy, it’s designed for finance and built to deliver transparent, accountable outcomes. We customise and train our AI using real- world data from the millions of transactions that flow across our platform. Learning from actual customer activity—not synthetic scenarios—means we can continually refine our models to reflect the mission- critical finance workflows businesses run every day. It’s already delivering results—reducing manual data entry by up to 90%, helping to double productivity in accounts payable, andreviewing seven million transactions amonth foranomalies. And as we advance agentic AI, we haven’t lost sight of thefundamentals. Systems of record such as the general ledger stillmatter. That’s why we’re committed to not only making Sage the best platform for human users, but also ensuring it’s the most trusted, capable environment for agents to run the workflows that power SMBs. What does success look likeforSageAi? In the near term, success means leading the agentic AIwaveby building trusted agents for accounting andfinance workflows while continuing to develop thesecure, scalable platform they run on. Our R&D isfocused on meeting finance standards, creating models that are flexible and cost-effective, refining ourmachine learning infrastructure tosupport automation at scale,and delivering a consistent AIexperience acrossour portfolio. Our success is measured by the outcomes we deliver forcustomers, enabling real-time strategic decision making byfreeing teams from manual, repetitive tasks. Delivering these outcomes is about more than technology —it’s also about leadership. Challengers may talk about what they intend, but real leadership is about execution at scale. The companies that win are those that prove resilient and setthe pace. At Sage, we’re doing just that. By building ontrusted financial data, deep domain expertise, and the strength of our partner network, we’re showing that incumbents with the right strategy don’t getdisplaced—they lead. ” “ We’re committed to not onlymaking Sage the best platform for human users, butalso ensuring it’s the mosttrusted, capable environment for agents. Aaron Harris CTO Strategic Report Governance Report Financial Statements Additional Information THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 21 Our key performance indicators Measuring our progress Strategic KPIs Underlying ARR growth Description ARR is the normalised reported recurring revenue in the last month of the reporting period, adjusted consistently period toperiod, multiplied by 12(FY25: £2,574m). ARR growth isstated on a comparable foreign exchangebasis, with the prior period ARR retranslated at the currentyear exchange rates, to neutralise theeffect of currency fluctuations. For a full definition, see our Glossary on page 261. Why we are measuring this Underlying ARR growth represents the annualised value of theunderlying recurring revenue base that is expected tobe carried into future periods, and its growth is a forward-looking indicator ofreported underlying recurring revenue growth. Performance Underlying ARR increased by 11% in FY25, reflecting growth across all regions balanced between newandexisting customers. Renewal rate by value Description Renewal rate by value is the ARR from renewals, migrations, upsell, and cross-sell of active customers at the start of the year, divided by the opening ARR for the year. Why we are measuring this Since it does not include new customer acquisition or reactivation of off-plan customers, renewal rate by value isanimportant measure of the strength of our existing customer base. Performance Renewal rate by value was 101% in FY25, reflectingstrong retention rates and a good level ofsalestoexisting customers. Sage has four strategic KPIs that show the impact and progress of our strategic execution. Efficient growth Our objective is to grow the business in a way that is both balanced and efficient, prioritising not only expansion but also long-term sustainability. We aim to achieve this through a focus on high- quality revenue growth and progressive margin improvement, ensuring that, as the business scales, it does so with increasing efficiency. This approach enables us to expand profitably while continuing to reinvest in our products, our platform and our people, reinforcing the resilience and longevity of our business model. Progress is measured using the Rule of 40, which combines underlying ARR growth and underlying EBITDA margin to provide a comprehensive view of bothtop-line performance and underlying profitability. Main metrics: Rule of 40 In addition to the KPIs outlined here, details of our environmental and additional employee-related metrics are provided in our Non-Financial Statement Other selected KPIs Customer experience We aim to differentiate Sage by delivering unique experiences that delight customers and drive growth. By placing customer centricity at the heart of our strategy, we have continued to evolve our customer experience approach, measuring sentiment through transactional Net Promoter Score (tNPS). This methodology captures feedback across a broad range of touchpoints, spanning multiple solutions and services, andprovides a granular view of the customer experience. In FY25, we launched Medallia, our new Voice of the Customer (VoC)platform, which significantly enhances insight across every interaction. These insights empower our customer support teams across our regions and functions to make smarter, more informed decisions. Broader customer insights are also actively shaping ourstrategy and execution, helping us identify trends and drive continuous improvement across the organisation. Main metrics: tNPS, customer experience improvements 11% 2025 2024 11% 2023 11% 101% 2025 2024 101% 2023 102% 22 THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 Sage Business Cloud penetration Description Sage Business Cloud penetration is the underlying recurring revenue from Sage Business Cloud solutions as a percentage oftheunderlying recurring revenue of the Future Sage Business Cloud Opportunity. 1 Why we are measuring this This metric measures progress in the transition of the business toSage Business Cloud solutions. Performance Sage Business Cloud penetration increased to 90% in FY25, reflecting the further expansion of Sage’s cloud solutions withinthebusiness mix. Subscription penetration Description Subscription penetration is the underlying software subscription revenue as a percentage of the underlying totalrevenue. Why we are measuring this This metric shows the progress Sage is making in migrating customers to subscription. Performance Subscription penetration reached 83% in FY25, reflecting continued growth from subscription contracts. 1. In FY25, underlying recurring revenue from Sage Business Cloud solutions was £2,047m, while underlying recurring revenue from the Future Sage Business Cloud Opportunity (which includes solutions that are part of, or have a clear pathway to, Sage Business Cloud) was £2,282m. Employee satisfaction Understanding how our colleagues experience Sage is essential to nurturing our culture. One of the ways we monitor and understand how happy our colleagues are working at Sage is to conduct regular colleague surveys, including measuring employee satisfaction (seepage 29). High response rates and rich insights from these surveys help us track sentiment and ensure we take meaningful action to protect and strengthen our culture. Main metrics: eSAT Sage Foundation volunteering Sage Foundation is a valued part of life at Sage and colleagues tell us it is one of the reasons they enjoy working here. Every colleague has up to five days of paid volunteering leave each year, allowing them to make a difference locally and connect with the communities where we operate. In FY25, we adopted a new methodology for measuring engagement, now focusing solely on volunteering during working hours. Previously, we reported on total volunteering hours, including those outside of work. This change enables more consistent and comparable impact measurement across peers and industry benchmarks. Main metrics: Sage Foundation volunteering hours Our strategic objectives See pages 15 to 18 90% 2025 88% 84% 2024 2023 83% 2025 2024 82% 2023 79% Strategic Report Governance Report Financial Statements Additional Information THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 23 ” Our people and culture The Sage culture “ Sage’s culture powers growth—uniting purpose, performance, and people to deliver exceptional outcomes. Amanda Cusdin Chief People Officer Why is culture so important at Sage? Our purpose is to knock down barriers so everyone canthrive: this defines what we do, while our culture defines how wedo it. It’s a shared commitment–it’s not owned by anyone team, and it shows up in how we work together, serve our customers, and live our Values: being Human, Bold,Trust, and Simplify. Together, our culture and Values guide our decisions, shape our behaviours, andcreate an environment where colleagues feel empowered to deliver exceptional outcomes. In FY25, our employee engagement remained strong. Weachieved an eSAT score of 76(FY24: 76), with a response rate of 82%. Colleagues reported a strong senseof belonging, have a clear sense of the contribution they make to team goals, and say theyvalue honest and constructive feedback. This reflects the positive impact of our continued focus onbuilding a culture of feedback and accountability. Our strong internal engagement is mirrored externally. Our Employer Brand Index improved by 15 points over FY25, and Sage was ranked #15 on the Financial Times’ Best Places to Work in the UK. These achievements demonstrate growing recognition of Sage as a Values- ledorganisation where people come first. By putting people at the heart of everything we do, weare building a workplace where everyone can thrive— today and into the future. How is Sage’s culture brought to life? We’ve built momentum by staying true to what weknowworks. The stability and continuity of our cultural priorities have provided a strong foundation forcontinued progress throughout FY25. We’ve embedded our high-performance culture more deeply across the organisation—centred on customer centricity, accountability, and engaging, empowering, and recognising colleagues. Our monthly manager enablement sessions raise awareness, provide tools, andshift mindsets, with more than 71% of people managers attending these sessions. Deep dive culture interventions have been running across the business, with more than 1,800 colleagues participating in interactive culture enablement sessions designed to boostengagement and help them take practical action, buildnew habits, and support high performance. All colleagues also have the opportunity to build core skills through the Professional Skills Academy, with a strong focuson feedback and accountability. We recorded more than 4,000 completions across the curriculum in FY25, reinforcing our culture and behaviours that drive performance and build trust. Critically, 86% of participants reported applying what they learned, and84% said it helped them do their jobbetter—demonstrating clear skill growth and real impact intheflow of work. A key driver of our culture is strong, human leadership. InFY25, we continued to invest in building accountable, future-ready leaders at every level. Our Leadership Academy remains a powerful platform for leadership development, with 855 colleagues having completed a programme in FY25. From aspiring to senior leaders, we’reequipping our people with the skills andmindset tolead with impact, drive performance, and rolemodel the behaviours that shape Sage’s culture. 24 THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 ” Finally, we reinforced our commitment to doing the rightthing, including by refreshing our Personal Data Protection training,with completion rates of 99%. “ The Aspiring Leader Programme really helped me shift my internal framework from a “me” to “us” mentality. This helped me focus onthe collective and how we can thrive asateam. It made the transition from individual contributorto managing a team alot easier. Whitney Ragan Product Design Manager How is Sage supporting colleagues to work inan AI world? We are proud of our progress in Artificial Intelligence andthe value it unlocks for our customers. Starting inFY24, we made a significant investment in theroll out of Sage Copilot, reflecting our commitment toAI product innovation. To stay ahead of the opportunity AI presents, we have focused on building AI literacy across our workforce, across all job roles. This investment is not only a strategic business imperative, but also a reflection of our belief that we should support every Sage colleague in adapting to the evolving world of work. Starting in FY24, we made Microsoft Copilot Chat available to colleagues. Building on this momentum, inFY25 we launched our AI Academy—designed to help colleagues learn, act, and embed AI in their day-to-day roles. We’re taking both a global and functional approach, tailoring learning to areas such as Marketing, Customer Success, and Engineering. The AI Academy combines foundational education, hands-on use cases, and deeper technical upskilling— including Microsoft and AWS Data & AI certifications on ourAI tech stack. Data skills are core to this, helping colleagues use AI and data confidently together. So far, 15,703 AI Course completions have been recorded. Our growing AI Champions Network is also helping embed AIpractices across Sage, with early signs of impact including a 45% increase inAI prompting confidence. Staying true to our Value of Trust, we launched a global AIandEthics e-Learning to help colleagues apply responsible AIprinciples in their work. Partnering closely with our Legal and Compliance teams, we provided clear guidance and robust processes for tool approval and use. We also reinforced the importance ofhuman skills—such as critical thinking and ethical judgement—through the Professional Skills Academy and LinkedIn Learning. These efforts ensure colleagues are confident using AI responsibly andwith integrity. What are your priorities for the year ahead? As our business evolves, so too will our People strategy —ensuring we can meet both internal and external demands as a growing global technology company. InFY26, we will accelerate our efforts to build afuture- fit workforce: one that moves at pace, embraces bold innovation, and adopts an AI-first mindset. Central to achieving our ambition are our leaders. We willcontinue to focus on developing broader and deeper leadership capability across the organisation. At the sametime, we will invest in and scale our Early Careers Programme, continue to develop and promote internal talent, and sharpen our understanding of the critical skillsneeded for long-term success. These priorities will be underpinned by our Values and acommitment to fostering an inclusive, collaborative culture—one where colleagues feel empowered, supported, andproud to bring their whole selves to work. Strategic Report Governance Report Financial Statements Additional Information THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 25 How we attract, develop, and engage talenttofuel Sage growth Creating a workforce fit for the future—one that positions Sage to fuel future growth and deliver extraordinary outcomes for our customers—requires deliberate and sustained effort. At the heart of our ambition lies a simple but powerful principle: having the right talent, doing the right work, withthe right skills, at the right time. Prioritising talent attraction was important when we opened our new North American Flagship Office and Customer Discovery Centre in Atlanta this year. We launched a boldemployer brand campaign to attract top salestalent. In justthree and ahalf months, the campaign generated nearly 15 million impressions and almost 9,000 applications, representing a 123% increase in application volume. This surge in visibility and engagement significantly improved thequality of our candidate pool. In FY25, we continued to invest in our direct sourcing model, confident that our Internal Hiring team is best placed to identify future Sage colleagues. This approach has enabled strong internal mobility, with many colleagues stepping into new roles that not only support business outcomes but also accelerate their personal growth. Our internal fill rate of 45% demonstrates this approach. Expanding entry routes into Sage remains a strategic priority. A strong talent pipeline begins with attracting exceptional individuals into our Early Careers Programmes. In FY25, we welcomed 392 Early Careers colleagues into thebusiness. While this is a positive step, we recognise theneed to scale further to align with industry benchmarks. Supporting colleagues at the start of their journey is critical, and our Sage Ignite Development Programme—now operating across the Group—plays a central role. This year, the Ignite Graduate Programme was a finalist for Best Graduate Development Programme at the Institute of Student Employers’ Annual Awards in June 2025. This recognition underscores our commitment to delivering structured, high-impact learning experiences and reinforces graduate development as a top strategic priority. In FY26, we plan to continue to invest heavily in this area and scale our early careers offering, ensuring our graduates have the skills, support, andopportunities they need to excel and leadconfidently. As part of our Colleague Engagement strategy, we remain deeply committed to building a workforce that reflects the diversity of the communities in which we live and work. We actively seek out and remove barriers to ensure everyone has the same opportunity for success. This year, Sage received the Best Diversity Recruitment Initiative of the Year award for our Partner Academy Programme at the CRN Women & Diversity inChannel Awards. This recognition highlights our use of the Pathways Programme to direct career returners and changers into the UK’s tech partner ecosystem. The collaboration between Pathways and the Partner Academy demonstrates our commitment to creating accessible and inclusive routes into tech careers for underrepresented talent. Our Sage Pathways Programme was also recognised witha Vercida Employer Excellence Award for Best OverallInitiative . We move at pace, innovate constantly, and stay ahead ofour customers’ needs—which is why we invest in building a future-fit workforce ready to thrive. Throughour Leadership Academy, we’re developing capable, accountable leaders equipped to drive performance and lead through change. We’realso building critical skills across the organisation viaour Professional Skills Academy and AI&Data Academy— developing the human and digital capabilities needed for success. We are strengthening functional or “craft” skills through targeted academies in areas such as sales, marketing, and product, ensuring colleagues are equipped with the expertise to fuel business and personal growth. We believe colleagues should be empowered to shape andown their careers. Now in its second year, our Talent Marketplace is delivering on its promise—enhancing talent mobility, increasing workforce agility, and supporting the growth of a skills-driven workforce aligned with our future strategy. Adoption rates reached 83% in FY25 and we now have 314 internal mentors who are ready to support their colleagues on their skills journey. Finally, our annual talent cycle and succession planning processes continue to be vital mechanisms for identifying and developing future leaders. This year, we’ve seen strong internal succession success, including at the Executive Leadership Team level (Jacqui Cartin as incoming CFO). Our people and culture continued ” “ The Manager Essentials Programme became a powerful space for reflection and growth, anddeepened my leadership toolkit. Joleen Tarr Customer Services Team Manager When promoted to Team Leader, Joleen Tarr, a Customer Services Team Manager based in Johannesburg, wanted to build the leadership skills needed to stepinto her new role with clarityand purpose. Byenrolling in the Manager Essentials Programme, she developed a strongfoundation in leadership, focusing on key areas such as clear communication, active coaching, and trust-based accountability. Promoting internal talent Case study 26 THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 In FY25, we laid the foundation of the Sales Academy through pilot programmes to test onboarding pathways and gather feedback, starting in France with Sage IntacctAccount Executives, followed by the USwith SalesDevelopment Representatives. Early results showed100% satisfaction and75% confidence across coretopics, prompting expansion to other regions. Our new Sales Academy fast-tracks onboarding and is already boosting performance We have developed a global timetable, aligning foundational and activated skills across six onboarding weeks, from “Intro to Sage” to “Ready to Go”. This structure ensures consistency while allowing localisation and personalisation. The Sales Academy’s infrastructure includes blended learning journeys and role-specific activation, supported by a governance model and live feedback dashboards. Test cases in Atlanta mirrored the satisfaction scores, and early results suggest new hires will be hitting targets one week ahead of previous cohorts. Creating an environment where everyonecanthrive To realise our core purpose to knock down barriers so that everyone can thrive, we must be an inclusive, welcoming organisation—one where colleagues are respected and empowered to be their authentic selves, without fear of discrimination or exclusion. We bring this to life through three guiding principles: • Build diverse teams Offer a range of voices, backgrounds, and experiences to help us innovate faster, see challenges earlier, and make the right decisions by better understanding our customers. • Inclusive culture Our leaders serve as positive role models and colleagues feel safe and encouraged to share their experiences. • Equity by design Our systems and processes ensure accountability for diversity, equity, and inclusion sits across the business, inthe day-to-day decisions being made. Our FY25 “All About Us” diversity self-declaration rates reached 60% across all active countries, following the onboarding of all our colleagues in India this year. This datagives us insights to better understand inequities and underrepresentation, and develop solutions toprovide fair access to opportunities at Sage. In India, the data has also shown us the proportions of colleagues who are care givers for one or more family members, prompting us to create a series of multi-language sessions to better promote our Employee Assistance Programme, Cleo, and Healthy Mind Coaches benefits and networks tosupport colleagues. Our Colleague Success Networks continue to be a key driver in fostering an inclusive culture and bringing our Values tolife, with membership now reaching 28% (FY24: 22%). InFrance, we have introduced the Pride Network. In North America, our Blacks United in Leadership and Development (BUILD) Network collaborated with our Foundation Partner, Access to Capital for Entrepreneurs (ACE) to host the second Annual Sage Small Business Expo. IntheUKI region, our Embrace Network partnered with Cyber Security to sponsor the Black Tech Fest. Our Ability Networks across North America, UKI and South Africa have supported the launch of the Hidden Disability Sunflower scheme across over 4,000 colleagues, to reduce the stigma associated with the conversations around workplace adjustments. The launch of our Global Workplace Adjustments and Accommodations Policy has provided a consistent global framework to ensure colleagues can access the support they need to perform at their best. Case study Strategic Report Governance Report Financial Statements Additional Information THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 27 Sage gender and ethnicity balance As part of our commitment to equity and transparency, Sage tracks and publishes data on gender and ethnicity representation in the regions where it is legally possible to do so, across our global workforce. The table below highlights our current progress and areas of focus for the Board, Executive Leadership Team (ELT) and their next reporting level. For further DEI information please see page 106. Board ELT 1 ELT and direct reports 2 All colleagues 3 Number of people 10 9 70 11,094 Gender Female 4 3 27 4,687 Male 6 6 42 6,289 Non-Binary –––29 Undisclosed –– 189 Ethnicity Asian 1 – 3 505 Black/African/Black S.African/Caribbean/ Black British/African American ––3240 I do not wish to self-identify my race or ethnicity ––2200 Indigenous ––– 8 Multiple Ethnic Groups – – 1 103 Other Ethnic Group –11175 White 9 8 51 3,217 Undisclosed – – 9 6,646 Data as of 30 September 2025. 1. ELT data reflects the information as at 30 September 2025 and includes the Executive Directors as well as Eduardo Rosini, who served as Chief Growth Officer and a member of the ELT throughout FY25. Steve Hare and Jonathan Howell are included in both the Board and ELT data. The gender balance of our ELT, excluding Steve and Jonathan, is three females and four males. The gender balance of both the Board and the ELT is expected to change on 1 January 2026 when Jacqui Cartin takes up her new role as CFO (after Jonathan Howell steps down on 31 December 2025). 2. ELT and direct reports include ELT members and those for whom they have direct line management responsibility, excluding administrative andsupport roles. 3. Total number of colleagues of 11,094 excludes 84 contractors and includes eight Non-executive Directors. Our people and culture continued Workplace wellbeing is not a standalone programme at Sage —it’s part of our culture. We create an environment where every colleague feels safe to speak openly, supported to find balance, and empowered with the tools to thrive inside and outside of work. Our approach spans mental, physical, social, and financial health, enabling colleagues tobring their best selves to work and grow with confidence. We deliver a consistent global monthly programme of health promotion, learning, and awareness that inspires change and builds the skills needed for sustainable high performance. Covering topics from stress management and suicide prevention to menopause, carer support, and mental health leadership training, we equip managers to provide tailored support and have doubled our Healthy Mind Coaches in Customer Support. Our Global Wellbeing Community now connects over 1,900 colleagues, with year-on-year growth embedding wellbeing deeper into our culture. We remain focused on healthy finances, and in April, we were proud to receive the 2025 GEO Award for Best in Financial Education and Wellbeing (10,000–25,000 employees). This recognition celebrates our dynamic, human-centred approach to financial education—an approach that places colleague empowerment at the heart of our Share Plan strategy. 28 THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 Evolving how we work: a story of collaboration, creativity, and connection We continue to learn that the most effective office moments are those centred on collaboration, connection, and community. These moments are not only essential to our culture but also critical to delivering better business outcomes. We want to empower colleagues to work in next-generation environments that inspire creativity, foster collaboration, and support high performance. Our industry moves at pace—and so mustwe. That means creating workplace conditions where work flows naturally, people feel energised, and teams are motivated to come together with purpose. In FY25, we updated our Hybrid Working Policy to drive greater in-person collaboration. This strategic shiftreflects our belief that purposeful time together drivesfaster decision making, strengthens relationships, and enhances overall impact. We’ve also focused on building stronger, more collaborative teams through tools such as Strengthscope and TetraMap. InFY25, these helped over 600 colleagues better understand their own strengths and working styles, improving self- awareness, communication, and team effectiveness across the business. In September, we launched People Zone— aglobally consistent, digital self-service and knowledge management platform that has simplified and modernised how we work, connect, and serve our colleagues. In line with our ongoing Places strategy, FY25 marked asignificant milestone with the opening of our North America flagship office in Atlanta. We also completed a series of office refurbishments, each designed to reflect ourevolving ways of working. This is part of a broader, multi- year programme that will reach colleagues across all regions, with new projects in motion for FY26 and beyond. People measures & awards Key metrics helpuskeeptrack of how we’reprogressing: 76 eSAT How happy our colleagues are working at Sage (FY24: 76) 45% Internal fill rate How successfully we’re providing colleagues the opportunities to develop their careers at Sage (FY24: 51%) 40% Gender diversity target The number of leadership teams (ELT to ELT-4) meeting our gender diversity target of no more than 60% of men, women, or non-binary people in any leadership team (FY24:41%) 28% Colleague Success Network Colleague participation (FY24: 22%) #15 on Financial Times best places to work in the UK #11 on FTSE Women Leader’s review, and #3 in the Technology Sector Best in Financial Education and Wellbeing 2025 GEO Awards Best Graduate Development Programme (Finalist) 2025 Institute of Student Employers’ Awards Strategic Report Governance Report Financial Statements Additional Information THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 29 Sustainability and Society The Multiplier Effect • Sage was recognised by Newsweek in the 2025 World’s Greenest Companies list, receiving a five-star rating. • Sage ranked again amongst the 500 global companies in the World’s Most Sustainable Companies 2025 list by TIME Magazine and Statista. • For a third year running, Sage was in the 2025 Financial Times Europe Climate Leaders list, rankingin the top 30 companies. • Sage won the 2025 edie award for Sustainability Reporting & Communications. • Sage was awarded CDP A List for Climate Leadership andCDP A List for Supplier Engagement. • Sage maintained its Gold medal on the 2025 EcoVadisrating. • Sage ranked 15th out of 500 companies in the Financial Times 2025 Best Employers UK list. 1,767 sustainability learnings delivered to colleagues inFY25, supporting increasing internal capability 91% of entrepreneurs who report an increase in their confidence to scale and grow their business 49% Sage Foundation Colleague Engagement Rate against 21.6% industry average $850,466 funds raised to help our communities thrive Snapshot of our 2025 highlights Sharpening our sustainability strategicdirection In FY25, we continued to deliver on our Sustainability and Society strategy and Sage’s purpose: knocking down barriers so everyone can thrive. We focused our efforts on progressing our commitments and targets across the three pillars of the strategy: Protect the Planet, Tech for Good, and Human by Design. And we continued to embed sustainability into our operations, products, and culture. In FY25 we reviewed the effectiveness of the Sustainability and Society strategy due to evolving stakeholder expectations, shifting macroeconomic conditions, regulatory developments, and Sage’s strategic direction. Collaborating with anexternal provider, we undertook a benchmarking exercise,reviewed our material issues and interviewed keystakeholders. This has helped us to prioritise and sharpen our focuseven further. In FY25 we focused on: • Review of our material topics: Taking into consideration Sage’s business strategy, AI and Data Ethics was classified as strategically significant for the business. We revised the definition of the topic Innovation to support customers and SMBs—to better focus our contributions to advancing social and environmental outcomes. Finally, the topic of Digital equality, including product accessibility, was merged respectively with DEI and Local community investment and support. • Streamline strategy and reporting: Our Sustainability and Society strategy remains focused on the three pillars— Protect the Planet, Tech for Good and Human by Design, the delivery of which is supported by a number of enablers and our continuous commitment to embed sustainability across the business. This year, we have fully integrated reporting against the Sustainability by Design pillar within the content of the three main strategy pillars— demonstrating how we integrate furthersustainability intoour business and aligning better with regulations suchas the EU Corporate Sustainability Reporting Directive(CSRD). Sage’s FY25 Non-Financial Statement offers a comprehensive overview of our preparedness in relation to the CSRD. 30 THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 • Embedding sustainability: In FY25, our material impacts, risks and opportunities (IROs) were signed off by the Sustainability, AI and Data Ethics (SAIDE) Committee and are now being integrated into our Enterprise Risk Management (ERM) system, which also holds our Principal Risks. We have continued to build internal capabilities, providing training on the evolving sustainability regulations and continuing to expand our anti-greenwashing awareness to the Legal team. Additionally, we have continued to embed sustainability into our policies and into our ongoing due diligence processes for suppliers, new partners and mergers and acquisitions. The Multiplier Effect • Targets planning: Many of our three-year targets were set when we created our Sustainability and Society strategy inFY22 and ended in FY25. For many areas of our strategy, FY26 is a transition year where we will focus on establishing a comprehensive baseline for key material areas. During this period, we will also model scenarios; set interim milestones; engage stakeholders and continue to report progress. By dedicating FY26 to these foundational activities, we will be better positioned to set and achieve meaningful long-term sustainability targets in subsequent years. Purpose To knock down barriers so that everyone can thrive Protect thePlanet Tech for Good Enabled by Human by Design Get SMBs to net zero Empowering end-to-end decarbonisationfor SMBs Data for Good Helping SMBsthrive using anonymised insights from our data and enabling better decision making by stakeholders Diversity, Equity, and Inclusion (DEI) Delivering diversity of thought andaninclusive culture Get Sage to net zero EnablingSage to transitiontoNet Zero Empowering Entrepreneurs and Communities Empowering entrepreneurs and communities with the skills and technology they need to thrive Empowering Colleagues Giving colleagues the right tools and environment to thrive Advocacy Sage FoundationDigital Trust AI & Sage Platform Sustainability by Design Core business fundamentals that giveSage a licence to operate as a sustainable business with integrity. For further detail visitFY25 Non- Financial Statement For further detailvisit FY25Impact Book Strategic Report Governance Report Financial Statements Additional Information THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 31 Sustainability and Society continued Key FY25 achievements Getting Sage to net zero • We achieved a ‘leadership’ CDP Climate Change rating of A (2022:B) and joined the CDP Supplier Engagement A-list (2022: C). • We have progressed well against our interim targets, which were validated by SBTi in 2023; 89% reduction in absolute Scope 1 and 2 GHG emissions (Target: 50% by 2030); 24% reduction in absolute Scope 3 GHG emissions (Target: 50% by 2030); 28% reduction in absolute scope 3 emissions from business travel, employee commuting and use of sold products. • In FY25, emissions have reduced by a further 13.4%, keeping us aligned with our glidepath. This continued progress reinforces our confidence in the transition plan, while recognising that the path to net zero is not always linear. • In FY25, we expanded our support for colleagues to reduce their Scope 3 emissions and formalised benefits associated with more sustainable colleague actions. We developed our partnership withMobilityWays to provide colleagues with access to tools that help them to reduce their commuting footprint. All colleagues atSage have access to a Personal Travel Plan, with personalised recommendations to get into a local office using the most sustainable locally available option. Continuing our partnership with Deedster, we have launched more climate challenges to help colleagues better understand their personal carbon footprint andguide them on reducing their impact. To date, 724 Sage colleagues have taken 26,590 climate challenges, resulting in approximately 137 tonnes saved CO 2 emissions. • In FY25, we expanded our use of the Microsoft Carbon Calculator to Cloud and Enterprise (Office 365 software). • With Dentsu (our paid media partner) we are implementing a media carbon calculator, launching in H1 FY26 to support the carbon optimisation of our media placement strategy. • Recognising the interconnected nature of environmental impacts and risks, in FY25, we progressed our LEAP (Locate, Evaluate, Assess, and Prepare) assessment in alignment with the Taskforce on Nature-related Financial Disclosures (TNFD) recommendations. Supporting SMBs in achieving net zero • Our carbon accounting capabilities are now integrated into the Sage for Small Business suite, enabling hundreds of thousands SMBs to measure and manage their emissions. • In 2025, we launched the Sage Carbon Accounting API, a milestone that represents the culmination of years of technical development and collaboration. Designed to accelerate the journey to net zero, the API gives financial institutions, fintechs, and other platforms direct access to Sage’s advanced carbon engine via a secure, public developer portal. Advocating for enabling policies and standards • Through Project Perseus, we are supporting the development of the UK’s physical and technical infrastructure for Scope 2 emissions data, laying the foundations for a more granular, automated, and reliable flow of energy data into accounting systems. • We are active contributors to the Broadway Initiative whose goalis to help ‘mainstream’ sustainability into the UK economy, and supporters of Business for Net Zero (B4NZ), helping deliver the UK’s new Voluntary SME Carbon Reporting Standard. • In FY25, we were founding partners of Carbon Commons, amajor new project with Small World Consulting to vastly improve the quality, accessibility, and transparency of emissions factors across the market. • We are also founding members of the Carbon Accounting Alliance, a new trade body representing the sector’s shared interests and advancing collaboration, interoperability, and policy influence. • In FY25, we provided consultation responses to the European Financial Reporting Advisory Group (EFRAG) VSME and the work of the OECD Platform on Financing SMEs for Sustainability under the OECD Committee on SMEs and Entrepreneurship (CSMEE). • Unlocking sustainable finance for SMEs https://www.sage.com/ en-gb/-/media/files/company/documents/pdf/sustainability- and-society/2024-reports/unlocking-sustainable-finance-for- smes-report-cop-29-final.pdf, launched at COP29, urged global decision-makers to bridge the gap between SMB’s growing sustainability ambitions and their ability to act, by calling for simplified reporting standards and access to green finance. What’s next By deepening collaboration with our suppliers and improving the quality and granularity of our data, we aimtoplay an active role indriving decarbonisation wherewe can make the most impact. We are preparing regional rollouts of Sage Earth across France, Spain, andGermany, while expanding integrations across our product ecosystem, with an ambition to accelerate decarbonisation at scale and making carbon tracking astandard part of doing business. Protect the Planet Performance against targets Sage to net zero Achieve net zero by 2040 and reduce absolute Scope 1, 2, and 3 GHG emissionsby50%by 2030, from a 2019 base year, aligned to SBTi On track Support SMBs in achieving net zero Help our customers reduce their GHG emissions by 2030 by providingaccesstocarbon management solutions and expertise On track Policy and advocacy for SMBs Put SMBs at the forefront of the transition to net zero by making suretheirvoiceisheard andlobbying for simplified standards On track 32 THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 Key FY25 achievements Data for Good Innovation to empower customers and SMBs • Working with Smart Data Foundry (SDF) and the Centre for Economics and Business Research (CEBR), we began building theinfrastructure to securely and ethically share anonymised data about how small businesses are performing in the real economy. The Small Business Tracker is a quarterly report offering real-time insight into the health of UK SMBs. The lastTracker was published in Q2 2025: https://www.sage.com/ en-gb/company/digital-newsroom/2025/09/01/the-sage-small- business-tracker-q2-2025/. • In May 2025, we joined forces with Enterprise Nation and the Federation of Small Businesses to host an event at the House of Commons, where we presented the findings gathered by the Small Business Tracker to industry leaders and policymakers. This data has helped to convince policymakers on the need to take action to support the millions of small businesses and entrepreneurs in the UK, with the Government currently exploring technological solutions to overcome the barriers that stop business from flowing. Empowering Entrepreneurs Local community investment and support • Sage Foundation’s strategy evolved with two key areas in focus: Multiply the impact of underserved small and medium businesses to advance a more sustainable world and empower our communities with the skills and technology they need to thrive. • FY25 has been a baseline year to evaluate, learn and improve our own impact collection as we transition to measuring our success, as well as embedding it into our new governance and impact measurement frameworks. • We launched our biggest single social impact programme—Sage Impact Entrepreneurship—a three year partnership with Village Capital, which will empower 165 purpose-driven entrepreneurs toscale and grow.In its first year, 56 businesses completed the program withaccess tofunding, mentorship, training and product. • Sage Foundation saw 80,036 hours volunteered and $850,466 raised to help our communities thrive in FY25. Building digital trust Cyber security and data privacy • We continue to expand and improve our Trust and Security Hub.The Hub offers relevant cyber security, privacy, and AI anddataethics advice for UK, US, French, German, Portuguese andSpanish markets to help SMBs “go digital safely”. • We have integrated security throughout our product lifecycle, with regular training for developers, secure software design, andprompt vulnerability remediation. Our Security Champions actas force-multipliers within software development and engineering teams. They ensure that vulnerabilities are identified and remediated promptly and play a crucial role inrecognising and addressing security threats early in the development process. Tech for Good Performance against targets AI and data ethics • At Sage Future Atlanta we set out our vision for the Agentic AIerathrough the AI trust label. This initiative is designed tobringgreater clarity and accountability to how AI is built andused in business software. • We have included data accuracy and trustworthiness across key policies including our AI and Data Ethics Policy and Information Security Policy, reflecting our commitment to incorporating datamanagement into our risk management process. • All colleagues are required to complete mandatory training on dataprotection, focusing on relevant data privacy laws and regulations. By monitoring privacy risks, we can process personaldata to create new and improved products and servicesand build our digital network. What’s next We will continue to evolve our AI and Data Ethics Policy and monitor compliance with our principles. Our ethics training will be launched in additional languages and uptake will be reported on. We will also continue to advocate for fair and simplified sustainability reporting standards ensuring SMBsare not left behind. Through Sage Foundation, we willscale our skills programmes further, to help equip more people with the skills and technology they need to thrive. Data for Good Support SMBs and advance the UN Sustainable Development Goals (SDGs) byusingourdatatocreatevisualisations (reports, trends, analytics) thatcaninformbetter decision making by 2025 Completed Empowering entrepreneurs Raise $5m for non-profits around the world by 2030 On track Build digital trust Expand our Trust and Security Hub tosupport SMBs in going digital safelyby2025 Completed Embed AI and data ethics intothe fabric of Sage by 2025 Completed Strategic Report Governance Report Financial Statements Additional Information THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 33 Sustainability and Society continued Key FY25 achievements Diversity, Equity and Inclusion • Currently 40% of leadership teams are reaching our target to achieve representation of no more than 60% of men, women, or non-binary people in any leadership team (ELT to ELT-4) by the end of FY26. • In line with the Parker Review—a framework for the ethnic diversity of UK boards—we have set ourselves a target of 20% ofour Executive Leadership Team (ELT) and ELT-1 (their direct reports) tobe from an historically underrepresented race or ethnic group. Wefinished FY25 at 11%. • During FY25, we welcomed 474 colleagues in India to the All AboutUs programme, increasing this programme’s reach to 94%of our colleague population. • We conducted baseline maturity assessments with Lexxic toassess neuro-inclusion and Workplace Pride, and to better understand support available at Sage for LGBTQ+ colleagues. • We developed action plans to close gaps identified in these assessments for full implementation in FY26. Product Accessibility • In FY25, 13 additional products reached the first milestone in our accessibility journey toward compliance. This brings Sage to a total of 17 products successfully passing automated accessibility tests using the Axe tool, aligned with the WCAG 2.1 AA standard. • Over the past four years, Sage has also conducted 40+ manual audits to ensure full coverage of the WCAG requirements. We havereduced the number of accessibility issues identified during human audits — by roughly one-third to date. Empowering Colleagues • 1,767—sustainability learnings delivered to colleagues inFY25,supporting increasing internal capability. • We introduced new structured learning paths and interactive bootcamps via The Cloud Academy, combining expert-led sessions with self-paced learning to develop cloud skills. AIconfidence and skills were strengthened through new education and learning programmes across the business. • We continued to invest in colleagues at the early stages of theircareers—such as interns, apprentices, and graduates— withafocus on building confidence, capability, and supporting diverse talent development, and we are launching a new Commercial Graduate Programme in FY26 to strengthen thispipeline. • 1,876 leaders went through the High-Performance Culture— HumanLeader Programme, equipped to role model and cascadekey behaviours, helping embed cultural change andbuildcapability across teams. Wellbeing • We continue to embed tools and resources that safeguard and strengthen mental health and wellbeing across our policies, processes, and day-to-day business practices. In 2025, this workhas become more deliberate and strategic, with focused enhancements woven into our DEI programmes and planning— firmly establishing mental health and wellbeing as a vital component of equity by design. Human by Design Performance against targets DEI Achieve representation of no more than 60%of men, women, or non-binary people inany leadership team (ELT to ELT-4) by the end of FY26 Behind track Achieve 20% ethnically diverse representation by the end ofFY27inseniorleadershipteams (ELT and ELT-1) Behind track Empowering Colleagues Colleagues to complete 5,000 Future Fit learnings by 2025 Completed Achieve a 20% YOY increase in Pathways hires up to 2025, with500+peoplereceivingwork readiness training each FY Completed Double the number of Healthy Mind coaches by 2025 Completed Product accessibility Cloud products to meet Web Content Accessibility Guidelines (WCAG) criteriaby2025 Behind track What’s next? We are committed to building a high-performing, future- ready workforce by expanding leadership capability, strengthening critical skills, and embedding continuous learning. We aim to enhance equity in our policies, processes and practices by leveraging diversity data, colleague insights, and increasing focus on providing mechanisms for continuous feedback. We’re focused on accelerating AI and data readiness, enabling commercial excellence, and growing a strong early careers pipeline. We will continue to reduce digital barriers by embedding accessibility deeper into our product development culture. 34 THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 TCFD The Task Force on Climate- related Financial Disclosures Compliance Statement FCA Listing Rules In this report, we set out our climate-related financial disclosures consistent with all the Task Force on Climate- related Disclosures (TCFD) recommendations and recommended disclosures pursuant to Listing Rule 6.6.6 (8) R. This includes all four TCFD pillars and the 11 recommended disclosures in the “Implementing the Recommendations of the Task Force onClimate-related Financial Disclosures’’ published in October 2021 by the TCFD. We have used TCFD guidance material including the TCFD technical supplement on the use of scenario analysis, TCFD Guidance on Metrics, Targets, and Transition Plans, the TCFD Guidance for All Sectors, Supplemental Guidance for Non-Financial Groups, TCFD Final Report and the Annex, TCFD Guidance on Risk Management Integration and Disclosure, and the Guidance on Scenario Analysis for Non-Financial Companies. We report against theTCFDFramework, in line with FCA Listing Rules. In FY25, we continued our progress in understanding and reporting against all four pillars of TCFD. We further developed our understanding of how Sage’s climate risks and opportunities could financially and operationally impact the business and identified additional strategic and operational touchpoints to better take advantage of climate opportunities and manage climate risks. We outline detailed information on our FY25 progress against TCFD in the table below, together with a summary of how we are consistent with TCFD recommendations. Further detail on our transition plan and Sustainability and Society strategy can be found in ourNon- Financial Statement—pages 22 to 30 and 6 to 7 Companies Act 2006 Our disclosure also meets the Companies (Strategic Report) (Climate-related Financial Disclosure) Regulations 2022 amended sections 414C, 414CA, and 414CB of the Companies Act 2006. UK Climate-related Financial Disclosures (CFD) We comply with the mandatory climate-related financial disclosure requirements under UK CFD. Our disclosures areconsistent with the TCFDrecommendations. Under ourStrategy pillar, we outline the rationale for the chosen scenarios used to assess the resilience of our business toclimate, and our timeline for refreshing the analysis undertaken, so that we continue to monitor how a changing climate may impact Sage over time. TCFD Compliance Status TCFD recommendation Summary and FY26 priorities Governance a) Describe the board’s oversight of climate- related risks and opportunities. Governance— page69 to 73 Fully consistent with TCFD recommendations The Board retains ultimate accountability for Sage’s approach to climate-related risks and opportunities, as well as the broader ESG agenda. It is responsible for setting the Group’s risk appetite and ensuring the effectiveness of risk management and internal control system. Oversight of ESG and climate-related risks is delegated to the Audit and Risk Committee (ARC), which receives regular updates from management and provides challenge and direction on key issues. In FY25, the Board and ARC received four updates on sustainability matters through formal Board papers and Committee briefings. These included progress against Sage’s Sustainability and Society strategy, developments in the Protect the Planet action plan, andinsights into emerging sustainability trends and their strategic implications for the business. The Board was also involved in setting climate related performance objectives. Maggie Chan Jones is Sage’s designated Non-executive Director for ESG, supporting Board oversight and providing specific challenge and guidance onthe ESG agenda. The CEO provides regular updates to the Board, informed by either attending the quarterly Sustainability, AI, and Data Ethics Committee as a non-member, or debriefs following the Committee. The Committee membership comprises a subset of Executive Leadership Team (ELT)members and our Board ESG representative is also a regular non-member attendee. FY26 priorities We will continue to monitor the updates and training programmes for the Board and ELT as part of our Sustainability and Society strategy, including briefings, progress updates, and formal training sessions, ensuring they remain well informed on climate-related developments and risks. Strategic Report Governance Report Financial Statements Additional Information THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 35 TCFD continued TCFD recommendation Summary and FY26 priorities Governance b) Describe management’s role in assessing and managing climate-related risks and opportunities. Risk governance— page 58 Board activities— page 86 Directors’ Remuneration report—pages 117 to151 Fully consistent with TCFD recommendations The CEO and ELT are accountable for Sage’s Climate strategy and our approach to the TCFD recommendations. The Executive Vice President (EVP) of Sustainability and Sage Foundation have responsibility and oversight our Protect the Planet strategy. Climate risks and opportunities have assigned owners, whoreceive strategic oversight from the EVP Sustainability and Foundation on a quarterly basis, during a sustainability risk review meetingcoordinated by the sustainability function. If further support on mitigation is needed, climate risks and opportunities are raised to the Sustainability, AI, and Data Ethics Committee. Chaired by the Chief Brand and Corporate Affairs Officer, the Committee meets quarterly, and reviews climate-related matters, monitors progress against key targets, and ensures alignment with Sage’s strategic objectives. Key outcomes from these meetings are shared with theCEO and ELT and inform updates to the Board. The Committee uses Sage’s Enterprise Risk Management Framework and the results ofSage’s climate scenario analysis and double materiality assessments to assess climate-related risks. These insights inform strategic planning, investment decisions, and risk mitigation actions. We track progress through a dedicated KPI dashboard and climate-related performance is embedded in executive remuneration. In FY25, a proportion of the Executive Directors’ and ELT’s Performance Share Plan awards were again linked to strategic non-financial measures, including climate-related targets (see our Remuneration Policy on pages 127 to 131). FY26 priorities We will continue to enhance how we are integrating climate-related matters into strategic planning, performance management, reporting, and due diligence processes. We will also continue to monitor emerging climate-adjacent topics—such as nature and broader sustainability issues—to ensure consistent and effective oversight across all areas of impact. TCFD recommendation Summary and FY26 priorities Strategy a) Describe the climate- related risks and opportunities the organisation has identified over the short, medium, and long term. See climate risks and opportunities table on pages 42 to 44 Further information can befound in our Non-financial statement Fully consistent with TCFD recommendations Reflecting on our progress outlined in our previous disclosures, we continue to improve our understanding, through the use of climate scenario analyses of climate-related risks and opportunities across short-, medium-, and long-term time horizons, and aim to develop aholistic understanding of how climate change may impact aspects of Sage’s business strategy, operations, and finances. Through a qualitative climate scenario analysis, we identified climate-related risks and opportunities; our methodology is outlined inour FY22 Annual Report. Relevant internal stakeholders assessed risks and opportunities using Sage’s Enterprise Risk Management (ERM) Framework, taking into consideration likelihood and impact, as well as setting a defined risk appetite (see page 56 to 66 for further details) and the potential impact to Sage (see Strategy pillar disclosure ‘b’ and ‘c’). In FY25, our climate-related risks and opportunities remained consistent with previous years. We built on our previous assessment by undertaking a quantitative climate scenario analysis, to examine the potential financial implications of both physical and transition climate risks. To support this analysis, we used the “Risilience” climate modelling platform to simulate a range of climate scenarios andinform our strategic planning. As part of the assessment, we identified physical risks and six key categories of transition risks related to climate change that may impact our operations, value chain, and stakeholder relationships. These categories are linked toourexisting climate risk profile, and are outlined below. Physical risks Exposure and related vulnerability of Sage’s physical assets to selected climate hazards—coastal flooding, drought/water stress, flash flood, freezing, heatwave, riverine flood, temperate, and tropical windstorms. Transition risks • Policy: Anticipated increases in the cost of emitting greenhouse gases (GHGs) due to evolving climate-related legislation, including carbon pricing mechanisms and mandatory disclosure requirements. • Litigation: Potential for legal action against companies perceived to be underperforming on climate commitments or failing to meet regulatory obligations. • Customer sentiment: A shift in customer preferences towards more sustainable products and services could reduce demand for offerings perceived as carbon-intensive, particularly in markets with high climate awareness. • Investor/market sentiment: Growing scrutiny from investors and financial institutions may lead to reduced access to capital or higher financing costs for businesses not aligned with net zero pathways or if a company’s transition strategy is perceived as overly aggressive, diverging from investor expectations. • Reputation: Increased public and stakeholder pressure on organisations seen as lagging in their climate transition could impact brand equity, employee engagement, and customer loyalty. • Technology: The shift towards low-carbon technologies may result in increased operational costs, accelerated depreciation ofexisting assets, and delivery risks associated with new systems and platforms. 36 THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 TCFD recommendation Summary and FY26 priorities Strategy b) Describe theimpact of climate-related risks and opportunities onthe organisation’s businesses, strategy, and financial planning. See climate risks and opportunities table on pages 42 to 44 Fully consistent with TCFD recommendations Reviewing the output of our FY25 TCFD-aligned climate change scenario analysis against our strategy, business plan, and operations, we have not identified any material risks on the Group’s financial results, going concern, viability, businesses, or current strategy in the short, medium or long term. We evaluated these risks against our internal materiality threshold, defined as a substantive financial or strategic impact (see page 38 in strategy section ‘c’). We assessed the potential impact on Sage’s cumulative discounted cash flows over three years, assuming no mitigating actions are in place. The table below shows the risk categories and linked risks from our FY22 qualitative assessment that were assessed against three warming scenarios: no policy (>4°C), stated policy (2.5°C) and Paris ambition (1.5°C). Risk categories Linked risks from FY22 qualitative assessment Policy Increasing cost of energy and carbon Consumer sentiment Changing customer behaviour and needs Reputation Reputational damage Investor sentiment Reputational damage Liability Reputational damage Physical Damage to facilities Technology New: Not identified as a risk in FY22 assessment Risks arising from climate change and its associated risks are constantly evolving, so we will monitor and evaluate climate-related impacts and review them in line with our evolving business strategy (see note 1 of the Group financial statements on page 182). In the table on pages 42 to 44, we provide an overview of our climate risks and opportunities. If we identify material climate-related risks, we will manage and prioritise these risks based on their financial materiality, as per our Risk Management Framework. Climate change is considered as part of our strategy and operations. We are well positioned to support global climate awareness andaction through our products such as Sage Earth (Sage’s carbon accounting offering). In FY25, we continued to deliver against our NetZero Transition Plan and Climate strategy, obtaining an A-List award from CDP in recognition of our environmental and climate leadership. This year, initiatives under our Net Zero Transition Plan included completing lifecycle assessments of selected products, togain more granular data on how our products function and what activities are associated with their operations. This allowed us to mapthe detailed sources of our emissions from products, enabling more targeted decarbonisation actions. Further details are outlinedin our Non-Financial Statement which can be found at www.sage.com/en-gb/company/ sustainability-and-society/. FY26 priorities We will continue to monitor and assess our climate-related financial risks, working to continuously improve our quantitative modelling. Strategic Report Governance Report Financial Statements Additional Information THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 37 TCFD continued TCFD recommendation Summary and FY26 priorities Strategy c) Describe theresilience ofthe organisation’s strategy, takinginto consideration different climate-related scenarios, including a 2°Cor lower scenario. Fully consistent with TCFD recommendations In FY25, we refreshed our climate scenario analysis to further evaluate Sage’s strategic resilience to physical and transition risks under high and low carbon scenarios. We used five climate scenarios and emission pathways: Paris Ambition (1.5°C), Paris Agreement (2°C), Stated Policy (2.5°C), Current Policy (3°C), and No Policy (>4°C) with temperatures consistent with global warming above pre-industrial levels by 2100. We selected the five pathways to reflect the IPCC 6th Assessment Report (AR6), with each representing a broad narrative offuture socio-economic development. The assessment focused primarily on the short-term horizon (1–5 years), while also considering implications for the medium term (5–15 years) and long term (15-30 years). It was conducted on a ‘no additional mitigation’ basis, assuming no additional mitigations are in place. Our main assumptions for the FY25 climate scenario analysis were: each emission pathway has a different probability of happening; No Policy (>4°C) and Paris Ambition (1.5°C) are opposite ends of the stress test. In reality, the future will be a mix of all scenarios. The basis was our current asset base without factoring in any potential changes over the analysed time horizons. Similarly, potential shifts in our cloud infrastructure providers or technology stack were not considered, as the software industry is highly dynamic and volatile, with projections of trends over the analysed time horizons not deemed robust enough. Where company-specific emissions or asset data wasnot available, industry-average values by sector and region were applied based on external datasets and default model parameters. In line with previous disclosures, the additional analysis undertaken during FY25 did not identify that climate is a financially material risk to Sage in the short, medium or long term. As impacts arising from climate change are constantly evolving, we maintain a climate risk and opportunity register, to ensure a proactive risk management approach with early response. The results of the FY25 assessment were raised to the Global Risk Committee, with members including General Counsel and Company Secretary, the Chief Executive Officer, and the Chief Financial Officer, to increase the level of understanding around the types and level of climate risk that Sage is exposed to. We have a range of measures and activities in place to manage identified climate change impacts, as detailed between pages 21 and 32 of our Non-Financial Statement. FY26 priorities We will focus on gaining a better understanding of how climate interacts with various touchpoints across the business. TCFD recommendation Summary and FY26 priorities Risk Management a) Describe the organisation’s processes for identifying andassessing climate-related risks. Principal Risksand uncertainties— page 61 to 66 Fully consistent with TCFD recommendations We fully align with TCFD recommendations and have embedded climate risk identification, assessment, and management within our established ERM processes. As above, the results of our FY25 climate scenario analysis indicate that climate-related risks are not currently financially material to Sage. We manage climate change as a sub-risk under our ESG Principal Risk, ensuring we reach our desired risk appetite. An operational climate risk register feeds into our climate sub-risk and helps to monitor the individual climate risks and opportunities that are relevant toour business. To address existing and emerging regulatory requirements and best practice, we have a formalised process to identify climate-related risks and opportunities, which includes: • Yearly horizon scanning informed by regulatory guidance, climate science, and expert judgement. • Using climate scenario analysis and double materiality assessment, to prioritise risks and opportunities. • An operational climate risk register reviewed quarterly by the EVP Sustainability and Foundation, to assess if any risks need to be escalated to the Sustainability, AI and Data Ethics committee. Our prioritisation process integrates the financial materiality component of the CSRD-related double materiality assessment, enabling us to focus detailed reporting and management on the highest priority risks. We monitor lower priority risks and revisit them periodically. FY26 priorities We will continue to refine identification and prioritisation processes, leveraging scenario analysis outcomes, and enhancing our climate risk register accordingly. TCFD recommendation Summary and FY26 priorities Risk Management b) Describe the organisation’s processes for managing climate-related risks. Principal Risksand uncertainties— page 61 to 66 Fully consistent with TCFD recommendations Our ERM Framework provides a consistent methodology to manage all risks, including climate-related risks, supporting risk-informed decision making across the organisation. The Climate team in collaboration with key internal stakeholders, uses the ERM framework to decide whether to mitigate, transfer, accept, or control exposure for each risk. Risk owners across regions and functions are responsible for the day-to-day management of climate risks and implementing controls. For example, physical risks are managed by our property and crisis management teams with contingency and business continuity plans. Reputational damage is overseen by our Corporate Affairs team. To strengthen risk management capabilities, we have delivered bespoke training to risk owners and key stakeholders on ESG risk management and regulatory requirements. This upskilling supports consistent and informed management of climate risks across Sage. FY26 priorities We plan to expand our training programme and deepen engagement with internal stakeholders to enhance our risk management practices. 38 THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 TCFD recommendation Summary and FY26 priorities Risk Management c) Describe how processes for identifying, assessing, and managing climate-related risks are integrated intothe organisation’s overall risk management. Principal Risksand uncertainties— page 61 to 66 Fully consistent with TCFD recommendations Climate-related risks are fully integrated within Sage’s ERM Framework, which manages strategic, operational, commercial, financial, compliance, change, and emerging risks using a consistent methodology. • ESG is a Principal Risk, with climate change a key sub-risk, ensuring that climate considerations are embedded at the highest levels of risk governance. • Functional teams incorporate climate risks relevant to their domain, ensuring risk ownership is clear and embedded operationally. The sustainability function and the EVP Sustainability and Foundation provide strategic oversight quarterly. • Our Sustainability team supports the integration by coordinating cross-functional risk assessments and aligning them with our strategic objectives. FY26 priorities We will focus on embedding our FY25 climate scenario analysis insights into broader business risk discussions and conduct an education campaign to help colleagues understand our impact on the planetary boundaries, including climate change, biodiversity, waste, and water, and the implications for their daily roles. TCFD recommendation Summary and FY26 priorities Metrics and Targets a) Disclose the metrics used by the organisation to assess climate-related risks and opportunities inline with its strategy and risk management process. Further information can befound in our Non-financial statement Fully consistent with TCFD recommendations Since 2018, we have measured and reported on energy and carbon emissions, providing us with a robust baseline from which to planourjourney to net zero. We monitor various metrics related to climate risks, such as the percentage of renewable energy used. Thesemetrics and any related targets are subject to ongoing review and updates, with monitoring and target-setting aligned to themateriality of the risks. Group net zero targets Our carbon emissions calculations are also subject to independent limited assurance. In 2023, the SBTi validated our near-term 2030 commitment. In FY24, the SBTi validated our commitment to become net zero by 2040. Sage uses the SBTi definition of net zero for its targets (page 62, https://sciencebasedtargets.org/glossary). We have continued to reduce emissions against our target commitment. Since FY19, our market-based emissions have fallen by 27.8%, against an SBTi glidepath of 27.2%, reducing from 231,957 tCO 2 e to 167,444 tCO 2 e in FY25. Our Non-Financial Statement www.sage.com/ en-gb/company/sustainability-and-society/ outlines the specific actions that will be taken to achieve our near-term 2030 target. We trackour progress by targets and monitor through our climate risk register (our climate risks and opportunities can be found in the table onpages 42 to 44). Related executive remuneration targets In FY22, we introduced a set of three-year performance measures to include relevant ESG metrics. Every year since FY22, we have setthree-year performance measure for reducing emissions, in alignment with our SBTi-approved Net Zero Transition Plan. In FY23theweighting of ESG measures increased from 15% to 20%. Our FY23 performance measures vested this year achieving ourstretchtarget. Read more in our Directors’ Remuneration Report on page 137. Our most recent global emissions footprint is on page 36 of our Non-Financial Statement report. FY26 priorities We will continue to monitor and review our climate targets and metrics, providing quantitative disclosures where appropriate. Strategic Report Governance Report Financial Statements Additional Information THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 39 TCFD continued TCFD recommendation Summary and FY26 priorities Metrics and Targets b) Disclose Scope1, Scope2,and, ifappropriate, Scope 3 greenhouse gas (GHG) emissions, and the related risks. Further information can befound in our Non-financial statement Fully consistent with TCFD recommendations Sage calculates and discloses emissions from Scope 1, Scope 2 and Scope 3, in compliance with Streamlined Energy and Carbon Reporting (SECR) regulations. Scope 1 and 2 emissions: UK and global 1 Current reporting year Oct 2024—Sept 2025 Previous reporting year Oct 2023—Sept 2024 Previous reporting year Oct 2022—Sept 2023 Total GHG emissions data UK and offshore area Global (excluding UK and offshore area) UK and offshore area Global (excluding UK and offshore area) UK and offshore area Global (excluding UK and offshore area) Emissions from activities which the Company ownsorcontrols, including combustion of fuel andoperation of facilities (Scope 1)/tCO 2 e 435 714 834 554 196 1,030 Emissions from the purchase of electricity, heat, steam, or cooling by the Company for its own use Scope 2 (Indirect) location-based emissions (tCO 2 e) 679 2,399 878 2,357 738 2,518 Scope 2 (Indirect) market-based emissions (tCO 2 e) 39 268 14 1,864 13.3 1,395 Total gross Scope 1 and location-based Scope2emissions (tCO 2 e) 1,114 3,113 1,713 2,911 933 3,548 Energy consumption used to calculateaboveemissions (kWh) 4,530,170 10,151,427 4,921,509 9,539,260 4,217,496 12,202,282 Carbon intensity ratio: location-based CO 2 e per total GBP£1,000,000 revenue (Scope 1 and 2) (tCO 2 e/revenue) 2.1 1.6 3.6 1.6 2.2 2.0 Scope 3 emissions (indirect) WTT, T&D and WTT (T&D) 289 818 315 702 268 891 1. The table sets out Sage’s mandatory reporting on GHG emissions and global energy use pursuant to the Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008, as amended by the Companies Act 2006 (Strategic Report and Directors’ Report) Regulations 2013 and the SECR under the Companies (Directors’ Report) and Limited Liability Partnerships (Energy and Carbon Report) Regulations 2018. * Energy consumption includes all energy use related to Scope 1 and 2. ** Global revenue in FY25 is £2,513m for Sage during the reporting period. It was £2,332m for the previous year’s reporting period. Sage also screens and discloses emissions across all relevant Scope 3 categories as covered within our SBTi target. In FY25, limited assurance of our GHG report has been provided by Bureau Veritas; a copy of the statement can be found in the Appendix of our Non-Financial Statement. Further detail on our Scope 1, 2, and3GHG emissions and protocol aligned methodology, andemissions can be found in our Non-Financial Statement on pages 90 to 104. The Non-Financial Statement canbe found here: www.sage.com/en-gb/company/sustainability-and-society. Energy-efficiency actions Business travel: We continue to manage the risks associated with increased business travel while monitoring external factors, including rising carbon intensity. In FY25, we enhanced our carbon emissions travel dashboard. Building on the addition of a shadow carbon price (£200 per tonne) in FY24, we developed a Travel Insights Dashboard with up-to-date travel data, providing colleagues with key insights into their own travel data. Contextualising travel behaviours alongside peers helps us to work directly with those colleagues to track emissions, to educate, and support the decarbonisation of business travel. Colleague engagement: We recognise the critical role that our colleagues play in reducing our carbon emissions. In FY25, we continued to roll out the launch of the programme with Deedster to combine education and action. Colleagues can complete carbon-saving quizzes and challenges on the Deedster app. To date, 724 Sage colleagues have taken 26,590 climate challenges, resulting in approximately 137tonnes of CO₂ emissions saved. Additionally, we have continued to expand the reach of our active travel scheme to five additional countries. In partnership with Liftshare, we are providing colleagues with tools to reduce emissions derived from colleague commuting and incentivising more sustainable modes of travel. At present, 276 colleagues are actively Liftsharing, resulting in approximately 32,000 road miles and 7.1 tonnes CO₂ emissions saved. Property related: We continued to manage our sites effectively and efficiently in FY25 via our Sustainable Property strategy, which seeks to improve the environmental characteristics and efficiency of our property estate. We saw an increase in the use of certified renewable energy sources, reaching 86% of our total electricity consumption for FY25, compared with 54% in FY24. In FY25, we entered into a performance-based energy efficiency partnership with a global commercial real estate services firm, at our global headquarters in Cobalt, Newcastle. This initiative, involving the implementation of sub-metering and energy management software, achieved a 6.6% reduction in electricity consumption, despite an increase in the occupancy rate due to changes in our Working from Home policy. Reuse, Resell, Recycle: The IT department continued its “Reuse, Resell, Recycle” policy. This involves collecting old equipment and ensuring it is upcycled and recycled. Sage sells the equipment to an external party and donates the proceeds to charity. 40 THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 TCFD recommendation Summary and FY26 priorities Metrics and Targets b) Disclose Scope1, Scope2,and, ifappropriate, Scope 3 greenhouse gas (GHG) emissions, and the related risks. Continued. Further information can befound in our Non-financial statement Methodology Our methodology underlying our disclosed emissions remains consistent with the previous year and is based on the “Environmental Reporting Guidelines: including streamlined energy and carbon reporting guidance” (March 2019) issued by the Department for Business, Energy & Industrial Strategy (BEIS) , the predecessor to DESNZ. This methodology is consistent with the World Resources Institute’s Greenhouse Gas Protocol (GHGP) Corporate Accounting and Reporting Standard. We have also used the UK government emissions factors for company reporting (published by DESNZ in 2023), combined with the most recent International Energy Agency (IEA) international conversion factors (2022) for non-UK electricity within our reporting methodology. We have also used EcoAct’s emission factors tool for Well toTank(WTT) and Transport & Distribution (T&D) for non-UK sites as DESNZ/DBT no longer publishes them. These emission factors are basedon the specific fuel mix of each country’s electricity generation. For Scope 3 emissions sources,we have used a combination ofthe Comprehensive Environmental Data Archive (CEDA version 6) and UK government GHGemission factors. As our data collection improves, we aim to collect more supplier specific data. Our purchased goods and services calculation has used supplier-specific data from the CDP Supply Chain questionnaire where relevant. Working with CDP and other partners, we aim to increase the proportion further in subsequent years as more suppliers make use of this service. In some cases, we have extrapolated total emissions by using available information from part of a reporting period and extending it to apply to the full reporting year. For example, this has occurred where supplier invoices for the full reporting year were unavailable prior to the publication of this year’s Annual Report and Accounts. Extrapolations have taken place based on a hierarchy of data availability in line with the GHGP guidance for carbon accounting. For further details, our methodology document can be found at www.sage.com/investors/. Reporting period Our mandatory GHG reporting period is 1 October 2024 to 30 September 2025 and is aligned with our financial reporting year. Organisational boundary and responsibility We report our emissions data using an operational control approach to define our organisational boundary which meets the definitional requirements of the Companies Act 2006 (Strategic Report and Directors’ Report) Regulations 2013 and the UK Streamlined Energy & Carbon Reporting (SECR) regulations 2019 in respect of the energy consumption and emissions for which we are responsible. Under this approach, we have accounted for 100% of GHG emissions from operations over which Sage has control. Carbon intensity To express our annual emissions in relation to a quantifiable factor associated with our operational activities, we have used “annual revenue” in our intensity ratio calculation as this is the most relevant indication of our growth and provides for a good comparative measure over time. TCFD recommendation Summary and FY26 priorities Metrics and Targets c) Describe the targets used by the organisation to manage climate-related risks and opportunities and performance against targets See climate risks and opportunities table on pages 42 to 44 See Protect the Planet targets on page 32 Further information can befound in our Non-financial statement Fully consistent with TCFD recommendations Targets related to net zero We have committed to net zero by 2040, and to reduce absolute Scope 1, 2, and 3 emissions by 50% by 2030 against a 2019 baseline. Wearealso committed to the SBTi, the UN climate change Race to Zero, and the UN Global Compact Business Ambition for 1.5ºC. We continue to work towards our SBTi-validated carbon targets. Since FY19 our market-based emissions have fallen by 27.8%, against anSBTi glidepath of 27.2%, reducing from 231,957 tCO 2 e to 167,444 tCO 2 e in FY25. See Non-Financial Statement www.sage.com/en-gb/ company/sustainability-and-society/ for more detail on our 2030 target, 2040 targets, and Net Zero Transition Plan. Targets and metrics related to our climate risks and opportunities Our Protect the Planet strategy outlines our core climate-related targets, which includes our Net Zero Transition Plan, our target to support of SMBs in reducing their emissions, and our advocacy for SMBs to enable them to align to sustainability standards. We have included further detail on thesein our FY25 Non-Financial Statement where our Protect the Planet strategy is discussed in relation toour double materiality assessment, found here: www.sage.com/en-gb/company/sustainability-and-society/. We have established metrics tomonitor the progress of our targets and manage or climate related risks. For example, the opportunities for renewable energy procurement have been via the percentage of electricity sourced from renewable energy contracts. When these contracts approach renewal, we seek to procure renewable energy. FY26 priorities We will continue to monitor the climate targets we have in place, providing quantitative disclosures against targets where possible. Strategic Report Governance Report Financial Statements Additional Information THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 41 TCFD continued Key Risk assessment period Short term 1-5 years Medium term 5-15 years Long term 15-30 years Sage has selected time horizons that harmonise with those of national and international climate policy and goals, including the 2015 international ParisAgreement and our three-year strategic plan of the business. Maturity High maturity Quantitative climate scenario analysis performed Medium maturity Good understanding, further work desireable Low maturity Further work is required to fully impact, mitigate, and adapt Our key climate-related risks and opportunities Quantification risk categories Risk Maturity Time horizon Climate scenario analysis Transition risks Consumer sentiment Changing Customer Behaviour andNeeds Sub-type Market Sage is closely linked to economic activity and the success of SMB markets. However, SMB markets are more exposed and lessresilient to the impacts of climate change. An increase in global disruption due to climate change could reduce economic activity and lead to a lower demand for Sage services. FY25 update We have strengthened our role as a trusted partner by equipping sales teams with clear, insight-driven sustainability resources. Wedeveloped a one-stop suite of sales enablement assets helping colleagues confidently engage customers. Tailored messaging andtargeted training ensure we support SMBs effectively amid climate challenges, reinforcing our commitment to trusted guidance on sustainability. Long term (2023 & 2025) Policy Increasing Cost of Energy and Carbon Sub-type Regulation and Technology Offices, hosting services, and data centres are energy-intensive operations. If the cost of carbon increases, this could make the Group’soperating costs more expensive. Sage may need to mitigate costsand risk through increased carbon efficiency, and/or consider where these costs are absorbed. FY25 update We are minimally impacted by high energy costs and prioritise absoluteemissions reductions aligned with the SBTi Corporate Net-Zero Standard,while recognising that high-quality carbon removalsmaysupport future efforts to address residual emissions. We are closely tracking updates to the SBTi framework, as wellasevolving carbon market regulations and potential futurecarbonprices.These insights will inform our approach toresidual emissionsand long-term Carbon Removals strategy https://www.sage.com/en-gb/company/sustainability-and- society/#reports. Long term (2023, 2024, 2025) Reputation Investor sentiment Liability Reputational Damage Sub-type Reputation Stakeholders’ expectations regarding ambitious carbon targets and climate advocacy are increasing. They are applying greater scrutiny to how Sage aligns all business activities to its Net Zero Transition Plan. Sage may suffer reputational damage if targets are missed orifit is notsufficiently active in this space. FY25 update We worked closely with our External Communications team to integrate sustainability into our reputation monitoring programme tobetter assess how our Sustainability and Society strategy influences brand sentiment and stakeholder trust https://www.sage.com/en-gb/company/ sustainability-and-society/#reports. We continue to monitor stakeholder sentiment on sustainability and climate-related matters, extending alongside global partners including WBCSD and Bankers for Net Zero. Short to Medium term (2025) 42 THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 Quantification risk categories Risk Maturity Time horizon Climate scenario analysis Physical risks Physical Workforce Productivity Sub-type Chronic & Acute An increasing number of extreme weather events may leave offices andhomes unfit for work. This could reduce workforce productivity bymaking it difficult for employees to work during certain times. FY25 update We continue to invest in flexible working structures that support collaboration and adaptability, balancing local colleague needs withbusiness priorities to ensure a safe working environment. Short term (2022 & 2024) Physical Damage to Facilities Sub-type Chronic and Acute Extreme weather events have the potential to disrupt or damage Sage sites/facilities. Flooding, heatwaves, droughts, and rising sea levels could all impact our facilities. Insufficiently prepared facilities could be unable to deal with more frequent and intense occurrences of such events. FY25 update In FY24, our Climate team conducted a climate scenario analysis across all global office locations. This assessment identified North America as a high-risk region. In response, Sage’s Business Resilience team developed and implemented an Extreme Weather & Natural Disasters Playbook for the North America Executive Management Team (NA EMT). The Playbook was tested through a tabletop exercise in May 2025, simulating the impact of a major hurricane on our Atlanta and Lawrenceville offices. The exercise validated the Playbook, reinforced NA EMT roles and responsibilities, and tested decision making under pressure. The event also served to strengthen regional preparedness and resilience. Short term (2022, 2024, 2025) Physical Hosting Resilience Sub-type Chronic & Acute Sage has a number of centralised public cloud providers, as well as hosting services. This infrastructure could be vulnerable to persistent and extreme weather events. These events could become more frequent, reducing service availability and customer experience. FY25 update We work with multiple hosting partners and regularly engage with our most critical providers to understand how they incorporate climate risks into their continuity and recovery plans. In FY25, we continued these engagements, noting that many key providers adhere to ISO 22301:2019, which supports climate-related riskmanagement through robust business continuity practices. Short to Medium term (2022) Strategic Report Governance Report Financial Statements Additional Information THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 43 Maturity Time horizon Opportunities Retaining andHiring Superior Talent Sub-type Efficient and mindful workforce It is important for employers to demonstrate sustainability as a cultural value. This can help attract and retainenvironmentally conscious talent. A more climate-informative hiring process can make Sage more attractive to talent. FY25 update In FY25, we introduced a new sustainability onboarding presentation to engage and inspire new hires from the start, helping them understand Sage’s climate goals and their role in achieving them. We continued to develop our colleague benefits, including electric vehicle schemes, low-carbon commuting incentives and hybrid working support. Our partnership with MobilityWays offers personalised travel plans, while our car-sharing app ‘Liftshare’ has expanded to more sites, reducing commuting emissions. We also advanced our sustainability learning, with many colleagues completing courses through Sustainability Unlocked andtaking partinClimate Fresk workshops, enabling them to supportour decarbonisation efforts. Short to Medium term Renewable Energy Renewable Energy Procurement Sub-type Energy source Sage could ingrain renewable energy provision into our facility management plans. This would incentivise Sage building managers, landlords, and hosting services to develop and innovate more carbon-efficient buildings. The combined pressure from Sage, its peers, and society can help reduce carbon emissions and costs. FY25 update We are making progress in transitioning to clean energy in support of our 2030 emissions reduction and 2040 net zero targets. In FY25, we secured a carbon-free energy contract for our largest UK site, Cobalt, and opened our new Atlanta office at Ponce City Market, a low-carbon building with strong sustainability credentials. We continue to face challenges in expanding renewable energy use across our global estate, particularly in leased sites and regions with limited access to green tariffs, such as North America and South Africa. Despite these constraints, we remain committed to working with landlords and monitoring market developments to identify further procurement opportunities. Short to Medium term New Products and Services Sub-type Products andservices Climate change demands are presenting a new opportunity for Sage to develop products and services for its SMB customers that will help them tackle the challenges of climate change and put sustainability at the core oftheir business. FY25 update In FY25, we continued to roll out Sage Earth, our carbon accounting solution designed to help small and mid-sized businesses measure, report, and reduce their emissions. Available in the UK and US, Sage Earth uses advanced AI and partners with financial institutions, fintechs, and energy providers to expand its reach. We continue to advocate for simpler climate standards that support SMBs in their net zero journey. Through collaboration with colleagues, partners, and customers, we aim to align our products and operations with the Paris Agreement and create lasting climate impact. Short to Long term Enhanced Brand Sub-type Reputation Sage has an opportunity to help SMBs fight climate change and be their voice for the future, supporting them when it comes to lobbying for change. FY25 update Our sustainability leadership continues to be externally recognised. We upheld our EcoVadis Gold rating, were once again named one of the UK’s most sustainable companies by TIME, and achieved an A rating from CDP, reflecting strong progress and transparency on climate action. Short to Medium term * Site strategy, an opportunity identified in Sage’s Annual Report 2024, has been integrated into renewable energy procurement, to help streamline initiatives and reporting. TCFD continued 44 THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 Non-financial and sustainability information statement Human rights We respect the most fundamental of human rights including no child labour, no forced labour or modern slaveryand the freedom ofassociation. We pay special attention to addressing the human rights identified as potentially higher impact to oursector, through Respecting privacy and protecting data; Developing inclusive and accessible products; Responsible development and use ofArtificial Intelligence (AI); and Protection from modern slavery and promoting sustainable supply chain practices. We conduct appropriate due diligence on our partners, and allof our partners and suppliers are required to adhere to theprinciples set out inthe Supplier and Partner Code ofConducts, including on human rights. Details on our duediligence processes continue to be reported in our Modern Slavery Statement available at www.sage.com/investors/governance. Governance and oversight We recognise that assurance over our business activities and those of our partners and suppliers is essential. During FY25, we monitored and reported on the completion of our mandatory Code of Conduct training for all new colleagues. The training is then mandatory for all colleagues at regular intervals thereafter. You can read more about our risk management and Principal Risks from pages 56 to 66. Tax strategy We publish our tax strategy on our website (www.sage.com/ investors/governance/tax-strategy) and are committed to managingour tax affairs responsibly and incompliance with relevant legislation. Our tax strategy is aligned to our Code of Conduct and Sage’s Values andbehaviours and is owned and approved by the Audit and Risk Committeeannually. Anti-Financial Crime The Board and ELT remain fully committed to upholding our keyvalue of ‘we do the right thing’, which includes having a zero-tolerance approach to fraud and other forms of financial crime.In alignment with the Economic Crime and Corporate Transparency Act 2023, we continue to take proactive steps to ensurethat we have reasonable and proportionate procedures in placeto prevent fraud by persons associated with our business. Ouranti-financial crime policy and accompanying procedure makeit clear that Sage expects colleagues to recognise and reportany concerns or suspicious activity they encounter via ourinternal reporting and whistleblowing mechanisms, so thattheycan be thoroughly investigated. Any investigations concerning incidents of fraud or other financial crime are reportedto the Audit and Risk Committee, which reviews theoutcomes of each case. Anti-bribery and corruption Sage has an anti-bribery and corruption policy which details our zero-tolerance approach to all forms of bribery and corruption. Weuse Transparency International’s Corruption Perceptions Index to inform our risk based approach to ourdue diligence on customers, suppliers and partners, which is codified in our third-party due diligence policy. Our dedicated Business Due Diligence team supports colleagues infulfilling their third-party due diligence obligations. We also require our partners to adopt our position on bribery and corruption and we support them indoing so by clearly setting out our expectations in our Partner Code of Conduct. Sage’s anti-bribery and corruption policy, together with associated whistleblowing procedures and grievance mechanisms, are designed to ensure that colleagues and other parties, including contractors and third parties, are able to report any instances of poor practice safely through internal channels or an independent organisation. Allreports received via this or any other reporting mechanism are thoroughly investigated and reported to the Audit and Risk Committee, which reviews each case and its outcomes. None of our investigations during FY25 identified any systemic issues or breaches ofour obligations underthe Bribery Act 2010. The anti-bribery and corruption policy is supported by our gifts &hospitality and conflicts of interest policies and theirsupporting declaration and approval procedures, as well as periodic checks and reminders. Further details on our policies and procedures in this area can be found in the Appendix of the Non-Financial Statement available at www.sage.com/en-gb/company/sustainability-and-society. Non-financial and Sustainability InformationStatement Information as required byregulation can be found on the following pages: Environmental matters pages 30 to 32, and 35 to 44 Our employees pages 24 to 29, and 94 Social matters pages 30 to 34, 45 and 96 Human rights page 45 Anti-corruption andanti-bribery page 45 Climate-related disclosures pages 35 to 44 Business model pages 8 and 9 KPIs pages 22 and 23 Principal Risks pages 61 to 66 Ethics and governance Strategic Report Governance Report Financial Statements Additional Information THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 45 Section 172(1) statement Section 172(1) statement The Directors of The Sage Group plc. confirm that, throughout the year, they have acted in good faith and in a manner they consider most likely to promote the success of the Company for the benefit of all its shareholders as a whole. In fulfilling this duty, they have given due consideration to the interests of Sage’s wider stakeholder community, safeguarded the Company’s reputation, and supported its long-term sustainability. This duty is outlined in section 172(1)(a) to (f) of the Companies Act 2006 (‘section 172’). Engagement with our stakeholders plays a vital role in ensuring that our Directors fully understand their needs and make well-informed decisions that consider different priorities. However, the Board recognises that stakeholder priorities may sometimes compete. The Board therefore seeks to make decisions that best support Sage’s strategy and deliver sustainable value over time. Stakeholder views are considered in all matters of strategic significance, and the principles of section 172 are embedded throughout the organisation, from Board-level decisions to operational culture. Details of the principal decisions made during the year canbe found onpages 88 to 89. Alongside the key decisions outlined, the table opposite highlights other sections of this report which explain how the Directors havehad regard to section 172 factors in FY25. Board members have undertaken numerous stakeholder engagement activities throughout the year to understand stakeholder perspectives and interests. Further information onthese activities can be found on pages 90 to 97. Section 172 factors a) The likely consequences ofany decision inthelong term b) The interests of the company’s employees c) The need to foster thecompany’s business relationships with suppliers, customers, and others d) The impact of the company’s operations onthe community and theenvironment e) The desirability ofthecompany maintaining a reputationfor high standards of business conduct f) The need to act fairly as between members ofthecompany 46 THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 4 6 THE SA GE GRO UP PLC . A NNU AL REP ORT AN D A CCO UNT S 2 025 46 THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 Further information on how section 172 has been applied by the Directors can be found throughout the Annual Report. Section 172 factors Pages Section 172 factors Pages Likely consequences of decisions in the long term Impact of operations on the community and the environment Interests of our colleagues Maintaining a reputation for high standards of business conduct Acting fairly between members of the Company Fostering business relationships with suppliers, customers, and others Chair’s statement Our strategy Sustainability and Society TCFD Principal Risks and uncertainties Viability Statement Corporate governance report— Board activities Stakeholder engagement Nomination Committee Report Directors’ Remuneration Report Directors’ Report 10 and 11 15 to 18 30 to 34 35 to 44 61 to 66 67 and 68 86 and 87 90 to 97 102 to 108 117 to 151 152 to 158 Chair’s statement CEO’s review Sustainability and Society TCFD Non-financial and sustainability information statement (NFSIS)— Ethics and governance Principal Risks and uncertainties Corporate governance report— Board activities Stakeholder engagement—Society 10 and 11 12 to 14 30 to 34 35 to 44 45 61 to 66 86 and 87 91 and 96 Chair’s statement CEO’s review Our people and culture Principal Risks and uncertainties Chair’s introduction to governance Corporate governance report—Board activities Stakeholder engagement—Colleagues Stakeholder engagement— Board Associate Corporate governance report— Embedding culture 10 and 11 12 to 14 24 to 29 61 to 66 72 and 73 86 and 87 91 and 94 95 98 and 99 Chair’s statement CEO’s review Our people and culture Sustainability and Society TCFD NFSIS—Ethics and governance Corporate governance report— Board activities Stakeholder engagement Corporate governance report— Embedding culture Corporate governance report— Board performance review Audit and Risk Committee Report 10 and 11 12 to 14 24 to 29 30 to 34 35 to 44 45 86 and 87 90 to 97 98 and 99 100 and 101 109 to 116 Corporate governance report Corporate governance report— Board activities Stakeholder engagement— Shareholders Directors’ Remuneration Report Directors’ Report 70 to 101 86 and 87 91 and 97 117 to 151 152 to 158 Our business model Chair’s statement CEO’s review Our strategy Sustainability and Society NFSIS—Ethics and governance Principal Risks and uncertainties Corporate governance report Corporate governance report— Board activities Stakeholder engagement— CustomersandSociety 8 and 9 10 and 11 12 to 14 15 to 18 30 to 34 45 61 to 66 70 to 101 86 and 87 90 to 92 and 96 Strategic Report Governance Report Financial Statements Additional Information THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 47 Financial review The Financial review provides a summary of the Group’s results on a statutory and underlying basis, alongside itsorganic performance. Underlying measures allow management and investors to understand the Group’s financial performance adjusted for the impact of foreign exchange movements and recurring and non-recurring items,while organic measures also adjust for the impact ofacquisitions and disposals. 1 Introduction Sage performed well in FY25, with continued growth across all regions. Disciplined cost management together with operating efficiencies supported strong operating profit and margin expansion, driving double-digit growth in earnings per share and robust cash flows. Underlying total revenue increased by 10% to £2,513m, with all regions contributing to growth, including North America at 12%, the UKIA region at 9%, and Europe at 7%. Growth was driven by strong demand for our solutions as SMBs continue to digitalise their accounting, HR, and payroll functions. Sage’s growth was underpinned by a strong performance inunderlying ARR, which increased by 11% to £2,574m (FY24: £2,329m), reflecting good levels of growth from newand existing customers and strong retention rates. This led to an increase in underlying recurring revenue of 10% to £2,436m. As a result, 97% of Sage’s total revenue is recurring, reflecting the high-quality and resilient nature ofthe Group. On an organic basis, total revenue grew by 9% to £2,506m (FY24: £2,296m), while ARR grew by 10% to £2,560m (FY24: £2,329m). Underlying operating profit grew by 17% to £600m, leading to a strong increase in operating margin of 150 basis points to 23.9%. This was driven by strong revenue growth and operating efficiencies, with disciplined cost management supporting ongoing investment. Reflecting this progress and the impact of recent share buybacks, underlying basic EPS increased by 18% to 43.2p. The Group remains highly cash generative. Underlying cash flow from operations increased by 2% to £660m, underpinned by cash conversion of 110%, which was mainly driven by further growth in subscription revenue. In line with our disciplined approach to capital allocation, wecontinue to invest in both organic and inorganic growth, while delivering shareholder returns. The Board is proposing a final dividend of 14.40p per share, representing a total dividend in respect of FY25 of 21.85p per share, an increase of 7%. We have also announced a share buyback programme of up to £300m, to be executed in FY26, reflecting strong cash generation, our robust financial position, and the Board’s confidence in Sage’s future prospects. Financial review ” “ Sage delivered another goodperformance in FY25, with strategic focus driving strong, sustainable growth. Disciplined capital allocation continues to support margin expansion, investment, and shareholder returns. Jonathan Howell Chief Financial Officer 1. Figures provided on an underlying basis unless otherwise stated. Underlying and organic revenue and profit measures are defined in the Glossary. 48 THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 Statutory and underlying financial results Financial results Statutory Underlying FY25 FY24 Change FY25 FY24 Change North America £1,138m £1,052m +8% £1,138m £1,018m +12% UKIA 2 £729m £670m +9% £729m £668m +9% Europe £646m £610m +6% £646m £604m +7% Group total revenue £2,513m £2,332m +8% £2,513m £2,290m +10% Operating profit £530m £452m +17% £600m £513m +17% Operating profit margin % 21.1% 19.4% +1.7 ppts 23.9% 22.4% +1.5 ppts Profit before tax £484m £426m +14% £555m £486m +14% Profit after tax £369m £323m +14% £423m £370m +14% Basic EPS 37.7p 32.1p +18% 43.2p 36.7p +18% 2. United Kingdom and Ireland, Africa, and Asia-Pacific (APAC). The Group achieved statutory and underlying total revenue of £2,513m in FY25. Statutory total revenue increased by 8%, reflecting underlying total revenue growth of 10%, offset by a 2-percentage point foreign exchange headwind, with sterling strengthening against key currencies. Statutory operating profit increased by 17% to £530m, reflecting a 17% increase in underlying operating profit to £600m, together with a £7m decrease in recurring and non-recurring items 3 , mainly relating to lower acquisition-related expenses. Statutory and underlying basic EPS increased by 18%, to 37.7p and 43.2p respectively, mainly reflecting higher underlying profit, with an increase in net finance costs, offset by a reduction in the weighted average number of shares as a result of recent share buybacks. Revenue The Group increased underlying total revenue by 10% to £2,513m (FY24: £2,290m), with all regions contributing to growth. In North America, revenue grew by 12%, with a strong performance from Sage Intacct together with continued growth in Sage 200 and Sage 50. In the UKIA region, revenue increased by 9%, driven by Sage Intacct together with cloud solutions for small businesses including Sage 50. In Europe, revenue increased by 7%, with growth across our accounting, payroll, and HR solutions. Our aim is to efficiently grow revenues across all products and services, by attracting new customers and delivering more value to existing customers. Sage Business Cloud, comprising our cloud native 4 and cloud connected 5 solutions, helps customers benefit from a growing range of cloud and AI-powered services via the Sage Platform, leading to deeper customer relationships and higher lifetime values. As a result, Sage Business Cloud total revenue increased by 13% to £2,083m (FY24: £1,837m), driven by growth in cloud native revenue of 23% to £885m (FY24: £718m) primarily through new customer acquisition, and by growth in cloud connected revenue from both existing and new customers. Underlying recurring revenue increased by 10% to £2,436m (FY24: £2,215m), with software subscription revenue up by 12% to £2,093m (FY24: £1,876m), leading to subscription penetration of 83% (FY24: 82%). As a result, 97% of the Group’s revenue is recurring. On an organic basis, total revenue grew by 9% to £2,506m (FY24: £2,296m), whilst recurring revenue grew by 9% to £2,429m (FY24: £2,221m). 3. Recurring and non-recurring items are defined in the Glossary and detailed in note 3.6 of the financial statements. 4. Cloud native solutions run in a cloud environment enabling access to up-to-date functionality at any time, from any location, via the internet. 5. Cloud connected solutions are deployed on premise with significant functionality delivered through the cloud. Strategic Report Governance Report Financial Statements Additional Information THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 49 Financial review continued Revenue by region North America FY25 FY24 Change Organic change US £997m £891m +12% +11% Canada £141m £127m +11% +11% Underlying total revenue £1,138m £1,081m +12% +11% In North America, underlying total revenue increased by 12% to £1,138m, with growth across Sage’s key accounting solutions, particularly among mid-sized businesses. Recurring revenue grew by 12% to £1,110m (FY24: £994m), while subscription penetration increased to 82%, up from 81% in the prior year. In the US, total revenue increased by 12% to £997m. Sage Intacct, which now represents over 45% of US revenue, grew by 23% to£461m (FY24: £374m), driven by strength across key industry verticals, particularly construction and real estate, financial services and not-for-profit, together with an enhanced commercial proposition through the expansion of suites and introduction of multi-year customer contracts. Revenue was also driven by growth in Sage 200, with good levels of upsell toexisting customers and higher pricing, together with further growth in Sage X3 and Sage 50. In Canada, total revenue grew by 11% to £141m, with good performance from Sage Intacct driven by new customers, together with growth in Sage 50. In addition, Sage HR continued to gain momentum, particularly through cross-sell to existing customers. Adjusting for the acquisitions of Fyle in FY25 and Anvyl in FY24, organic total revenue grew by 11% in the US, and by 11% in the North America region as a whole. UKIA FY25 FY24 Change Organic change UK and Ireland (Northern Europe) £554m £505m +10% +10% Africa and APAC £175m £163m +7% +7% Underlying total revenue £729m £668m +9% +9% In the UKIA region, underlying total revenue increased by 9% to £729m, with further strength across Sage’s accounting, HR, and payroll solutions. Recurring revenue also grew by 9% to £714m (FY24: £653m), while subscription penetration was 89%, inline with the prior year. In the UK and Ireland, total revenue grew by 10% to £554m. Sage Intacct continued to scale rapidly, driven by accelerating newcustomer acquisition. Sage 50 also contributed strongly, together with Sage 200, supported by a strong renewal rate andhigher pricing. In addition, Sage’s cloud native solutions for small businesses, including Sage Accounting, Sage Payroll, andSage HR, delivered good levels of growth. The recent launch of Sage Copilot supported the strong performance of both Sage 50 and Sage Accounting. Revenue was also driven through the continued growth of Sage for Accountants. In Africa and APAC, total revenue grew by 7% to £175m, with continued growth in Sage Accounting and Sage Payroll, driven bynew customer acquisition and higher pricing, together with a strong performance from Sage Intacct. Sage X3 and local products in the Sage 50 franchise also continued to contribute to growth. Europe FY25 FY24 Change Organic change France £324m £306m +6% +6% Central Europe £155m £146m +6% +6% Iberia £167m £152m +10% +7% Underlying total revenue £646m £604m +7% +6% Europe achieved underlying total revenue growth of 7% to £646m, reflecting a strong performance particularly in Sage 200, Sage X3, HR, and payroll solutions. Recurring revenue grew by 8% to £612m (FY24: £568m), while subscription penetration increased to 79%, up from 76% in the prior year. In France, total revenue grew by 6% to £324m, driven by accounting solutions. Sage X3 was a significant contributor of growth, with continued strong customer demand, while Sage 200 also performed well. In addition, Sage Intacct continued to see early traction as the solution starts to scale. 50 THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 Central Europe achieved a total revenue increase of 6% to £155m. HR and payroll solutions, which represent almost half the region’s revenue, grew strongly, driven by upsell to existing customers together with new customer wins. Growth was also driven by Sage 200, mainly through sales to existing customers. In Iberia, total revenue grew by 10% to £167m, reflecting strength across Sage 200 and Sage 50, driven by renewals, higher pricing, and new customers. Growth was also driven by ForceManager, a mobile workforce management solution acquired in October 2024. In addition, Iberia achieved good levels of growth from accountants, following the recent introduction of Sage for Accountants into the region. Adjusting for the impact of the ForceManager acquisition, organic total revenue grew by 7% in Iberia, and by 6% in the Europe region as a whole. Revenue—underlying and organic reconciliation to statutory Total revenue bridge FY25 FY24 Change Statutory £2,513m £2,332m +8% Impact of FX 6 – (£42m) Underlying £2,513m £2,290m +10% Disposals – – Acquisitions (£7m) £6m Organic £2,506m £2,296m +9% 6. Impact of foreign exchange (FX) retranslating FY24 revenue and costs at FY25 average rates. Statutory and underlying revenue was £2,513m in FY25. Underlying revenue in FY24 of £2,290m reflects statutory revenue of £2,332m retranslated at current year exchange rates, resulting in a foreign exchange headwind of £42m. Organic revenue in FY25 was £2,506m, reflecting underlying revenue of £2,513m adjusted for £5m of revenue from the acquisition of ForceManager and £2m from the acquisition of Fyle during the year. Organic revenue in FY24 of £2,296m reflects underlying revenue of £2,290m, adjusted for £6m of revenue from Anvyl and Infineo, which were acquired at the end of FY24. Operating profit The Group increased underlying operating profit by 17% to £600m (FY24: £513m), resulting in a strong increase in underlying operating margin of 150bps to 23.9% (FY24: 22.4%). This was driven by revenue growth and operating efficiencies, with disciplined cost management supporting ongoing investment. On an organic basis, adjusting for the impact of acquisitions inFY24 and FY25, operating profit increased by 16% to £600m (FY24: £515m) while margin was in line with underlying. Operating profit—underlying and organic reconciliation to statutory Operating profit bridge FY25 FY24 Operating profit Operating margin Operating profit Operating margin Statutory £530m 21.1% £452m 19.4% Recurring items 7 £73m £82m Non-recurring items • Reversal of property restructuring (£2m) – • Reversal of employee-related costs – (£3m) • Reversal of restructuring costs (£1m) (£2m) Impact of FX 8 – (£16m) Underlying £600m 23.9% £513m 22.4% Disposals –––– Acquisitions ––£2m – Organic £600m 23.9% £515m 22.4% 7. Recurring and non-recurring items are defined in the Glossary and detailed in note 3.6 of the financial statements. 8. Impact of retranslating FY24 revenue at FY25 average rates. The Group achieved a statutory operating profit in FY25 of £530m. Underlying and organic operating profit of £600m in FY25 reflects statutory operating profit adjusted for recurring and non-recurring items. Strategic Report Governance Report Financial Statements Additional Information THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 51 Financial review continued Recurring items of £73m (FY24: £82m) comprise £42m of amortisation of acquisition-related intangibles (FY24: £48m) and £31m of M&A-related charges (FY24: £34m). Non-recurring items in FY25 comprise a £2m reversal of property restructuring costs (FY24: £nil) and a £1m reversal of other restructuring costs (FY24: £2m). Non-recurring items in FY24 also comprised a£3m reversal of employee-related charges for French payroll taxes relating to previous years. Together, recurring and non-recurring items reduced by £7m compared with the prior year. In addition, the retranslation of FY24 underlying and organic operating profit at current year exchange rates has resulted inan operating profit headwind of £16m. This has led to a 30-basis point margin headwind from foreign exchange to 22.4% (FY24underlying as reported: 22.7%). Organic operating profit of £515m in FY24 reflects underlying operating profit of £513m adjusted for £2m of operating profit from Anvyl and Infineo, which were acquired at the end of FY24. Underlying EBITDA Underlying EBITDA was £694m (FY24: £605m) representing a margin of 27.6%. The increase in underlying EBITDA principally reflects the growth in underlying operating profit. FY25 FY24 Margin Underlying operating profit £600m £513m 23.9% Depreciation and amortisation £48m £47m Share-based payments £46m £45m Underlying EBITDA £694m £605m 27.6% Net finance cost The underlying net finance cost for the FY25 increased to £45m (FY24: £27m), mainly reflecting higher interest expense following the new debt issuance (see page 54) together with lower interest income on cash and cash equivalents during theyear. The statutory net finance cost of £46m (FY24: £26m) is broadly in line with the underlying net finance cost. Taxation The underlying tax expense for FY25 was £132m (FY24: £116m), resulting in an underlying tax rate of 24% (FY24: 24%). Thestatutory income tax expense for FY25 was £115m (FY24: £103m), resulting in a statutory tax rate of 24% (FY24: 24%). Earnings per share FY25 FY24 Change Statutory basic EPS 37.7p 32.1p +18% Recurring items 5.7p 6.3p Non-recurring items (0.2)p (0.5)p Impact of foreign exchange – (1.2)p Underlying basic EPS 43.2p 36.7p +18% Underlying basic EPS and statutory basic EPS increased by 18% to 43.2p and 37.7p, respectively, mainly reflecting higher underlying operating profit. Cash flow Sage remains highly cash generative, with underlying cash flow from operations increasing by 2% to £660m (FY24: £649m), representing underlying cash conversion of 110% (FY24: 123%). This strong cash performance reflects growth in subscription revenue and strength in receivables collection, partly offset by increased capital expenditure due to workplace investment together with the timing of certain payments to third parties. Free cash flow of £517m (FY24: £524m) reflects robust underlying cash conversion, offset by higher net interest and income tax. 52 THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 Cash flow APMs FY25 FY24 (asreported) Underlying operating profit £600m £529m Depreciation, amortisation and non-cash items in profit £44m £44m Share-based payments £46m £45m Net changes in working capital £26m £55m Net capital expenditure (£56m) (£24m) Underlying cash flow from operations £660m £649m Underlying cash conversion % 110% 123% Non-recurring cash items (£8m) (£5m) Net interest paid and derivative financial instruments (£34m) (£25m) Income tax paid (£101m) (£91m) Profit and loss foreign exchange movements – (£4m) Free cash flow £517m £524m Statutory reconciliation of cash flow from operations FY25 FY24 (asreported) Statutory cash flow from operations £675m £625m Recurring and non-recurring items £41m £44m Net capital expenditure (£56m) (£24m) Other adjustments including foreign exchange translations – £4m Underlying cash flow from operations £660m £649m Net debt and liquidity Group net debt was £1,189m at 30 September 2025 (30 September 2024: £738m), comprising cash and cash equivalents of£390m (30 September 2024: £508m) and total debt of £1,579m (30 September 2024: £1,246m). The Group had £1,020m ofcashand available liquidity at 30 September 2025 (30 September 2024: £1,138m). The increase in net debt in the period is summarised in the table below: FY25 FY24 (as reported) Net debt at 1 October (£738m) (£561m) Free cash flow £517m £524m New leases (£28m) (£26m) Acquisition of businesses (£87m) (£34m) M&A and equity investments (£33m) (£41m) Dividends paid (£207m) (£199m) Share buyback (£605m) (£348m) Purchase of shares by Employee Benefit Trust – (£55m) FX movement and other (£8m) £2m Net debt at 30 September (£1,189m) (£738m) The Group’s debt is sourced from sterling and euro denominated notes, together with a syndicated multicurrency revolving credit facility (RCF). Strategic Report Governance Report Financial Statements Additional Information THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 53 Financial review continued The Group’s notes include £300m 12-year notes issued inMarch 2025 with a coupon of 5.625%, and €500m 5-year notesissued in February 2023 with a coupon of 3.82%, under the Group’s Euro Medium Term Note programme. Sage’s other notes comprise £400m 12-year notes issued in February 2022 with a coupon of 2.875%, and £350m 10-year notes issued in February 2021 with a coupon of 1.625%. The Group’s RCF of £630m expires in December 2029 and wasundrawn at 30 September 2025 (FY24: undrawn). Sage hasan investment grade issuer rating assigned by Standard and Poor’s of BBB+ (stable outlook). Sage debt maturity profile (£m) RCF 0 200 400 600 800 1,000 1,200 FY27 FY28 FY29 FY30 FY31 FY32 FY33 FY34 FY35 FY36 FY37 Sterling Bond Eurobonds (€500m) 437 350 300 400 630 Capital allocation Sage’s disciplined capital allocation policy is focused on accelerating strategic execution through organic and inorganic investment and delivering shareholder returns. During FY25, Sage completed the acquisition of Tritium Software, the developer of ForceManager (now branded Sage Sales Management), a mobile workforce management solution for field-based sales teams, and Fyle, an AI-powered expense management platform that transforms how SMBs track and manage expenses. Sage has a progressive dividend policy, intending to grow the dividend over time while considering the future capital requirements of the Group. The final dividend proposed by the Board is 14.40p per share, taking the total dividend for theyearto 21.85p, up 7% compared with the prior year (FY24: 20.45p). The Group also considers returning surplus capital to shareholders. On 30 July 2025, Sage completed a share buyback programme, commenced on 20 November 2024 and extended on 15 May 2025, under which a total of 48.2m shares were purchased for an aggregate consideration of £600m and subsequently cancelled. Alongside these results, we have announced a further share buyback programme of up to £300m, reflecting Sage’s strong cashgeneration, robust financial position, and the Board’s confidence in the Group’s future prospects. Sage continues tohave considerable financial flexibility to drive the execution of its growth strategy. FY25 FY24 (as reported) Net debt £1,189m £738m Underlying EBITDA (last 12 months) 694m £622m Net debt/underlying EBITDA ratio 1.7x 1.2x 54 THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 The Group’s underlying EBITDA over the last 12 months was £694m, resulting in a net debt to underlying EBITDA leverage ratio of1.7x, up from 1.2x in the prior year. Sage intends to operate in a broad range of 1x to 2x net debt to underlying EBITDA over the medium term, with flexibility to move outside this range as business needs require. Return on Capital Employed (ROCE) for FY25 was 31% (FY24 as reported: 26%) 9 . A reconciliation of ROCE to our reported measures isset out below. Going concern The Directors have robustly tested the going concern assumption in preparing these financial statements, taking into account the Group’s strong liquidity position at 30 September 2025 and a number of downside sensitivities, and remain satisfied that the going concern basis of preparation is appropriate. Further information is provided in note 1 of the financialstatements on page 181. Foreign exchange The Group does not hedge foreign currency profit and loss translation exposure, and the statutory results are therefore impacted by movements in exchange rates. The average rates used to translate the consolidated income statement and tonormalise prior year underlying and organic figures are as follows: Average exchange rates (equal to GBP) FY25 FY24 Change Euro (€) 1.18 1.17 +1% US dollar ($) 1.31 1.27 +3% Canadian dollar (C$) 1.83 1.73 +6% South African rand (ZAR) 23.61 23.50 +0% 9. A reconciliation of ROCE to our reported measures is set out below. Reconciliation of Return on Capital Employed FY25 FY24 (as reported) Underlying operating profit net of amortisation of acquired intangibles £558m £481m Net assets less borrowings and cash £1,909m £1,832m Less: • Derivative financial instruments (£32m) (£17m) • Provisions for non-recurring costs £6m £16m • Financial liability for the purchase of own shares £8m £4m • Tax assets or liabilities (£49m) (£54m) Adjusted net assets £1,842m £1,781m Average adjusted net assets £1,811m £1,870m Return on Capital Employed 31% 26% Strategic Report Governance Report Financial Statements Additional Information THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 55 Our ERM Framework M o n i t o r R e p o r t A s s e s s I d e n t i f y M a n a g e Risk management Risk Management Framework Our Enterprise Risk Management Framework helps us to manage a wide range of risks, enabling a consistent approach to identifying, managing, and overseeing risks to support effective decision making and enhance long-term resilience. We seek to improve continuously the use and adoption of our ERM Framework. It isn’t a process that we merely apply to the business—it is integral to how we make decisions and work every day,and helps us to achieve our strategic objectives through risk-informed decision making. Using our ERM Framework, we expect all regions and functions to identify risks that could affect the successful execution of their strategy and operations while managing any risk exposure, ensuring appropriate controls and plans are in place. The ERM Framework helps focus our efforts on the areas that matter most to Sage, providing clarity about risk tolerances and appetite in a way that facilitates effective business decisions and ensures we are adequately prepared to manage risks. 56 THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 How we identify risks Our risk identification process follows an enterprise-wide “top-down, bottom-up” approach, as follows: • Top down, we focus on Principal Risks; these are the mostsignificant risks to our ability to achieve our strategic objectives. • Bottom up, we focus on strategic, commercial, operational,compliance, and change risks (“business risks”) that arise at regional and functional levels. Theserisks pose the greatest threat to the success ofbusiness activities across the Group. How we assess risks We analyse all risks for likelihood and impact using a tailored risk assessment methodology that considers a range of impacts, including on our customers and colleagues, as well aspotential financial implications. The analysis considers risk before any mitigations (inherent risk) andafter all current mitigations (residual risk). The keybenefit of assessing inherent risk is that it highlights thepotential risk exposure if mitigation were to fail completely or not be in place. How we manage risk We recognise that eliminating risk is often unfeasible orundesirable. Instead, we define risk appetite for each Principal Risk, to provide our leaders with guidance so theycan make decisions on the level of risk to achieve theirstrategic objectives. We set our Board-approved risk appetite statements in collaboration with relevant leaders, anduse their expertise to ensure these statements align to our strategy and priorities. Each Principal Risk is assigned an executive owner, who isresponsible for overall management, ensuring adequate controls are in placeand implementing action plans if the risk falls outside risk appetite. In addition to Principal Risks, we consider business risks ataregional or functional level. These risksareowned and managed within their respective management structures and reviewed on an ongoing basis. Formal risk review takes place quarterly with regional and functional leaders. Risk reporting and monitoring To fully understand our risk landscape, we consider risks both individually and collectively. By analysing the correlation between risks, we can identify those with the potential to trigger, amplify, or influence other risks. This exercise informs our scenario analysis, particularly those scenarios in the Viability Statement on pages 67 and 68. We monitor Principal Risks against our risk appetite targets using measures and tolerances, which weevaluate throughout the year to ensure they align with our strategic objectives. Business risks are considered from a Group-wide perspective with input fromour senior leaders, who provide their own strategic, functional, and emerging-risk perspectives. They are escalated in line with the Risk Management Policy and via our ERM Framework to Regional or Functional leadersand then to the Global Risk Committee. This escalation process provides organisational visibility to emerging, strategic, commercial, operational, financial, andcompliance risks while reinforcing accountability forrisk management and driving action. As part of the escalation process, we evaluate whether risks should be included in the current set of Principal Risks, orwhether a new Principal Risk should be created. Read more about our Principal Risks on pages 61 to 66 Risk culture Culture underpins the effectiveness ofour ERM Framework and supports an effective control environment. Our Values help ensure that a culture of managing riskseffectively is linked to our daily business activities and outcomes. Our Code of Conduct reinforces these Values and sets clear expectations across Sage for compliance with ethical standards. Values form a significant part of our colleague performance management process, and, in FY25, we continued to manage culture as a Principal Risk. Strategic Report Governance Report Financial Statements Additional Information THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 57 Risk management continued The Board The Board has overall responsibility for risk management and internal control, including settingthe Group’s risk appetite and ensuring appropriate governance arrangements are in place.It promotes a strong risk culture and monitors the internal and external risk environment toensurethe Group’s Principal Risks remain relevant and aligned with strategic objectives. For more information on the responsibilities of the Board, please refer to page 80. Audit and Risk Committee (ARC) The ARC supports the Board in setting our risk appetite and ensuring that processes are in place to identify, manage, and mitigate our Principal Risks. At each meeting, ARC reviews the Principal Risks and their associated appetite targets and metrics, to assess if they are relevant, effective and aligned to achieving our objectives, and within an acceptable tolerance. For more information on the responsibilities of the ARC, please refer to page 110. Global Risk Committee (GRC) The GRC is responsible for providing direction and support for managing risk across Sage, including setting and monitoring risk appetite for Principal Risks and driving action to align riskexposure to strategy. The GRC provides the ARC with information to enable them to discharge their responsibility for reviewing the Company’s risk management and internal control systems, including regarding financial reporting. For more information on the membership and responsibilities of the GRC, please refer to page 81. Regional and Functional Reviews The Regional and Functional Reviews monitor key operational and strategic risks that could impact strategic plans or Sage’s Principal Risks, together with other key strategic, operational, financial, and compliance risks. All business areas are required to adopt the ERM Framework. Key risks that could affect the execution of regional or functional strategic plans are reviewed atleast quarterly with senior leaders, while ensuring that appropriate mitigations are in place. Where necessary, risks are escalated to the GRC via the ERM framework. Bottom up Identification and assessment ofrisk exposures atregional and functional level Top down Oversight, accountability, and assessment of Principal Risks, significant operational risks, and emerging risks Risk governance 58 THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 1. First line All colleagues Identify, own, operate First Line comprises all our colleagues who are at theforefront of the business. They hold the skills and knowledge needed to help identify and manage risks withinour business. Colleagues in the first line have ultimateaccountability for the management and ownershipof risk, while ensuring we manage risks withintheERM framework. 2. Second line Sage Risk andControls Guide, support, oversee Second Line is our Risk and Controls team, which is responsible for setting the ERM framework, policies, tools, and techniques to enable the First Line to manage risk effectively. As part of this role, the team provides support, guidance, and oversight of First Line risk management, to ensure that we maintain a consistent approach to managing risk. This includes supporting the Global Risk Committee, and our Regional andFunctional leaders in fulfilling their responsibilities. 3. Third line Sage Assurance Independent andobjective Third Line is our Internal Audit and Assurance team, whose primary role is to provide independent assurance to ensure the first two lines are operating effectively. They achieve this by conducting risk-based reviews of the effectiveness of risk management, internal controls, and governance. The Internal Audit and Assurance team is also accountable to the Audit and Risk Committee, to provide comfort to Sage leadership that appropriate controls and processes are in place and are operating effectively. Three lines model Our three lines governance model defines clear roles and responsibilities for all colleagues and establishes accountability for actions and decisions. It also describes how we ensure appropriate oversight, challenge, andassurance over our business activities. Strategic Report Governance Report Financial Statements Additional Information THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 59 Risk management continued Horizon scanning Global conflicts (e.g. Russia-Ukraine, Israel-Gaza), evolution in global economic strategies such as US tariffs, energy shortages, rising interest rates, and inflation are just someevents that may have a material impact on Sage andour customers. To maintain resilience in this continually changing external landscape, we operate an ongoing horizon scanning process. This allows us to monitor external events and trends, identify associated risks, and assess their potential impact on our colleagues, customers, and partners. We review external risks at every Global Risk Committee meeting to ensure weare responding proactively to material events. Part of our horizon scanning also involves looking beyond the present by considering emerging risks, via workshops with representatives across business functions including Marketing and Customer Experience, Product, Security, Sustainability, People, Finance, and Strategy. During these workshops, we consider current external mega- trends and global threats and opportunities over theshort, medium, and long term. This process enables ustodefine a set of key risk scenarios that may have an impact on Sage, as well as the potential time horizon ofeachscenario. We then evaluate the extent of planning and mitigation required toensure Sage is adequately prepared and protected for ourkey emerging risks. The Global Risk Committee considers the plans and mitigations, and provides updates to the Audit and Risk Committee for oversight. Emerging risk scenario Time horizon 1–2 years 3–5 years Over 5 years 1. Rapid advances in AI, including agentic systems, intelligent workflows, andubiquitous AI-powered tools, may change the role of the general ledger, reshape SMB operating models, and introduce powerful new competitors. If Sage fails to adapt and differentiate its offerings, it risks loss of relevance, market share, and profitability. 2. Intense competition across the tech industry for top experts makes it difficultto attract and retain the skills needed to drive innovation and maintain product leadership. Without sustained access to this talent, AIinitiatives risk delay or failure, creating operational, strategic, reputational,and intellectual property vulnerabilities. 3. The rapid integration of AI and automation is reshaping job roles and required skills. Many routine tasks are being automated, while demand is rising for digital, analytical, and creative skills. This shift could lead to reskilling at scale, talent shortages, and changes in workforce structure. 4. Increasing data localisation requirements, divergent AI regulations, and emerging technology laws may restrict Sage’s ability to manage and share data,develop and deploy AI solutions, and deliver on its product strategy. Thesechanges could drive increased compliance costs, legal and intellectual property risks, and potential competitive disadvantage. 5. Rising tensions between major economies may disrupt global supply chains, introduce new trade barriers, drive increasing wage-price inflation or contribute to a global economic downturn. This could impact Sage’s abilitytoserve customers in multiple regions and require rapid adaptation toshifting regulations; it may also result in increased default of SMBs, an increasein customer churn, and a reduced ability to sell to new or existing customers. Additionally, increased labour costs in key markets could hamper Sage’s ability to retain and attract talent. 60 THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 Principal Risks anduncertainties The Board and the Audit and Risk Committee conducted arobust and ongoing assessment of the principal and emerging risks facing the Group throughout FY25. This assessment considered the risks that would threaten Sage’s business model, future performance, solvency or liquidity, and reputation, and ensured that the risks continued to alignwith Sage’s business strategy. The Board retains overall responsibility for setting Sage’srisk appetite and for risk management and internalcontrol systems. In accordance with the UK Corporate Governance Code 2018 (the “Code”), the Board is responsible for reviewing the effectiveness of the risk management and internal control systems and confirms that: • There is an ongoing process for identifying, evaluating, and managing the Principal Risks faced by the Company. • The systems have been in place for the year under reviewand up to the date of approval of the Annual Reportand Accounts. • They are reviewed regularly by the Board. • The systems accord with the FRC guidance on risk management, internal control, and related financial andbusiness reporting. There were no instances of significant control failing orweakness in FY25. Read more about our risk management and internal control systems on pages 56 to 60, and about the associated work by the Audit and Risk Committee onpages 109 to 116 Principal Risk Risk context Management and mitigation 1. Customer experience If we fail to deliver ongoing value to our customers by focusing on their needs over the lifetime of their customer journey, we will not be able to achieve sustainable growth through renewal. Trend Stakeholder alignment Link to viability scenario Data breach Existing or new market disruptor Global economic shock Cloud operations failure We must maintain a sharp focus on the relationship we have with our customers, offering the products, services and experiences they need for success. Ifwemeet or exceed their expectations, customers will stay with Sage, increasing lifetime value and becoming our greatest advocates. By aligning our people, processes and technology with this focus in mind, all Sage colleagues help our customers be successful and in turn improve financial performance. • Brand-health surveys to provide an understanding ofthe customer perception of the Sage brand and itsproducts, used to inform and enhance our marketofferings. • Our Market and Competitive Intelligence team provides insights that guide our strategy and support our growth. • Proactive analysis of customer activity and churn data, to improve customer experience. • Customer Advisory Boards, call listening, and closed-loop feedback to constantly gather information on customer needs. • Customer-journey mapping to ensure appropriate strategy alignment and alignment to our target operating model. • “Customer for life” roadmaps, detailing how products can fit together, any interdependencies, and migration pathways for current and potential customers. • Continuous Net Promoter Score (NPS) surveying toidentify customer challenges and respond in atimely manner to emerging trends. • Sage Membership for all customers, providing customers with access to curated resources, tools, and a connected community of business leaders. The following table provides an overview of the Group’s Principal Risks and the way we manage these. Key—Stakeholder groups Risk exposure change Stable IncreasingDecreasing Customers Shareholders Partners Society Colleagues Strategic Report Governance Report Financial Statements Additional Information THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 61 Principal Risks and uncertainties continued Principal Risk Risk context Management and mitigation 2. Execution of productstrategy If we fail to deliver the capabilities and experiences outlined in our product strategy, we will not meet theneeds of our customers orcommercial goals. Trend Stakeholder alignment Link to viability scenario Existing or new market disruptor Global economic shock Cloud operations failure Sage needs to adapt continuously itsapproach to new technologies andchallenges. This requires a clear direction and strategic guardrails to support our go-to-market offerings. Bysimplifying our product portfolio andpartnering with the right businesses,we can enhance our solutionsand drive success. • Robust product organisation and governance model, supported by strategic interlock with our Routes to Revenue (RtR) teams, aligning the way we deliver product to meet the needs of SMBs. • Migration Framework in key countries to support our customers as they move to the cloud. • Continued expansion of Sage Intacct outside NorthAmerica and for additional product verticals. • Enhancing accessibility of Sage cloud products to meet Web Content Accessibility Guidelines. • Focus on accountants through a tailored Sage for Accountants proposition. • Ongoing deployment of Sage Copilot AI-powered assistant into existing Sage products, including Sage Intacct and integration into Sage Sales Management. • Developing AI agents for use in our core products. 3. Developing and exploiting new business models Sage is unable to develop, commercialise, and scale new business models to diversify from traditional Software as aService (SaaS), especially consumption-based services and those that leverage data. Trend Stakeholder alignment Link to viability scenario Data breach Existing or new market disruptor Global economic shock Cloud operations failure Sage must be able to identify, design and deploy new innovations to create new or enhance existing products and capabilities. Unlocking the ability to do this at pace will enable access to new markets and/or customers early, driving new revenue and opportunities for the business. • Business unit focused on the Sage Platform torealise the opportunities with automation of accounting processes (like Accounts Payable and Accounts Receivable). • Sage Platform integrating Sage’s products with AI and digital services to enhance workflows, improve customer experiences, and accelerate innovation. • Enhanced, consistent digital experience for all SageBusiness Cloud users through the Sage Experience Platform. • A team focused on the product strategy and assessing new business opportunities in emerging ecosystems to identifythose that may align with our vision. • Acceleration of Embedded Services by expanding Sage’s Fintech and Payments ecosystem through strategic partnerships with Stripe, Monzo and Tide. • Managed growth of the API estate, including enhanced product development that enables access by third-party API developers and optimisation ofAPIintegrations to improve efficiency. Key—Stakeholder groups Risk exposure change Stable IncreasingDecreasing Customers Shareholders Partners Society Colleagues 62 THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 Principal Risk Risk context Management and mitigation 4. Route to market If we fail to deliver a globally consistent blend of route to market channels in each market, Sage will miss the opportunity to efficiently deliver the right capabilities and experiences to our current and future customers. Trend Stakeholder alignment Link to viability scenario Data breach Existing or new market disruptor Global economic shock Cloud operations failure We have a blend of channels to communicate with our current and potential customers and ensure our customers receive the right information, on the right products and services, at the right time. Our sales channels include selling directly to customers through digital and telephone channels, via our accountant network and through partners, and we will adapt our approach to target customers in our key verticals. We use these channels to maximise our marketing and customer engagement activities. This can shorten our sales cycle and ensure we improve customer retention, maximising our market opportunity. • Our Global Routes to Revenue team drives a consistent approach to taking Sage’s products to market. • Deployment of an enhanced reporting tool to track go-to-market metrics using standard definitions across geographies. • Acceleration of strategic partnerships to strengthen the Sage Platform. • Three strategic pillars focused on delivery to the market to align priorities across Sage. • Centre of Excellence to support our indirect sales and third-party approach. • Sage Discovery Centre at our North American headquarters in Atlanta reaffirms our commitment to helping entrepreneurs, communities, and customers to thrive in the age of AI. 5. People and performance If we fail to ensure we have engaged colleagues with the critical skills, capabilities, and capacity we need to deliver on our strategy, wewillnot be successful. Trend Stakeholder alignment Link to viability scenario Data breach Global economic shock As we evolve our priorities, the capacity, knowledge, and leadership skills we need will continue to change. Sage will not only need to attract the right talent to navigate change but will also need to provide an environment where colleagues can develop to meet these new expectations. By empowering colleagues and leaders tomake decisions, be innovative, and be bold in meeting our commitments, Sage will be able to create an attractive working environment. By addressing what causes colleague voluntary attrition, and embracing the Values of successful technology companies, Sage can increase colleague engagement and create aligned high-performing teams. • Focus on hiring channels to ensure we areattractive in the market through our enhanced employee value proposition and enhanced presence through social media such as Glassdoor, Comparably, X, LinkedIn, and Facebook. • Reward mechanisms to incentivise and encourage the right behaviour, with a focus on ensuring fair andequitable pay in all markets. • Series of Leadership Academies and talent programmes to support the development of internaltalent. • OKR Framework defines measurable goals and tracks outcomes of colleague success. • Enhancing skills and talent technology ecosystem to identify capabilities and skills gaps, talent pipeline, development, and career pathways and mentoring. • Strategic Workforce Planning Framework across thebusiness. Key—Stakeholder groups Risk exposure change Stable IncreasingDecreasing Customers Shareholders Partners Society Colleagues Strategic Report Governance Report Financial Statements Additional Information THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 63 Principal Risks and uncertainties continued Principal Risk Risk context Management and mitigation 6. Culture If we do not define, shape and proactively manage our culture in line with our brand Values, we will be challenged to deliver our strategic priorities and purpose; we will risk disengaging colleagues, increasing attrition, and impacting our ability to attract and retain diverse talent. Trend Stakeholder alignment Link to viability scenario Data breach Global economic shock The development of a shared behavioural competency that encourages colleagues to always do the right thing, put customers at the heart of business and improve innovation is critical to Sage’s success. Devolution of decision making, and the acceptance of accountability for those decisions, will need to go hand in hand as the organisation develops and sustains its shared Values and Behaviours, and fosters a culture that provides customers with a rich digital environment. We will also need to create a culture ofempowered leaders that supports the development of ideas, and that provides colleagues with a safe environment allowing for honest disclosures and discussions. A trusting and empowered environment can help sustain innovation, enhance customer success, and encourage the engagement that results in increased market share. • Integration of Values and Behaviours into all colleague priorities including talent attraction, selection, and onboarding as well as OKRs. • All colleagues encouraged to take up to five paid Sage Foundation days each year, to support charities and provide philanthropic support to the community. • DEI strategy focused on building diverse teams, an equitable culture, and fostering inclusive leadership. This is supported by strategic plans to track progress, ensuring we meet our commitments, including notolerance of discrimination and equal chances for everyone. • Code of Conduct training for all colleagues (including anti-bribery and corruption requirements) delivered as snippets, so we can signpost relevant training at colleagues’ point of need. • Core e-learning modules, with regular refresher training. • Whistleblowing and incident-reporting mechanisms so issues can be formally reported and investigated. • Scaling Sage culture initiatives, including target culture measurement framework, leadership assessments, and alignment of people processes. 7. Cyber security If we fail to ensure an appropriate standard of cyber security across the business, we will not be able to combat cyber threats and will fail to meet our regulatory obligations and lose the trust of our stakeholders. Trend Stakeholder alignment Link to viability scenario Data breach Cloud operations failure Stakeholder trust is central to Sage’s growth and cyber security is an essential component of that. Failure to safeguard customer and colleague data and ensure the availability of our products and critical services could have severe reputational, legal, and financial consequences. This means we must be confident our cyber security controls, and the culture and awareness of our colleagues are sufficient to mitigate thedynamic and evolving cyber risk environment, while also supporting the agility and innovation of the business. • Multi-year cyber security programmes in IT and Product to ensure we are continuously improving, and reduce cyber risk across technology, business processes, and culture. • Accountability within both IT and Product for internal and external data being processed by Sage. • Formal certification schemes maintained across thebusiness include internal and external validation of compliance. • Sage colleagues are required to undertake regular cyber security awareness training. • A Cyber Security Risk Management Methodology and standards are deployed to provide clear requirements and objective risk information on our assets and systems. • Sage Security Champions, who help amplify and embed a secure culture. • An in-house Cyber Defence Operations team to proactively detect, respond to, and prevent cyber threats 24/7. • Continued investment in strengthening business resilience and elevating crisis management capabilities. Read more about our recent crisis management exercise on page 66 Key—Stakeholder groups Risk exposure change Stable IncreasingDecreasing Customers Shareholders Partners Society Colleagues 64 THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 Principal Risk Risk context Management and mitigation 8. Data and AI governance If Sage fails to collect, process, store, and use data ina way that is compliant withregulation, internal policy, and our ethical principles, we will lose the trust of our stakeholders. If we fail to recognise the value of our data and deliver effective data foundations, wewill be unable to realise the full potential of our data assets. Trend Stakeholder alignment Link to viability scenario Data breach Existing or new market disruptor Data is central to the Sage strategy andour ambition to deliver sustainable growth by leveraging AI and expanding the Sage Platform. Our strategy is underpinned by our ability to innovate customer propositions, improve insight and decision making, and create new business models and ecosystems. The successful ability to use data will accelerate our growth and will be key inhelping customers transform how theyrun and build their businesses, andwe must do this in a way that iscompliant with laws and regulations, andin line with our Values. • Our AI and Data Ethics Principles ensure the responsible use of customer data in support of our strategy, with an ethics checklist in place to assess adherence to these principles. • Governance policies, processes, and tooling to enhance and manage data quality, trust, and privacy. • The implementation of our AI Governance Framework, supported by an AI Inventory and AI assurance process, to ensure that the development and use ofAI align with our risk appetite and meet legal, regulatory, ethical, and security requirements. • Data Privacy Framework governing the collection, use,and protection of personal data in compliance with applicable laws and regulations. • Our Sustainability, AI, and Data Ethics Committee, which includes members from the Executive Leadership Team and Sage Board, governs activities relating to data and AI ethics. • We require all colleagues to undertake awareness training for data protection, with a focus on all relevant data privacy laws and regulations. • Our Trust and Security Hub supports our customers and their understanding of cyber security, data privacy, and AI and data ethics in Sage products. 9. Readiness to scale As Sage’s ambition grows, ifitfails to ensure its cloudproducts can build andoperate at an industrial, global scale, it will erode itscompetitive advantage. The hosting of its products must achieve economies of scale, aligned to ambition, inparallel with the ability toaccelerate to market withquality. Both must beachieved with reduced environmental impact andzero customer impact. If not addressed, Sage’s cloud products would be less resilient and less able to respond to its customer expectations. Trend Stakeholder alignment Link to viability scenario Data breach Cloud operations failure As Sage continues to build sustainable growth, we continue to focus on scaling our platform services environment in arigorous, agile, and speedy manner toensure we provide a consistent and healthy cloud platform and associated network. We must provide the right infrastructure and operations for all ourcustomer products, and ahosting platform, together with the governance toensure optimal service availability, performance, security protection, and restoration (if required). • Cost optimisation of cloud native products and continued migration of legacy footprint topublic cloud. • Accountability across product owners, underpinned by ongoing risk assessments and continuous improvement projects. • Formal onboarding process through ongoing portfolio management. • Incident and problem management change processes adhered to for all products and services, with new acquisitions onboarded in a timely manner. • Service-level objectives including uptime, responsiveness, and mean time to repair. • Defined real-time demand-management processes and controls, and disaster-recovery capability and operational-resilience models. • A governance framework to optimise operational cost base in line with key metrics. • All new acquisitions required to adopt Sage cloud operation standards. Key—Stakeholder groups Risk exposure change Stable IncreasingDecreasing Customers Shareholders Partners Society Colleagues Strategic Report Governance Report Financial Statements Additional Information THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 65 Principal Risks and uncertainties continued Principal Risk Risk context Management and mitigation 10. Environmental, social, and governance If Sage is unable to respond toevolving stakeholder expectations and ESG regulation, Sage could face fines and potential legal action, damaging Sage’s reputation and brand, and diminishing stakeholder trustand credibility. In addition, if Sage fails torespond to the range ofopportunities and risks associated with Sustainability and Sage Foundation, it wouldbe less resilient, less competitive, and could put itslicence to operate at risk. Trend Stakeholder alignment Link to viability scenario Global economic shock Cloud operations failure We invest in education, technology, and the environment to give individuals, SMBs, and our planet the opportunity tothrive. Internally, it is essential that Sage understands the potential impact ofclimate change on its strategy andoperations and considers appropriate mitigations. Societal and governance-related issues are integral to Sage’s purpose and Values and to the achievement of Sage’s strategy. • Sage’s Sustainability and Society strategy, informed by a rigorous materiality assessment, focusing on three pillars: Protect the Planet, Tech for Good, andHuman by Design. • Ensuring adequate executive oversight through theSustainability, AI, and Data Ethics Committee. • Enabling accountability through integration of ESGmeasures within long-term incentive plans. • An integrated framework to manage ESG-related riskand physical and transitional climate risks, asdetailed by TCFD. • External limited assurance obtained over selected metrics to ensure accuracy of sustainability data and claims. In April 2025, Sage conducted a comprehensive cyber security simulation exercise for the Crisis Management Team (CMT) which included the CEO, members of Executive Leadership Team, and functional leaders. The exercise was developed by our Business Resilience team in partnership with a leading UK crisis consultancy. This scenario was selected due to the credible threat that cyber-attacks pose to Sage, a risk that is considered within the Cyber Security Principal Risk. We delivered Strengthening Crisis Readiness and Resilience afour-day crisis simulation where participants faced dynamic challenges, including ransom demands from attackers, customer inquiries, and media scrutiny, designed to replicate the intensity and unpredictability of a cyber crisis. The outcomes tested and validated our Crisis Management Framework and strengthened our risk readiness to ensure we remain well-prepared tonavigate disruption. Key—Stakeholder groups Risk exposure change Stable IncreasingDecreasing Customers Shareholders Partners Society Colleagues Case study 66 THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 Viability Statement Viability Statement In accordance with provision 31 of the UK Corporate Governance Code 2018, the Directors set out how they have assessed the Group’s prospects, the period covered by the assessment, and the Group’s formal Viability Statement. The Directors have assessed the prospects of the Group by considering the Group’s current financial position, its recent and historic financial performance and forecasts, its business model and strategy (pages 8 and 9, and 15 to 18) and the Principal Risks and uncertainties (pages 61 to 66). The Group’s operational and financially robust position is supported by: • A high-quality recurring revenue base • Resilient cash generation and a robust liquidity position, with strong underlying cash conversion of 110%, reflecting the strength of the subscription business model • A well-diversified small and medium customer base The Directors have reviewed the period used for the assessment and determined that three years remains suitable. The Directors believe that projections overa three-year period remain appropriate given the relative predictability of cash flows associated with Sage’s subscription business during this period. This period alignsour Viability Statement with our three-year strategic planning horizon and is appropriate given the nature and investment cycle of a technology business. Projections beyond this period are less reliable due to the evolving technology landscape in whichSage operates. No scenario modelled over the three-year period leads toinsufficient liquidity headroom. The Directors have noreason to believe the Group will not be viable over alonger period. Assumptions The financial forecasts contained in the Group’s three-year plan make certain assumptions about the composition of theGroup’s product portfolio, and the ability to acquire new customers and maintain a strong renewal rate by value byproviding additional functionalities to our existing customers. The plan also assumes that the Group continues to generate resilient cash conversion of more than 100%, pays debt and interest instalments as they fall due, and thatthe existing borrowing facilities remain available to theGroup. Based onthe Group’s current liquidity profile, debt maturing during the forecast period is assumed to berefinanced onsimilar terms. The assessment process In forming the Viability Statement, the Directors conducted arobust assessment of the Principal Risks and uncertainties facing the Group which could impact the business model, future performance, solvency or liquidity and reputation. These are reviewed by the Board and the Audit and Risk Committee quarterly, and are a foundation forthe Group’s strategic plan. The risk process is outlined inmore detail onpages 56 to 60. As part of the assessment, the Group stress-tested the three-year plan using various severe but plausible scenarios. Management reviewed the Principal Risks and considered which might threaten the Group’s viability. None of the individual risks would in isolation compromise the Group’s viability, and so we considered several different severe scenarios where Principal Risks arose in combination. These scenarios were developed with input from our Global Risk Committee, whichhas members fromkey functions across the business. Under the stress scenarios, churn assumptions were increased byup to 75% and a reduction by up to 50% of newcustomer acquisition and sales to existing customers considered. In all stress scenarios, the Group continues to have sufficient resources tooperate without triggering the need to renegotiate debt. Scenarios modelled reflect our latest assessment of the anticipated impact of the risks identified in line with theprior year. The scenarios considered to be the most plausible and significant in performing the assessment of viability andthe combination of Principal Risks involved are shownonthenext page. Strategic Report Governance Report Financial Statements Additional Information THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 67 A cross-functional group of senior leaders, including representatives from Finance, Risk, ESG, Cloud Operations, IT, Product Marketing, and Legal, estimated the monetary impact of each scenario and evaluated the possible consequences on the Group should each scenario arise. As set out in the Audit and Risk Committee’s report on pages109 to 116, the Directors reviewed and discussed theprocess undertaken by management and also reviewed the results of reverse stress testing performed to provide anillustration of the level of churn and deterioration in new customer acquisition which would be required to exhaust cash down to minimum working capital requirements. The result of the reverse stress testing has highlighted that such a scenario would only arise following acatastrophic deterioration in performance, well in excess of the assumptions considered inthe viability scenarios set out above. If the scenarios set out above were to arise, management would have severaloptions available to maintain the Group’s financial position, including cost reduction measures, the arrangement of additional financing and a review of the sustainability of the dividend policy. Confirmation of longer term viability Based on the assessment explained above, the Directors confirm that they have a reasonable expectation that the Group will continue to operate and meet its liabilities, asthey fall due, for at least the next three years. Viability scenario Linked Principal Risks i) Data breach The deliberate targeting or accidental release of customer datathat breaches data privacy laws and/or societal expectations in any region could have a significant impact onSage’s reputation in the market, as well as impact its regulatory compliance with the various data protection laws towhich Sage is subject. • Customer experience • Developing and exploiting new business models • Route to market • People and performance • Culture • Cyber security • Data and AI governance • Readiness to scale ii) Existing or new market disruptor The entry of a new player, or the expansion of an existing marketplayer in the financial and accounting management space with a free or very low-cost offering or leveraging AI in anew way to disrupt the accounting software category, that significantly disrupts Sage’s total market share. • Customer experience • Execution of product strategy • Developing and exploiting new business models • Route to market • Data and AI governance iii) Global economic shock The crystallisation of a global economic shock that leadstoaglobal economic downturn or an inflationary wage-price spiral, resulting in increased default of small andmedium-sizedbusinesses. This could lead to a significant increase in customer churn andareduced ability to sell to new or existing customers. Additionally, increased labour costs in key markets could makeit difficult for Sage to retain and attract talent. • Execution of product strategy • Developing and exploiting new business models • Route to market • Customer experience • ESG • People and performance iv) Cloud operations failure The risk of an event that causes the live services environment tobe brought down due to the operating environment being changed internally through product or system changes, external or internal cyber-attack, or a key third-party provider being compromised. The risk also considers the extent to which hosting infrastructure supporting Sage’s cloud operations could be physically damaged through an adverse climate event. • Execution of product strategy • Developing and exploiting new business models • Route to market • Customer experience • Cyber security • Readiness to scale • ESG • Data and AI governance Viability Statement continued 68 THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 GOVERNANCE REPORT Strategic Report Governance Report Financial Statements Additional Information THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 69 UK Corporate Governance Code 2018 Compliance Statement The Board is pleased to confirm Sage’s compliance with the provisions of the UK Corporate Governance Code 2018 (the ‘Code’) throughout FY25. A copy of the Code can be found on the Financial Reporting Council’s (FRC) website: www.frc.org.uk. The Board remains committed to upholding the highest standards of corporate governance and during FY25 undertook a comprehensive review of its preparedness against theUK Corporate Governance Code 2024 (the ‘2024 Code’), in anticipation of the 2024 Code applying to Sage from 1 October 2025. The Board will present its first report oncompliance with the 2024 Code in the FY26 Annual Report. The following pages outline Sage’s governance framework and introduce the members of the Board, the Executive Leadership Team, and the work of the Board and its Committees during FY25. The table below outlines where to find information on how the Principles set out in the Code areembedded and applied across Sage. The Board has continued with its chosen alternative approach toworkforce engagement, through the Board Associate Programme, as permitted by the Code. The Programme’s effectiveness was reviewed during FY25 and it continues toserve as a valuable communication channel between Boardmembers and Sage colleagues, providing the Board with meaningful insights into colleague perspectives to inform decision making. Further details on the role of the Board Associate and its effectiveness can be found on pages 91, 95 and 99 Board Leadership and CompanyPurpose Page Purpose and culture 24 to 29, 98 and 99 Shareholder engagement 91 and 97 Colleague engagement 91, 94 and 95 Other stakeholder engagement 46 and 47, 90 to 97 Conflicts of interest 82 Division of Responsibilities The role of the Board 80 The role of the Board Committees 80 Board composition 81 Committee composition 83 Time commitment 104 and 105 Composition, Succession, and Evaluation Board composition and succession 104 Diversity, equity, and inclusion 105 to 108 Annual election and re-election of Directors 104 Board performance review 100 and 101 Audit, Risk, and Internal Control Page Significant reporting and accounting matters 111 to 113 Fair, balanced, and understandable 114 Viability Statement and going concern 67 and 68, and 113 Risk management and internal controls 114 Internal audit 115 External auditor 115 Principal and emerging risks 56 to 66 Remuneration Remuneration principles 120 Pensions and benefits 127 and 128 Directors’ shareholdings and share interests 147 External advisors 151 Corporate governance report 70 THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 Governance highlights Board ethnicity 2024/25 Asian 1 White 9 2023/24 Asian 2 White 8 Board genderBoard nationality 1 2024/25 British 8 American 2 2023/24 British 8 American 2 Board tenure 2 Less than a year 1 to 3 years 3 to 6 years Over 6 years 02 Number of Board members 51 43 Governance 14% Executive updates 38% Strategy 48% 2024/25 Male 6 Female 4 2023/24 Male 6 Female 4 Directors’ key skills and experience Andrew Duff Steve Hare Jonathan Howell Dr John Bates Jonathan Bewes Maggie Chan Jones Annette Court Roisin Donnelly Derek Harding Lori Mitchell- Keller Executive and strategic leadership Financial acumen Technology and innovation Remuneration and people Audit and risk Sustainability and environment Strategy and M&A Customer-centricity International experience Board allocation of time spent in FY25 2. The data reflects Board tenure as at 30 September 2025. 1. Dr John Bates holds dual nationality of British and American. For the purpose of the Board nationality statistics his nationality is stated as British. Strategic Report Governance Report Financial Statements Additional Information THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 71 Governance at the heart ofpurposeful leadership Chair’s introduction to governance Dear shareholder, On behalf of the Board, I am pleased to introduce our Governance Report for the financial year ended 30 September 2025. This report outlines how the Board oversees corporate governance across the Group, ensuring that long-term sustainable success is at the heart of our decision making, while acting with transparency, openness, and fairness to ourstakeholders. The report also provides insight into the key activities of the Board and its Committees in FY25 and how we seek to ensure the maintenance of effective controls and processes to monitor and manage strategic risks and capitalise on opportunities presented by digital transformation and innovative technology. Our strong culture and shared Values remain fundamental to the continued success of thebusiness, and it’s important that theBoard plays its partin keeping our purpose, strategy, and culture aligned. Board composition andsuccession Overseeing and implementing effective succession planninghas been a key priority for the Board in FY25. Wewelcomed Lori Mitchell-Keller as a new Non-executive Director, who wasappointed to the Board in February 2025. Lori brings acustomer-centric mindset and hasexperience in scaling, differentiating, and advancing businesses through technology transformation. Her expertise complements and enhances the Board’s capabilities. Also inFebruary 2025, Sangeeta Anand stepped down from the Board in order to fully focus her time on her other board commitments, and wewish her well for her future endeavours. As announced in March 2025, Jonathan Howell informed the Board of his intention to step down from his role as Chief Financial Officer on 31 December 2025, having servedon theBoard for twelve years, with five of those asaNon- executive Director, and then seven years as ChiefFinancial Officer. Iam grateful to Jonathan for his outstanding contribution, commitment, and dedication tothe Board during his tenure. Jonathan willleave with our best wishes ashemoves on from executive life. In line with the Group’s succession plans, Jonathan will be succeeded by Jacqui Cartin as Chief Financial Officer witheffect from 1 January 2026. Jacqui is exceptionally wellqualified to be the new Chief Financial Officer of Sageand an outstanding successor. Iam looking forwardto welcoming Jacqui to the Board. For more information on our Board composition andsuccession planning, please seepages 104 and105 Stakeholder engagement In FY25, we added partners as a key stakeholder, recognising their strategic importance in helping us drive sustainable growth and achieve our ambitions for our customers. The Board and I were pleased to have several opportunities throughout the year to meet with different stakeholder groups, allowing us to listen to their feedback and perspectives. Theseinteractions ensure we gain a thorough understanding ofdiverse views, which in turn inform and guide the decisions in the Boardroom. ” “ Our strong culture and shared Valuesremain fundamental to the continued successofthebusiness, andit’simportantthattheBoard playsitspart in keeping our purpose, strategy, and culture aligned. Andrew Duff Chair 72 THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 One of the most valued and enjoyable aspects of the Board’s role is the opportunity to meet and spend time with colleagues across the Group. The conversations that take place inform our direct understanding of the sentiment of our colleagues and their views on the Group’s operations, risks, successes, and challenges. I would like to thank all those colleagues who took the time to attend Board events and share their experiences with us in FY25.In addition to these engagements, our ongoing Board Associate programme continues to enhance our awareness bybringing the colleague voice into the Boardroom. All ofthese interactions give the Board insights as to how the Group’s high-performance culture is being consistently embedded at all organisational levels. Amy Cosgrove, our current Board Associate, will conclude her tenure in December 2025. I am grateful to Amy for bringing her valuable insights into the Boardroom, and I wish her every success as she takes on her next challenge within Sage.The Board has commenced the process of appointing hersuccessor, ensuring continued representation of colleagues’ perspectives in the Boardroom. You can read more on the Board’s engagement withstakeholders on pages 90 to 97 Details on how the Board is monitoring and embedding culture can be found on pages 98 and 99 Board performance review This year the Board undertook an external performance review led by Manchester Square Partners, an independent advisory firm. The review process was undertaken between May and July 2025. I am delighted to confirm that thereview concluded that the Sage Board wasfunctioning extremely well and in line with first-class corporate governance processes, demonstrating strong leadership, rigour, and support. Positive feedback was also received on individual Directors and Committee Chairs, noting their time investment, commitment, and support of the business and the leadership team. The Board is committed to ongoing improvement and is developing a plan to address those areasof improvement identified during the review. Further details about the FY25 Board performance review can be found on pages 100 and 101 Annual General Meeting The 2026 Annual General Meeting (‘2026 AGM’) will be held onThursday, 5 February 2026 at Sage’s Newcastle office. Ihopeyou will be able to attend. The Board looks forward tomeeting shareholders, hearing their views, and answering any questions. Further details about the 2026 AGM, including the resolutions to be tabled for shareholder approval, will beprovided in the Notice of Annual General Meeting, and shareholders will be notified when it is available to view onour website. The year ahead As I look to the future, I am excited about the opportunities that lie ahead for the Group. The ongoing support from our stakeholders remains integral to our continued success, and Iwould like to take this opportunity to thank all who have contributed so meaningfully throughout FY25. My appreciation also extends to my fellow Board members for their invaluable insight, and to the Executive Leadership Team, whose commitment and leadership have positioned the Group to deliver sustained value as we move into the new financial year. Andrew Duff Chair Strategic Report Governance Report Financial Statements Additional Information THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 73 Our leadership Board of Directors Maggie Chan Jones Independent Non-executive Director Lori Mitchell-Keller Independent Non-executive Director Jonathan Bewes Independent Non-executive Director Annette Court Senior Independent Director Dr John Bates Independent Non-executive Director Roisin Donnelly Independent Non-executive Director Andrew Duff Chair Steve Hare Chief Executive Officer Jonathan Howell Chief Financial Officer Derek Harding Independent Non-executive Director 74 THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 C Board Chair C Committee Chair Audit and Risk Committee Nomination Committee Remuneration Committee Key Andrew Duff Chair C C Appointed Non-executive Director on 1 May 2021 and Non-executive Chair on1 October 2021 Gender Male Ethnicity White Nationality British Skills Wealth of experience as a non-executive director and chair, with a strong track record of transforming high-profile international businesses. Effective leader with strategic insights and international experience. Strong focus on purpose, culture, customer-centricity, and delivering value for allstakeholders. Key previous experience Non-executive chair and chair of the nomination committee of Elementis plc Non-executive chairand chair of the nomination committee of SevernTrent plc Senior independent director andchair of the remuneration committee of Wolseleyplc Chief executive officer of npower Key external commitments Non-executive director of UK Government Investments Limited Steve Hare Chief Executive Officer Appointed 3 January 2014 asChiefFinancial Officer, 31 August 2018 asChief Operating Officer, and asChief Executive Officer on 2 November 2018 Gender Male Ethnicity White Nationality British Skills Significant financial, operational, and transformation experience, which includes driving change programmes in several previous roles. Broad knowledge of Sage, having joined the Board in January 2014 as Chief Financial Officer. Extensive understanding of the drivers and priorities needed for the commercial delivery of Sage’s strategy and in creating a high-performance culture. Key previous experience Operating partner and co-head of the Portfolio Support Group at the private equity firm Apax Partners Chief financial officer of Invensys plc and Marconi plc Group finance director of Spectris plc Key external commitments Non-executive director of J Sainsbury plc Jonathan Howell Chief Financial Officer Appointed 15 May 2013 as Non- executive Director and as Chief Financial Officer on 10 December 2018 Gender Male Ethnicity White Nationality British Skills Highly experienced group finance director, chair and non- executive director. Significant financial and accounting experience, gained across several sectors to provide substantial insight into the Group’s financial reporting and risk management processes. Excellent working knowledge of Sage, having joined as an independent Non-executive Director and served as the Chair of the Audit and Risk Committee. Key previous experience Group chief financial officer of Close Brothers Group plc Group chief financial officer of London Stock Exchange Group plc Non-executive director of EMAP plc Chair of FTSE International Key external commitments 1 Non-executive director and chair of theauditcommittee of Experian plc 1. Non-executive director and chair of the audit committee of Whitbread PLC from 1 January 2026. Dr John Bates Independent Non-executive Director Appointed 31 May 2019 Gender Male Ethnicity White Nationality British, American Skills Visionary technologist and highly accomplished business leader in the fields of technology innovation and business transformation. Proven track record of applying cutting edge techniques, including Artificial Intelligence and Machine Learning, to revolutionise business areas including algorithmic trading, smart environments, software test automation and document process automation. Key previous experience Co-founder, president, and chief technology officerof Apama (pioneer in Streaming Analytics) Head of industry solutions and chief marketing officer of Software AG Chief executive officer of Terracotta, Inc. (asubsidiary of Software AG) Executive vice president of corporate strategy and chief technology officer at Progress Software Chief executive officer at Plat.One (now part of SAP) Chief executive officer of the Eggplant Group, partof Keysight Technologies Inc Key external commitments Chief executive officer of SER Group Holding GmbH Jonathan Bewes Independent Non-executive Director C Appointed 1 April 2019 Gender Male Ethnicity White Nationality British Skills Wealth of accounting and financial experience andexperienced audit committee chair. Strong investment banking experience gained over a 25-year career in the sector. Advised boards of UKand overseas companies on a wide range of financial and strategic issues, including financing,corporate strategy, and governance. Key previous experience Investment banking experience with Robert Fleming, UBS, and Bank of America Merrill Lynch Chartered accountant with KPMG Vice-chair, corporate and institutional banking atStandard Chartered Bank plc Key external commitments Senior independent director and chair of the audit committee of Next plc Non-executive director and chair of the audit and risk committee of the Court of the Bank of England Chair of MONY Group plc Changes to the Board and to Board Committees duringFY25 and announced up to the date of this report • Sangeeta Anand stepped down from the Board on 6 February 2025. • Lori Mitchell-Keller was appointed to the Board on 7 February 2025. • Maggie Chan Jones was appointed to the Remuneration Committee on1 August 2025. • Jonathan Howell will step down from the Board on 31 December 2025. • Jacqui Cartin will join the Board as Chief Financial Officer on 1 January2026. Strategic Report Governance Report Financial Statements Additional Information THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 75 Our leadership continued Maggie Chan Jones Independent Non-executive Director Appointed 1 December 2022 Gender Female Ethnicity Asian Nationality American Skills Deep international marketing and brand experience gained from time spent at some of the world’s largest technology companies. SAP’s first woman chief marketing officer, responsible for driving global marketing across more than 180 countries. Recognised as an industry thought leader in the marketing and technology sector andwas previously named as one of the “Most Influential CMO” in the world by Forbes. Key previous experience Non-executive director of Avast plc Chief marketing officer of SAP Founder and former chief executive of Tenshey, Inc Key external commitments Non-executive board advisor to Ontinue Non-executive director and designated non-executive director for workforce engagement of BT Group plc Vice president and chair of the compensation committee of the United States Tennis Association Annette Court Senior Independent Director Appointed 1 April 2019 Gender Female Ethnicity White Nationality British Skills Experience of serving as chair of a remuneration committee, as well as in executive and non- executive director roles at the highest levels, including as chair of FTSE 100 companies. Strong technology background combined with a record of using ecommerce to drive commercial success. Expertise in mentoring leaders to achieve greater clarity of purpose and provide a practical approach to problem-solving. Key previous experience Senior independent director of Jardine Lloyd Thompson Group Chief executive officer of Europe General Insurancefor Zurich Financial Services Chief executive officer of the Direct Line Group Member of the board of the Association of BritishInsurers (ABI) Non-executive director of Foxtons Group plc Chair of Admiral Group plc Key external commitments Chair of WH Smith PLC Director of Admiral Europe Compañía de Seguros SAU (AECS) Roisin Donnelly Independent Non-executive Director C Appointed 3 February 2023 Gender Female Ethnicity White Nationality British Skills Extensive customer, marketing, and branding experience brought to the Board, gained during executive career at Procter & Gamble. Strong background in digital transformation and data, andsignificant knowledge and experience of developing environmental, social and governance(ESG) strategies at board level. Key previous experience Non-executive director of Just Eat plc Non-executive director of HomeServe Limited Non-executive director of Holland & Barrett Limited Non-executive director of Bourne Leisure Limited Key external commitments Non-executive director of NatWest Group plc Non-executive director ofPremier Foods plc Derek Harding Independent Non-executive Director Appointed 2 March 2021 Gender Male Ethnicity White Nationality British Skills Significant financial experience, including leading business transformations and sharp financial acumen. Broad experience across a rangeof commercially focused financial and operational roles including strategy, investor relations, and mergers and acquisitions. Key previous experience Chief financial officer of Senior plc Group finance director of Shop Direct Finance director of Wolseley UK Chief financial officer of Spectris plc Key external commitments President of Spectris Scientific and board memberof Spectris plc Lori Mitchell- Keller Independent Non-executive Director Appointed 7 February 2025 Gender Female Ethnicity White Nationality American Skills Global technology leader and strategic advisor whohas over 30 years of experience of scaling, differentiating, and advancing businesses throughtechnology transformation. A strong trackrecord of spearheading industry-focused product solutions and growth strategies. Key previous experience Vice president of Google Cloud President of Industry Cloud at SAP Senior vice president of Product/Solution Management and Marketing at JDA Software Chief marketing officer of Manugistics Software Director of Allegiance Healthcare Key external commitments Board member of Mitratech Holdings Inc Non-executive director of OneStock Scan or click the QR code to read more about the Board of Directors C Board Chair C Committee Chair Audit and Risk Committee Nomination Committee Remuneration Committee Key 76 THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 About our Board The Board comprises the Chair, seven independent Non-executive Directors, and two Executive Directors. There is a clear and distinct division between the roles of the Chair and the Chief Executive Officer. Each has a clearly definedremit, which is established and agreed by the Board. As Directors of the Company, both the Non-executive and Executive Directors have the same duties, but distinct roles ontheBoard, which ensures appropriate accountability and oversight. Roles and division of responsibilities Andrew Duff Chair • Leadership and effective operation of the Board • Sets the Board agenda, and the style andtone of Board discussions • Ensures the Board receives accurate and timely information • Leads the annual Board performance review • Promotes an inclusive and open culture and debate • Engages with stakeholders through structured dialogue and ensuring their feedback informs and shapes Board decisions • Promotes the highest standards of corporate governance, assisted by theCompany Secretary, and demonstrates objective judgement • Promotes and safeguards the interests and reputation of the Company Steve Hare Chief Executive Officer • Provides leadership of the Company, develops and implements the Group’s objectives and strategy • Leads the Executive Leadership Team and senior management, with a focus on driving Sage’s operational and financial performance • Keeps the Chair and Board informed onkey issues, shares senior management’s views to improve Board discussions, and presents differing opinions from management before decisions arereached • Maintains an effective internal controls and risk management environment to ensure risks are rigorously managed • Promotes a strong culture and ensures Sage operates in line with itsValues by doing the right thing Jonathan Howell Chief Financial Officer • Manages the Group’s financial affairs, including any tax and treasury matters • Supports the CEO in implementing the corporate strategy and overseeing operational performance • Ensures effective financial reporting, processes, and controlsare in place • Engages with Sage’s stakeholders, and manages relationships with Sage’s investor base • Provides insights into the Group’s commercial and financial position • Recommends the annual budget and long-term strategic and financial plan Annette Court Senior Independent Director • Provides support and acts as asounding board for the Chair • Serves as a trusted intermediary forthe other Directors • Acts as an alternative contact for shareholders, if concerns have not been addressed through normal channels of communication • Leads the performance review ofthe Chair and meets with the other Non-executives atleast annually without the Chairpresent • Together with the Nomination Committee, leads the Chair succession process Dr John Bates, Jonathan Bewes, Maggie Chan Jones, Roisin Donnelly, DerekHarding, and LoriMitchell-Keller Independent Non-executive Directors • Contribute, challenge, and monitor the delivery of strategic objectives and Group performance • Assist in development, approval, and review of strategy • Oversee internal controls and theEnterprise Risk Management Framework, and ensure they are rigorous • Provide external perspectives, independent insight, and support based on relevant experience • Engage with internal and external stakeholders and take their views into account in their decision making, including the culture atSage • Review the succession planningtogether with the BoardCommittees, Chair, and Senior Independent Director Vicki Bradin General Counsel and CompanySecretary • Ensures the necessary information flow between the Board and its Committees, and senior management to drive Board and Committee efficiency and effectiveness • Advises the Board on legal, compliance, and corporate governance developments • Supports the Chair with Board procedures by facilitating comprehensive and tailored inductions, training and professional development, andstakeholder engagement plansfor Non-executive Directors • Supports the Chair on the Boardperformance review The Non-executive Directors’ terms of appointment are available for inspection atSage’s Registered Office. Strategic Report Governance Report Financial Statements Additional Information THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 77 Executive Leadership Team Our leadership continued Amanda Cusdin Chief People Officer Amy Lawson Chief Brand and CorporateAffairs Officer Vicki Bradin General Counsel and CompanySecretary Derk Bleeker Chief Commercial Officer Aaron Harris Chief Technology Officer Walid Abu-Hadba Chief Product Officer Steve Hare Chief Executive Officerand member of the Executive Leadership Team See full biography in Board of Directors, page 75 . Jonathan Howell Chief Financial Officer and member of the Executive Leadership Team See full biography in Board of Directors, page 75. 78 THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 1. The Executive Leadership Team composition data in this section reflects the information as at 30 September 2025 andincludes theExecutive Directors aswell as Eduardo Rosini, Chief Growth Officer, who served asa member of the ELT throughout FY25. 2. Jonathan Howell’s tenure does not forthispurpose include time as Non-executive Director. Executive Leadership Team composition 1 Experience Technology and innovation 11% Financial 11% Customer success 22% Marketing/Brand 17% Corporate affairs 6% Strategy 11% Colleague success and ESG 17% Legal, risk and governance 6% Tenure 2 1 to 3 years 3 to 6 years Over 6 years 02 Number of Executive Leadership Team 6143 5 Gender Male 6 Female 3 Walid Abu-Hadba Chief Product Officer Appointed 1 January 2022 Skills and experience Extensive industry experience and leadership skills gained in the technology sector, with abreadth of technology sector experience. Passionate about driving strategy and building the culture that delivers tangible, customer- centric solutions. Joined Sage in 2021, having previously spent 20years at Microsoft as corporate vice president responsible for the developer and platform evangelism group, before joining ANSYS, Inc aschief product officer. Most recently senior vicepresident of Oracle Developer Tools. Holds board-level roles in the technology sector and patents in the field of AI. Derk Bleeker Chief Commercial Officer Appointed 1 October 2019 Skills and experience Accountable for Sage’s Go to Market teams, including commercial performance, customer support, and performance marketing. Joined Sage in 2014 and has held a number of commercial, finance, mergers and acquisitions, and strategy leadership roles, including as Sage’s Chief Corporate Development and Strategy Officer and most recently as President—EMEA. Appointed Chief Commercial Officer on 1 March 2024. In-depth experience as a leader of corporate development, gained from working for a global industrial and medical technology company. Experience in private equity and as a mergers and acquisitions specialist in investment banking. Vicki Bradin General Counsel and CompanySecretary Appointed 1 October 2016 Skills and experience Leads the Office of the General Counsel, which includes several teams at Sage, including Legal and Company Secretariat, Security, Procurement, Mergers and Acquisitions, AI and Data Governance, Risk, and Assurance. Extensive corporate legal experience built over 20 years in global and magic circle law firms and in-house at large multi- nationals and UK-Iisted companies. Contributes in-depth software and technology sector knowledge and experience across a breadth of legal areas, including mergers and acquisitions, litigation, risk, and intellectual property. Amanda Cusdin Chief People Officer Appointed 1 October 2017 Skills and experience Joined Sage in March 2015, becoming Chief People Officer in September 2018. Leads our global People function and has overall executive accountability for Sage’s Places strategy, creating world-class workplaces that promote innovation, productivity, and wellbeing, and amplify the Sage experience for colleagues and visitors alike. Before joining Sage, spent 18 years within a numberof FTSE organisations, working across all aspects ofHuman Resources to drive change and transformation, with particular focus on mergers and acquisitions integration. Passionate about developing talent and leadership, and creating truly inclusive organisations which promote diversity. Aaron Harris Chief Technology Officer Appointed 1 April 2019 Skills and experience Key contributor and creator of Sage’s technology strategy, and advisor on its software architecture. More than 20 years of high-tech engineering experience in business applications and softwaredevelopment strategies. Founding leader of Sage Intacct, acquired by Sagein 2017. Led the company’s product vision and technology direction, establishing Sage Intacct as the innovation leader in cloud financialmanagement solutions. Amy Lawson Chief Brand and CorporateAffairsOfficer Appointed 1 March 2022 Skills and experience Joined Sage in 2015, becoming Chief Corporate Affairs Officer in 2022, and Chief Brand and Corporate Affairs Officer in 2024. Responsible for brand and corporate affairs at Sage, including internal and external reputation and engagement. Leads our global strategy for communications and PR, brand and campaigns, public affairs, sustainability, and Sage Foundation. Former Board Associate at Sage. Prior to joining Sage, served as head of the CabinetOffice media operation as a civil servantfor the UK government and was Head ofCommunications for Channel 4 News, responsible for protecting and promoting the reputation of the national news programme. Changes to the Executive Leadership Team during FY25andannounced up to the date of thisreport • Cath Keers stepped down from the Executive Leadership Team on 31 December 2024. • Eduardo Rosini stepped down from the Executive Leadership Team on 31 October 2025. • Jonathan Howell will step down from the Executive Leadership Team and the Board on31 December 2025. • Jacqui Cartin will join the Executive Leadership Team when she assumes the position of Chief Financial Officer on 1 January2026. • Walid Abu-Hadba will step down from his role as Chief Product Officer and from the Executive Leadership Team with effect from 31 March 2026. Strategic Report Governance Report Financial Statements Additional Information THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 79 Corporate governance report Governance framework Our governance framework empowers the Board to function with optimal efficiency and effectiveness, ensuring well-informed decision making, robust oversight, and transparent accountability. Executive Leadership Team The Board delegates responsibility for the day-to-day strategic execution and operational management oftheCompanytotheELT, which is led by the Chief Executive Officer. The ELT is accountable for executing the Company’s strategy and achieving its commercial objectives. It drives operational andfinancial performance while operating within established risk management and internal control frameworks, and plays a criticalrole in fostering and sustaining the Company’s culture. Members of the ELT provide regular updates at Board meetings andmaintain ongoing dialogue with the Board to ensure alignment, enable support, and encourage constructive challenge. Shareholders Shareholders, as the Company’s owners, are instrumental in guiding our governance practices. More information about our shareholder engagement can be found on pages 91 and 97 Board of The Sage Group plc. The Board is responsible for the stewardship, strategic direction, and overall performance of the Group. Its role is to promote the long-term success of the Company by generating sustainable value for shareholders and considering the interests of the Group’s other stakeholders. The Board monitors the Group’s culture and Values, ensuring they are effectively embedded throughout the organisation. It also provides constructive challenge to management on the execution of strategy and is accountable for maintaining robust risk management and internal control systems. The Board is supported by three Committees, each of which is entrusted with delegated authority to provide rigorous oversight and focused attention on key matters. The Chair of each Committee reports regularly to the Board, ensuring that all members remain informed and actively engaged in decision making on delegated issues. Audit and Risk Committee Oversees the integrity of theCompany’s financial and narrative reporting and ensures themaintenance of robust internal controls and risk management systems. It monitors the effectiveness of internal audit andthe effectiveness of the externalaudit process and the external auditor independence andobjectivity. See pages 109 to 116 forthe Audit and Risk Committee Report Nomination Committee Keeps the structure, size, and composition of the Board under regular review and recommends appointments to the Board and its Committees. It oversees succession planning for the Board and Executive Leadership Team, ensuring a diverse pipeline of talent and promoting diversity across the Board and the wider Group. See pages 102 to 108 for the Nomination CommitteeReport Remuneration Committee Sets the Group’s Remuneration Policy andagrees the remuneration framework for the Chair, Executive Directors, and Executive Leadership Team (‘ELT’) members, and selected senior executives. It does so with regard to remuneration practices and policies across the wider workforce within the Group. It is also responsible for reviewing the design ofthe Group’s incentive plans and performance-related pay. See pages 117 to 151 for the Remuneration CommitteeReport Scan or Click the QR code for insight into Sage’s Board Committee membership and their TermsofReference Scan or click the QRcode for furtherinsight into Sageleadership 80 THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 Our governance framework enables agile and effective decision making, by providing a clear framework for delegated responsibilities, whilst ensuring the Group operates within established and robust governance and risk practices. The governance framework also includes a number of additional supporting corporate and management Committees: The Group’s subsidiary entities are equally held to the same rigorous standards of corporate governance and operate under a well-established delegated authority framework thatis consistently applied across the Group. Schedule of matters reserved Certain key matters requiring Board approval are set out inaformal schedule of matters reserved, which the Board reviews annually. Scan or click the QR Code for the full schedule of matters reserved fortheBoard Board composition The Board recognises that diversity of background, experience, and perspective among its members is essential to fostering constructive debate, enhancing decision making, and supporting overall effectiveness. The composition of the Board is subject to ongoing review and all Board appointments follow a formal and rigorous search process, which complements the comprehensive succession planning activities. The Board entrusts the Nomination Committee with the responsibility of ensuring its composition remains appropriate, drawing on the Committee’s expertise and insight. The Sustainability, AIand Data Ethics Committee provides oversight for the direction and progress of Sage’sSustainability and Societystrategy, and ongoing adherence and developments to the AI and Data Ethics Principles. Members 1 : The Committee is chaired by theChief Brand and Corporate Affairs Officer, with membership including the EVP Sustainability and Foundation, the EVP Chief Risk Officer, the General Counsel and Company Secretary, the Chief Product Officer, the Chief People Officer, and the Chief Technology Officer. 1. Effective from FY26, EVP People—Routes to Revenue, Learning and Inclusion, andVicePresident (‘VP’) AIandData Governance will joinasCommittee members, andthe Chief People Officer willstep down. The Mergers and Acquisitions Committee (‘M&A Committee’) considers proposals to acquire, divest, and/or make investments in businesses as outlined in the Group’s Merger, Acquisition & Divestiture Policy. This Committee also oversees updates on integration of acquisitions in line with an established cadence. The M&A Committee is a central part ofdisciplined and efficient acquisition, divestiture, and investment management at Sage. Members: The Committee is chaired by the Chief Executive Officer, with membership including the Chief Financial Officer, the General Counsel andCompany Secretary, and theChief People Officer. The Global Risk Committee (‘GRC’) oversees Sage’s risk management activities in order to mitigate risks and enable opportunities identified bythe business. It holdsultimate accountability foridentifying, assessing, and managing strategic risks across the Group. It sets therisk appetite and approves changes to Sage’s Principal Risks. Members: The Committee is chaired by the General Counsel and Company Secretary, with membership including the Chief Executive Officer and the Chief Financial Officer. The Chair of the Audit and Risk Committee attends regularly, and other Non-executive Directors are invited to participate on an ad hoc basis to provide additional insight and oversight. The Disclosure Committee oversees the accuracy, timeliness, and materiality of Group disclosures and announcements, ensuring that Sage meets itscompliance obligations in accordance with applicable regulations. Members: The Committee is chaired by the Chair of the Board, with membership including the Chief Executive Officer, theChief Financial Officer, the Chair of the Audit andRisk Committee, and the General Counsel and Company Secretary. Strategic Report Governance Report Financial Statements Additional Information THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 81 Non-executive Director induction programme Lori Mitchell-Keller Led by the Company Secretary with input from the Chair, acomprehensive induction programme was designed for ournew Non-executive Director, Lori Mitchell-Keller. The programme featured a tailored schedule of meetings and a dedicated reading room via Sage’s secure Board portal to support Lori’s understanding of the Sage business and the UK governance landscape. As part of Lori’s business familiarisation, she met withthe Executive Leadership Team and senior leaders across the organisation, gaining valuable insights intoSage’s strategic priorities, brand positioning, sustainability strategy, cyber security, and culture. Board familiarisation included one-to-one sessions withtheBoard Chair, Committee Chairs, and the Company Secretary, offering an overview of Board structure, Committee responsibilities, and governance processes. Meetings with the Senior Independent Director supported Lori’sunderstanding of Board dynamics. Meetings were also held with the Board Associate, to enable her understanding ofthe colleague sentiment across the business. The programme also deepened Lori’s understanding ofthe current UK corporate governance landscape, equipping her with valuable insight into the evolving expectations placed on UK listed companies—particularly in relation to Board leadership, succession planning, and the effective discharge of her duties asaDirector. Managing conflicts of interest Directors are required to disclose any actual or potential conflicts of interest to the Board as soon as they arise. At each Board meeting, the Board formally considers a register of interests, commitments, and potential conflicts, including any proposed new external appointments. When appropriate, the Board gives the necessary approvals in accordance with our articles of association. Ifany possible conflict exists, Directors recuse themselves from consideration of the relevant subject matter. During FY25, the Board has concluded that no Director had aconflict that would have a detrimental impact on their independence and judgement or their time commitment toSage. Further information on external directorships andtime commitments can be found on pages104and 105 Induction, training, and professionaldevelopment On appointment, all new Directors undertake a comprehensive and tailored induction programme. This programme is designed to ensure a smooth transition for new Directors to theBoard, which consists of meetings and events, and takes into consideration their specific background, experience, and prospective Committee memberships. This was demonstrated in the induction programme undertaken byLori Mitchell-Keller, as outlined inthe panel on the right, which ensured a thorough understanding of both Sage’s business and the statutory responsibilities of aDirector. Theprogramme is structured around key themes: business familiarisation, corporate governance including Directors’ duties, and Director development. As part of the business familiarisation theme, new Directors engage with members of the ELT and senior management to gain valuable insights into the Company’s operations and strategic priorities. Directors are regularly invited to provide feedback throughout their induction, and the programme isadapted to address any identified needs. In addition to these responsibilities, Non-executive Directors participate in tailored briefings and continuous professional development activities. These sessions are designed to ensure Directors maintain a comprehensive understanding of the Group’s operations, industry trends, and regulatory landscape. The Remuneration Committee receives updates from the Committee’s remuneration advisors covering governance and developments in executive remuneration. Separately, the Audit and Risk Committee spent time at a focused session in February 2025, examining the implications of the2024 Code, with particular focus on Provision 29 and assessing Sage’s readiness to report inline with the 2024 Code’s recommendations. Corporate governance report continued 82 THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 Board and Committee meeting attendance and cross-membership 1 Key Board Audit and Risk Committee Nomination Committee Remuneration Committee C Board Chair C Committee Chair S Secretary Directors Scheduled Board Audit and Risk Committee Nomination Committee Remuneration Committee Andrew Duff C C – – Steve Hare ––– Jonathan Howell ––– Sangeeta Anand 2 –– Dr John Bates – Jonathan Bewes C – Maggie Chan Jones 3 –– Annette Court Roisin Donnelly C –– Derek Harding –– Lori Mitchell-Keller 4 ––– Vicki Bradin 5 S S S S 1. Board and Committee meetings during FY25 followed the formal schedule, with 100% attendance at scheduled meetings by respective members. The table above shows current Committee memberships, each of which complied with the Code throughout the year. Attendance figures for Committee meetings reflect participation by Committee members only. 2. Sangeeta Anand stepped down from the Board on 6 February 2025. 3. Maggie Chan Jones was appointed to the Remuneration Committee effective 1 August 2025. 4. Lori Mitchell-Keller was appointed to the Board on 7 February 2025. 5. The Company Secretary acts as a Secretary to the Board and all Board Committees. Schedule of Board meetings Board meetings are conducted in an environment that encourages open dialogue, constructive challenge, and thoughtful debate. The Board maintains a comprehensive schedule of meetings and a forward-looking agenda to ensure its time is used most effectively and efficiently, andis supported by the Company Secretary.Members of theBoard and Committees are expected toattend every scheduled meeting and any ad hoc meetings,where possible. If a Director cannot attend a meeting, due to either exceptional circumstances or prior commitments, they are encouraged toprovide comments and observations to the Chair of theBoard or Committees, so these can be provided at that meeting. The Board considers its meetings an important opportunity to meet colleagues at different operating locations and aims to hold at least two meetings outside of the UK each year, providing an opportunity to engage with adiverse group of colleagues, including senior business leaders. This approach allows the Board to listen to local colleagues’ perspectives to gain first-hand insight into thebusiness and ensure that decisions are grounded in thepracticalities of day-to-day operations. During the year, five scheduled Board meetings were held, alongside three meetings of the Nomination Committee, four ofthe Audit and Risk Committee, and six of the Remuneration Committee. An additional brief Board call is also scheduled in March every year to provide an update on any key matters that management wishes to bring to the Board’s attention. The scheduled meetings were evenly distributed throughout the year to support effective oversight and decision making by the Board. Inaddition, adhoc meetings were convened as neededtoensure timely responses to emerging matters. To ensure the whole Board is kept up to date on the key strategic decisions and discussions of the Committee meetings, the Chairs of the Audit and Risk, Remuneration, and Nomination Committees update the Board on their respective proceedings, while standing papers from each Committee are also presented to the Board. All Directors areinvited to attend Committee meetings, regardless of membership, subject to recusal where matters concern thempersonally or present a potential conflict of interest. Strategic Report Governance Report Financial Statements Additional Information THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 83 Corporate governance report continued The Non-executive Directors devote considerable time to the Group beyond the schedule of Board and Board Committee meetings. Their activities include consideration of out-of- cycle papers and submitted reports and discussion with thesenior management and other subject-matter experts, between Board meetings. The Board appreciates the importance of opportunities to meet and interact outside of the Boardroom. This includes Board dinners, where the Board gathers informally to connect and strengthen Board cohesion. Board Strategy Day The Board met in February 2025 for its annual Strategy Day inour Newcastle offices, which is attended by the ELT and other senior management. The day was structured to facilitate in-depth strategic discussions, enabling the Board to review progress, explore growth opportunities, and assess challenges across key areas including product development and AI capabilities, M&A strategy, and the competitive landscape. The Board also considered the ongoing integration of a high-performance culture throughout the business. The agreed actions and key takeaways for management were noted with updates provided and built into the Board agendaoverthe course of FY25. For further information on the Board activities, refer to pages 86 and 87 Board engagement Engaging with all our stakeholders is crucial to the Group’slong-term success. This year, the Board connected with all key stakeholders to understand their interests and incorporate them into Board decision making. The Board also acknowledges the importance of meeting colleagues outside the formal meeting schedule, via office visits and walkarounds, which facilitate natural interactions and help the Board gain a deeper understanding of Sage’s culture. Further information regarding engagement activities with our stakeholders can be found onpages 90 to 97 Board meeting timeline 3 years Dates and venues of Board meetings are set. 1 year A rolling agenda of standing and periodic items iscompiled. This is updated throughout the year toreflect key developments in the business. 1 month The Company Secretary prepares the meeting agendain consultation with the Chair and CEO. 7 working days Papers are submitted to the Company Secretary forfinal review. 5 working days Papers are circulated to the Board via a secure webportal. Board meeting + 10 working days Minutes of the meeting and a schedule of actions aresent to the Chair for review. Annual General Meeting The 2025 Annual General Meeting (‘2025 AGM’) was held on 6 February 2025 at Sage’s Newcastle office, as an in-person meeting. Allour Directors, as well as both the external auditor for FY24 (EY) and the auditor for FY25 (KPMG), along with members of senior management, were present in person. Allresolutions at the 2025 AGM werevoted on a poll and were passed with over 80% of votes cast in favour. The website is the principal means by which wecommunicate with our shareholders. Scan or click the QR code for details ofourpast Annual General Meetings The 2026 Annual General Meeting (‘2026 AGM’) is scheduled tobe held on Thursday, 5 February 2026 at Sage’s Newcastle office. The 2026 AGM is a keydate in theBoard’s calendar and presents an important opportunity toengage with shareholders. In accordance withSage’s articles of association and the Code, all Directors who wish to continue to serveare subject to shareholder election or re-election atthe 2026 AGM. Sage provides shareholders with the opportunity to submit questions about the business of the 2026 AGM ahead of the meeting. Further details will be provided to our shareholders in the Notice ofMeeting for the 2026 AGM. 84 THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 Sage’s new North America headquarters: From Board decision to realised vision 120 engagement events 16 Sage Studio sessions 2 97.3 NPS score 1 Scan or click the QR code to find out more about the Sage Discovery Centre Scan or click the QR code to find out more onSage’s new flagship office in Atlanta 1. NPS score calculated from surveys completed by Sage Discovery Centre attendees. 2. Sage Studio is a dedicated space for stakeholders to create and capture content. Decision In February 2023, the Board approved thecapital expenditure for the new North America headquarters, underpinning the decision by elevating Sage’s brand presence, meeting sustainability commitments through its design, and a vision forapremium collaborative workplace to attract talentand facilitate customer connection. Vision Sage’s management team carried out a comprehensive search to relocate our North America headquarters within Atlanta. Asustainable site was proposed in Ponce City Market, to continue our presence ina city with strategic potential, diverse talent, and a thriving tech community. Spanning 58,000 square feet over two levels of a four floor building, the new workspace was conceived as a hubforinnovation, collaboration, and growth. Surrounded by local businesses, the unique location provides an environment for connection and partnerships. Experience Inclusivity and accessibility are central to the officedesign, with flexible workspaces, wellness rooms, and biophilic features supporting wellbeing. Every detail, from ergonomic furnishings to multi- faithquiet spaces, brings the colleague experience tothe forefront. Sustainability iswoven throughout thespace, including zero net carbon operations, LEEDGold certification, and theuse of locally sourcedGeorgia timber. Connection At the heart of the space is the Sage Discovery Centre, purpose-built as an immersive venue for stakeholder engagement. In response to customer feedback for in-person connection with Sage experts, this dynamic space hosts customers, partners, and community groups for hands-on technology showcases, events, andcollaborative workshops. Realisation The office opened its doors in March 2025, closely followed by July’s Sage Discovery Centre launch event.Customers, partners, local community leaders, andcolleagues were in attendance to experience the immersive space for the first time. In September 2025, the Board visited the completed flagship office to experience the strategic vision brought to life. Board members deepened stakeholder relationships during their visit through a guided office tour and participation in engagement sessions with colleagues, customers, and partners, along with a session with local entrepreneurs run through Sage Foundation. Forfurther details on stakeholder engagement, please refer to pages90 to 97. Strategic Report Governance Report Financial Statements Additional Information THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 85 February Key stakeholders considered Activity SO F E PC G CT CI RM Approval • Review of merger and acquisition transaction delegation of authority • EMTN Programme update • Disclosure Committee Terms ofReference • Anti-bribery and Corruption, and Sanctionspolicies Deep dive • Board Strategy Day • FY25 strategic dashboard Review • Q1 FY25 performance and results • Dividend and funding strategy • Culture and diversity, equity, and inclusion(‘DEI’)annual update Board engagement: Newcastle, UK • UKI business overview • UKI people and culture overview • Customer journey walk through • Colleague engagement lunch • UKI product demos • Go to Market and partner updates Announcements • Result of Annual General Meeting Link to Principal Risks 1 2 3 4 5 7 8 9 10 Corporate governance report continued Recurring updates Strategy: The Board receives updates on the Group’s strategy atscheduled Board meetings and holds a Strategy Day every year.Please refer to page 84 for more details. Executive: The CEO and CFO report on financial performance, corporate development, and investor relations are presented at every scheduledmeeting. A cyber security update is presented asastanding item at each Board meeting. Committees: The Board receives regular updates from theAuditandRisk Committee, the Nomination Committee, andtheRemuneration Committee. Governance: Legal and governance updates are received ateachBoard meeting. 2024 2025 Board activities November Key stakeholders considered Activity SO F E PC G CT CI RM Approval • FY24 Annual Report and Accounts • Final dividend • FY25 Rolling Board Agenda Review • FY24 Sustainability and Society and Climate Reports • Annual Non-executive Director fee review • Go to Market update • Board Associate update • FY25 Board Strategy Day agenda Announcements 1 • Full FY24 results Link to Principal Risks 1 2 4 5 6 7 9 10 1. The announcements in the Board activities section include relevant press releases from the monthof the scheduled Board meeting. All financial results and dividend RNS announcements are approved in principle by the Board, with final approval delegated to the Disclosure Committee. 86 THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 May Key stakeholders considered Activity SO F E G CT CI RM Approval • Delegated approval to Disclosure Committee: • Share buyback extension • H1 FY25 interim dividend • Audit and Risk, Nomination, and Remuneration CommitteesTerms of Reference • Whistleblowing, and Board Diversity, Equity and Inclusionpolicies Deep dive • Cyber security strategy review Review • H1 FY25 performance and results • Capital allocation • Sustainability strategy and reporting • Go to Market update • Health and safety and wellbeing annual report Announcements • H1 FY25 results • Share buyback extension Link to Principal Risks 1 2 4 5 6 7 8 9 10 September Key stakeholders considered Activity SO F PC G CT CI Approval • FY26 preliminary budget • Criterion, Inc (‘Criterion’) acquisition Deep dive • Strategic progression and evolution Review • FY25 external Board performance recommendations Board engagement: Atlanta, US • North America Go to Market update • Partner and customer roundtable • Colleague engagement lunch • Sage Impact Entrepreneurship Programme deep dive Please see stakeholder engagement on pages 90 to 97 for more information Please see the principal decisions by the Board on page89 for the Fyle and Criterion announcements Link to Principal Risks 1 2 5 7 9 1 Customer experience 3 Developing and exploiting newbusiness models 5 People and performance 7 Cyber security 9 Readiness to scale 2 Execution of productstrategy 4 Route to market 6 Culture 8 Data and AI governance 10 Environmental, social andgovernance Key stakeholder groups Principal Risks Activity SO Strategy and operations PC People and culture G Governance CT Cyber threat CI Customers and innovation F Finance RM Risk management E ESG July Key stakeholders considered Activity SO F PC G CT CI RM Approval • Schedule of matters reserved for the Board • Share Dealing Code, and Social and External Communications, and Environmental policies • Remuneration Committee membership Deep dive • Strategic planning update • European business update • Annual talent review Review • Q3 FY25 performance and results • Share buyback update • Three-year financial plan • Update on Fyle Technologies (‘Fyle’) acquisition • External Board performance review feedback • Board Associate update Board engagement: Frankfurt, Germany • CEU business overview • European product focus • Colleague engagement lunch • Customer, Go to Market and partner updates Announcements • Fyle acquisition • Q3 FY25 trading update • Maggie Chan Jones appointment toRemuneration Committee Link to Principal Risks 1 2 4 5 6 7 8 9 Customers Shareholders Partners SocietyColleagues Strategic Report Governance Report Financial Statements Additional Information THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 87 Outcomes The Board maintains oversight through progress updates from senior management that allow the Board to review and adjust plans as situations evolve. Principal decisions by theBoard during FY25 The principal decisions and processes described below illustrate how the Board considers the interests of stakeholders intheir strategic decision making. These decisions were considered by the Board to have a material impact on our stakeholders during FY25. Board information Board papers fromsenior management clearly identify thekeystakeholders impacted. Where appropriate, they include summaries of stakeholder engagement activities and outcomes. To support effective decision making, the Board ensures the quality and completeness of information through appropriate due diligence and seeks assurance where necessary. Board information and considerations Sage announced in March 2025 that Jonathan Howell had informed the Board of his intention to step downas Chief Financial Officer on 31 December 2025. The CFO succession process was initiated and ledby the Nomination Committee, with oversight from the full Board, to identify a candidate with both therequisite technical expertise and a deep understanding of Sage’s strategic priorities, culture, andValues. Jacqui Cartin, currently serving as EVP Group Financial Controller, was selected following arigorous assessment process, including formal interviews, where she demonstrated exceptional leadership, financial acumen, and strategic vision. Succession planning for key leadership roles is a fundamental element of Sage’s governance framework. The Board recognises the importance of strategic succession planning at executive levels and its far- reaching implications, and therefore a range of stakeholders were considered during the succession planning process. The Board considered how the appointment would support Sage’s high-performance culture, ensuing that it continues to nurture internal talent, fostering an environment where colleagues see clear pathways for growth and advancement. Stakeholders considered Section 172 factors Outcome Chief Financial Officer Upon recommendation from the Nomination Committee, the Board appointed Jacqui Cartin as the ChiefFinancial Officer with effect from 1 January 2026. In reaching its decision, the Board reaffirmed its commitment to responsible leadership, cultivating talent from within, and promoting a culture where colleagues can grow, thrive, and contribute meaningfully toSage’s success. Jacqui’s knowledge of Sage, complemented by her deep technical knowledge, uniquely positions her to help deliver on Sage’s strategic ambitions and create lasting strategic growth and sustainable value for all our stakeholders. For further information on the CFO appointment please see the Nomination Committee Report on pages 102 to 104 Scan or click the QR code forthe CFO announcement Decision: Appointment of Chief Financial Officer Board strategic discussion The Board Chair encourages open and constructive challenge, fostering discussions that consider different stakeholder perspectives. Throughout these discussions, Directors actively reflect on their duties under section 172. Board decision The Board ensures thatdecision making issufficiently well informed, including longer-term sustainable impact andvalue creation for Sage stakeholders. Corporate governance report continued 88 THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 Board information and considerations On 20 November 2024, Sage announced the commencement of a £400m share buyback programme, withan extension to the programme announced on 15 May 2025 for an additional aggregate consideration of£200m (together the ‘share buyback programmes’). The Board noted that share buyback remains an efficient method of returning excess capital to shareholders, with feedback from shareholders indicating strong support for this approach. Sage’s robust financial position, and its commitment to shareholders to maintain a progressive dividend policy, were key considerations by the Board in the approval of the interim dividend of 7.45 pence per share, as announced on 15 May 2025, and final dividend of 14.40p per share, as announced on 19 November 2025 (together the ‘FY25 dividend’). The Board reflected that the share buyback programmes and the FY25 dividend together demonstrate the Board’s confidence in Sage’s future outlook and robust financial position, while retaining the financial flexibility and resilience necessary to execute the Group’s growth strategy. The Board plays a vital role in shaping Sage’s strategic direction and, as part of its ongoing oversight, the Board carefully evaluated the proposed acquisitions of Fyle Technologies (‘Fyle’) and Criterion, Inc. (‘Criterion’) by assessing the strategic rationales and benefits of the acquisitions. Key factors included the enhanced functionality Fyle’s expense management technology would bring to Sage’s small and mid-sized customers and how Criterion’s Human Capital Management strengths would bolster Sage’s offerings to customers. Consideration was also given to how both Fyle’s and Criterion’s teams would integrate within Sage, and how new colleagues would be successfully transitioned and supported during integration. Stakeholders considered Section 172 factors Outcomes 1 Capital allocation The Board approved the share buyback programmes, pursuant to which, the Company has repurchased and cancelled over 48 million shares for an aggregate consideration of £600m. The Board approved the FY25 dividend (with the final dividend for FY25 remaining subject to shareholder approval at the 2026 AGM) and noted the dividend growth of 7% year on year. As announced in July 2025, the Board approved the acquisition of Fyle, and, as more recently announced inOctober 2025, the acquisition of Criterion. The Board believes that these acquisitions will enhance Sage’s product ecosystem, providing greater value and improved solutions for customers and partners, while creating opportunities for colleagues. These decisions reflect the Board’s ongoing commitment to disciplined capital allocation and financial resilience. These actions were guided by a comprehensive perspective on stakeholder value creation, while carefully balancing short- and long-term interests to ensure they are both aligned and mutually supportive. 1. The Board also approved the acquisition of Tritium Software, S.L., the developer of ForceManager (nowSageSalesManagement), in FY25. For further information, please refer to Principal Decisions bytheBoardonpage 46 of Sage’s FY24 Annual Report. Scan or click the QRcodes to learn more about the acquisitions Fyle acquisition Criterion acquisition Decisions: Approval of the share buyback programmes, the FY25 dividend, andtheacquisitions of Fyle and Criterion. a) The likely consequences ofany decisions inthe long term c) The need to foster thecompany’s business relationships with suppliers, customers, and others e) The desirability ofthecompany maintaining a reputation for high standards of business conduct b) The interests of the company’s employees d) The impact of the company’s operations onthe community and theenvironment f) The need toactfairly as betweenmembers ofthe company Section 172 factors Key stakeholder groups Customers Shareholders Partners SocietyColleagues Strategic Report Governance Report Financial Statements Additional Information THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 89 Stakeholder engagement Empowering connections, delivering value The Board undertakes an annual review of key stakeholder groups to ensure continued alignment with our purpose and strategic priorities. As noted in the FY24 Annual Report, partners were formally recognised as a key stakeholder groupfrom FY25 onwards, reflecting their critical role inextending our reach, enhancing our capabilities, and delivering improved outcomes for Sage customers. Stakeholder interests are systematically considered in business decision-making processes across the Group and are embedded in Board decision-making. Board papers routinely incorporate stakeholder considerations to support informed, balanced decisions that reflect diverse perspectives. While stakeholder interests may occasionally diverge, the Board strives to balance competing priorities through a fair and transparent approach, thereby promoting equitable and sustainable outcomes. Sage’s section 172 (1) statement on pages 46 and 47 and principal decisions for FY25 on pages 88 and 89 explain how the Directors have considered stakeholders in their decision-making. Understanding and engaging with our stakeholders is fundamental to the delivery of Sage’s strategy and underpins the long-term, sustainable success of the Company. We establish open, constructive dialogue with stakeholders, enabling us to strengthen relationships, understand evolving expectations, and respond meaningfully to feedback. Customers Engagement with the Board Regular updates during Board meetings on: • Customer insights to understand customer behaviours andcustomer needs • Customer feedback and metrics • Trust, security, and product innovations for customers Further details on Board engagement withcustomers are on page 92 Engagement across the Group • Initiatives for colleagues to understand customer behaviour, needs andfeedback: • Internal customer hub for colleagues to access customer insights • Global call listening initiative for colleagues to hear first hand our customers’ experiences • Strategic acquisitions to bring in new product capabilities withCriterion, Fyle, and ForceManager (now Sage Sales Management). Please see pages 89 for further details • US Customer Supper Clubs launched, providing opportunities for management to connect directly with customers • First Sage Day held in August 2025. Hosted at the Sage Discovery Centre in Atlanta, the event connected customers to colleagues and industry thought leaders to strengthen customer and community engagement and impact • Continued support provided to customers through the evolved online Trust and Security Hub Scan or click the QR code to access ourTrust and Security Hub Partners Engagement with the Board • An update on our partners strategy is provided during regionalupdates at Board meetings Further details on Board engagement withpartnersare on page 93 Engagement across the Group • Sage’s Partner Centre of Excellence and Partner Network supports global partner and customer success, fostering a strong partner ecosystem. Sage Channel Executives deliver tailored partner onboarding and success plans • Colleagues connect with partners via events, including: • June’s Sage Accountants Roadshow in Johannesburg and Cape Town • Partner conference, Sage Summer Camp 2025 in Berlin in May • Strategic Partner meeting at the Sage Discovery Centre in Atlanta in July • Accountex UK in May 90 THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 Colleagues Engagement with the Board Regular updates during Board meetings on: • Colleague sentiment, including Sage’s biannual Pulse Survey results and key outcomes and actions • Implementation of the Group’s DEI strategy • Progress on embedding a high-performance culture across the Group • Colleague sentiment reports received from the Board Associatebiannually Further details on Board engagement with colleagues areonpages 94 and 95, and in Boardactivities on pages 86 and 87 Engagement across the Group • Sage’s “All About Us” voluntary and confidential programme reached aglobal self-declaration rate of 60% in FY25, following the onboarding of colleagues in India. The programme provides insights into equity and representation to inform solutions • Flexible Working policy updated, and new Sage workplaces launched to boost collaboration and engagement • Colleague Success Networks membership increased to 28% inFY25 from 22% in FY24 • Global Wellbeing Community, a 24/7 Employee Assistance and whistleblowing hotline, and Healthy Mind Coaches available • Personal Data Protection learning refreshed, reinforcing ethicalstandards • Sage TV Live broadcasts, kick-off events, town halls and skip-level meetings enable direct engagement between colleagues and senior leaders Society Engagement with the Board • Annual update on the evolved Sustainability and Society strategy along with updates on the FY25 sustainability reporting suite and non-financial disclosures and assurance process • Sustainability, AI and Data Ethics Committee insights from attendee Maggie Chan Jones, our Non-executive Director for ESG, were received by the Board Further details on Board engagement with society are on page 96 Engagement across the Group • Sustainability, AI and Data Ethics Committee updated sustainability material topics, material impacts, risks, and opportunities • Embedded sustainability into operations and culture through policies and supplier onboarding • Enhanced supplier due diligence for human rights and labourrelations • Launched Sage Impact Entrepreneurship Programme, empowering 165 entrepreneurs over three years • Sustainability Learning initiative upskilled 1,767 colleagues globally Engagement with the Board • Board Chair meets top shareholders to discuss strategic progress. Extensive feedback gathered from top shareholders and proxy agencies on the 2025 Directors’ Remuneration Policy • Board members’ attendance at 2025 Annual General Meeting allows engagement with shareholders attending the meeting • Regular updates on top shareholders, movements in the share register, share price performance, and investor engagements • Approve material investor communications, including the Annual Report and Accounts, and results announcements • Investor meeting feedback after full-year and half-year resultsannouncements and quarterly trading updates Further details on Board engagement with shareholders are on page 97 Engagement across the Group • Senior management and Investor Relations met with shareholders and analysts to discuss Sage’s strategy and performance • Six investor roadshows held in the UK and US with senior management attendance • A senior management-led webinar covered product, technology, and go-to-market strategies for investors and analysts • Annual equity analyst event with senior management • Annual and interim results reports and presentations Scan or click the QR code for access to our investor relations website. This is our primary digital communications tool andis available to all shareholders Shareholders Strategic Report Governance Report Financial Statements Additional Information THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 91 Non-executive Director engagement highlights February Call listening, Newcastle Non-executive Director Maggie Chan Jones participated in call listening with Customer Support colleagues as part of the Customer Centricity initiative May Sage Future, Atlanta Non-executive Directors Maggie Chan Jones, Roisin Donnelly, and Lori Mitchell- Keller walked the Expo floor and attended keynote speeches throughout the event, meeting a wide range of customers Accountex, London Board Chair met with customers as Sage demonstrated how our AI-powered productshelp businesses to thrive July Call listening, Johannesburg Our Board Chair heard directly from customers during call listening with Customer Support colleagues in the Africaand Middle East (AME)region 2025 We want to be customer-centric every day, and we understand thatevery customer’s needs and behaviours, triggers and barriers, priorities and preferences are different. Therefore, we have developed a robust method of grouping customers with similar characteristics, which enables us to design, develop, and communicate more effectively with each segment and persona of customers, leveraging human insight and expertise to deliver greater value. Byunderstanding the customers needs and emotions, we measure success through their eyes, creating a unique Sage experience thatexceeds expectations and ensures confidence and support intheir business. KPIs Customer experience, renewal rate by value, and Sage Business Cloud penetration What customers need from Sage (i) Enhanced technology that helps them run and grow their business with ease and efficiency, (ii) trust and security including AI ethics, (iii) personalised value-added experiences, and (iv) innovation and future-readiness for AI-driven productivity, connected services, and sustainability tools. Outcomes from FY25 engagement initiatives • Our approach to capturing and leveraging customer feedback continues to mature. Our transactional Net Promoter Score (tNPS) has risen from 73 in FY24 to 79 in FY25 and our renewal rate by value held steady at 101% in FY25, demonstrating customers’ advocacy and commitment to Sage • The uplift in our Customer Effort Score from 81.7 in FY24 to 82.5 in FY25 reflects a positive shift in ease and efficiency of customer interactions, signalling improved customer experience at key service touchpoints • Thousands of customer reviews, giving Sage an overall score of 4/5 on Trustpilot, 4.2/5 on G2 and 4.2/5 on Gartner, highlighting the high regard with which our customers value Sage products • Implemented global Voice of the Customer platform to deepen our understanding of customers and guide decision making through continuous feedback • Sage was recognised at the UserTesting 2025 illumi awards for ouruse of customer insights to create better experiences Stakeholder engagement continued In September, customers and partners from North America were hosted at the Sage Discovery Centre for roundtable discussions with the Board. These sessions were a valuable opportunity for open dialogue, enabling Non-executive Directors and senior management to hear first hand about stakeholder experiences, expectations, and perceptions of Sage’s products and services. The conversations offered rich insight into what matters most to our customers and partners, helping to inform strategic decision making and strengthen relationships. The Board gained a deeper understanding of how Sage’s Values and purpose are reflected in day-to-day interactions, and how our solutions support businesses to thrive. Customer and partner roundtable discussions Customers Case study 92 THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 Our partners are fundamental to Sage’s ongoing growth and our unwavering commitment to customer success. By expanding our market reach and delivering enhanced outcomes across diverse customer segments, partners amplify the impact of our solutions and services. We support our partners through a tailored, collaborative approach that connects customers to Sage’s digital network, facilitating seamless interactions and value creation. Through these strategic partnerships, we further our mission to deliver exceptional experiences and results for customers worldwide. KPIs Renewal rate by value and Sage Business Cloud penetration What partners need from Sage Partners seek opportunities to create monetisable value and sustainable growth, and we are committed to enabling that ambition. Partners want the ability to differentiate their offering toremain competitive in the market and deliver business impact tothe evolving needs of customers. They look to Sage for support with driving growth by accelerating the time they spend on increasing value and revenue. Outcomes from FY25 engagement initiatives • Simplified partner categories introduced to provide clarity on what partners offer and reflect the diversity of their ecosystem and products. Partners can adapt their offering to fit their needs and the needs of our customers Scanor click the QR code for more information about the different categoriesof Sage partners • The Partner Code of Conduct sets out Sage’s Values and ways of working, along with the behaviour and ethical standards partners must demonstrate • Sage leaders Juha Harkonen, VP Partner Ecosystem & Marketplace Strategy, and Nancy Sperry, VP Partner Sales, were named in the prestigious 2025 CRN Channel Chiefs list to recognise their commitment in empowering our partners and reinforcing Sage’s position as a leader in enabling partner success Non-executive Director engagement highlights May Sage Future, Atlanta Non-executive Directors Maggie Chan Jones, Roisin Donnelly, and Lori Mitchell- Keller attended Partner Day to connect with a range of North American partners July Partner meeting, Frankfurt Members of the Board met with a partner as part of regional updates on partner success September Roundtable discussions, Atlanta The Board engaged with partners and customers at a roundtable event to hear first-hand insights into their experiences with Sage 2025 Women in Tech Networking Breakfast Sage Future launched in Atlanta, bringing together over 4,000 customers, partners, and colleagues to explore ourvision for business transformation through AI and high-performance solutions. The event showcased Sage’s commitment to customers and partners, and was attended by Non-executive Directors Maggie Chan Jones, Roisin Donnelly, and Lori Mitchell-Keller and senior leaders. A highlight of Sage Future was the Women in Tech Networking Breakfast, which offered an opportunity to celebrate the women in Sage’s partner ecosystem through mentorship and meaningful discussions. Over 60 female partners and colleagues attended, and a panel discussion between the three Non-executive Directors and Sage leaders kicked off the event, with practical advice and stories on owning career journeys, inclusive communities, and intentional leadership. The event transitioned into facilitated table discussions with Sage colleagues, where partners shared their career experiences and defining moments, and the importance of allyship and key learnings. Scan or click the QR code for further information about Sage Future Atlanta Scan or click the QR code to sign up for upcoming SageFuture events Partners Case study Strategic Report Governance Report Financial Statements Additional Information THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 93 Stakeholder engagement continued Our colleagues are critical to the successful delivery of our strategy, and we believe in building a high-performing and human-centred culture that supports each colleague to reach their full potential. AtSage, we are committed to creating an inclusive environment where colleagues feel energised to contribute their best work, are engaged and embrace our purpose and Values, and collaborate to drive growth, innovation, and positive impact. KPI Employee satisfaction What colleagues need from Sage Colleagues want to work for a company that genuinely values theircontributions and provides them with an opportunity andanenvironment to bring their authentic self to work. They expect Sage to address crucial societal issues, such as diversity, sustainability andthe evolving nature of work. Our colleagues wantto be treated fairly and feel supported with their health, safetyand wellbeing, while being recognised and rewarded fortheircontribution. Outcomes from FY25 engagement initiatives • 82% of colleagues completed the biannual September 2025 Pulse Survey, with 15,500 colleague comments and an overall eSAT score of 76, an increase from 74 in March. Colleagues reported the positive impact of colleagues and managers who listen and mentor to drive performance, and their continued confidence to speak up • Let’s Talk sessions launched in North America, directly addressing Pulse Survey feedback and fostering leader-colleague connection • New global People Zone launched in September for streamlined access to resources and AI-powered support • Interactive culture enablement sessions and 360 surveys strengthened feedback and high-performance habits • Sage is proud to be placed #15 on the Financial Times UK’s BestEmployers of 2025 list and recognised as one of the World’s Best Employers 2025 by Forbes Non-executive Director engagement highlights February Colleague Connect, Newcastle The Board heard directly from Customer Service and Early Careers colleagues on life at Sage, opportunities for change, and future direction Corporate Affairs All- Handsmeeting, Newcastle Non-executive Director Roisin Donnelly attended as guest speaker at a Q&A session with Corporate Affairs colleagues April Global Risk Committee, London Audit and Risk Committee Chair, Jonathan Bewes, attended the Global Risk Committee meeting July Colleague Connect, Frankfurt The Board engaged with colleagues, discussing Sage’s future focus, continuous improvement, and personal career stories Chair Visit, Johannesburg Our Board Chair met both formally and informally with a range of teams and colleagues during a two-day office visit September Colleague Connect, Atlanta The Board joined North American colleagues to hearperspectives ongrowth opportunities, barriers to success, and elevating Sage’simpact 2025 placement image In July, our Board Chair, Andrew Duff, visited our Johannesburg office in the AMEregion. The visit signified the Board’s commitment to engaging with colleagues on the ground, strengthening mutual understanding of interests, and aligning strategic priorities with regional execution. The Chair actively engaged with a wide range of colleagues, gaining first-hand insight into colleague sentiment, regional performance, and market dynamics. These conversations deepened the Board’s understanding oftheregion’s contribution to Sage’s growth and how cultureisbeing embedded across the Group, while alsoproviding colleagues with a clearer view of the Board’s role in driving long-term value. A key moment of the visit was the Chair’s participation ina live Q&A session during the AME All-Hands meeting toencourage open dialogue and connection. Colleagues posed questions virtually and in person on a range of topics, such as Sage’s purpose and culture, growth opportunities, and shareholder expectations. Board Chair visit to Johannesburg office opportunities, and shareholder expectations. Colleagues Case study 94 THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 ” Connecting with purpose: My journey as a Board Associate Since Sage launched the Board Associate programme in 2017, it has played a vital role in connecting colleagues with the Board and deepening organisational understanding of Board governance. In January 2024, I was honoured to be appointed to the Board Associate role. Over the last two years, the role has involved attending Board meetings, observing how decisions are made, and ensuring the colleague voice is partof the conversation at the very top. It’s been an incredible learning experience. I’ve had direct exposure to leadership at its highest level, new insight into Board decision making, and the chance to engage deeply with colleagues across the business. This perspective has sharpened my own strategic thinking and strengthened the link between on-the-ground team perspectives and Sage’s long-term vision. Highlights so far have included colleague roundtables across our key hubs, podcasts and interviews with Board members, and open sessions such as Fireside Chats that created space for honest dialogue. Sharing Board insights with colleagues, and elevating their views into Board discussions, helps keep our strategy and culture grounded in the real experiences of the people who deliver them. As I move into the final phase of my tenure, the process to appoint the next Board Associate is underway. Nominations come from our Executive Leadership Team, and shortlisted colleagues go through a multi-stage process, including interviews with Non-executive Directors and our Chair. Thisapproach ensures the next Board Associate brings fresh perspective, strong leadership, and a deep commitment to representing colleagues at Board level. Looking ahead, I am committed to making the most of the final months by strengthening relationships, elevating colleague dialogue, and continuing to use this unique vantage point in my leadership. Serving as Board Associate has been a privilege, and one I will carry forward to champion trust, human connection, and collaboration across Sage. 2024 November Interview with Audit and Risk Committee Chair Jonathan Bewes onSage’sapproach to risk. Roundtable with colleagues basedinLondon. 2025 January Article published on experience in first year of role and priorities for second year. February Roundtable hosted with early careers and customer service colleagues inNewcastle. Interview with Remuneration Committee Chair Roisin Donnelly and EVP Reward, Global Mobility, People Operations and Function Leader Tara Gonzalez discussing theRemuneration Committee. April Deep dive on Pulse Survey results withCulture, Engagement, and ColleagueExperience team. May Engagement with colleagues inLondonoffice. June Article published on Sage Future and Non-executive Director attendance. July Roundtable with colleagues in Frankfurt. September Interview with Non-executive Director Derek Harding on balancing strategic leadership roles. Roundtable with colleagues in Atlanta. “ It’s been an incredible learning experience. I’ve had direct exposure to leadership at its highest level, new insight into Board decision making, and the chance to engage deeply with colleagues across the business. Amy Cosgrove EVP People—Routes to Revenue, Learning and Inclusion Colleague engagement and communication activities Strategic Report Governance Report Financial Statements Additional Information THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 95 Stakeholder engagement continued placement image During a visit to Atlanta in September, the Board engaged with the Sage Impact Entrepreneurship Programme, our largest-ever social impact programme, delivered through Sage Foundation. During a dedicated engagement session, Board members took part in a mock advisory Board meeting, offering their expertise to help two programme entrepreneurs navigate business challenges. Entrepreneurs came prepared with major strategic challenges, recent milestones, and company background, and led the session. The discussion focused on overcoming key growth barriers, with Board members asking insightful questions, challenging assumptions, and sharing their expertise to create a dynamic and authentic Boardroom experience. The session not only strengthened Sage’s connection to the communities it serves but also demonstrated how corporate governance can play a direct role in knocking down barriers so everyone can thrive. Sage Impact Entrepreneurship Programme We understand that systemic barriers including discrimination, bias, unequal access to education, and digital resources continue toaffect opportunities for many individuals and communities. Weare dedicated to reducing digital and economic inequality and supporting environmental sustainability by investing in education, technology, and initiatives that empower individuals, SMBs, and communities to thrive. Through Sage Foundation, we break down barriers to digital and economic inequality, and support environmental sustainability, through global partnerships, volunteering, and fundraising. By empowering underserved entrepreneurs and equipping communities with essential digital and AI skills, we aim to build a more inclusive and sustainable future. KPIs Sage Foundation volunteering What society needs from Sage A positive societal and environmental impact, and a commitment todiversity matters. We are in a great position to help SMBs align their business practices with societal values, leading to sustainable growth and long-term success. Outcomes from FY25 engagement initiatives • Received a number of awards and accolades for the first time inFY25, including (i) a five-star rating in the 2025 Newsweek Greenest Companies list, (ii) a Leadership score for climate change based on an assessment by CDP, and (iii) edie award for 2025 Sustainability Reporting & Communications • 56 businesses completed the Sage Impact Entrepreneurship Programme, with access to funding, mentorship, and training • In FY25, £3.4m was disbursed to charitable partners around the world through Sage Foundation, including provision for disaster relief • Colleagues logged 80,036 volunteering hours during the year, with 49% of colleagues engaging with volunteering and fundraising in FY25 Scan or click the QR code forthe2025Impact Book Non-executive Director engagement highlights November Sustainability, AI and Data Ethics Committee Committee meeting attended by Non-executive Director Maggie Chan Jones March Sustainability, AI and Data Ethics Committee Committee meeting attended by Non-executive Director Maggie Chan Jones June Sustainability, AI and Data Ethics Committee Committee meeting attended by Non-executive Director Maggie Chan Jones May Sage Future, Atlanta Non-executive Director Roisin Donnelly connected with entrepreneurs at the SageImpact Summit September Sage Impact Entrepreneurship Board session, Atlanta The Board took part in mock Board sessions with entrepreneurs. Please see the above case study for more information 2024 2025 Society Case study 96 THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 We target sustainable growth in shareholder value. Our shareholders are our owners and providers of equity capital, and are key beneficiaries in the value we create. Insights and feedback from our shareholders help shape our strategic direction, guide our investment decisions, and ensure we stay aligned with our shared vision for success. KPIs Underlying ARR growth, renewal rate by value, subscription penetration and efficient growth What shareholders need from us (i) Deliver a return on their investment underpinned through robust financial and operational performance, (ii) sustainability practices, risks, and opportunities, (iii) strong leadership and executive remuneration, and (iv) a culture and shared Values conducive to goodgovernance and high standards of business ethics. Outcomes from FY25 engagement initiatives • Positive interactions with shareholders and analysts, ensuring aclear understanding of investor perspectives and reinforcing support for Sage’s management, strategic direction, executive remuneration, and capital allocation priorities • Maintained active and constructive relationships with our top shareholders at multiple organisational levels • Proactive approach to targeting prospective shareholders, particularly those based in the US, and to sustaining regular dialogue with current shareholders. US institutional ownership stands at around 40% • Approximately 81% of issued share capital voted at FY25 Annual General Meeting, with 80.72% of the votes received supporting the2025 Directors’ Remuneration Policy Non-executive Director engagement highlights January Shareholders meetings, virtualand in person Board Chair Andrew Duff and Remuneration Committee Chair Roisin Donnelly met with top shareholders to discuss the 2025 Remuneration Policy Annual Chair’s roadshow, virtual and in person The Board Chair held 15 shareholder meetings as part of an annual roadshow February 2025 Annual General Meeting, Newcastle The Board attended the 2025 Annual General Meeting September Shareholder meeting, London The Board Chair held a one-to-one meeting with the governance team of a top shareholder 2025 Roisin Donnelly, Chair of the Remuneration Committee, alongside Andrew Duff, Chair of the Board, and members of Sage’s Reward team, led a comprehensive engagement process with key shareholders ahead of the Board’s proposal for a new Remuneration Policy at the 2025 Annual General Meeting (the ‘2025 AGM’). The revised Policy was designed to better align Executive Director remuneration with Sage’s recent performance, international scale, and strategic ambition, while supporting the attraction and retention of top-tier talentfrom the competitive global talent market. An extensive consultation process with shareholders took place in the latter part of FY24 and into FY25 in thelead up to the 2025 AGM. Initial proposals were shared with 18shareholders, covering 59% of issued share capital. Feedback received during this initial phase helped to shape revised proposals, which were communicated in early FY25 to 46 shareholders (covering 75% of Sage’s voting rights in total), and to proxy agencies. Further meetings were held during October and November 2024, with feedback reflected in the final Policy. Full details of our initial proposals, together with information on the changes made as a result of the consultation process, were published in theFY24 Annual Report and Accounts. Following this comprehensive engagement, the new Remuneration Policy was approved with 80.72% shareholder support. 2025 Directors’ Remuneration Policy Shareholders Case study Strategic Report Governance Report Financial Statements Additional Information THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 97 Corporate governance report continued The Board holds ultimate accountability for defining Sage’s purpose, Values, and strategic direction, and ensuring these are embedded within the Company’s culture. Culture remains a standing priority on the Board’s agenda, both as a dedicated topic and as a lens through which broader strategic matters are considered. To monitor and assess how effectively culture is embedded across the organisation, the Board draws on adiverse range of tools and data sources, including colleague feedback, functional reporting, deep dives, andperformance indicators. These insights enable the Board to evaluate how Sage’s Values are being lived throughout the business. The Board also receives regular updates on succession planning for the ELT and senior management, supporting the development and retention of high-calibre internal talent. By leading the way in modelling andcommunicating Sage’s Values, the Board and ELT supportthe embedding of high- performance culture anddrive sustainable business outcomes. We do the right thing Human We make connections with customers, partners, and colleagues, through empathy and care Bold We are curious, courageous, ambitious, and creative Simplify We strip away complexity Trust We deliver our promises to customers, colleagues, society, and shareholders Embedding culture—from the Boardroom to our colleagues 98 THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 Board performance An independent externally led performance review of the Board wascarried out in FY25 to ensure theBoard, its Committees, and the Directors perform effectively and uphold high standards of governance. The scope of the review included howthe Board is actively involved insetting and assessing Sage’s Valuesand culture. Read more about FY25’s Board performance review on pages 100 to101 Functional insights Our Assurance and People functions play a crucial role in helping the Boardtoidentify and address any misalignments between colleague behaviours, business purpose, and Sage’s Values to ensure that our culture isembedded. People data such as performance reviews, grievance data and employee turnover can highlight areas of concern or emerging cultural risks. The Assurance team, through independent audits and reports to theAudit and Risk Committee, continues to enhance how itprovides insights into how culture isembedded across the business. Its findings have potential to enrich how the Board evaluates whether the Values and behaviours promoted at the top are reflected throughout the business. High-performance culture The Board receives regular updates on how a high-performance culture isembedded across the business andengages with management to assess its effectiveness. Structured reporting provides assurance through engagement data, behavioural outcomes, and cultural indicators. Atits February 2025 meeting, the Board conducted a deep dive into FY25 priorities, focusing on talent, performance management, and reinforcing key behaviours. These discussions enable the Board to evaluate how Values are lived across the business and to challenge management on measuring and sustaining cultural alignment. Read more about our high-performance culture FY25 progress onpages 24 to29, and page 34 Board Associate The lived experience of colleagues is brought directly into the Boardroom through regular updates from the Board Associate. These updates provide valuable insights into colleague sentiment and regional perspectives, offering the Board agrounded view of Sage’s culture inpractice. This direct line of communication enables the Board toassess how Sage’s Values are beingembedded across the business, supporting informed oversight and continuous cultural alignment. Read more about our Board Associate’s engagement activities during FY25 onpage95 Connecting with colleagues The Board sees the time spent with colleagues as invaluable as it offersmeaningful insight into Sage’s culture in action. Board members connect withcolleagues across the regions to gain a deeper understanding of the local culture and regional differences. These sessions also give colleagues the chance toask questions directlyand see the Board actively role-modelling Sage’s Values andbehaviours. The CEO Open Circle brings together high-potential colleagues from across the business to engage in meaningful dialogue with the CEO ahead of each Board meeting, with membership refreshed periodically to ensure insights are gathered from a broad and diverse range of colleagues. This collaborative forum enables theCEO to gather diverse perspectives onkey agenda items, including strategic direction, risk, and success metrics. By capturing a broad spectrum of colleague perspectives, the Open Circle provides the CEO (and the Board via CEO updates) with valuable insights through inclusive and dynamic discussions to support informed decision-making. Read more about colleague engagement on pages 91 , 94 and 95 DEI strategy The Board’s dedicated DEIPolicy applies to both the Board and its Committees, and complements Sage’sGroup-wide DEI Policy while setting a consistent, enterprise-wide tone from the top. The Board receives regular updates onSage’s DEI strategy and progress made against our commitments towards an equitable and inclusive culture. The DEI Accountability Board,chaired by theCEO, plays animportant role inensuring alignment of the DEI strategy to business outcomes, thedesired culture and Sage Values. Sage’s DEIself-disclosure programme “AllAbout Us” provides data-driven insight to understand inequities andunderrepresentation to provide solutions that build diverse teams and an inclusive culture. Read more about the DEI strategy on page 108 Reward framework The Remuneration Committee ensures Sage’s reward and incentive framework promotes behaviours aligned with our Values. Grounded intransparency and fairness, the framework supports a high-performance culture and long-term value creation. Through ongoing dialogue with the Board and the Executive Leadership Team, the Remuneration Committee ensures that remuneration outcomes contribute to a culture that supports strategic delivery, talent retention, and stakeholder trust. Please see the Directors’ Remuneration Report on pages 117 to 151 for more information on the Committee’s work in FY25 Pulse Surveys Sage’s Pulse Survey captures candid feedback from across the business and gives the Board a view of what is working well and where improvements can be made to help colleagues perform at their best and deliver great stakeholder outcomes. Pulse Survey data provides detailed insight into the collective colleague experience and perspectives in order to understand culture and Values in action. Read more about the FY25 Pulse Survey results on page 94 Strategic Report Governance Report Financial Statements Additional Information THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 99 Corporate governance report continued Board Performance Review The Chair and the Board are committed to continually strengthening and enhancing their performance, skills, and experience to align with the Group’s strategy and to maintain effectivedecision making. The annual Board performance review affords the Board, itsCommittees, and individual Directors with a valuable opportunity to reflect on their overallperformance, fostering robust governance, leadership, and oversight. Our Board performance review cycle In FY25, the annual performance review of the Board was externally facilitated by Manchester Square Partners (MSP), an independent advisory firm with no other connection to Sage and no significant connection to any individual Director. 1 An outline of the evaluation process is set out opposite. FY25 externally facilitated Board performance review process Scope and framework March—April 2025 • The scope and evaluation framework were agreed between MSP and the Chair, supported by the Company Secretary. The review focused on key governance attributes and built upon themes identified in FY24’s Board performance review. Focus areas included: • Strategy, opportunities, challenges, and risk • Values and culture • Role of the Board and Committees and their governance, leadership, and engagement • Structure, composition, and succession planning Preparation and observations March—May 2025 • Review of Board documents and structure of meetings • Attendance by MSP at the Board and Committee meetings to observe the meeting proceedings and Board and Committee dynamics • One-to-one interviews by MSP with the Board, the Company Secretary, the Chief People Officer, and the Board Associate Discuss findings June—July 2025 • Results evaluated by MSP and discussed withtheBoard Chair • Final report presented at the July Board session • Separate discussion led by the Senior Independent Director, without the Board Chair present, to discuss the performance review of the Board Chair FY26 Action planning September 2025 • Action plans developed, presented andapproved 1. MSP previously provided coaching services to one Non-executive Director, who had no direct or indirect involvement in selecting MSP forthis role. Year 1 2023 internal evaluation Year 2 2024 internal evaluation Year 3 2025 external evaluation FY25 Board performance review findings Board Overall, the Sage Board operates to veryhigh standards ofgovernance, with strong leadership, guidance, and support, fostering an environment conducive to open discussion, constructive challenge, and effective debate. Aparticular strength of the Board lies in its composition ofhigh-calibre individuals, whose complementary skills and diverse experiences provide a broad spectrum of perspectives. Governance matters are managed with diligence, enabling the Board to devote appropriate attention to strategic priorities. Board Committees The Board Committees continue tooperate effectively, withstrong leadership from their respective Chairs. The Committees maintained the confidence and trust of the Board in their handling of delegated matters, and were commended for their rigorous approach and clear focus. Regular and transparent reporting to the Board further supports the effective discharge of their responsibilities. Individual Directors Each Director continues to make an effective contribution to the Board. The Non-executive Directors have expressed their satisfaction and pride in serving on the Board, reflecting the positive and collaborative environment. Chair The Chair is held in high regard, leading the Board with a balanced leadership style that fosters diversity of thought, encourages open dialogue, and builds trust. His guidance ensures well-structured discussions, a clear understanding of strategy and performance, and effective follow-through on agreed actions. 100 THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 Update on progress for the focus areas identified for FY25 FY25 areas of focus Actions implemented in FY25 Continue to constructively challenge management to maintain focus on driving long-term growth Maintained commitment to strategic oversight by constructively challenging management and engaging in robust, insightful debate while ensuring continued focus on long-term growth and value for stakeholders. Further details of the Board’s activities in support of this agenda are outlined on pages 86 and 87. Continue to focus on execution ofthe technology strategy, with aparticular focus on AI, Sage Network, and Sage Copilot Regular updates on the evolving AI landscape and Sage’s product strategy. The Board was kept apprised of the launch and commercialisation of Sage Copilot, our first AI-powered accounting assistant, in key Sage regions. Provide clarity on M&A strategyandambition Regularly reviews the M&A pipeline and engage with acquisitions requiring Board approval, with focused discussion on M&A strategy at the Board Strategy Day. Continue to monitor competitor landscape and Sage’s performance against the competition Targeted discussions on competitive landscape and market intelligence, with ongoing updates provided prior at each Board meeting. Maintain awareness of emerging risks, opportunities, and trends specific to Sage and the industry, and continue monitoring of successful delivery of strategy to execution The Board through its delegation to the Audit and Risk Committee, comprehensively reviews Principal Risks and emerging risks, ensuring alignment with the Group’s risk appetite and promptly identifying and evaluating response as needed. Continue to focus on succession plans for the Board, and capability development for key senior management positions The Board and Nomination Committee prioritised succession planning in FY25,appointing a new Non-executive Director and Chief Financial Officer, anddiscussing succession plans for the Executive Leadership Team. Continue to monitor how diversity is being built into talent pipelines DEI considerations are embedded into all succession planning for the Board, Committees, and, Executive Leadership Team. The Board also received Group DEIupdates at the culture deep-dive session at the February 2025 Board meeting. Ensure culture remains a focus onBoard agendas (meetings andengagement) Regular culture updates to the Board and Nomination Committee, including a deep-dive at the February 2025 Board meeting. Colleague engagement during site visits to Newcastle, Frankfurt, and, Atlanta further inform the Board’s oversight of the Group’s culture. Ensure Board paper length does justice to more complex topics The Company Secretariat collaborates with Board and Committee paper authors, with targeted external training delivered in FY25 to enhance submission quality and clarity of all Board papers. Continue to invite external speakers, to build knowledge on strategic discussions and give a fresh perspective for continuous education to the Board An external speaker addressed the Board dinner in September 2025, offering insights into the evolving landscape of AI. Focus areas for FY26 • Maintain clear visibility of Sage’s principal strategicenablers, supporting the delivery of its strategicambition over theshort and medium term. • Continue to deepen understanding of market trends andcompetitive insight. • Maintain clear visibility and effective governance ofallBoard succession planning activities. • Remain cognisant of the evolving cyber risk and cyber security landscape through ongoing cyber reviews,ensuring robustoversight. • Shape the Board agenda to maintain an appropriate balance of the time spent between operational oversight and strategic priorities. • Continue to monitor progress towards further embedding and maintaining a high-performance culture across the Group. Strategic Report Governance Report Financial Statements Additional Information THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 101 Corporate governance report continued Nomination Committee ” “ A principal focus during FY25centredon stewarding the successionprocess for the incoming CFO, who is set to join the Board in January 2026, andensuring an orderly and smoothtransition. Andrew Duff Chair of the Nomination Committee Other Nomination Committee members Dr John Bates Jonathan Bewes Annette Court Committee purpose and responsibilities The Nomination Committee (the ‘Committee’) is responsible for overseeing the appointment process for Board members and ensuring robust succession plans are in place forkey senior leadership roles. It regularly reviews the structure, size, and composition of the Board and its Committees to ensure an effective balance of skills, experience, knowledge, and diversity. Key responsibilities of the Nomination Committee include: • Ensuring formal, rigorous, and transparent procedures are in place for Director appointments and reappointments, and making recommendations to the Board. • Championing diversity, equity, and inclusion, while ensuring all appointments are made on merit against objective criteria. • Reviewing Directors’ time commitments to confirm they can meet their Sage Board responsibilities. • Overseeing induction programmes for new Board members and supporting ongoing training. • Ensuring a high-quality Executive Leadership Team and senior management are in place, underpinned by credible succession plans. Key FY25 activities February Non-executive Director succession planning March * CFO appointment May Directors’ time commitments DEI Policy and Committee Terms of Reference July * Remuneration Committee appointment September ELT succession planning * Ad hoc meetings. 102 THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 Dear shareholders, On behalf of the Nomination Committee, I am pleased to present the Nomination Committee Report for FY25, which highlights the vital role of the Committee in maintaining anoptimum balance of skills, experience, knowledge, and diversity across the Board and its Committees. A primary focus for the Committee in FY25 was to ensure aseamless succession for the Chief Financial Officer (‘CFO’)role, following Jonathan Howell informing the Board ofhis intentionto step down on 31 December 2025. In line with ourcommitment to a rigorous and transparent process and ongoing succession planning, theCommittee had conducted a comprehensive and thorough internal review, and subsequently recommended to the Board the appointment of Jacqui Cartin as CFO, effective from1 January 2026. This appointment demonstrates the strength of our internal talent pipeline and underscores theeffectiveness of our succession planning, enabling the business to maintain continuity and leadership stability through the promotion of a high-calibre internal candidate. In addition, following a comprehensive and externally facilitated recruitment process, and after thorough assessment of candidates against the defined criteria, the Committee was pleased to recommend to the Board theappointment of Lori Mitchell-Keller as an independent Non-executive Director. Lori was appointed tothe Board with effect from 7 February 2025. This followed on from Sangeeta Anand stepping down from the Board in February 2025, having chosen not to stand for re-election at the 2025 AGM. The Committee also recommended the appointment of Maggie Chan Jones as a member of the Remuneration Committee, effective from 1 August 2025, following its annual review of committee composition. I am pleased to confirm that these appointments followed rigorous processes, resulting in the enhancement of both the Board’s and the Remuneration Committee’s collective skills and expertise in strategically important areas. The Committee maintained its strong commitment to diversity, equity, and inclusion throughout the year, with ongoing oversight at Board level and continued monitoring progress across the Group. For FY25, the Board’s gender diversity remained at 40%. The Boardalso continued to meet the ethnic diversity target referred to inthe Parker Review. More details on the progress towards our Group-wide DEI strategy and targets can be found on pages 108. Further information on the diversity of the Board and Executive Leadership Team can be found on pages 71 and 79. The Committee also dedicated considerable time during theyear to succession planning activities for our Executive Leadership Team, keeping under review the leadership needs of the business and ensuring that we continued to invest and develop our diverse pool of high-potential internal talent. Following an externally facilitated performance review this year, I am pleased to report that the process demonstrated that this Committee continues to operate effectively across all its responsibilities. Further information on the outcome of the performance review conducted in FY25 can be found on pages 100 and 101. Looking forward, with a new CFO commencing her tenure inearly 2026, a primary focus for the Committee will beto ensure a smooth transition for Jacqui as she steps into her Executive Director role. The Nomination Committee, together with the Board, iscommitted to providing the necessary support to enable Jacqui’s success in this critical position. I would like to thank my fellow Committee members for their openness, insight, and constructive challenge throughout the year. Their ongoing dedication and valuable contributions have been instrumental in enabling the Committee to fulfil its responsibilities effectively. Andrew Duff Nomination Committee Chair Strategic Report Governance Report Financial Statements Additional Information THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 103 Board and Board Committee composition andsuccession planning The Chair leads the process for new Board appointments, except in instances when the Committee is dealing with the Board Chair succession. The Committee follows established procedures for appointing new Non-executive and Executive Directors, which are clearly set out in its Terms of Reference. Over the course of the year, the Committee considered two Board appointments, with a focus to ensure that the Board’s composition continues to support Sage’s strategic direction and high standards of governance. To facilitate a rigorous and inclusive external selection process for a new Non-executive Director, the Committee was supported by the Lygon Group, an independent executive search company with no other connection to the Company or any of itsDirectors. TheCommittee met with a shortlist of diverse candidates, who were assessed on merit against objective criteria as well as their alignment to Sage Values and culture. In reaching its recommendation, the Committee also considered the Board’s collective composition, the existing skillsets of individual Directors, the skills required for the future, and how the candidate would integrate with theBoard. On the Committee’s recommendation, the Board appointed Lori Mitchell-Keller asa Non-executive Director in February 2025in view of the valuable expertise she would bring while strengthening the Board’s diversity of thought and strategic capabilities. On her appointment, Lori undertook a full Board induction programme, which was designed to help her obtain a deepunderstanding of her role and responsibilities, and to support the smooth transition intothe Boardroom. Further details of Lori’s induction programme can be found on page 82. The Committee also considered the succession of Sage’s CFO, following Jonathan Howell informing the Board of his intention to step down from the role on 31 December 2025. Inits deliberations, the Committee reviewed the CFO succession plan, including the requisite skills, knowledge, financial expertise, stakeholder understanding, and personalattributes required to succeed in the role. In line with the Group’s robust succession planning activity, an internal candidate was identified as the preferred successor. To assist the Committee in its evaluation, an independent assessment of the candidate’s readiness was undertaken by anindependent advisory firm, YSC Consulting, which has noother connection to the Company or any of its Directors. Thiscomprehensive review encompassed an analysis of the candidate’s strengths and areas for development. In addition, interviews were held with each Committee member, the Chief Executive Officer, and the Chief People Officer to inform theCommittee’s recommendation. On the recommendation oftheCommittee, the Board appointed Jacqui Cartin as the newCFO with effect from 1 January 2026. The appointment ofan internal successor demonstrates the robustness of the succession planning process, and underlines our commitment to nurturing internal talent, preserving knowledge within the business and minimising disruption. Further details of how the Board considered section 172 factors in its approval of the new CFO can be found on page 88. Membership for all the Board Committees is reviewed annually to ensure an optimum combination of skills, experience, knowledge, anddiversity that supports effective governance and decision making. Further to such review, theCommittee recommended to theBoard the appointment of Maggie ChanJones to the Remuneration Committee. She brings valuable insight through her understanding of the US software market and remuneration matters, and draws on herexperience at Sageand her other externalcommitments. Maggie Chan Jones’ appointment, effective 1 August 2025, ensures thatthe Remuneration Committee remains appropriately resourced, maintaining anoptimum balanceof relevant skills and perspectives. Nochanges wererecommended tothe membership of the Auditand Riskor the Nomination Committees. Further information on the Board skills matrixcanbe found on page 71 Annual election and re-election of Directors Every year, the Committee considers and, if thought fit, recommends to the Board the election or re-election of Directors by shareholders at the Annual General Meeting. Aspart of the annual review process, the Committee reviews the time commitment, contribution and effectiveness of each Board member, and, having noted that Jonathan Howell will step down from his role on 31 December 2025, recommended tothe Board that each Director be proposed for election or re-election by shareholders at the 2026 Annual General Meeting. Lori Mitchell-Keller and Jacqui Cartin will be standing for election by shareholders for the first time at the 2026 Annual General Meeting. Time commitments and external directorships The Board places significant emphasis on ensuring that Directors are able to dedicate the time and attention necessary to fulfil their Sage Board responsibilities effectively. Prior to appointment, Non-executive Directors are made fully aware ofthe expected time commitment associated with their role. AllDirectors are also informed that any proposed additional external appointments or significant new commitments would require prior approval of the Board. The Board maintains ongoing oversight of the number and nature of external directorships held by its members and conducts an annual review of their significant external time commitments. As part of this annual process, consideration is given by the Committee to internal Sage policies, market best practice, meeting attendance records, and the scope of each Director’s external directorships. These assessments enable the Committee to ensure that allDirectors continue to contribute meaningfully to Board discussions and decision making. The Board remains satisfied that no Director is overboarded and that each continues to perform their duties to the Sage Board effectively. In FY25, the Committee considered the proposed external appointment of Steve Hare as a non-executive director at JSainsbury plc, with effect from 3 July 2025. Following a thorough assessment of the anticipated time commitment associated with this role, the Committee concluded that Steve Hare would continue to discharge his responsibilities to the Sage Board effectively. The Committee also recognised Corporate governance report continued 104 THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 that the Sage Board would benefit from the broader insights and perspectives Steve gains through this non-executive appointment. Accordingly, the Committee recommended tothe Board to approve this external appointment. The Committee also reviewed the proposed appointment of Jonathan Howell as an independent non-executive director and chair of the audit committee at Whitbread PLC, effective from 1 January 2026. The Committee noted that the appointment would take effect following Jonathan stepping down from hisrole as an Executive Director at Sage. The Committee further considered the appointment of Lori Mitchell-Keller to the board of OneStock, and concluded that it was satisfied that she would continue to be able to devote sufficient time to herduties on Sage’s Board and that the appointment did not represent a conflict. The Committee recommended that the external appointment be approved bythe Board following its deliberations. As disclosed in the FY24 Annual Report, the Committee reviewed and approved the appointment of Jonathan Bewes as Chair of MONY Group plc, effective from 1 January 2025. Further details regarding the Committee’s considerations relating to this appointment were provided on page 102 of the FY24 Annual Report. Succession planning for the Executive Leadership Team and senior management To foster an environment of an inclusive culture and ensure robust succession planning for the Executive Leadership Team and senior management, the Committee maintains clear oversight of a diverse pool of senior talent identified as potential successors. Regular reviews are conducted to assess candidates’ readiness, evaluating a broad spectrum of leadership capabilities and personal attributes to ensure the succession pipeline is both strong and representative of high-calibre colleagues from diverse backgrounds. As part of this process, the Committee also considers how Sage attracts and retains high-calibre individuals and nurtures high-potential talent to realise their career aspirations. These efforts are underpinned by Sage’s inclusive, high-performance culture which remains a critical enabler of the Group’s ability to succeed in a dynamic and competitive global market. In FY25, the Committee dedicated time to discussing succession plans for several key positions, including the ChiefCommercial Officer, Chief Growth Officer and Chief Technology Officer. These discussions involved a detailed review of each of the role’s evolving requirements, the strength and depth of the succession pipeline, and the futurecapabilities needed to meet the Group’s strategic ambitions. One-to-one colleague mentoring conversations (the Non-executive Director Conversation Programme) werealso arranged to provide Non-executive Directors withvaluable exposure to succession pipeline candidates. This initiative supports both the development of future leaders and enhances the Directors’ understanding of emergingsenior talent. Succession planning for the ExecutiveLeadership Team and senior management willremain a key focus of the Committee in FY26. Committee performance and evaluation The Board is dedicated to upholding the highest standards of governance and conducts a formal and rigorous evaluation of its performance, as well as of its Committees, individual Directors, and the Chair annually. In FY25, in accordance with the recommendations of the Code,anexternally facilitated Board performance review was conducted. As part of this process, the Committee’s performance was assessed, which included consideration ofthe effectiveness of the Committee Chair. The findings of the external performance review affirmed the effectiveness of the Committee Chair and the strong performance of the Committee, noting a positive culture ofopen dialogue andconstructive debate. Further information on the FY25 external Board performance review, outcomes and next steps are available on pages 100 and 101 Diversity, equity, and inclusion The Committee and the Board conducted its annual review ofthe Board Diversity, Equity and Inclusion (‘DEI’) Policy. Thepolicy sets out the DEI approach for the Board and its Committees, with the intention of fostering inclusive leadership and maintaining appropriate Board and Committee composition. While all Board and Committee appointments are based on merit and objective criteria, the Board remains committed to promoting diversity, equity, and inclusion. We continue to meet the targets set out by the FTSE Women Leaders Review, the Parker Review, and the UK Listing Rules. These commitments, together with the Board DEI Policy, and other associated global policies, reflect our broader responsibility to foster inclusive leadership and reflect the diversity of our global business. As at 30 September 2025 and the date of this report, the Board composition meets both the gender and ethnic diversity targets set out in the UK Listing Rules, with women representing 40%of Board membership, Annette Court serving as one ofthe specified senior Board positions in her role as Senior Independent Director, and one Board member being from an ethnic minority background. Following the appointment of Jacqui Cartin as an Executive Director and CFO in January 2026, Board gender diversity is expected to increase to 50%, with women holding two out of four senior Board positions, thereby potentially exceeding the targets set by the FTSE Women Leaders Review and the UK Listing Rules. The Board and senior management believe diversity, ourstrong culture, and Values remain fundamental to the continued success of the business, providing the right blendof perspectives and insights required to meet our purpose and deliver on our strategic objectives. The Board and the Committee will continue to monitor progress against the Board DEI Policy to provide meaningful disclosure in the Annual Report and Accounts on the policy’s implementation and progress in meeting its objectives. Scan or click the QR code to access theBoard DEI Policy Further information on the diversity of the Executive Leadership Team and their direct reportscan be found on page 28 Strategic Report Governance Report Financial Statements Additional Information THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 105 UK Listing Rules—Board and executive management diversity reporting The Committee recognises the requirements under the UK Listing Rules to disclose data in a prescribed format about the gender identity or sex, and the ethnic background of members of the Board and executive management. Approach to data collection The data used for the purpose of our disclosure against Board diversity targets, as set out on this page, was collected as part of the annual declaration process, whereby the Board and the Executive Leadership Team confirmed their details through theinternal DEI dashboard or through self-declaration. This self-declaration process is based on individuals voluntarily self-reporting their personal information, including confirmation of ethnicity and consent for its inclusion in public reporting. The data in the tables below is used for statistical reporting purposes and is as at our chosen reference date of30 September 2025. Further information on the gender balance of those in senior management and their direct reports canbe found on page 79. Board and executive management gender Number of Boardmembers 1 Percentage oftheBoard Number of senior positions on the Board (CEO, CFO, SID and Chair) 1 Number in executive management 2,3,4 Percentage of executive management 2,3,4 Men 6 60% 3 6 67% Women 4 40% 1 3 33% Not specified/prefer not to say – – – – – Board and executive management ethnicity Number of Boardmembers Percentage oftheBoard Number of senior positions on the Board (CEO, CFO, SID and Chair) Number in executive management Percentage of executive management White British or other White (including minority White groups) 9 90% 4 8 89% Mixed/Multiple ethnic groups ––––– Asian/Asian British 110%––– Black/African/Caribbean/ BlackBritish ––––– Other ethnic group – – – 1 11% Not specified/prefer not to say ––––– 1. The data for the Board members is expected to change on 1 January 2026 as the new CFO, Jacqui Cartin, joins the Board. Jonathan Howell will step down from the Board on 31 December 2025. 2. As per the UK Listing Rules, executive management within Sage is, for this purpose, the Executive Leadership Team, including the Company Secretary. 3. The data for the executive management is expected to change on 1 January 2026 as Jacqui Cartin joins the Executive Leadership Team. 4. The executive management data reflects the information as at 30 September 2025 and includes the Executive Directors as well as Eduardo Rosini, who served as Chief Growth Officer and a member of the Executive Leadership Team throughout FY25. Corporate governance report continued 106 THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 Board policy Board DEI Policy objectives Implementation and progress against objectives All appointments to the Board should be made on merit against objective criteria which take into account experience, skills, and the need to ensure an appropriately diverse balance in the resulting membership of the Board. The Board and the Committee are committed to ensuring the composition of the Board exhibits a diverse mix of skills, personal attributes, professional and industry backgrounds, geographical experience and expertise, independence of thought, gender, age, tenure, race, ethnicity, and broader aspects of diversity which may include, for instance, disability, sexual orientation, andsocio-economic background. Consider candidates for appointment to the Board from asdiverse a pool of applicants as possible, ensuring that the recruitment and selection process has been reviewed tomitigate bias. The Board and the Committee seek a wide and diverse listofcandidates for Board appointments who possess a range of critical skills of value to the Board and relevant tochallenges and opportunities faced by the Company. Independent executive search firms help the Company toidentify candidates from diverse backgrounds which support the Company’s diversity, equity, and inclusive culture, always with the aim of securing the very best candidate for the position. Continue to meet (or, where appropriate in respect of futuretargets, work towards meeting) the targets of theParker and FTSE Women Leaders Reviews and the UKListingRules, and our internal global gender diversity target, as far as possible, recognising that there may be temporary periods when this is not possible; such periods should be minimised. The Board and the Committee are satisfied that the Board continues to meet the recommendation of the Parker Review, with at least one Board member of ethnic minority. The Sage Board meets the target set by the UK Listing Rulesand by the FTSE Women Leaders Review to have one ofthe senior Board positions (Chair, CEO, CFO, or SID) held by a woman. It is expected that, when Jacqui Cartin joins theBoard on 1 January 2026, female representation on the Board will increase to 50%, with women holding two out of four senior Board positions. Please refer to page 106 for further information. Engage executive search firms that understand Sage’s Values and approach to diversity, equity, and inclusion, havesigned up to the Voluntary Code of Conduct on both gender and ethnic diversity and best practice, and utilise an open recruitment process for non-executive roles. The Board engages independent advisory firms to assist with the selection of non-executive roles. The Lygon Group was appointed by the Board in FY25 to facilitate the search and appointment of Lori Mitchell-Keller, who joined the Board as a Non-executive Director in February 2025. The Lygon Group has signed up to the Voluntary Code of Conduct on both gender and ethnic diversity and best practice, and utilises anopen recruitment process for non-executive roles. Ensure advertisements, role descriptions, and long lists reflect the Board’s commitment to diversity, equity, and inclusion, as set out in this policy. All role briefs are maintained to reflect the Board’s policyofconsidering a diverse pool of candidates withdifferent backgrounds. Strategic Report Governance Report Financial Statements Additional Information THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 107 Group-wide DEI initiatives The Group continues to invest in its global DEI strategy, supported by three strategic principles of building diverse teams, creatingan inclusive culture, and delivering equity by design. Despite shifts in the socio-political landscape in some regions andresulting decline in DEI commitments, Sage remains unwavering in its dedication to doing the right thing. The Board receives updates from members of the Executive Leadership Team and seniormanagement on the Group-wide initiatives which underpin the DEI strategic principles and monitor progress againstkey measures. The alignment of refreshed targets with our strategic cycle (FY25-FY27) demonstrates our continued commitment to the DEI strategic principles. This, coupled with the ongoing commitment of executive leaders, senior management, and colleagues, means we are well positioned for thenext three years. The following table outlines key progress in FY25: Group-wide initiative Progress in FY25 All About Us colleague participation This initiative is designed to better understand our colleagues and encourages them to voluntarily share insights about themselves. Sage is committed to a workforce that fully represents the many different cultures, backgrounds, and viewpoints of its customers, partners, and communities. When the personal insights are combined, colleagues’ contributions will provide an accurate view of Sage’s colleague population and help Sage to redesign polices, processes, and procedures to help build an equitable experience for all colleagues. Participation in FY25 at 60% (FY24: 64%). The global participation target for the end of FY25 was 60%, increasingto 65% for FY27. In FY25, we expanded the All About Us programme with a successful launch campaign in India, engaging 474 colleagues and achieving a 69% participation rate among our Indian workforce. This approach contributed to our global self- disclosure rate achieving the FY25 target. Sage recognises that the gathering of data will become increasingly important as government reporting on pay transparency increases to encompass other DEI criteria. FY26 will see the launch of arefreshed programme for Sage colleagues in France. Colleague Success Network participation This initiative aims to create an inclusive and welcoming culture through well-supported colleague communities. All of Sage’s Colleague Success Networks have the same overarching goal, aiming to help create and support the Company’s inclusive culture. The Networks support the Company’s DEI journey by centring and elevating the voices of underrepresented communities across disability, race and ethnicity, and gender. They provide inclusive platforms for sharing lived experiences and identifying shared challenges, which are fed back into the DEI strategy. Participation in the year grew to 28% of colleagues participating in one or more Networks (FY24: 22%). The global participation target for the end of FY25 was 20%. Throughout the year, we continued to support our volunteer- led Colleague Success Networks through evolving our framework and governance structure to enhance their impact, and strengthened the Networks’ partnership with Sage Foundation. In FY25, we launched two new Networks, Inclusion Network in France and Gender Alliance Network inSouth Africa, and broadened the remit of the UK&I Family Network to the Family & Carers Network. Sage Group’s global gender diversity goal Supporting our building diverse teams DEI strategic principle, our global gender diversity goal is for 65% of our leadership teams to be gender diverse by FY27. This means there are no more than 60% men, women or non-binary people in any leadership team. Our revised FY27 targets are ambitious but achievable, with targets set at management and leadership teams at the top four levels of seniority. Milestone target for FY25 is 50%. 40% of leadership teams currently meet this target (FY24: 41%). In FY25, we have evolved our FY27 targets and annual diversity milestone targets for the top four levels of seniority. We have also introduced a Sage race/ethnicity target for FY27 of 20% for senior leadership teams. The Company acknowledges that continued effort is essential to continue increasing the percentage of leadership teams meeting our ambitious targets each yearand to achieve the overall targets by the end of FY27todeliver long-term impactful change. Sunflower Hidden Disabilities Programme The Programme is a simple tool for colleagues to share that theyhave a disability, illness, or condition that may not be immediately visible. As diverse as these conditions are, so are our colleagues’ individual needs and the support they require. The sunflower is a globally recognised symbol for non-visible disabilities, conditions, or chronic illnesses andwe have chosen to participate in the scheme to reduce stigma, build understanding, and encourage conversations between colleagues about the support that they need to perform at their best. In FY25, we launched our Sunflower Hidden Disabilities Programme to all colleagues in the UK, Ireland, and South Africa. Colleagues with non-visible disabilities have the option to wear a green sunflower lanyard, bracelet, or pin badge, or to use a sunflower Microsoft Teams background, to discreetly let others know that they may require additional support and understanding to improve their day-to-day work experience. This year, we distributed 1,400 green sunflower lanyards, pin badges, and wristbands to colleagues. Additionally, we provided 1,435 white sunflowerlanyards, wristbands, pin badges, and stickerstoallies of the Programme. Corporate governance report continued 108 THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 Audit and Risk Committee ” “ The external audit was a key focus for the Committee this year, as the Group transitioned to its new external auditor, KPMG. Alongside this, the Committee hasmaintained its focus and oversight onthe Group’s external reporting, internalcontrols, and the continued strengthening of risk management. Jonathan Bewes Chair of the Audit and Risk Committee Other Audit and Risk Committee members Annette Court Derek Harding Dear shareholders, I am pleased to present the Annual Report of the Audit andRisk Committee (the “Committee”) for FY25. This reportsets out our role and how we have delivered on it during the year, while adapting to the changing needs ofthebusiness. The Committee is central to Sage’s governance framework, overseeing financial and non- financial reporting, risk management, and internal controls.The Committee seeks to ensure the clarity andreliability of the Group’s financial statements and non-financial disclosures, and to provide independent oversight of both internal and external audit activities. Throughout the year, the Committee maintained close engagement with both management and the external auditor to receive updates on ongoing matters. FY25 marked the first year of the Group’s new external auditor, KPMG LLP (KPMG). Accordingly, one of the Committee’s key activities during the year was managing the transition to KPMG, to which a significant amount of time and attention was dedicated. Jonathan Bewes Chair of the Audit and Risk Committee Key FY25 activities November FY24 Full-Year results and Annual Report and Accounts Net Zero Transition Strategy Update February 2024 Corporate Governance Code Preparedness (Deep Dive) KPMG Audit Transition Update May H1 FY25 Interim Results AI Governance and Data Privacy Update September Non-Financial Sustainability Disclosures FY26 Internal Audit Plan Strategic Report Governance Report Financial Statements Additional Information THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 109 Audit and Risk Committee Report continued Activities and evaluation During the year, the Committee oversaw the Group’s financial and non-financial reporting, risk management and internal control procedures, and the work of Sage Assurance (internal audit) and the external auditor. The Committee also received specific updates on several key matters, including the Group’s preparedness for compliance with the enhanced internal control recommendations under the revised UK Corporate Governance Code 2024, the transition to KPMG as external auditor, the migration of the financial reporting system in North America, and the evolving risk framework for Artificial Intelligence (AI) and data governance. Further details on these matters are provided on page 114. The Committee’s performance was also reviewed as part of anexternally facilitated Board performance review process, which included consideration of the effectiveness of the Chair of the Committee. The report on this review, shared with both the Chair of the Board and the Chair of the Committee, supported the performance and effectiveness of the Committee. The Committee operated during the year in accordance with the principles of the Financial Reporting Council’s (FRC) UKCorporate Governance Code 2018 (the “Code”) and the associated recommendations set out in the FRC’s Guidance on Audit Committees. Role of the Committee The Committee is an essential part of Sage’s overall governance framework. The Board has delegated to the Committee the responsibility to oversee and assess the integrity of the Group’s financial reporting, internal controls and risk management (including risk appetite, tolerance, and strategy), whistleblowing, anti-bribery and fraud, as wellas the work of Sage Assurance (internal audit) and the external auditor. With respect to ESG, the Committee is responsible for monitoring the integrity, accuracy, and consistency of both ESG and sustainability-related non- financial disclosures. These responsibilities are defined in the Committee’s Termsof Reference, which were reviewed and approved bytheCommittee and the Board in May 2025. Composition The Code requires that at least one member of the Committee has recent and relevant financial experience. The Disclosure Guidance and Transparency Rules (DTRs) require that at least one member has competence in accounting and/or auditing. The Board is satisfied that these requirements are met, with Jonathan Bewes being a qualified chartered accountant and experienced Audit Committee Chair following 25 years in financial services as a corporate finance advisor in the investment banking sector. Derek Harding is also considered to meet these requirements as a chartered accountant who previously served as chief financial officer at Spectris plc and remains on the board as an executive director of the group. Further, the Board considers that the Committee has the necessary competence and broad experience relevant to the sector in which Sage operates as required by the Code. Annette Court is a former chief executive officer with extensive experience of leading complex, customer focused businesses. Sangeeta Anand stepped down from the Committee following her resignation from the Board in February 2025. There have been no other changes in the composition of the Committee during the year. Activities during the year The Committee held four scheduled meetings during the year, in line with its Terms of Reference. Details of individual attendance at scheduled meetings are set out on page 83. Regular attendees by invitation include the Chair of the Board, the Chief Executive Officer, the Chief Financial Officer, the General Counsel and Company Secretary, the EVPGroup Financial Controller, the EVP Chief Risk Officer, and the VP Assurance. All Committee meetings are attended by the external auditor, KPMG. By invitation, other members of management are invited to present. The Chair of the Committee reported to the Board on key matters arising after each Committee meeting. At certain meetings, the Committee met with the external auditor andthe VP Assurance, without management being present. Outside these formal Committee meetings, the Chair of the Committee met with the Committee’s regular attendees by invitation, as well as the external auditor. During the year, the Committee received, considered, and, where appropriate, challenged: • Scheduled finance updates on business performance and significant reporting and accounting matters, including going concern, from the EVP Group Financial Controller; • The Group’s half-year results and Annual Report and Accounts, as well as the accompanying press release, ahead of their review by the Board; • A detailed summary of the Group’s tax strategy, which waspresented by the EVP Group Financial Controller, andsubsequently approved by the Committee; 110 THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 • Scheduled risk updates, including risk dashboards outlining both principal and any escalated risks. TheCommittee also received summary reports and supplementary briefings from management on selected Principal Risks and other “in-focus” reviews, in addition toa general update on business resilience matters; • The assessment of the Group’s Principal Risk appetites andconsideration of emerging risks; • Summary reports of escalated incidents and instances ofwhistleblowing and fraud, together with status of investigations and, where appropriate, management actions to remediate issues identified; • The internal audit plan and subsequently progress againstthe plan and results of internal audit activities, including Sage Assurance reports on internal control andthe implementation of remedial management actions,to address issues identified and make internal control improvements; • The external audit plan and subsequent updates on delivery of the external audit and reports from the external auditor on the Group’s financial reporting and observations on the internal financial control environment in the course of its work; • Updates on the legal and regulatory frameworks relevant tothe Committee’s areas of responsibility, including an update on AI, cyber security, and data privacy matters; • A joint update from the EVP Group Financial Controller andthe EVP Chief Risk Officer with respect to the Group’s Viability Statement; and • Updates from the EVP Sustainability and Foundation on non-financial disclosures, including ESG metrics and reporting as well as other ESG compliance and related reporting matters. Audit and corporate governance reform During the year, the Committee received updates from the EVP Group Financial Controller and EVP Chief Risk Officer with respect to the Group’s preparedness for compliance withthe enhanced internal control recommendations under Provision 29 of the revised UK Corporate Governance Code 2024, which are applicable for the Group from FY27 onwards. The Group will perform a dry run of procedures to support compliance with Provision 29 during FY26, with the Committee supportive of the preparatory work completed todate. Updates on the dry run will be presented to the Committee at each meeting throughout FY26. Review by the Financial Reporting Council (FRC) During the year, the Corporate Reporting Review team of theFinancial Reporting Council (FRC) wrote to the Company noting that a review of the company’s annual report and accounts for the year ended 30 September 2024 had been carried out in accordance with the FRC’s Corporate Reporting Review Operating Procedures. The review did not identify anyquestions or queries that the FRC wished to raise with theCompany. The Committee notes that the FRC’s review doesnot provide assurance that the annual report and accounts were correct in all material respects as the FRC’s roleis not to verify information but to consider compliance with reporting requirements. Financial reporting, including significant reporting and accounting matters The agenda for every Committee meeting includes a formal finance update from the EVP Group Financial Controller. This informs the Committee about developments in the Group’s reporting and accounting environment, and compliance with relevant reporting standards. During the year, the Committee considered how these developments were addressed in preparing the Group’s financial statements, ensuring that applicable requirements were appropriately reflected. The Committee assessed the overall quality of financial reporting through review and discussion of the significant accounting matters and the interim and annual financial statements. The Committee’s review included assessing the appropriateness of the Group’s accounting policies and practices, confirming their compliance with financial reporting standards and relevant statutory requirements, and reviewing the adequacy of disclosures in the financial statements. In performing its review of the Group’s financial reporting, the Committee considered and challenged the work, judgements and conclusions of management. The Committee also received reports from the external auditor setting out its view on the accounting treatments included in the financial statements. The Committee has also reviewed and considered the requirements of the FRC’s Audit Committees and the External Audit: Minimum Standard. Significant reporting and accounting matters During the year, the Committee considered a number ofsignificant reporting and accounting matters which impacted the Group’s financial statements. The Committee’s response and challenge over these matters is set out on the pages that follow: Strategic Report Governance Report Financial Statements Additional Information THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 111 Audit and Risk Committee Report continued Significant reporting andaccountingmatters Response and challenge Cross-reference Revenue recognition Revenue recognition continues to bean important area of focus for theGroup. The Group has a detailed revenue recognition policy for each category of revenue. This includes the application of rules relating to thevarious ways in which the Groupsells its products. With over a third of the Group’s revenue generated through sales to partners rather than end-users, the keyjudgement in revenue recognition is determining whether a business partner is a customer of the Group. Considering the nature of Sage’s subscription products and support services, this judgement is usually based on whether the business partner has responsibility for payment, has discretion to set prices, and takes on the risks and rewards of the product from Sage. Inherently, this assessment can be judgemental. • The Committee continues to oversee management’s application of revenue recognition policies and, during theyear, has continued to monitor compliance with financial reporting and accounting controls linked to revenue recognition. During the year, there have been nochanges to the Group’s revenue recognition policies. • The Committee has considered the Group’s revenue recognition policies with respect to emerging business models, including revenue earned from services provided via the Sage Platform, particularly those which are commercialised on a consumption basis. • As part of the preparation for the interim and annual financial statements, the Committee obtained reports from both management and KPMG, which set out the application of accounting and reporting treatment against the revenue recognition policy. • KPMG provided an update to the Committee on the nature, extent, and findings from its procedures over revenue recognition during the year. See note 3.1 of the financial statements on pages 192 to 194. Carrying value of goodwill Given the Group’s goodwill balanceof£2,213m and the continuingevolution of Sage’s business model, the annual assessment of the recoverability ofgoodwill is a significant area offocus for the Committee. During the year, the Group made twoacquisitions—ForceManager andFyle. Further information on bothacquisitions is set out in note14.1 on page 244 and 245 inthefinancial statements. • The Committee reviewed and considered the methodology applied and challenged the key inputs into the impairment model including areas of estimation and judgement such as forecast cash flows and discount rates, with consideration to their appropriateness given the evolving macroeconomic environment. • Where appropriate, the Committee acknowledged the useof external specialists to support and corroborate management’s inputs. • The Committee further enquired as to whether any other reasonable changes in assumptions would result in a material impairment and therefore require sensitivity disclosure in the financial statements. The Committee considered management’s sensitivity testing and agreed that the possibility of such reasonable changes is remote and therefore agree with the disclosures provided. • The Committee considered the level at which goodwill is tested and concluded a consistent approach to the prior year is appropriate. See note 6.1 of the financial statements on pages 205 to 207. 112 THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 Significant reporting andaccountingmatters Response and challenge Cross-reference Going concern and viabilityassessment Both the going concern and viability assessment are key areas of focus for the Committee due to the level of management judgement required. In preparing these assessments, consideration was given to the macroeconomic environment. The Committee received a detailed update from management during the year which included both reverse and scenario-specific stress testing. • The Committee reviewed management’s process for assessing the Group’s longer-term viability, including thedetermination of the period over which viability should be assessed, the appropriateness of the viability scenarios identified in light of the Group’s Principal Risksand uncertainties, and the reasonableness of key assumptions used by management in calculating the financial impact of a viability scenario arising. • With consideration to the macroeconomic environment, the Committee reviewed the key assumptions underpinning management’s longer-term forecasting, and the sufficiency and adequacy of future funding requirements. As part of this review, the Committee considered the level of available liquidity over the forecast period. • The Committee reviewed the results of management’s scenario-specific stress testing for both going concern and viability, as well as reverse stress testing, the result of which demonstrated the resilience of the Group’s business model. • It was noted that under scenario-specific stress testing,the Group maintains sufficient available liquidityover the forecast period. The results of reverse stress testing highlighted that such a scenario would only arise following a highly significant deterioration in performance, well in excess of the assumptions in the scenario-specific stress testing. • As part of its review and challenge, the Committee took into consideration updates provided by the EVP Chief RiskOfficer with respect to the Group’s principal and emerging risks. • The Committee approved the disclosures in relation to both the going concern and viability assessment, and recommended to the Board the preparation of the financial statements under the going concern basis. The Group’s going concern and viability statements can be found on pages 153, 67 and 68, respectively. Alternative Performance Measures (APMs) The Committee closely monitors management’s interpretation and definition of APMs, in particular annualised recurring revenue (ARR). In addition, the Committee considers the presentation of APMs in the Group’s Annual Report and Accounts in the context of the requirement that they be fair, balanced, and understandable. The Committee continues to review and challenge management’s use of APMs and, as part of the preparation for the interim and annual financial statements, requests aclear reconciliation between key APMs and statutory reporting measures. There is a continued focus by the Committee on the ARR APMgiven its importance as a key measure of business performance. Biannually, an update on ARR performance isprovided to the Committee. The Committee has challenged the sufficiency, adequacy,and clarity of disclosures related to APMs intheAnnual Report and Accounts, and considers them tobeappropriately disclosed. The Committee also reviewed supplementary information issued alongside the financial statements, including the Group’s press release, to ensure consistency in the way APMs are disclosed and presented on a balanced basis alongside statutory reporting measures. The definition of APMs can be located in the glossary on pages 261 and 262. Reconciliations of statutory revenue, operating profit, andbasic earnings pershare to their underlying and organic equivalents are in the Financial review starting on page 48. Strategic Report Governance Report Financial Statements Additional Information THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 113 Audit and Risk Committee Report continued Fair, balanced, and understandable Each year, the Committee advises the Board on whether theAnnual Report and Accounts taken as a whole are fair, balanced, and understandable, and provide the information necessary for shareholders to assess Sage’s position, performance, business model, and strategy. In reaching itsconclusion, the Committee considered the results of management’s assessment of going concern and viability, together with disclosures relating to the Group’s principal and emerging risks, reviewed the Annual Report and Accounts as a whole, and assessed the results of processes undertaken by management to provide assurance that the Group’s financial statements were fairly presented. These processes included an analysis of how the key events in the year had been described and presented in the Annual Report and Accounts, how APMs had been defined and presented, and the outcome of representations received from country management teams on the application of a range of financial controls. The Committee also considered the perspective of the external auditor. Risk management and internal controls The Committee assists the Board in its monitoring of the Company’s internal control and risk management systems, and in its review of their effectiveness. This monitoring includes oversight of all material controls, including financial, operational, regulatory, and compliance controls, and assessing whether the control systems are fit for purpose and whether any corrective action is necessary. During the year, the Committee: • Reviewed the Principal Risks, their evolution during theyear, and the associated risk appetites and metrics, challenging and confirming their alignment to the continued achievement of Sage’s strategic objectives. Ateach meeting, the Committee considered and challenged the ongoing overall assessment of each risk,their associated metrics and management actions,and mitigations in place and planned; • Considered the latest updates on the risk profile surrounding the use of AI and data privacy more broadly,including an update on the Group’s AI governanceframework; • Received an update from the EVP Chief Risk Officer onbusiness resilience preparedness, with a focus on keytopics including product security, enterprise IT solutions, and crisis management; • Reviewed and considered an assessment of the effectiveness of risk management more broadly, and reviewed updates on fraud risk management and the Group’s adherence to policies, including Conflicts of Interest, Anti-Money Laundering, Sanctions, Competition Law, Anti-Bribery and Corruption, and Modern Slavery; • Received reports from Sage Assurance and management oninternal control and monitored the implementation of management actions to remediate issues identified and make improvements. The Committee is satisfied that management’s response to any financial reporting orinternal financial control issues identified by the external auditor was appropriate; • Reviewed at each Committee meeting any escalated incidents and any instances of whistleblowing and management actions to remediate any issues identified (see Incident management, fraud, and whistleblowing paragraph below for further details); and • Considered individual incidents and associated actions to assess whether they demonstrated a significant failings or weaknesses in internal controls, of which none were identified. For further details on the Group’s risk management and internal control systems, its risk-informed decision-making process and its Principal Risks, refer to the Risk management section on pages 56 to 60 and Principal Risks and uncertainties on pages 61 to 66. Specific areas of focus The Committee spent time on the following specific areas offocus during the year to consider and challenge relevant, current and important issues: • The Group’s activities to ensure preparedness for the enhanced internal control recommendations of the revisedUK Corporate Governance Code 2024, which included a deep dive session led by management for Committee members in the first half of FY25; • The progress relating to the implementation of a new financial reporting system in the Group’s North America business; and • An update on cyber security and data privacy matters, alongside updates on broader matters relating to the Group’s strategic initiatives, including the Sage Platformand use of AI and Machine Learning. ESG reporting The Committee received updates from the EVP Sustainability and Foundation on ESG reporting and compliance matters, with a focus on the evolving regulatory landscape. As part of this, the Committee considered the processes andcontrols in place to ensure the integrity of external ESG reporting, as well as the plans around assurance. In addition, the Committee received updates on the Group’s progress towards achieving its net zero targets. The Committee reviewed the progress made during the year relating to the reporting requirements under the EU Corporate Sustainability Reporting Directive (CSRD), including the double materiality assessment and reporting approach. Itisnoted that the European Parliament has voted to delay theimplementation of CSRD, with further updates expected on the revised effective implementation date. Incident management, fraud, andwhistleblowing The Committee considered the suitability and alignment ofthe Incident, Emergency, and Crisis Management, and Whistleblowing policies, and confirmed the effectiveness ofthese policies in facilitating appropriate disclosure to 114 THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 senior executive management and the Committee. At each meeting, the Committee received a summary report of any escalated incidents and instances of whistleblowing and, together with management, considered whether there were any thematic issues and identified remediating actions. As part of this reporting process, the Committee was notified of all whistleblowing matters raised, including anyrelating to financial reporting, the integrity of financialmanagement or that included any allegations relating to fraud, bribery, or corruption. The Committee wasalso notified of all non-whistleblowing incidents exceeding an agreed materiality threshold. Internal audit Internal audit is delivered by the in-house Sage Assurance function. Reporting directly to the Committee, its remit is toprovide independent and objective assurance over the Group’s operations and activities, to assist management and colleagues in fulfilling their responsibility to develop and maintain appropriate internal controls. The VP Assurance has direct access to the Chair of the Audit Committee and meets with the Committee without management present to allow for open discussion. The specific objectives, authority, scope, and responsibilities of Sage Assurance are set out in the Internal Audit Charter, which is reviewed annually by the Committee. The Committee also considers and evaluates the level of Sage Assurance resource and its quality, experience, and expertise, supplemented as appropriate by third-party support and subject-matter expertise, to ensure it is appropriate to provide the required level of assurance. Additionally, in line with the recommendations of both the UK Corporate Governance Code and the Chartered Institute of Internal Auditors’ (IIA) Internal Audit Code of Practice, the effectiveness of Sage Assurance is reviewed by the Committee on an annual basis and is also subject to an independent external quality assessment (EQA) at least once every five years. In 2025, PwC was appointed to conduct the latest EQAand assess conformance with the Global Internal Audit Standards and the IIA’s Code of Practice. Feedback from theEQA was positive and noted conformance with the IIA Standards, with the team viewed as being modern, agile, andvalued. The EQA report was presented and discussed atthe September 2025 Committee meeting, at which the Committee endorsed these conclusions. The Committee reviews and approves the nature and scope ofthe work of Sage Assurance, and the Sage Assurance plan was approved by the Committee at the beginning of the financial year, along with subsequent quarterly updates. Progress against the plan and the results of Sage Assurance’s activities, including the quality and timeliness of management responses, are monitored at each Committee meeting. This includes a summary of findings from the internal audit plan, reported at each meeting by Sage Assurance, as well as an executive summary for each individual internal audit. Following its review of the Company’s internal control systems, the Committee considered whether any matter required disclosure as a significant failing or weakness in internal control during the year. No such matters were identified. External audit In September 2023, the Group announced the Board’s intention to propose to shareholders that KPMG be appointed as the Group’s external auditor for the financial year ending 30 September 2025. The audit tender process was described in detail in the FY23 Annual Report and Accounts, and KPMG’s appointment was approved by shareholders at the 2025 AGM. As part of KPMG’s transition and first-year audit, the following steps have beenundertaken: • KPMG shadowed EY during its final FY24 audit, including attending some meetings alongside EY. This included KPMG’s attendance at the September 2024 and November 2024 Committee meetings. • Early and regular engagement to ensure an effective audit process, including review and approval of the FY25 audit plan by the Committee at the February 2025 meeting. • A review by KPMG of all significant judgements and estimates, as well as the Group’s accounting policies. There were no areas where the Group’s interpretation differed from that of KPMG. • Throughout the year, KPMG has provided updates to theCommittee, noting that no changes to the audit risk assessment have been proposed against the audit plan presented at the start of the year. The external auditor is required to rotate the lead audit partner every five years. The FY25 audit was the first year forthe KPMG lead audit partner, Simon Richardson. The Committee confirms that the Company is, and has beenthroughout the year under review, in compliance withthe requirements of The Statutory Audit Services forLarge Companies Market Investigation (Mandatory Use ofCompetitive Tender Processes and Audit Committee responsibilities) Order 2014. Auditor effectiveness The Committee is responsible for assessing the effectiveness of the external auditor. In doing so, the Committee considers the independence, objectivity, and level of professional scepticism exercised by the external auditor, as well as the results of the annual auditor effectiveness review. To fulfil its responsibility for oversight of the external audit process, the Committee reviewed and agreed: • The terms, areas of responsibility, associated duties, and scope of the audit as set out in the external auditor’s engagement letter; • The overall work plan and fee proposal; • The issues that arose during the course of the audit and their resolution; • Key accounting and audit judgements; • The level of errors identified during the audit; and Strategic Report Governance Report Financial Statements Additional Information THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 115 Audit and Risk Committee Report continued • Control recommendations made by the external auditor. In addition to the above, specific considerations made by the Committee during the year included: • The detail relating to KPMG’s scoping and audit plan forFY25, which was presented to the Committee at its February meeting; • The findings published by the FRC into its view on the effectiveness of KPMG’s audits; • The experience and expertise demonstrated by the auditor in its direct communication with, and support to, the Committee; • The content, quality of insight, and added value provided by KPMG’s reports; • The robustness, including professional scepticism, and perceptiveness of KPMG in its handling of key accounting and audit judgements; and • The interaction between management and the auditor. At certain Committee meetings, a separate, private meeting was held between Committee members and the lead audit partner, Simon Richardson, to encourage open and transparent feedback. The Chair of the Committee also met with the external auditor outside of Committee meetings, supporting effective and timely communication. During the year, the Committee also received feedback fromvarious stakeholders across the businesses evaluating the performance of each assigned audit team. Management’s report to the Committee included a summary of the findings of a survey of key Sage colleagues on the quality of the KPMG’s delivery, communication, and interaction with the various finance teams across the Group. Management concluded thatthe working relationship between the finance team and KPMG across the Group was effective, and the audit had been carried out in an independent, professional, organised, and constructive manner, with an appropriate level of challenge and scepticism over management’s treatment of significant reporting and accounting matters. Auditor independence The Committee is responsible for the development, implementation, and monitoring of policies and proceduresto ensure auditor independence. At Sage, thisisgoverned by the Group’s Auditor Independence Policy(the “Policy”). The Policy has been in place throughoutthe year. It specifies the role of the Committee inreviewing and approving non-audit services in order to ensure the ongoing independence of the external auditor. Asummary of non-audit fees paid to the external auditor isprovided to the Committee on a quarterly basis. The Policy states that Sage will not use the external auditor for non-audit services, except in limited circumstances, andas permitted by the Ethical Standard, where non-audit services may be provided by the external auditor with pre-approval by the Committee unless clearly trivial. This is provided that the approval process set out in thePolicy is adhered to and that potential threats to independence and objectivity have been assessed and safeguards applied to eliminate or reduce these threats toanappropriate level. Any non-audit services individually in excess of £75,000 require pre-approval by the Chair of the Committee, as doany non-audit services where the cumulative total of previously approved non-audit services in the financial yearexceed £75,000. The Committee considered the application of the Policy with regard to non-audit services and confirms it was properly and consistently applied during the year. The Policy also requires that the ratio of audit fees to non-audit fees must be within Sage’s pre-determined ratio, and non-audit fees for the year must not exceed 70% of the average of the external audit fees billed over the previous three years. In FY25, the ratio of non-audit fees to audit fee was 9% (FY24: 10%), principally reflecting the fee paid for the half-year interim review and other permitted assurance services. A breakdown of total audit and non-audit fees charged by the external auditor for the year under review isshown in note 3.2 to the financial statements. The Committee has also considered the independence oftheexternal auditor’s partners and staff involved in the auditof Sage. KPMG has confirmed that all its partners and staff complied with its ethics and independence policies andprocedures that are consistent with the FRC’s ethical standards, including that none of its employees working onthe audit hold publicly listed securities issued by Sage. Inaddition, the Committee acknowledges management’s internal assessment that no employee in a key financial reporting oversight role has a close relationship with any KPMG employee that may impact their independence. Auditor re-appointment Having considered the summary set out above relating to the effectiveness and independence of KPMG, the Committee has recommended to the Board that a resolution to re- appoint KPMG be proposed to shareholders at the 2026 AGM,for the year ending 30 September 2026. The Board hasaccepted and endorsed this recommendation. 116 THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 Directors’ Remuneration Report Remuneration Committee ” “ I would like to thank shareholders for their strong support of our 2025 Directors’ Remuneration Policy. The Committee isconfident that the Policy is driving pay for performance and remains strongly aligned to our business ambition. Roisin Donnelly Chair of the Remuneration Committee Other Remuneration Committee members Maggie Chan Jones Dr John Bates Annette Court Composition of the Committee The Remuneration Committee is composed solely of independent Non-executive Directors, Maggie Chan Jones,Dr John Bates and, Annette Court, and is chaired byRoisin Donnelly. Details of the skills and experience ofthe Remuneration Committee members can be found intheir biographies on pages 75 and 76, and in the skillsmatrix on page 71. Letter from the Remuneration Committee Chair page 118 Remuneration at a glance page 121 Remuneration Committee governance page 123 Corporate Governance Code considerations page 125 Remuneration Policy 2025 page 127 Directors’ Annual Remuneration Report page 132 Statement of implementation of Remuneration Policyin the following financial year page 144 Scan or click the QR code for more information on the Committee’s Terms of Reference Activities during FY25 November • Determined outcomes for 2024 bonus and vesting levelof 2022 Performance Share Plan (PSP) award • Approved the 2024 Directors’ Remuneration Report • Reviewed stakeholder feedback and provided final approval of the 2025 Directors’ Remuneration Policy and implementation in 2025 • Approval of Long Term Incentive Plan (LTIP) rules February • Reviewed stakeholder feedback and remuneration-related results from the 2025 AGM • Reviewed workforce remuneration following the annual review • Reviewed performance against in-flight incentive plans • Reviewed remuneration-related policies March 1 • Approved CFO transition arrangements May • Market update provided by the Committee’s advisors • Approved the annual review of the Committee’s Terms of Reference • Reviewed remuneration arrangements for below Board executives in the US • Reviewed performance against in-flight incentive plans July • Market update provided by the Committee’s advisors • Approved structure of 2026 bonus and performance share awards • Approved 2026 below Board equity allocation policy • Reviewed workforce remuneration and related policies • Reviewed performance against in-flight incentive plans September • Market update provided by the Committee’s advisors • Approved targets for 2026 bonus and performance share awards • Reviewed structure of 2026 remuneration packages forbelow Board executives • Approved implementation of the Directors’ Remuneration Policy for Executive Directors in 2026 • Reviewed share plan rules • Reviewed performance against in-flight incentive plans 1. Ad hoc meeting. Strategic Report Governance Report Financial Statements Additional Information THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 117 10% Underlying total revenue growth (FY24: £2,290m) £2,513m driven by broad-based growth in cloud solutions £600m Underlying operating profit (FY24: £513m) 17% increase, driven by revenue growth and an increase in underlying operating profit margin of 150 bps to 23.9% 11% Underlying ARR growth (FY24: 11%) reflects growth across all regions balanced between new and existing customers 43.2p Underlying basic EPS (FY24: 36.7p) increased by 18% Undoubtedly, our colleagues are central to our success, and the broader colleague experience plays an important part inthe Committee’s decision making. In FY25, our colleague engagement remained very strong, with eSAT of 76 and a response rate of 82%, our Employer Brand Index improved by15 points over the year. These achievements demonstrate a growing recognition of Sage asa values-led organisation with colleagues at the heart. Remuneration updates for Executive Directors in FY26 We are proposing several changes to FY26 remuneration arrangements, all of which are consistent with the 2025Policy: 1) Base salary increase for the CEO (as disclosed inthe 2024 Directors’ Remuneration Report) In last year’s Remuneration Report, we set out details of ourextensive review into senior executive remuneration arrangements. The review highlighted a number of issues, including a perceived disconnect between pay and performance, internal relativities, the competitiveness of the global technology market, the Company’s exposure to the US and market positioning of remuneration against peers. To address these issues, we made a number of changes under our new Remuneration Policy, including a salary increase forthe CEO phased over two years. Before implementing thesecond phase of this increase, the Committee carefully considered performance during FY25 and noted that Sage has had another year of good financial performance, as outlined in the performance highlights on this page, and consistent with our values, our focus has been on delivering practical, safe, human-first AI that empowers our customers and their businesses. Our executive team, led by the CEO, hasbeen a key driver of that performance. Accordingly, the Committee intends to implement the planned second phase of the base salary increase and so, with effect from 1 January 2026, the CEO’s base salary will increase to £1,223,313 (15% increase), as disclosed on page 121 of the 2024 Annual Report and Accounts. There are no changes to the CEO’s annual bonus or LTIP opportunity in FY26. 2) Remuneration for incoming CFO in FY26 Jacqui Cartin will be appointed CFO with effect from 1 January 2026. On appointment, her basic remuneration package will comprise: a basic annual salary of £650,000, apension contribution of 10% of salary, plus bonus, long- term incentives, and all other benefits in accordance with the2025 Policy. The Committee was satisfied that this package was commensurate with Jacqui’s skills, qualifications, and experience. 3) Change to FY26 annual bonus plan measures Our Remuneration Policy incentivises the delivery of our strategy to achieve sustainable, efficient growth. In FY25, total revenue was introduced as the primary financial measure within our annual bonus plan, in alignment with thekey revenue metrics communicated to the market. To further reinforce our commitment to sustainable growth anddrive accelerated ARR growth, a Rule of 40 metric will be introduced alongside the total revenue measure inFY26. As noted in our KPIs on page 22, theRule of 40 isacritical financial benchmark usedtoevaluate the performance and Dear shareholders, I am delighted to present the Directors’ Remuneration Report (the “Report”) for the year ended 30 September 2025 on behalf of the Remuneration Committee (the “Committee”). This marks the first year of our 2025 Remuneration Policy (the“Policy”), following shareholder approval. I would like tothank shareholders for their engagement during the extensive consultation process and for the strong support ofthe Policy at the 2025 AGM. TheCommittee has striven toensure that the Policy hasbeenimplemented effectively, aligned to our pay for performance ethos, and driving forwardSage’s ambition. The following statement, on pages 118 to 122, provides detail and context regarding the Committee’s decisions during the year relating to FY25 incentive outcomes and FY26 remuneration for Executive Directors. Broader context is provided in an expanded disclosure explaining remuneration for the wider workforce on pages 138 to 140. The Annual Report on Remuneration, set out on pages 132 to151, will be subject to an advisory vote at the 2026 AGM. Context for FY25 incentive outturns andFY26remuneration decisions Sage has delivered another year of strong progress and delivery against our strategy. As the Board Chairhighlights inhis statement, a continued, sharp focusongrowth and operational efficiency has resulted infurther significant revenue and earnings expansions. Performance highlights areset out below. Performance highlights Directors’ Remuneration Report continued 118 THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 efficiency of SaaS organisations. Theannual bonus plan measures for FY26, asset out below, are, in the Committee’s opinion, the bestway to drive sustainable value creation. FY26 incentive How it promotes theachievement ofstrategy FY26 measures Weighting How it will bemeasured Changes in FY26 Annual bonus Incentivises management todeliverstrong annualrevenue growth,balanced bystrategic goals Total underlying revenue growth 40% of bonus See page 261 for the definitions ofunderlying measures Reduction in weighting from 70% of bonus to 40% of bonus to enable equal weighting with the Rule of 40 metric forFY26 Rule of 40 40% of bonus Underlying ARR growth plus underlying EBITDAmargin. Seepage 261 for the definitions ofunderlying measures Introducing this measure reflects theimportance of our disciplined approach to balanced growth, focusing on high-quality revenue and progressive margin improvement as the business scales, while supporting continued investment in future opportunities Strategic goals 20% of bonus Assessment of theindividual Executive Directors’ performance against their strategic goals None To avoid overcomplicating the bonus plan, the separate customer metric has been removed for FY26 and relevant customer- related goals incorporated into Executive Directors’ strategic goals, where appropriate. For completeness, there are no proposed changes to the FY26 performance share award metrics (basic underlying earnings per share (EPS), relative Total Shareholder Return (TSR), and ESG). The full set of annual bonus and performance share award measures and related targets forFY26 aresetout on pages 145 to 146. Incentivising balanced performance inFY26in line with our strategy Balanced growth The weighting of both total revenue and the Rule of 40 in the annual bonus, and EPS growth in the LTIP incentivises the delivery of complementary objectives: achieving high- quality revenue growth and a gradually improving margin aswe scale the business efficiently, while investing in futuregrowth. A high-quality revenue mix with the ability toexplore adjacent revenue opportunities Incentivising total revenue aligns with our market guidance, and will ensure recurring revenue, which represents 97% of total revenue and is central to our growth plans, is maximised. It also supports management in the additional development of adjacent, high-quality revenue opportunities, including, for example, certain digital network services. When determining incentive outcomes, the Committee examines the quality ofour revenue mix as part of the broader context in which performance was delivered. Strategically aligned M&A in a fast-paced sector Strategically aligned acquisitions enable Sage to accelerate its strategic progress. The Return on Capital Employed (ROCE) underpin ensures a continued focus on value creation with regard to such acquisitions. Revenue, the Rule of 40 and EPS aremeasured on an underlying basis, so the impact of M&A decisions on these can be evaluated. The Committee will review, based on materiality, the impact of significant acquisitions and disposals on the annual bonus and LTIP, and judge whether an adjustment to incentive targets or outcomes is required. Any adjustment would bedisclosed in the Directors’ Remuneration Report. Setting target ranges to reward performance appropriately The goal of creating value for stakeholders involves a balance between incentivising high performance relative toour ambition, and providing fair and competitive reward aligned with the experience of our external stakeholders. The Committee determines target ranges for the annual bonus and LTIP through a robust review process which considers, where relevant, various factors, including, but not limited to, the current business plan and budget, historical performance, peer benchmarks, and market forecasts. This helps to ensure that remuneration outcomes are appropriate for the level of performance achieved through the full target ranges. Assessing quality when determiningoutcomes When determining incentive outcomes, the Committee examines various factors, including the broader contextin which performance was delivered. This includesbalanced growth, a high-quality revenue mix, and strategically alignedM&A as components of the shareholder experience. TheCommittee has the discretion to decide whether and towhat extent the performance conditions havebeen met,and, in appropriate circumstances, to override theformulaic outcome. Strategic Report Governance Report Financial Statements Additional Information THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 119 Directors’ Remuneration Report continued Delivering our remuneration principles in FY26 We aim to align the total remuneration for our Executive Directors to our business strategy through a combination ofsalary,bonus, and long-term incentive schemes underpinned by stretching performance targets. The table below summarises the remuneration arrangements for our current Executive Directors in FY26, in accordance with the 2025 Policyand our remuneration principles, which are: Remuneration principles 1 Drives focus on strategy, purpose, and culture 2 Market competitive 3 Simplicity 4 Aligned with shareholder interests Element of Policy Purpose Implementation in FY26 Base salary 1 2 Enables Sage to attract and retain Executive Directors of the calibre required to deliver the Group’sstrategy. Steve Hare: £1,223,313 (15% increase) Jacqui Cartin: £650,000 (on appointment from 1 January 2026) Jonathan Howell: £684,780 (until he steps down fromhisrole on the Board and his role as CFO on31 December 2025) The equivalent average increase for colleagues eligible for an annual pay award is 3.85% (in respect ofcolleagues based in the UK). Pension 1 2 3 Provides a competitive post-retirement benefit, in away that manages the overall cost to the Company. 10% of base salary in line with the pension benefit for the UK’s wider workforce. Benefits 2 Provide a competitive and cost-effective benefits package to Executive Directors to assist them in carrying out their duties effectively. Standard benefits package plus costs of travel, accommodation, and subsistence for the Executive Directors and their partners onSage-related business. Annual bonus 1 2 3 4 Rewards and incentivises the achievement ofannual financial and strategic targets. Aminimum of one third deferral into shares for three years is compulsory until the enhanced shareholding guideline is met, following which the deferral requirement reduces to 15% of any bonus earned. The remainder is delivered in cash. Maximum 175% of base salary 40% based on underlying total revenue growth, 40%based on the Rule of 40 metric, and 20% based onstrategic goals. Performance share awards 1 2 3 4 Support achievement of our strategy by targeting performance under various financial performance indicators. Vesting is after three years, and awards aresubject on vesting to a holding period of two yearsbefore being released. Face value of 400% of base salary for Steve Hare Face value of 300% of base salary for Jacqui Cartin Jonathan Howell is not eligible for an award in FY26 60% based on underlying EPS with a ROCE underpin, 30% based on relative TSR performance, and 10% based on an ESG basket of measures. All-employee share plans 1 Provide an opportunity for Executive Directors tovoluntarily invest in the Company. Eligible to participate up to the tax-efficient limit of £500 per month. Chair and Non-executive Director fees 2 Provide an appropriate reward to attract and retain high-calibre individuals. See page 147 of this Report for a list ofNon-executive Director fees Shareholding guideline 4 The shareholding guideline for the CEO is 500%of base salary and for the CFO is 350% ofbase salary. Achievement of this is expected within a maximum offive years from the time the Executive Director became subject to theguideline. The post-employment shareholding guideline requires Executive Directors to retain shares following cessation of employment as a Director, inline with Investment Association guidelines. Shareholding at 30 September 2025 (inclusive of deferred shares held, net of tax at the current estimated marginal tax withholding rate, and Sage shares held by an Executive Director’s connected person): Steve Hare 922% of base salary Jonathan Howell 654% of base salary See page 147 for more information onthe shareholding guideline 120 THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 Remuneration at a glance Key remuneration outcomes for FY25 Measure Weighting % of the overall maximum award Annual bonus Total revenue growth 1 70% 28.0% Customer experience 10% 6.9% CEO performance against personal strategic goals 20% 14.0% CFO performance against personal strategic goals 20% 16.0% CEO total bonus opportunity achieved 100% 48.9% CFO total bonus opportunity achieved 100% 50.9% Performance Share Plan Sage Business Cloud penetration 2 50% 42.3% Relative TSR 30% 26.0% ESG: Reduction in Scope 1, 2, and 3 carbon emissions 7.5% 7.0% ESG: Sage products with functionality for carbon accounting 5% 4.0% ESG: Inclusion Score 3.75% 0.0% ESG: Gender diversity target 3.75% 0.0% Total PSP opportunity achieved 100% 79.3% 1. Payment of a bonus for total revenue growth is subject to the achievement of an underpin condition of Group underlying operating profit (UOP) margin of 19.5%. Group UOP was 24.1% andthe underpin met. Actuals have been retranslated at budgeted foreign currency exchange rates consistent with the basis on which the targets were set. 2. For any of this portion of the PSP award to vest, underpins relating to ROCE (12.0%), absolute organic revenue growth (>0.0%), and cloud native penetration (30.0%) must be met across the three-year performance period. ROCE of 25.3%, absolute organic revenue growth of 31.4%, and cloud native penetration of37.8% were achieved across the performance period, therefore the underpins were met. FY25 performance and incentive outturns Sage has delivered another year of strong progress and delivery against our strategy, with underlying total revenue growth of9.8% and underlying operating profit margin of24.1% (at budgeted FX rates consistent with the basis on which the bonus targets were set); focus continues on scaling the business, with growth creating the headroom to increase investment andexpand margins. As outlined in previous Directors’ Remuneration Reports, the Remuneration Committee maintains a robust pay-for performance ethos, supported by highly stretching budget, target and personal strategic objective ranges relative to bonus opportunity. This has been reflected in incentive payouts of 48.9% to50.9% of maximum in the annual bonus and 79.3% ofmaximum in the PSP award. Wider workforce context Our colleagues deliver extraordinary outcomes every day andit is important for us to ensure they are rewarded fairly, feel valued, and are advocates for Sage. Colleague engagement remains strong, with eSAT of76. Across our workforce, our annual pay review budget is aligned with the external software market, and pay increases are aligned to performance, contribution, and the external market. Sage continues FY25 single figure for total remuneration summary for Executive Directors 26% 19% 55% Steve Hare CEO 25% 21% 54% Jonathan Howell CFO Fixed pay Annual bonus Long-term incentives Fixed pay for FY25 • Base salary • Benefits • Pension See page 132 Annual bonus for FY25 • 9.8% total revenue growth achieved (at budgeted FX) • Customer experience • Personal strategic goals See pages 133 to 135 PSP awards vesting in FY25 • 89.7% Sage Business Cloud penetration achieved • 80th TSR percentile rank • ESG basket of measures • Underpins met See pages 135 and 136 The summary below sets out clearly and transparently the total remuneration paid to our Executive Directors in FY25. Strategic Report Governance Report Financial Statements Additional Information THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 121 Directors’ Remuneration Report continued tobean accredited Living Wage Foundation employer. Additionally, Save and Share, our all-colleague share plan,enables eligible colleagues to become shareholders atall levels across the business. Total participation across all-colleague plans in 2025 was 39% ofeligible colleagues. Weplace importance onfinancial education and ensuring colleagues understand our all-colleague plans; this was externally recognised with the 2025GEO Award for Best inFinancial Education and Wellbeing (10,000–25,000 employees). Further details explaining remuneration for thewider workforce can be found on pages 138 to 140. The Committee also undertook a review of remuneration andrelated policies for the wider workforce, and deemed that the remuneration policies and practices for Executive Directors are aligned to the wider workforce. This is achieved byconsistent performance measures in the annual bonus plan, pay principles that are applicable across the entire workforce, and application of the annual pay review process consistently across all colleagues. In view of the above, the Committee is striving to balance the need for remuneration to reward high performance andstrategic delivery, to remain competitive within the global talent market, and to align to the external operating environment and UK corporate governance requirements. Engagement with stakeholders The Committee values input from shareholders and is committed to ensuring open and transparent dialogue inregard to executive remuneration. Where appropriate, theCommittee seeks the views of the largest shareholders individually and others through shareholder representative bodies when considering any significant changes to the Policy. Any feedback received is thoughtfully reviewed and,where appropriate, changes are implemented. Ahead ofthe 2026 AGM, the Committee consulted individually withSage’s top 20 shareholders and proxy agencies on theproposed changes to Executive Director remuneration and the annual bonus metrics for 2026. This was initially inwritten format and included one meeting to discuss the proposals in detail. Shareholders who responded indicated their support for the proposals. Colleague success is critical for Sage, and engaging with the workforce through meaningful, two-way dialogue underpins this. The CEO hosts frequent “All-Hands” calls for the whole workforce, during which he provides Company performance updates explaining how this translates to the bonus plan. Colleagues are encouraged to ask questions and the CEO provides open and transparent answers. Additionally, Company performance and bonus updates areperiodically provided on our intranet site and by email; this ensures that colleagues are able to understand how thebusiness is performing during the financial year and theimpact that can have on their reward package. Colleagues receive a detailed personal reward statement annually in December outlining their basic salary and bonusplan structure (where applicable) for the year. Colleagues have the opportunity to share their thoughts andfeedback on all topics, including our remuneration policies and practices, through our “Always Listening” survey. Originally launched during 2020 in response to thepandemic, this is a continuous feedback survey which colleagues can access at any time. In addition, our biannual colleague Pulse Surveys have a high response rate, demonstrating that colleagues welcome theopportunity to share their thoughts, and CEO roundtablesoffer further opportunities for colleagues to provide direct feedback. A global Reward and Recognition policy is available to allcolleagues and applies across the entire workforce. Furthermore, colleagues are able to access a more detailed explanation of executive pay through this Report and of our equity awards through our colleague intranet. Board changes considered in FY25 As announced on 27 March 2025, Jonathan Howell will step down from the Board and his role as CFO on 31 December 2025, and will remain employed by Sage until the end of his notice period on 31 March 2026 in order to assist a successful transition. Jonathan will remain eligible for a pro-rated bonus, paid wholly in cash, for the financial year ending 30 September 2026, but will not be eligible to receive a FY26 LTIP award. Inlight of his excellent service to Sage and the nature of his departure, the Committee determined that Jonathan should be treated as a good leaver. Accordingly, hewill retain his unvested Deferred Bonus Plan (DSBP) awards, and his unvested LTIP awards will be time pro-rated by reference to the date on which he leaves the Company and remain subject to performance. There will be no acceleration of vesting for any unvested equity awards and the awards will continue to be subject to a two-year holding period. Concluding remarks The Committee reviewed the implementation of the Policy over 2025 and judged it to be operating as intended and with no deviation from the approved Policy. It determined this through the periodic review of potential incentive outcomes and their contribution to the single figure for remuneration; a consideration of wider business performance including customer metrics; the experience of shareholders and our TSR; and the experience of our colleagues. This letter, along with the broader Directors’ Remuneration Report, outlines the Group’s approach toremuneration, which takes into account best practice andmarket trends while continuing to support the Group’scommercial priorities, as well as the interests ofshareholders and other stakeholders. The Committee giveshigh priority to ensuring that there is aclear link between pay and performance, including a focus on culture and adherence to the Group’s risk framework, and that our remuneration outcomes reflect this broader context. Roisin Donnelly Chair of the Remuneration Committee 18 November 2025 122 THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 Remuneration Committeegovernance Objectives and responsibilities The Committee’s main objective is to determine the framework, broad policy, and levels of remuneration for the Group’s Chief Executive Officer, the Group’s Chief Financial Officer, the Chair of the Company, and other executives as deemed appropriate, ensuring compliance with legal and regulatory requirements and striving to enhance Sage’s long-term development. This framework includes, but is not limited to, establishing stretching performance-related elements of reward and is intended to promote the long-term success of the Company. We achieve this through: • Providing recommendations to the Board, within agreedTerms of Reference, on Sage’s framework of executive remuneration. • Determining the contract terms, remuneration, and other benefits for each of the Executive Directors, including performance share awards, performance-related bonus schemes, pension rights, and compensation payments, andaligning such to the Company’s purpose, values, andculture. • Reviewing workforce remuneration, and related policies across the Group and the alignment of incentives and rewards with culture, taking these into account when setting the Policy for Executive Directors. • Determining remuneration for senior executives below Board level. • Approving share awards. • Ensuring the Policy promotes long-term shareholdings by Executive Directors by ensuring share awards granted are released on a phased basis and subject to a total vesting and holding period of five years. Committee meetings The Committee held six scheduled meetings during FY25. Details of individual attendance at scheduled meetings are provided in the table below. 4 November 2024 14 November 2024 26 February 2025 13 May 2025 9 July 2025 9 September 2025 Committee members Roisin Donnelly Annette Court Dr John Bates Maggie Chan Jones 1 ––––– 1. Maggie Chan Jones was appointed to the Remuneration Committee on 1 August 2025. Activities of the Committee at a glance Allocation of time 60% 20% 15% 5% Determining the Policy and its implementation Considering the views on remuneration of our stakeholders and reviewing trends in executive remuneration Reviewing the effectiveness of the Policy Other Note: Allocation of time has been rounded to the nearest 5%. Strategic Report Governance Report Financial Statements Additional Information THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 123 Directors’ Remuneration Report continued Activities and evaluation Details of the Committee’s activities are set out below. Activities of the Committee During the year, the Committee focused on the matters summarised in the table below: Key area of activity Matters considered Outcome Determining the Policy and its implementation • Determined 2025 bonus targets and bonus outcomes for 2024. • Determined PSP outcomes for the 2022 award. • Approved the 2025 Directors’ Remuneration Policy. • Reviewed content of the 2024 Directors’ Remuneration Report. • CFO transition arrangements. • 2024 bonus determined at 55.9% to 59.7% of potential, as disclosed in last year’s Report. • 2022 PSP determined at 95.1% of the overall award for vesting, as disclosed in last year’sReport. • Shareholder approval of the Policy at the 2025 AGM. • Approved the 2024 Directors’ RemunerationReport. • Terms as detailed on pages 122 and 118 respectively of this Report. Considering theviews on remuneration of ourstakeholders and reviewing trends in executive remuneration • At least quarterly, the Committee’s advisors presented on market trends, legislative change, and corporate governance requirements in executive remuneration. • Views of shareholders, proxy voting agencies, and market insight provided invaluable context for the Committee’s deliberations on the implementation of thePolicy and its effectiveness. Reviewing the effectiveness ofthePolicy • Reviewed performance against in-flightincentive plans. • Reviewed remuneration-related risks. • Reviewed the structure of remuneration. • Discussed the base salaries, and the bonus and LTIP structure for 2026 through the implementation of the 2025 Policy. • Determined that the Policy was operating asintended for FY25. Other • Reviewed the Committee’s Terms ofReference. • Reviewed workforce remuneration andrelated policies. • Determined no change needed to the Committee’s Terms of Reference. • Considered the implementation of the 2025 Policy in FY26 in light of workforce remuneration. 124 THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 Corporate Governance Codeconsiderations We are fully compliant with the UK Corporate Governance Code 2018. When reviewing the Policy for Executive Directors anddetermining the approach to pay, in line with the Code, the Committee gives consideration to the following: Clarity Code provision: remuneration arrangements should be transparent andpromote effective engagement withshareholders and the workforce. Engaging with stakeholders effectively, in a timely, transparent, and relevant manner is important for theCompany. Further details on how we engage withstakeholders can be found on page 122. The purpose, strategic alignment, and structure of eachelement of pay is provided in the Policy and easilyaccessible on our Company website. Simplicity Code provision: remuneration structures should avoid complexity and their rationale and operation should be easy to understand. Simplicity is one of our remuneration principles and guides the design of our remuneration structures. Remuneration arrangements in place for Executive Directors are not complex: executives are eligible for an annual bonus and a performance share award under our Long Term Incentive Plan, the metrics of which are aligned to the Company’s strategy. Salaries are reviewed annually across the whole workforce and benefits including pension provision are provided in line with local market norms. This Report provides open and transparent disclosure of executive remuneration for our workforce and our shareholders. Risk Code provision: remuneration arrangements should ensure reputational and other risks from excessive rewards, and behavioural risks that can arise fromtarget-based incentive plans are identified and mitigated. There is an appropriate mix of fixed and variable pay andfinancial and non-financial measures and goals in ourremuneration plans. There are mechanisms in place toensure alignment with long-term shareholder interests andthe ongoing performance of the business: one third of annual bonus is deferred into Sage shares (reducing to 15% of any bonus earned, once a Director’s enhanced shareholding guideline is met), a holding period of two years is applicable to performance share awards, and Executive Directors are required to build up and maintain a significant holding of Sage shares both whilst an Executive Director (500% of salary for the CEO and350% of salary for the CFO) and for atwo-year period after stepping down from that position (100% of their “in-employment” guideline for two years after stepping down as a Director). The Committee is able to exercise discretion over theformulaic outcomes of the bonus and performance share awards to ensure outturns reflect the performance ofthe Executive Directors and the business. Malus and clawback provisions are applicable to these plans in the event of a trigger event. Predictability Code provision: the range of possible values of rewards to individual Directors and any other limits or discretions should be identified and explained at the time ofapproving the Policy. Incentive opportunities are capped with clearly defined payout schedules, deferral requirements, andholding periods. Additionally, the Committee is able to exercise discretion over theformulaic outcomes of the bonus and performance share awards to ensure outturns reflect the performance ofthe Executive Directors and the business. Strategic Report Governance Report Financial Statements Additional Information THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 125 Proportionality Code provision: the link between individual awards, the delivery of strategy,and the long-term performance of the Company should be clear. Outcomes should not reward poor performance. Executive Directors’ total remuneration package is designed to ensure that remuneration increases or decreases in line with business performance and aligns theinterests of Executive Directors and shareholders, specifically with the annual bonus and performance shareawards rewarding over the short and long term. Stretching targets over an annual (applicable to annual bonus) and three-year performance period (applicable toperformance share awards) are approved by the Committee and assessed at the end of the performance period, taking into account the wider business performance and the internal and external context. The Committee has overriding discretion over the formulaic outcomes of the bonus and performance share awards to ensure outturns reflect performance of Executive Directors, the business, and the shareholder experience, ensuring that poor performance is not rewarded. Alignment toculture Code provision: incentive schemes should drive behaviours consistent with the Company purpose, values, and strategy. Incentive schemes are aligned to Sage’s culture. The bonusplan is split between Company performance andachievement of strategic goals, which incorporate non-financial metrics such as employee engagement, leadership development, inclusion, talent development, and the community. The Company performance measures are central to the strategic progression of Sage and the strategic goal assessments are completed taking into account outputs and how they have been delivered in respect of the Company’s Values and Behaviours. Performance share award measures align to the Company’s strategic priorities in addition to the wider shareholder experience through TSR. The ESG measures first introduced into performance share awards in 2022 and updated for 2026 will help contribute to the achievement of the Sustainability and Society strategy. Full details of the proposed measures canbe found on pages 145 and 146. This Report complies with the requirements of the Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008 as amended in 2013, the provisions of the UK Corporate Governance Code 2018, the Companies (Miscellaneous Reporting) Regulations 2018, the Companies (Directors’ Remuneration Policy and Directors’ Remuneration Report) Regulations 2019, and the Listing Rules. Directors’ Remuneration Report continued 126 THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 Remuneration Policy 2025 The current Policy was approved by our shareholders at the 2025 AGM and can be found in full in the 2024 Annual Report, or can be downloaded from www.sage.com/investors. The table below sets out a summary of key elements of the Policy that shareholders approved at the 2025 AGM on 6 February 2025. Base salary Supports the recruitment andretention of Executive Directors from a global talent market of the calibre required to deliver the Group’s strategy. Rewards executives for the performance of their role. Set at a level that allows fully flexible operation ofour variable pay plans. Operation Normally reviewed annually, with any increases applied from January. When determining base salary levels, consideration is given to factors including the following: • Pay increases for otheremployees acrosstheGroup; • The individual’s skills andresponsibilities; • Pay at companies of asimilar size and international scope to Sage, in particular those within the FTSE 11–50 (excluding financial services companies); and • Corporate and individual performance. Maximum opportunity Ordinarily, salary increases will be in line with increases awarded to other employees in major operating businesses of the Group. However, increases may be made above this level at the Remuneration Committee’s discretion to take account of individual circumstances such as: • Increase in scope and responsibility; • The individual’s development and performance in role (e.g.fora new appointment where base salary may be increased over time rather than set directly at the level of the previous incumbent or market level); and • Alignment to market level. Accordingly, no monetary maximum has been set. Performance measures None, although overall performance of the individual is considered by the Remuneration Committee when setting and reviewing salaries annually. Pension Provides a competitive post-retirement benefit, inaway that manages the overall cost to the Company. Operation Defined contribution plan (with Company contributions set as a percentage of base salary). An individual may elect to receive some or all oftheir pension contribution as a cash allowance. Maximum opportunity The Company contribution rate for Executive Directors isaligned with the rate available to the majority of the workforce (currently 10% of salary). Performance measures None. Strategic Report Governance Report Financial Statements Additional Information THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 127 Benefits Provide a competitive and cost-effective benefits package to executives to assist them to carry out theirduties effectively. Operation The Group provides a rangeofbenefits which may include a car benefit (or cash equivalent), private medical insurance, permanent health insurance, life assurance, and financial advice. Additional benefits may alsobe provided in certain circumstances which may include relocation expenses, housing allowance, school fees, tax return support, and tax equalisation payments. Business expenses and associated tax thereon mayalso be reimbursed. Other benefits may be offered if considered appropriate andreasonable by the Remuneration Committee. Maximum opportunity Set at a level which the Remuneration Committee considers: • Appropriately positioned against comparable roles in companies of a similar size and complexity in the relevant market; and • Provides a sufficient level of benefit based on the role and individual circumstances, such as relocation. As the costs of providing benefits will depend on theDirector’s individual circumstances, the Remuneration Committee has not set a monetary maximum. Performance measures None. Annual bonus Rewards and incentivises theachievement of financial and strategic targets over theyear. An element of compulsory deferral, provides a link to the creation of sustainable long-term value. Operation Performance measures, weightings, and targets areset and payout levels aredetermined by the Remuneration Committee based on performance against those targets. The Remuneration Committee may, in appropriate circumstances, override theformulaic outcome and amend the bonus payout should this not, in the viewofthe Remuneration Committee, reflect overall business performance or individual contribution. The default arrangement is that a minimum of one third of any annual bonus earned by Executive Directors is delivered in deferred share awards with the remainder delivered incash. The deferral requirement reducesto 15% of any annualbonus earned by Executive Directors once their enhanced shareholding guideline, as outlined within the shareholding guideline section of this table, is met.The Committee has discretion to defer bonus in cash if dealing restrictions prevent share awards being granted. The deferral period will usually be a minimum ofthree years. Maximum opportunity 175% of salary. Up to 50% of the bonus can bepaid for delivering a targetlevel of performance. Performance measures At least 70% of the bonus willbe determined by measure(s) of Group financialperformance. No more than 30% of the bonus will be based on pre-determined financial, strategic, ESG, oroperational measures appropriate to the individual Director. The measures that will apply for the financial year 2026 are described in the Directors’ Annual Remuneration Report. Directors’ Remuneration Report continued 128 THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 Performance share awards (PSA) Motivate and reward the achievement of long-term business goals. Support thecreation of shareholder value through the delivery of strong market performance aligned with the long-term business strategy. Support achievement of our strategy. Operation PSAswill be granted under theterms of The Sage Groupplc. Long Term Incentive Plan (LTIP). Awards vest dependent uponthe achievement of performance conditions measured over aperiod usually of at least three years. Following the end of the performance period, the performance conditions will be assessed and the percentage of awardsthat will vest will bedetermined. The Remuneration Committee may decide that the shares inrespect of which an award vests will be subject to an additional holding period. Aholding period will normally last for two years, unless the Remuneration Committee determines otherwise. The Remuneration Committee has discretion to decide whether and to what extent the performance conditions have been met and, in appropriate circumstances, to override the formulaic outcome, taking into account such factors as the performance of the Group, the experience of the stakeholders and windfall gains. If an event occurs that causes the Remuneration Committee to consider that anamended or substituted performance condition would be more appropriate and not materially less difficult to satisfy, the Remuneration Committee may amend orsubstitute any performancecondition. Maximum opportunity Awards vest on the following basis: • Threshold performance: 20% of the maximum sharesawarded; • Exceptional performance: 100% of the shares awarded; and • The vesting schedule related to the levels of performance between threshold and exceptional, including whether or not this will include interim performance levels, willbedetermined by the Remuneration Committee on an annual basis and disclosed inthe relevant Directors’ Annual Remuneration Report forthat year. Overall individual limit of400% of base salary in respect of a financial year. Implementation for FY26 is outlined on page 120 of this Report. Performance measures Vesting will be subject to performance conditions asdetermined by the Remuneration Committee onan annual basis. The performance conditions will initially be underlying EPS, relative TSR, and ESG, although the Remuneration Committee will retain discretion to include additional or alternative performance measures which are aligned to the corporate strategy. At its discretion, the Remuneration Committee mayelect to add additional underpin performance conditions. Details of the targets that willapply for awards grantedin 2026 are set out inthe Directors’ Annual Remuneration Report. All-employee share plans Provide an opportunity for Directors (as well as the general workforce) to voluntarily invest in theCompany. Operation UK-based Executive Directors are entitled to participate inan HMRC-approved all-employee plan, the Save and Share Plan. Under this plan, they can make monthly savings over a period permitted by HMRC, which is currently three years, linked to the grant of an option over Sage shares. The option price can be at a discount set by HMRC; currently this is a maximum of 20% of the market value of shares on grant. Options may be adjusted to reflect the impact of any variation of share capital. Overseas-based Executive Directors are entitled to participate in any similar all-employee scheme operated by Sage in theirjurisdiction. Maximum opportunity UK participation limits are those set by HMRC from timeto time. Currently this is£500 per month (or foreign currency equivalent). Limits for participants in overseas schemes are determined in line with any local legislation. Performance measures None. Strategic Report Governance Report Financial Statements Additional Information THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 129 Chair and Non-executive Director fees Provide an appropriate rewardto attract and retain high-calibre individuals. Non-executive Directors donot participate in any incentive scheme. Operation Fees are reviewed periodically. The fee structureis as follows: • The Chair is paid a single, consolidated fee; • The Non-executive Directors are paid a basic fee, plus fees for additional responsibilities or time commitments such as chairing (and, where appropriate, membership) of Board Committees and tothe Senior Independent Director; and • Fees are currently paid in cash, but the Company may choose to provide some of the fees in shares. Additional travel allowance payments may be made to the Chair and Non-executive Directors for time spent travelling internationally onCompany business, for example to attend a Board meeting. Non-executive Directors may be eligible for benefits such as company car, use of secretarial support, healthcare, or other benefits that may be appropriate, including where travel to the Company’s registered office is recognised as a taxable benefit, in which case aNon-executive Director may receive the grossed-up costsof travel as a benefit. Maximum opportunity Set at a level which: • Reflects the commitment and contribution that is expected from the Chair and Non-executive Directors; and • Is appropriately positioned against comparable roles incompanies of a similar size, complexity, and international scope to Sage, in particular those within the FTSE 11–50 (excluding financial services companies). Overall fees paid to Directors will remain within the limit stated in our articles of association, currently £1.75m.Actual fee levels aredisclosed in the Directors’Annual Remuneration Report for therelevant financial year. Performance measures None. Shareholding guideline Aligns the interests of Executive Directors and shareholders, and encourages a focus on long-term performance. Operation Whilst in employment, Executive Directors are expected to build up a shareholding worth 500% of salary in respect of the CEO and 350% of salary in respect of other Executive Directors over five years from the Director becoming subject tothe guideline. The Remuneration Committee will review progress towards the guideline on an annual basis and has the discretion to adjust the guideline in what it feels are appropriate circumstances. Executive Directors are also expected to remain compliant with this guideline or, if lower, their actual shareholding at leaving for two years post-cessation of employment. Shares acquired by an Executive Director in their personal capacity at any time, or shares released to anExecutive Director prior to11 September 2019, are exempt from this guideline. The Committee retains discretion to amend or waive this guideline if it is not considered appropriate in thespecific circumstances. Notes: • Annual bonus and PSA performance measures and targets are selected each year so as to align with key financial and operational objectives. • Awards granted under the Deferred Bonus Plan and as a PSA may: a. Be made in the form of conditional awards or nil-cost options and may be settled in cash on vesting; b. Incorporate the right to receive an amount (in cash or shares) equal to the dividends which would have been paid or payable on the shares that vest in the period up to vesting/release (this amount may be calculated assuming the dividends were reinvested in the Company’s shares on a cumulative basis); and c. Be adjusted in the event of any variation of the Company’s share capital, demerger, delisting, special dividend, rights issue, or other event which may, in the opinion of the Remuneration Committee, affect the current or future value of the Company’s shares, or as a result of a participant moving from one jurisdiction to another or becomes tax resident in a different jurisdiction, and, as a result, there may be adverse legal, regulatory, tax, or administrative consequences for the participant and/or a member of the Group in connection with an award. Directors’ Remuneration Report continued 130 THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 Provisions to withhold (malus) or recover (clawback) sums paid under the annual bonus and PSA in the event of material negative circumstances, such as a material misstatement in the Company’s audited results, serious reputational damage orsignificant financial loss to the Company (as a result of the participant’s conduct), an error in assessing the performance metrics relating to the award, or the participant’s gross misconduct are incorporated into the terms of the PSA, the annual bonus, and the Deferred Bonus Plan. These provisions may apply up to three years from the release date of a PSA or three years from the date a cash bonus is paid or a deferred share award is granted. Details of the proposed implementation of those provisions in the forthcoming year are set out in the Directors’ Annual Remuneration Report. All Directors submit themselves for re-election annually. The Remuneration Committee intends to honour any commitments entered into with current or former Directors on their original terms, including outstanding incentive awards, which have been disclosed in previous remuneration reports and, where relevant, are consistent with a previous Policy approved by shareholders. Any such payments to former Directors will beset out in the Remuneration Report as and when they occur. The Remuneration Committee reserves the right to make any remuneration payments and payments for loss of office (including exercising any discretions available to it in connection with such payments) notwithstanding that they are not inline with the Policy set out above, where the terms of the payment were agreed (i) before the Policy set out above came intoeffect, provided that the terms of the payment were consistent with the shareholder-approved Remuneration Policy in force at the time they were agreed; or (ii) at a time when the relevant individual was not a Director of the Company and, in the opinion of the Remuneration Committee, the payment was not in consideration for the individual becoming a Director of the Company. For these purposes, “payments” includes the Remuneration Committee satisfying awards of variable remuneration and, in relation to an award over shares, the terms of the payment are “agreed” at the time the award is granted. The Remuneration Committee may make minor amendments to the Policy (for regulatory, exchange control, tax, or administrative purposes or to take account of a change in legislation) without obtaining shareholder approval for that amendment. Strategic Report Governance Report Financial Statements Additional Information THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 131 Directors’ Remuneration Report continued Directors’ Annual Remuneration Report Purpose of this section: • Provides remuneration disclosures for Executive and Non-executive Directors. • Details financial measures for the annual bonus plan and performance share awards. • Illustrates Company performance and how this compares with the pay of Executive Directors. • Outlines implementation of the 2025 Policy for Executive and Non-executive Directors for 2026. Single figure for total remuneration (audited information) The following table sets out the single figure for total remuneration for Executive Directors for the financial years ended 30 September 2025 and 2024. (a) Salary/fees 7 (b) Benefits 8 (c) Bonus 9 (d) PSP awards 10 (e) Pension 11 (f) Other Total fixed remuneration 12 Total variable remuneration 13 Total 14 2025 £’000 2024 £’000 2025 £’000 2024 (restated) £’000 2025 £’000 2024 £’000 2025 £’000 2024 (restated) £’000 2025 £’000 2024 £’000 2025 £’000 2024 £’000 2025 £’000 2024 (restated) £’000 2025 £’000 2024 (restated) £’000 2025 £’000 2024 (restated) £’000 Executive Directors S Hare 1,029 904 43 43 881 885 2,506 3,394 103 90 – – 1,175 1,037 3,387 4,279 4,562 5,316 J Howell 665 599 7 7 592 626 1,546 1,863 57 52 – – 729 658 2,138 2,489 2,867 3,147 Non-executive Directors A Duff 454 415 – – – – – – – – – – 454 415 – – 454 415 S Anand 1 27 73 4 16 – – – – – – – – 31 89 – – 31 89 J Bates 90 73 – – – – – – – – – – 90 73 – – 90 73 J Bewes 107 96 – – – – – – – – – – 107 96 – – 107 96 M Chan Jones 2 80 73 16 16 – – – – – – – – 96 89 – – 96 89 A Court 3 120 99 – – – – – – – – – – 120 99 – – 120 99 R Donnelly 4 103 83 – – – – – – – – – – 103 83 – – 103 83 D Hall 5 – 22 – – – – – – – – – – – 22 – – – 22 D Harding 86 73 – – – – – – – – – – 86 73 – – 86 73 L Mitchell-Keller 6 52 – 8 – – – – – – – – – 60 – – – 60 – Notes: 1. Sangeeta Anand stepped down from the Board on 6 February 2025. 2. Maggie Chan Jones joined the Remuneration Committee on 1 August 2025. 3. Annette Court was appointed as Senior Independent Director on 1 January 2024 and stepped down as Chair of the Remuneration Committee on 30 April 2024. 4. Roisin Donnelly was appointed as Chair of the Remuneration Committee on 1 May 2024. 5. Drummond Hall retired on 31 December 2023. 6. Lori Mitchell-Keller was appointed as a Non-executive Director on 7 February 2025. 7. Details of salary progression since 2022 for the current Executive Directors are summarised in the “Statement of implementation of Remuneration Policyinthe following financial year” on page 144 of this Report. Following a review of Non-executive Director fees, the Chair of the Board fee, the basicNon-executive Director fee, and the Senior Independent Director, additional fees were increased with effect from 1 January 2025. Committee membership fees for the Audit and Risk Committee, Remuneration Committee, and Nomination Committee were also introduced with effect from 1 January2025. Further details are provided on page 151 of the 2024 Annual Report and Accounts. 8. Benefits provided to the Executive Directors included: car benefits or cash equivalent (Steve Hare only), private medical insurance, permanent health insurance, life assurance, financial advice, and, where deemed to be a taxable benefit, the grossed-up costs of travel, accommodation, and subsistence forthe Directors and their partners on Sage-related business if required. Benefits exclude items subject to tax where they are in the nature of business expenses. Sangeeta Anand, Maggie Chan Jones, and Lori Mitchell-Keller, who are based in the US, each received a £4,000 travel allowance fee for their attendance at each Board meeting, which required travel from the US (total of 4 meetings), commensurate to the travel time required for attendance inperson. No tax support was provided to any of the Non-executive Directors in either FY24 or FY25 and the FY24 benefits figure for Maggie Chan Jones hasbeen restated accordingly. 9. Further information about how the level of FY25 bonus award was determined is provided in the additional disclosures below. 10. The 2025 PSP value for Steve Hare and Jonathan Howell is based on the PSP award granted in financial year 2023, which is due to vest in December 2025. Theperformance conditions applicable to the awards are outlined on pages 135 to 136 of this Report. The value is based on the number of shares vesting under the 2023 PSP award multiplied by the average price of a Sage share between 1 July and 30 September 2025, which was £11.512, plus dividend equivalents accrued. For Steve Hare, £739,282 of the value is attributable to movement in the share price between grant and vesting, and for Jonathan Howell, £456,212 of the value is attributable to movement in the share price between grant and vesting. No discretion has been exercised by the Committee. Further detail is set out below in the notes to the table. The values of Steve Hare’s and Jonathan Howell’s 2022 PSPs for 2024 have been restated. The change in value is as a result of changes in the share price reported in 2024 in line with the methodology set out in the 2013 Reporting Regulations (£10.323) and the share price actually achieved at vesting (£13.145). 11. Pension emoluments for Steve Hare were equal to 10% of base salary and for Jonathan Howell were equal to 10% of base salary (less a deduction for Employer National Insurance Contributions). Both elected to receive them as a cash allowance. Maximum pension contribution levels for the wider workforce in the UK are 10% of salary, subject to contributions from the colleagues themselves. 12. Total fixed remuneration is inclusive of salary/fees, benefits, and pension. 13. Total variable remuneration is inclusive of bonus and PSP awards. 14. Total remuneration for Directors in 2025 was £8,576,000 compared with £9,502,000 in 2024 (updated from the 2024 Directors’ Remuneration Report). 132 THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 Additional disclosures for single figure for total remuneration table (audited information) Annual bonus 2025 The bonus targets for FY25 were set with reference to the strategy for FY25, in particular the achievement of total revenue growth and improving the customer experience, taking into account the Company’s annual budget and historical performance in determining the payout curve. Bonus measure % weighting Threshold performance Target performance Stretch performance Actual performance (atbudget foreigncurrency exchange rates) % of maximum bonus payable Total revenue growth 70% 9.5% (21% of bonuspayable) 10.1% (35% of bonus payable) 10.9% (70% of bonus payable) 9.8% 28.0% Customer experience scorecard 10% The assessment of the customer experience scorecard is set outbelowthis table (between 0% and 10% of bonus payable) 6.9% Strategic measures 20% The assessment of strategic measures is set out below thistable(between 0% and 20% of bonus payable) Steve Hare (CEO): 14.0% of maximum Jonathan Howell (CFO): 16.0% of maximum Total Steve Hare: 48.9% of maximum bonus (85.6% of salary) Jonathan Howell: 50.9% of maximum bonus (89.1% of salary) Notes: • Payment of a bonus for total revenue growth was subject to the achievement of an underpin condition of Group UOP margin. Group UOP margin was 24.1%, which exceeded the underpin target of 19.5%. • Total revenue growth and UOP margin are defined on page 261. Actuals have been retranslated at budgeted foreign currency exchange rates consistent with the basis on which the targets were set. The Committee considered the movement of foreign currency exchange rates over the year, and determined that the effect was immaterial and that the use of like-for-like exchange rates was appropriate. • As the Executive Directors’ shareholding exceeds their respective shareholding guidelines of 500% for the CEO and 350% for the CFO, the bonus deferral requirement is 15% of the bonus earned deferred into Sage shares for three years. The Committee determined, after careful consideration of business performance and the interests of Sage’s stakeholders such as shareholders, customers, and colleagues, that the calculated outcome was appropriate. Consequently, 48.9% and 50.9% ofthe maximum bonus will be awarded to the CEO and CFO, respectively. Customer experience (10% weighting) Customer experience was measured in the FY25 annual bonus through Sales and Service tNPS and renewal rate byvalue (RRbV). Measure Performance commentary 1 tNPS is a lead indicator of customer experience and gives immediate insight to a customer’s experience following a specific customer touchpoint. tNPS is measured across the Company to understand customers’ feedback and generate improvement opportunities. Throughout FY25, tNPS remained a strategic focus across the business, resulting in year-on-year improvements across all business units. This was driven by sustained efforts to enhance customer access, first contact resolution, and speed to resolution, particularly within the medium segment. Additionally, ongoing technology optimisation enabled customers to access support more efficiently (e.g. via chat and knowledge materials). 2 Renewal rate by value demonstrates how Sage grows value within its current customer portfolio and is an important measure of the strength of our existing customer base. 100% and above shows an increase in customer cohort compared to the prior year. As a strategic KPI, renewal rate by value is an important measure of the strength of our existing customer base and demonstrates the efficacy of our in-life strategies. Renewal rate by value of 101.4% for FY25 reflects strong retention rates and a good level of sales to existing customers. In consideration of these factors, the Committee determined that a bonus of 6.9% of the maximum 10% for this element was an appropriate award. Strategic Report Governance Report Financial Statements Additional Information THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 133 Directors’ Remuneration Report continued Executive Directors’ strategic goals (20% weighting) Executive Directors’ strategic goals were set by the Committee at the beginning of the financial year, consistent with the keydeliverables within the annual budget. Targets for strategic goals are considered to be commercially sensitive and are notdisclosed. However, details of performance achievements that were taken into account by the Committee in coming to itsassessment of this measure are set out below. Steve Hare, CEO Steve Hare was set a range of highly stretching strategic goals linked to the execution of the 2025 budget and long-term strategy plan. These were: • Prepare a refreshed strategy to outperform competitors in the small business segment and demonstrate early execution progress (10% weighting); • Scale Sage efficiently (20% weighting); • Instil a high-performance culture (25% weighting); • Deliver on the promise of the Sage Platform and Copilot (25% weighting); and • Influence the change agenda (20% weighting). Personal strategic objectives The Committee took into account the following performance against those goals: Prepare refreshed strategy to outperform competitors in the small business segment and demonstrate early execution progress Refreshed cross-functional strategies implemented in the small business segment to accelerate growth. Sage Copilot made available to Sage Accounting and Sage 50 customers intheUK. Improvements made to brand perception among UK accountants. Keycampaigns and events have re- established Sageas a leading and trusted provider in this part of the market. Key partnerships have been signed with banks and Fintechs, as well as the EnglishFootball League sponsorship. Overall, the objective was exceeded. Scale Sage efficiently Positive progression on operating margin of 23.9% in FY25, with revenue growth in line with market expectations. Further acceleration needed to achieve our scaling ambition underpinned by the Rule of 40. Therefore, this objective was partially met. Instil a high-performance culture: develop talent, create clarity, anddrive high performance at all levels Processes implemented to increase clarity and accountability reflecting strategic objectives and embedding use of key results (OKRs). Location strategy implemented increasing the proportion of the workforce based in flagship and hub locations. Robust succession plans in placefor all ELT roles and a talented internal successor, Jacqui Cartin, announced as CFO. Overall, this objective was met. Deliver on the promise of the Sage Platform and Copilot Significant progress made towards creating the world’s most trusted network with the Sage Platform strategy designed and communicated. Sage Copilot available across key products, including Sage Accounting, Sage Active, Sage for Accountants, Sage 50, and Sage Intacct. Embedded services growth exceeded the stretching targets set. Accounts Payable (AP) automation platform adoption accelerated. Overall, theobjective was met. Influence the change agenda: become a thought leader and influencer on the digitalisation and AI agenda in our key geographies Sage is making a substantial impact through media, policy, and industry engagement. The CEO is positioned as a leading voice on Sage’s AI strategy and, throughout the year, had frequent engagement with UK and European government officials, driving the AI agenda for small and mid-sized businesses and accountants, including through digital policy, and e-invoicing initiatives. The objective was exceeded. 134 THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 The Committee maintains a robust pay-for-performance ethos, supported by highly stretching budget and target ranges relative to bonus opportunity. The Committee considers the formulaic calculation in the context of an expectation of high performance, to ensure strong alignment with shareholder experience and long-term value creation. This approach is consistent with our track record of setting highly stretching targets, ensuring incentive outcomes are proportionate, and reflects our culture of continually raising the bar on performance expectations of executives. In consideration of these factors and the overall performance of the business, the Committee determined that a bonus of 14.0% of the maximum 20%forthis element was an appropriate award. Jonathan Howell, CFO Jonathan Howell was set a range of strategic goals linked to the execution of the 2025 budget and long-term strategy plan. These were: • Scalable and efficient financial operations (25% weighting); • Enhance shareholder value (25% weighting); • Robust financial fundamentals (25% weighting); and • A diverse team of empowered finance professionals (25% weighting). Personal strategic objectives The Committee took into account the following performance against those goals: Scalable and efficient financial operations Efficient delivery of year-end and half-year reporting processes. Maintained accurate and timely forecasting, enabling agile decision makingand cost discipline. Successful transition of the Company’s auditor toKPMG. Progress madein driving efficiencies within Treasury. Overall, theobjective was exceeded. Enhance shareholder value Maintained high-quality communication with shareholders throughout the year. Strong engagement with investors and analysts, including six investor roadshows across the US and UK. The proportion of US shareholders was broadly maintained at around 40%. Completion of £600m share buyback during FY25. Therefore, this objective was exceeded. Robust financial fundamentals Achieved FY25 revenue growth in line with market expectations, with an operating margin of 23.9%, demonstrating effective cost management. Maintained a strong balance sheet including funding, liquidity, and leverage, with cash conversion over 100%. Credit rating of BBB+ maintained. On balance, the objective was partially met. A diverse team of empowered finance professionals Successfully led the Finance function, driving accountability and execution across the team. High-quality succession pipeline for key roles in place. High level of internal vacancy fill rate, with talent developed through Early Careers and training programmes. eSAT in the Finance function of 78 is ahead of the Company average. The objective was exceeded. Overall, under the CFO’s strong leadership, Sage delivered another year of good performance, with strategic focus driving strong, sustainable growth and margin expansion. Disciplined capital allocation continues to support investment and shareholder returns. In consideration of these factors and the overall performance of the business, the Committee determined that a bonus of 16.0% of the maximum 20% for this element was an appropriate award. PSP awards Awards granted under the PSP to Steve Hare and Jonathan Howell in December 2022 vest depending on performance against six measures, measured over three years, from 1 October 2022 to 30 September 2025: • 50% Sage Business Cloud penetration (with underpins for ROCE, absolute organic revenue growth, and cloud native penetration). • 30% relative TSR performance against the FTSE 100 (excluding financial services and extracting companies). • 20% ESG (7.5% percentage reduction in Scope 1, 2, and 3 carbon emissions; 5% number of Sage products that have carbon accounting functionality; 3.75% DEI—inclusion score; and 3.75% DEI—gender diversity). For each measure, three levels of performance are defined below: threshold, stretch, and exceptional. Strategic Report Governance Report Financial Statements Additional Information THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 135 Directors’ Remuneration Report continued Measure Between threshold (20% vests) andstretch (80% vests) Between stretch (80% vests) andexceptional (100% vests) Sage Business Cloud Penetration Between 85.0% and 89.0% (with ROCE of12%, absolute organic revenue growth>0%, and cloud native penetrationof 30%) Between 89.0% and 92.0% (or above) (withROCE of 12%, absolute organic revenue growth >0%, and cloud native penetration of 30%) Relative TSR Between median and upper quartile Between upper quartile and upper decile (or above) ESG—percentage reduction in Scope 1, 2, and3carbonemissions between baseline year FY22 and FY25 Between 6.9% and 13.8% Between 13.8% and 20.7% (or above) ESG—number of Sage products that havecarbon accounting functionality attheend of FY25 Between 3 and 6 Between 6 and 8 (or above) ESG—inclusion score in Q1/March 2025 Employee Engagement Survey Between 82 and 84 Between 84 and 86 (or above) ESG—percentage of leadership teams in thetop four levels of Sage meeting the genderdiversity target of no more than 60%ofany one gender at the end of FY25 Between 50% and 65% Between 65% and 80% (or above) The calculated vesting outcome of the award is detailed below. Measure Achieved Vesting Sage Business Cloud Penetration 89.7% 42.3% Relative TSR 80th percentile 26.0% ESG 1 —percentage reduction in Scope 1, 2, and 3 carbon emissions between baseline year FY22 and FY25 2 18.25% 7.0% ESG 1 —number of Sage products that have carbon accounting functionality at the end of FY25 3 64.0% ESG 1 —inclusion score in Q1/March 2025 Employee Engagement Survey 79 0.0% ESG 1 —percentage of leadership teamsinthetop four levels of Sage meeting the gender diversity target of no more than 60% of any one gender at the end of FY25 40% 0.0% Total 79.3% Notes: • Full details of the FY23 PSP performance measures and targets, including baselines were disclosed on pages 175 to 176 of the 2022 Annual Report and Accounts. • Bureau Veritas UK have conducted an independent third-party limited assurance of the ESG measures reported in accordance with the International Standard on Assurance Engagements (ISAE) 3000 Revised. 1. ESG measures have been accounted and reported in line with the Sage Basis of Reporting document 2025 as outlined on pages 89 to 113 of the Non-Financial Statement 2025. 2. The reduction in scope 1, 2, and 3 carbon emissions is related to market-based emissions. 3. Six products with carbon accounting functionality: SBCA UK, Sage 50 UK, Sage Platform, Sage Intacct UK, Sage for Accountants, and Suites for Small Business. Over the performance period, the ROCE was 25.3% (compared with the underpin of 12%), absolute organic revenue growth was31.4% (compared with the underpin of positive growth), and cloud native penetration was 37.8% (compared with the underpin of 30%), meaning that the underpin conditions were achieved. The Committee determined, after careful consideration of business performance and the interests of Sage’s stakeholders such as shareholders, customers, and colleagues, that the calculated outcome was appropriate. Consequently, 79.3% of thetotal award will vest. The Committee noted that it had satisfied itself, at the time of grant, that there was no issue of windfall gains in respect of this award. This conclusion had been reached following analysis of the number of shares granted in previous awards to the CEO. Consequently, the Committee was satisfied that no further adjustment was required in this respect at the time of vesting. Awards are scheduled to vest on 2 December 2025, and for both Executive Directors will be subject to a two-year holding period and released on 2 December 2027. 136 THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 Protect the Planet 5% of award Tech for Good 5% of award Yes No Underpins met: ROCE of 12.0% perannum TSR percentile ranking: Below median = 0% ofaward vests Median = 6% of awardvests Upper quartile = 24% ofaward vests Upper decile = 30% ofaward vests Percentage reduction in Scope 1, 2, and 3 carbon emissions: Below 8.6% = 0% ofawardvests 8.6% = 1% of award vests 17.2% = 4% of award vests 25.8% = 5% of awardvests * Reduction between FY24 and FY27. EPS in FY27: Less than 47.5p = 0% ofaward vests 47.5p = 12% of awardvests 58.0p = 60% of awardvests This portion of theaward does notvest 1. The context for the PSP measures selected for FY25 was provided on page 121 of the 2024 Annual Report and Accounts. Performance share awards granted in FY25 (audited information) Awards were granted under the LTIP on 7 February 2025 for the CEO and CFO at a market value of £13.120 per share in the form ofconditional share awards. In alignment with our business strategy for FY25, performance conditions for awards granted inFY25 are: 1 Underlying EPS 60% of award TSR 30% of award ESG 10% of award Vesting is on a straight-line basis between the points. The following key areas are highlighted in relation to the performancemeasures: • 60% of the awards being determined by EPS aligns with our growth strategy. • Continued focus on overall Group growth and delivery of shareholder value is achieved by: • Requiring the achievement of a ROCE underpin of 12.0% p.a. The Committee will exclude from the ROCE calculation, whereappropriate, any write down that arises from an asset that was acquired prior to the appointment of the current Executive Directors. • 10% of the awards being determined by an ESG basket of measures aligns to our Sustainability and Society strategy. • 30% of the awards being determined by relative TSR performance provides shareholder alignment. Awards will vest, subject to satisfaction of those performance conditions, in December 2027. A holding period for the PSAs will apply for two years from the vesting date. No further performance conditions attach to the awards during the holding period. Type of award Maximum number of shares Face value (£) 1 Face value (% of salary) Threshold vesting (% of award) End of performance period Steve Hare Performance shares 324,314 4,255,000 400% 20% 30 September 2027 Jonathan Howell Performance shares 156,580 2,054,340 300% 20% 30 September 2027 Note: 1. The face value of the PSAs has been calculated using the market value (middle market quotation) of a Sage share on 29 November 2024 (the last trading day prior to the grant for all eligible colleagues) of £13.120. Access to carbon accounting functionality viaSage suites: Enabling access to carbon accounting functionality via Sage for Sage Active suite in France = 1% ofaward vests Enabling access to carbon accounting functionality via Sagefor Sage Active suite in France, Spain, and Germany = 4% of award vests Enabling access to carbon accounting functionality via Sage for Sage Active suite in France, Spain, andGermany, and Sage Distribution and Manufacturing Operations(SDMO) suite = 5% ofaward vests * Performance assessed atthe endof FY27. Strategic Report Governance Report Financial Statements Additional Information THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 137 Directors’ Remuneration Report continued 39% of eligible colleagues participated in an all-employee share plan (Save and Share or theColleague Share Purchase Plan) in FY25 £7.6m value delivered to colleagues through share price appreciation from the Save and Share maturity and Colleague Share Purchase Plan purchases in FY25 3.85% FY25 budgeted salary increase in UK 79% of colleagues received a base salary increase in2025 as part of the annual reward review An Employee Assistance Programme is available toallcolleagues Remuneration for thewiderworkforce In setting Executive Director remuneration, the Committee places strong emphasis on understanding and aligning with theGroup’s broader approach to pay. Remuneration policies and practices for the wider workforce are reviewed by the Committee twice annually—once in February following the annual reward review, and again in July, as part of the Committee’songoing oversight. The policies and practices applying to the wider workforce are broadly consistent with those applying to Executive Directors. A key distinction is the greater emphasis on long-term performance and value creation for Executive Directors, with a significant portion of their remuneration delivered in Sage shares and subject to additional holding and post-employment shareholding requirements. The following table outlines how our remuneration approach for the wider workforce compares withthat of Executive Directors. 138 THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 Base salary Approach for colleagues Base salary reflects colleagues’ contribution to Sage and their value relative to market. It is normally reviewed annually, taking into account acolleague’s performance, contribution, and alignment tothe external market. Anyother factors, such as gender, race, orsexual orientation, do not impact acolleague’s base pay. Each role has a market-informed pay range, and colleagues can expect to progress through the pay range as their contribution increases. Pay is managed for all colleagues in alignment with local gender pay gap reporting requirements. Additionally, we are a UK Living Wage Foundation employer. Annual bonus Approach for colleagues Our annual bonus rewards colleagues for their performance and contribution tocompany success, with reward differentiated to reflect performance levels. It is calculated based on a percentage of base salary for achievement of goals which takeinto account a mixture of Company and personal performance. The percentage of basesalary and split between Company andpersonal performance varies by seniority (more junior colleagues have a higher weighting of personal performance as itmore accurately reflects their span of control). Payments are made on an annual basis. 77% of colleagues participate in Sage’s annual bonus plan (withthe remaining colleagues eligible for sales incentives). Pension and benefits Approach for colleagues To ensure that every colleague, no matter where they are based, hasaccess to consistent, meaningful support, we have a number ofglobally available benefits: • Employee Assistance Programme (EAP): Confidential support forwork, family, and personal issues, including coaching and counselling for colleagues and theirfamilies. • Calm: Access for colleagues and their family members to a mental wellness app. • Cleo: Access to expert guidance and personalised support for colleagues through different life stages, such as caring for achild or an ageing family member. • From Babies with Love: Gifts for new parents following the birth or adoption of achild on their return to work from parental leave. Additional benefits are aligned to local market requirements to remain market competitive. The most prevalent benefits available are annual leave, healthcare, retirement benefits, and voluntary and lifestyle benefits. Alignment with ExecutiveDirectors The same factors are considered when determining base salaryacross all colleagues inclusive ofExecutive Directors. Alignment with ExecutiveDirectors The annual bonus structure andassociated metrics are consistent across bonus-eligible colleagues and Executive Directors. Annual bonuses for Executive Directors are subject to a deferral requirement for a periodofthree years. Alignment with ExecutiveDirectors Executive Directors areeligible to receive arange of market- aligned benefits and pension in line with theUK wider workforce. Strategic Report Governance Report Financial Statements Additional Information THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 139 Directors’ Remuneration Report continued Sales incentives Approach for colleagues Our sales incentives reward colleagues for their performance and contribution to company success, with reward differentiated to reflect performance levels. Sales commission is paid for achievement of sales goals, typically on the value of contracts sold. Payments are typically made on a monthly basis, in line with market practice. All-employee share plans Approach for colleagues All-employee share plans provide an opportunity for colleagues to become shareholders in Sageand share in our long-term success. They are available in most geographies, where it is practicable to invite colleagues to participate in line with local regulatory requirements. Participation in all-employee share plans in FY25 was 39% across both the Save and Share and Colleague Share Purchase Plan (CSPP). £7.6m of value was delivered to colleagues through share price appreciation from the Save and Share maturity and CSPP purchases in FY25. Long-term incentives Approach for colleagues Restricted share awards are granted to around 800 colleagues annually across the organisation, creating value for our stakeholders through directalignment with our share price. Additionally, members of our ELT are eligible to receive performance shareawards, incentivising the delivery of long-term value creation andalignment with our strategic framework. Recognition schemes Approach for colleagues A non-financial, global peer-to-peer recognition scheme, “Hi-5”, enables colleagues to recognise their peers for achievements in line withour values. For Sales colleagues and partners, the Sage Platinum Club recognises top sales performance. Alignment with ExecutiveDirectors Executive Directors are noteligible to receive salesincentives. Alignment with ExecutiveDirectors Executive Directors are eligible to participate in the Saveand Share Plan onthesame terms as all other UK-based colleagues. Alignment with ExecutiveDirectors The same measures and targetsfor performance shareawards are applied toExecutive Directors astheELT. Executive Directors arenot eligible to receive restricted share awards (except in a recruitment scenario). 1 Alignment with ExecutiveDirectors All colleagues, including Executive Directors, canparticipate in Hi-5, our non-financial recognition scheme. Executive Directors arenot eligible for adhocrecognition. 1. As detailed in the recruitment section of the Directors’ Remuneration Policy—see pages 134 to 135 of the 2024 Annual Report and Accounts. 140 THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 Ratio of the pay of the CEO to that of the UK lower quartile, median, and upper quartile colleagues The table below shows the ratio of the pay of the CEO to that of the UK lower quartile, median, and upper quartile colleagues in 2025, consistent with the Companies (Miscellaneous Reporting) Regulations 2018. As outlined in the Remuneration Committee Chair’s letter, the treatment of colleagues has provided important context for the Committee’s decisions on executive remuneration in 2025 and the Committee is consequently satisfied that the median pay ratio for 2025 is consistent with thepay and progression policies for Sage’s UK employees as a whole. Year Method Pay ratio Remuneration values 25th percentile (lower quartile) 50th percentile (median) 75th percentile (upper quartile) Y25 (25th percentile) Y50 (50th percentile) Y75 (75th percentile) 2025 A 106 : 1 71 : 1 47 : 1 Total remuneration £42,995 £64,525 £98,040 Salary only £37,125 £54,749 £65,632 2024 A 108 : 1 73 : 1 48 : 1 Total remuneration £42,631 £63,037 £95,481 Salary only £33,201 £51,500 £76,347 2023 A 101 : 1 68 : 1 46 : 1 Total remuneration £39,536 £58,417 £87,553 Salary only £32,073 £47,669 £57,887 2022 A 65 : 1 43 : 1 29 : 1 Total remuneration £38,056 £57,421 £85,380 Salary only £32,122 £41,945 £48,854 2021 A 70 : 1 46 : 1 31 : 1 Total remuneration £34,807 £53,304 £79,739 Salary only £29,700 £42,103 £79,091 2020 A 55 : 1 36 : 1 23 : 1 Total remuneration £29,865 £45,942 £71,524 Salary only £27,955 £36,116 £56,983 2019 A 95 : 1 62 : 1 38 : 1 Total remuneration £26,463 £40,385 £66,095 Salary only £20,281 £34,184 £51,087 The year-on-year change in the pay ratio is largely driven by variation in business performance-related pay outcomes, such as the PSP and annual bonus. As the CEO has a larger proportion of his total remuneration linked to business performance than other colleagues based in the UK, the ratio has decreased compared with last year. This is due to a lower performance outcome for the FY23 PSP vesting on 2 December 2025, as set out on page 136 of this Report, compared with the FY22 PSP which vested on 2 December 2024 and is included in the 2024 ratio, and a lower bonus outcome for FY25 compared with the bonus outcome for FY24. Notes: • Under method A, colleague data is based on full-time equivalent pay for UK colleagues as at 30 September 2025. Pay for each colleague is calculated in accordance with the single figure for remuneration. All components of remuneration except long-term incentives are presented on a full-time equivalent basis by dividing sums by the average working hours divided by full-time equivalent hours for the portion of the year worked. Colleagues who worked no hours during the year are excluded from the dataset. • Method A has been selected as the basis of the disclosure as it is the best reflection of the underlying colleague data required by the Companies (Miscellaneous Reporting) Regulations 2018. • Total remuneration comprises salary and benefits. Certain benefits have been omitted from the remuneration of colleagues except the CEO. These principally comprise sums paid by way of expenses allowance chargeable to UK income tax and not paid through the payroll. Such expenses are typically irregular and generally immaterial to remuneration and are excluded to enable more meaningful comparison of the ratio of underlying colleague remuneration over time. • The CEO’s pay is based on the single figure for remuneration set out on page 132 of this Report. Because a large portion of the CEO’s pay is variable, the pay ratio is heavily dependent on the outcomes of variable pay plans and, in the case of long-term share-based awards, share price movements. Further information on these outcomes for the CEO in FY25 is set out on pages 133 to 136 of this Report. Gender and ethnicity pay We welcome colleagues of all races, genders and ethnicities, building an inclusive workplace where everyone can belong and thrive. Our 2025 UK gender pay gap report shows that the median gender pay gap of 6.95% has reduced from 2024 (9.37%), largely due to focus on ensuring equitable practices during our hiring and promotion processes. The mean gender pay gap of 5.05% has increased slightly since 2024 (4.81%), due to a higher number of men in senior roles. For the first time, we are also publishing our Ireland gender pay gap report (for Sage Hibernia Ltd.)—this highlights a median gender pay gap of 5.51% and a mean gender pay gap of 3.98%. For the fifth consecutive year, we have voluntarily reported our UK ethnicity pay gap, which shows a median pay gap of -6.73% (2024: -3.91%) and a mean pay gap of 2.05% (2024: 5.42%). The 2025 UK and Ireland gender pay gap reports and UK ethnicity pay gap report are available on the Company’s website. Strategic Report Governance Report Financial Statements Additional Information THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 141 Change in remuneration of Directors compared with colleagues The table below shows the annual percentage change in total remuneration of Directors with colleagues employed byTheSage Group plc. who are not also Directors of the Group. % change 2024/2025 % change 2023/2024 % change 2022/2023 % change 2021/2022 % change 2020/2021 Salary/ fees 1 Taxable benefits 2 Annual incentive 3 Salary/ fees 1 Taxable benefits 2 Annual incentive 3 Salary/ fees 1 Taxable benefits 2 Annual incentive 3 Salary/ fees 1 Taxable benefits 2 Annual incentive 3 Salary/ fees 1 Taxable benefits 2 Annual incentive 3 Executive Directors S Hare 13.8% 1.2% (0.5)% 8.5% (33.7)% (10.9)% 3.8% 48.3% (19.7%) 2.3% 3.8% 49.5% 0.5% (65%) 229% J Howell 11.1% 3.6% (5.3)% 4.8% (11.8)% (9.5)% 3.3% 7.7% (19.4%) 1.4% 36.3% 47.4% 0.5% (6%) 223% Non-executive Directors A Duff 4 9.3% –% –% 3.8% –% –% –% –% –% 1,500% – – – – – S Anand 5 (62.3)% (75.0)% –% 3.8% 33.3% –% 10.5% 200.0% –% 5.6% – – 140% – – J Bates 23.4% –% –% 3.8% –% –% 10.5% –% –% 5.6% – – 0% – – J Bewes 11.2% –% –% 7.1% –% –% 10.7% –% –% 5.6% – – 0% – – M Chan Jones 6 10.2% 0% –% 24.5% 51.5% –% –% –% –% – – – – – – A Court 7 21.7% –% –% 9.7% –% –% 10.7% –% –% 5.6% – – 0% – – R Donnelly 8 24.5% –% –% 80.2% –% –% –% –% –% – – – – – – D Hall 9 –% –% –% (75.0)% –% –% 8.3% –% –% 4.3% – – 0% – – D Harding 10 18.2% –% –% 3.8% –% –% 10.5% –% –% 82.1% – – – – – L Mitchell- Keller 11 –% –% –% ––––– ––––––– Colleagues of the Company 10.5% 5.0% 4.8% 7.1% 3.9% 3.7% 4.1% 2.4% 24.4% 4.2% 13.8% (8.7%) 5% 29% 6% Notes: • The change in the Non-executive Directors’ fees for 2021/2022 and 2022/2023 is due to the increase in the basic Non-executive Director fee, the Audit and Risk Committee Chair additional fee, and the Remuneration Committee Chair additional fee that took effect from 1 June 2022. Further information can be found on page 176 of the 2022 Annual Report and Accounts. • The change in the Non-executive Directors’ fees for 2023/2024 is due to the increase in the basic Non-executive Director fee, the Audit and Risk Committee Chair additional fee, the Remuneration Committee Chair additional fee, and the Chair of the Board’s fee that took effect from 1 January 2024. Further information can be found on page 158 of the 2023 Annual Report and Accounts. • The change in the Non-executive Directors’ fees for 2024/2025 is due to the increase in basic Non-executive Director fee, the Senior Independent Director additional fee, and the Chair of the Board’s fee that took effect from 1 January 2025, in addition to the Audit and Risk Committee membership fee, Remuneration Committee membership fee, and Nomination Committee membership fee, which also took effect from 1 January 2025. Further information can be found on page 151 of the 2024 Annual Report and Accounts. 1. Average colleague pay is based on the dataset used for the CEO pay ratio as set out on page 141 of this Report. It excludes colleagues that joined within the reporting period, as the dataset for the Company is so small that to leave them in provides a skewed result, making meaningful judgements difficult. The salary, taxable benefits, and annual incentive are the respective median values in the dataset and may relate to different incumbents. Salaries and fees for Directors for 2025 are as set out on page 132 of this Report. 2. Steve Hare’s and Jonathan Howell’s taxable benefits for 2025 are as set out on page 132 of this Report. Taxable benefits for colleagues employed by TheSage Group plc. are based on the dataset used for the CEO pay ratio, as set out immediately following this section. 3. The annual incentive values for Steve Hare and Jonathan Howell for 2025 are as set out on page 132 of this Report. Annual incentives for colleagues employed by The Sage Group plc. are inclusive of bonus and commission and are based on the dataset used for the CEO pay ratio as set out immediately following this section. Non-executive Directors are not eligible for annual incentives. 4. Andrew Duff was appointed as a Non-executive Director on 1 May 2021 and accordingly no comparison prior to 2021/2022 can be drawn. The significant change in his fee for 2021/2022 is due to his fee being pro-rated in 2021 to his start date of 1 May 2021 and his change in role from Non-executive Director toChair of the Sage Board with effect from 1 October 2021. 5. Sangeeta Anand stepped down from the Board on 6 February 2025. Her taxable benefits reflect the travel allowance she received for attending one Board meeting during FY25 and four Board meetings during FY24. 6. Maggie Chan Jones was appointed as a Non-executive Director on 1 December 2022 and accordingly no comparison to prior years can be drawn. Her taxable benefits reflect the travel allowance she received for attending four Board meetings during FY25 and FY24. 7. Annette Court was appointed Senior Independent Director on 1 January 2024 and stepped down as Chair of the Remuneration Committee on 30 April 2024, resulting in a change of fees for 2023/2024. 8. Roisin Donnelly was appointed as a Non-executive Director on 3 February 2023 and accordingly no comparison to prior years can be drawn. The change inher fee for 2023/2024 is due to her fee being pro-rated in 2023 to her start date of 3 February 2023 and her appointment as Chair of the Remuneration Committee on 1 May 2024. 9. Drummond Hall retired on 31 December 2023. 10. Derek Harding was appointed as a Non-executive Director on 2 March 2021 and accordingly no comparison prior to 2021/2022 can be drawn. The significant change in his fee for 2021/2022 is due to his fee being pro-rated in 2021 to his start date of 2 March 2021. 11. Lori Mitchell-Keller was appointed as a Non-executive Director on 7 February 2025. Her taxable benefits reflect the travel allowance she received for attending two Board meetings during FY25. Directors’ Remuneration Report continued 142 THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 Historical executive pay and Company performance The table below summarises the Chief Executive Officer’s single figure for total remuneration, annual bonus payout, and PSP vesting as a percentage of maximum opportunity for the current year and previous nine years. CEO 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 CEO single figure forremuneration (in£’000) Steve Hare 1 – – 98 2,495 1,557 2,507 2,524 4,358 5,316 4,562 Stephen Kelly 2 1,7233,5471,690–––––– Annual bonus payout (as % maximum opportunity) Steve Hare – – 0% 3 94% 18% 60% 88% 68% 56% 49% Stephen Kelly 69%19%0%––– PSP vesting (as % of maximum opportunity) Steve Hare – – 29% 15% 27% 34% 20% 73% 95% 79% Stephen Kelly –66%29%–––––– Notes: 1. Steve Hare was appointed Interim COO and CFO on 31 August 2018. Whilst Steve Hare’s job title at 30 September 2018 was Interim COO and CFO, not CEO, heis regarded as being the equivalent of CEO for the purposes of the disclosure. 2. Stephen Kelly stepped down from the position of CEO on 31 August 2018. 3. Steve Hare waived his entitlement to a bonus in respect of 2018. Historical Group performance against FTSE 100 The graph below shows the TSR of the Group and the FTSE 100 over the last 10 years. The FTSE 100 Index is the index against which the TSR of the Group should be measured because of the comparable size of the companies which comprise that index. Value (£) 30-Sep-15 Sage FTSE 100 Index 30-Sep-16 30-Sep-17 30-Sep-18 30-Sep-19 30-Sep-20 30-Sep-21 30-Sep-22 30-Sep-23 30-Sep-24 30-Sep-25 0 50 100 150 200 250 300 Note: • This graph shows the value, by 30 September 2025, of £100 invested in The Sage Group plc. on 30 September 2015 compared with the value of £100 invested in the FTSE 100 Index. The other points plotted are the values at intervening financial year ends. Payments to past Directors (audited information) No payments were made to past Directors during FY25. Payments for loss of office (audited information) No payments were made for loss of office during FY25. Strategic Report Governance Report Financial Statements Additional Information THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 143 Relative importance of spend on pay The charts below show the all-employee pay cost (as stated in the notes to the Group financial statements), profit before tax (PBT), and returns to shareholders by way of dividends and share buybacks for 2024 and 2025. The information shown in the charts is based on the following: • Underlying PBT (underlying as reported)—Underlying profit before income tax taken from note 3.6 on page 199. Underlying PBT has been chosen as a measure of our operational profitability. • Returns to shareholders—Total dividends taken from note 13.4 on page 241; value of shares purchased during the year taken from consolidated statement of changes in equity on pages 177 and 178. • Total colleague pay—Total staff costs from note 3.3 on page 195, including wages and salaries, social security costs, pension, and share-based payments. Underlying PBT (Underlying as reportedin £m) +£53m FY25: 555 FY24: 502 Dividends paid to shareholders (£m) Total dividends +£8m FY25: 207 FY24: 199 Value of shares purchased during theyear +£203m FY25: 609 FY24: 406 Total colleague pay (£m) -£15m FY25: 1,097 FY24: 1,112 Statement of implementation of Remuneration Policy in the following financial year This section provides an overview of how the Committee is proposing to implement the Policy in FY26. Base salary Executive Director salaries effective 1 January 2026 have been set by the Remuneration Committee as outlined on pages 118 to 120 of this Report. The CEO’s salary is as disclosed on page 121 of the 2024 Annual Report and Accounts: Salary 1 January 2026 Salary 1 January 2025 Salary 1 January 2024 Salary 1 January 2023 Salary 1 January 2022 Steve Hare £1,223,313 (15.0% increase) £1,063,750 (15.0% increase) £925,000 (9.9% increase) £841,500 (4% increase) £809,000 (3% increase) Jacqui Cartin 1 £650,000–––– Jonathan Howell 2 – £684,780 (13.0% increase) £606,000 (5% increase) £577,000 (4% increase) £555,000 (1.8% increase) 1. Jacqui Cartin appointed as CFO from 1 January 2026. 2. Jonathan Howell steps down from the Board and his role as CFO on 31 December 2025. Directors’ Remuneration Report continued 144 THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 Pension and benefits The CEO and the CFO will continue to receive a pension provision worth 10% of salary, as a contribution to a defined contribution plan and/or as a cash allowance. The pension for the wider workforce is 10% of salary. Executive Directors will also receive a standard package of other benefits and, where deemed necessary, the costs of travel, accommodation, and subsistence for the Directors and their partners on Sage-related business, consistent with that in FY25. Annual bonus Key features of the Executive Directors’ annual bonus plan for FY26 are as follows: • The maximum annual bonus potential is 175% of salary (pro-rated where relevant). • One third of any bonus earned will be deferred into shares for three years under the Deferred Bonus Plan, unless a Director is compliant with their enhanced shareholding guideline or in other circumstances set out in the Policy. Ifalready compliant with their shareholding guideline, the deferral requirement will be reduced to 15% of the bonus earned. • Annual bonuses awarded in respect of performance in FY26 will be subject to potential withholding (malus) or recovery (clawback) if specified trigger events occur within three years of the payment/award of the annual bonus. Trigger events will include a material misstatement of the audited results, error in calculation of the bonus payout, serious reputational damage, or significant financial loss as a result of an individual’s conduct or gross misconduct which could have warranted an individual’s summary dismissal. The annual bonus for FY26 for Executive Directors will be determined as detailed below: As a percentage of maximum bonus opportunity: Measure 1 Total revenue growth 40% Rule of 40 (underlying ARR growth plus underlying EBITDA margin) 40% Strategic goals 20% Notes: 1. Executives’ incentives for FY26 will be measured on an underlying basis. This will apply to the total revenue growth and the Rule of 40 in the annual bonus. The Remuneration Committee will review on a case-by-case basis the impact on underlying measures of significant acquisitions and disposals and judge whether to adjust incentive targets or outcomes. The selection of measures reflects the Company’s strategic priorities as outlined on the Remuneration Committee Chair’s letter on pages 118 to 120. Targets take into account the Company’s internal budgeting, and, where relevant, analyst forecasts. Therevenue growth measure is based on the definition of underlying measures set out on page 261. Strategic goals will include diversity, equity, and inclusion metrics, and customer metrics, where relevant. Targets are not disclosed because they are considered by the Board to be commercially sensitive. Many of the Company’s competitors are unlisted companies and not required to disclose their targets; the Company’s disclosure could provide its competitors with a considerable advantage. It is intended for retrospective disclosure to be made in next year’s Report. When determining incentive outcomes, the Remuneration Committee will examine factors including the broader context in which performance was delivered. This includes: balanced growth, a high-quality revenue mix, and strategically- aligned M&A, as components of the shareholder experience. The Remuneration Committee has discretion to decide whether and to what extent the performance conditions have been met, and in appropriate circumstances to override the formulaic outcome. Performance share awards The Remuneration Committee reviews award sizes annually, taking into account factors such as underlying business performance, individual performance, and share price movement. FY26 performance share awards will be granted over shares worth 400% of salary for the CEO and 300% of salary for Jacqui Cartin (based on salaries effective 1 January 2026 as set out on page 144). Jonathan Howell is not eligible for aFY26 performance share award. Vesting of these awards will be subject to satisfaction of the performance conditions detailed on page 146, measured over the three financial years to 30 September 2028. Measures and weightings are unchanged from FY25. The Remuneration Committee is satisfied that all the targets represent a degree of challenge proportionate to the potential rewards that may be realised for their achievement in light of all relevant factors, including the current business plan, historical performance, and analysts’ forecasts. Strategic Report Governance Report Financial Statements Additional Information THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 145 Underlying EPS (60% of award) 1 EPS 1 in FY28 % of award vesting 2 Below threshold Below 53.3p 0% Threshold 53.3p 12% Exceptional 65.3p 60% Notes: 1. EPS is measured as the amount of post-tax profit attributable to each ordinary share on an underlying basis. 2. Vesting of this portion of the performance share award is subject to the achievement of 12% p.a. ROCE underpin. ROCE is defined on page 262. ROCE willbe measured on an underlying basis. The Remuneration Committee will review on a case-by-case basis the impact on underlying measures of significant acquisitions and disposals, and judge whether to adjust incentive targets or outcomes. The impact of share buybacks will be included. Relative TSR performance condition (30% of award) TSR ranking % of award vesting Below threshold Below median 0% Threshold Median 6% Stretch Upper quartile 24% Exceptional Upper decile 30% Notes: • TSR performance comprises share price growth and dividends paid. Vesting is on a straight-line basis between the points. • Sage’s TSR performance will be measured relative to the TSR of the constituents of the FTSE 100, excluding financial services and extracting companies. ESG—Protect the Planet (5% of award) Delivering on our climate change commitment, this metric addresses reduction in Scope 1, 2, and 3 carbon emissions: % reduction in carbonemissions¹ % of award vesting Below threshold Below 10.1% 0% Threshold 10.1% 1% Stretch 16.5% 4% Exceptional 18.8% 5% Notes: 1. Targets are for emissions reduction between FY25 and FY28, aligning to our Net Zero goal by 2040. Outturns will be independently verified. Vesting is on a straight-line basis between the points. ESG—Tech for Good (5% of award) Supporting customers on their sustainability journey through enabling access to carbon accounting functionality for Sage Medium customers and through Sage Copilot automations. Supporting customers on their sustainability journey through enabling access to carbon accounting functionality for Sage Medium customers and through Sage Copilot automations 1 % of award vesting Below threshold Sage Earth available for 50% or less of Medium financial accounting customers in the UK 0% Threshold Sage Earth available for more than 50% of Medium financial accounting customers in the UK 1% Stretch Sage Earth available for more than 50% of Medium customers in the UK and France; and Sage Earth via Copilot skill(s) enabled in at least one Sage suite 4% Exceptional Sage Earth available for more than 50% of Medium customers in the UK, France and an additional EU country; and Sage Earth via Copilot skill(s) enabled in multiple Sage suites 5% Note: 1. At the end of FY25, the industry average benchmarking solution was added to Sage Intacct UK, available to all customers of this product. Performance will be assessed at the end of FY28, when the Remuneration Committee will determine the availability of Sage Earth to Sage Medium customers and Sage Earth via Copilot skill(s) enabled in Sage suites. Performance share awards granted in FY26 will be subject to potential withholding (malus) or recovery (clawback) if specified trigger events occur prior to the third anniversary of the release date of an award. Trigger events in respect of PSAs will comprise a material misstatement of the audited results, an error in calculation of the extent of the PSA vesting, serious reputational damage, or significant financial loss as a result of an individual’s conduct or gross misconduct which could have warranted an individual’s summary dismissal, or a material failure of risk management. Directors’ Remuneration Report continued 146 THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 Non-executive Director remuneration Non-executive fees, except for the fee for the Chair, are determined by the executive members of the Board plus the Chair. Thefee for the Chair of the Board is determined by the Remuneration Committee. Consistent with the Investment Association’s Principles of Remuneration, fees are regularly reviewed to ensure they fairly reflect the time commitment and complexity of different roles. In consideration of these factors and relevant market data, several adjustments have been made to FY26 fees, as set out in the table below. Fees effective from 1 January 2026 Fees effective prior to 1 January 2026 Chair of the Board all-inclusive fee £487,000 £465,000 Basic Non-executive Director fee £85,000 £80,000 Senior Independent Director additional fee £27,500 £25,000 Audit and Risk Committee Chair additional fee £27,500 £25,000 Remuneration Committee Chair additional fee £27,500 £25,000 Audit and Risk Committee membership fee £10,000 £10,000 Remuneration Committee membership fee £10,000 £10,000 Nomination Committee membership fee £5,000 £5,000 Directors’ shareholdings and share interests (audited information) The shareholding guideline for the CEO is 500% of salary and for the CFO is 350% of salary. Executive Directors are expected to build up the required shareholding within a five-year period of the Executive Director becoming subject to the guideline. As at 30 September 2025, Steve Hare held shares worth 922% of salary and Jonathan Howell held shares worth 654% of salary. Values include unvested deferred shares net of tax at the estimated marginal withholding rates and any shares held bythe Executive Directors’ connected persons. The values for an Executive Director are derived from interests in shares valued using the average market price of a share in the three months to 30 September 2025 (the last trading day of the financial year),which was £11.512, and the Executive Director’s basic salary over the same period. Executive Directors are required to hold Sage shares for a two-year period after stepping down from that position. This post-employment shareholding guideline is aligned to the Investment Association guidance, such that Executive Directors are required to remain compliant with 100% of their “in-employment” shareholding guideline for two years after stepping down as a Director. The Executive Director’s actual shareholding will include any shares acquired through the vesting or release of shares from share incentive plans (net of tax, where applicable) after the date the Policy was adopted and unvested shares granted under the Deferred Bonus Plan (net of tax), but excludes shares acquired through purchase and the release of shares under share incentive plans where the release occurred prior to the Committee’s adoption of the Policy. Additionally, performance share awards vesting after cessation are subject to a two-year holding period at vesting. On cessation as an Executive Director, the Committee may subject any relevant portion of an unvested share award preserved for “good leaver” reasons to the fulfilment of the post-cessation shareholding requirement as a condition of vesting. Furthermore, for awards granted to an Executive Director on or after 1 October 2019, the Committee may as a condition of grant require an Executive Director to have a relevant portion of a released share award be released into a nominee account tobe held on their behalf until such time as the post-cessation shareholding requirement expires. Strategic Report Governance Report Financial Statements Additional Information THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 147 Interests in shares The interests as at 30 September 2025 of each person who was a Director of the Company during the year (together with interests held by his or her connected persons) were: Director Ordinary shares at 30 September 2025 Ordinary shares at 30 September 2024 S Anand 1 1,000 1,000 J Bates 2 16,735 16,735 J Bewes 10,000 10,000 M Chan Jones 10,000 10,000 A Court 7,300 7,300 R Donnelly 10,000 10,000 D Hall 3 – 10,000 S Hare 4 540,887 558,291 J Howell 192,946 231,885 D Harding 5 10,000 10,000 A Duff 13,150 13,150 L Mitchell-Keller 6 0– Total 812,018 878,361 Notes: 1. Sangeeta Anand stepped down from the Board on 6 February 2025. This is the balance on that date. 2. Jillian Marie Bates is a person closely associated with Dr Bates. The total for 30 September 2025 includes 16,735 shares held by Jillian Marie Bates. 3. This is the balance at 31 December 2023 on the date Drummond Hall retired. 4. Lucinda Cowley is a person closely associated with Mr Hare. The total for 30 September 2025 includes 30,000 shares held by Lucinda Cowley. 5. Fiona Harding is a person closely associated with Mr Harding. The total for 30 September 2025 includes 10,000 shares held by Fiona Harding. 6. Lori Mitchell-Keller was appointed a Non-executive Director on 7 February 2025. There have been no changes in the interests of each Director between 30 September 2025 and 18 November 2025, being adate not more than one month prior to the publication of the notice of the 2026 AGM. Details of the Executive Directors’ interests in outstanding share awards under the PSP, LTIP, Deferred Bonus Plan, and all-employee share option plans are set out below. All-employee share options (audited information) All Executive Directors are eligible to join the all-employee share plan, the Sage Save and Share Plan, on the same terms asalleligible colleagues based in their respective local jurisdiction. See note 13.2 of the Group financial statements onpages 234 to 239 for more detail of this plan. In the year under review, Steve Hare participated in this scheme. The outstanding all-employee share options granted to each Director of the Company are as follows: Director Exercise price per share Shares under option at 1 October 2024 number Granted during the year number Exercised during the year number Lapsed during the year number Shares under option at 30 September 2025 number Date exercisable S Hare 690p2,608–––2,608 1 August 2026-31 January 2027 Total 2,608–––2,608 Notes: • Steve Hare participated in the 2023 Save and Share Plan. Under the UK Save and Share Plan rules, the scheme has a three-year saving period. No performance conditions apply to options granted under this plan. For the 2023 UK Save and Share grant, the exercise price was set at £6.90, a 20% discount on the average share price on 18 May 2023, 19 May 2023, and 22 May 2023 of £8.614. • Jonathan Howell did not participate in the 2023 Save and Share Plan. Neither Steve Hare or Jonathan Howell participated in the 2025 Save and Share Plan. • The market price of a share of the Company at 30 September 2025 (the last trading day of the financial year) was £11.00 (mid-market average) and the lowest and highest market prices during the year were £9.536 and £13.398, respectively. Directors’ Remuneration Report continued 148 THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 Performance Share Plan and Long Term Incentive Plan (audited information) The outstanding performance awards granted to each Executive Director of the Company under the PSP and for 7 February 2025 under the LTIP are as follows: Director Grant date Under award 1October 2024 number Awarded during the year number Vested during the year number Lapsed during the year number Under award 30September 2025 number Vesting date S Hare 7 February 2025 – 324,314 – – 324,314 2 December 2027 1 February 2024 241,514–––241,5144 December 2026 2 December 2022 259,210–––259,2102 December 2025 4 February 2022 258,169 – (245,518) (12,651) – 2 December 2024 758,893 324,314 (245,518) (12,651) 825,038 J Howell 7 February 2025 – 156,580 – – 156,580 2 December 2027 1 February 2024 118,668–––118,6684 December 2026 2 December 2022 159,961–––159,9612 December 2025 4 February 2022 141,690 – (134,747) (6,943) – 2 December 2024 420,319 156,580 (134,747) (6,943) 435,209 Total 1,179,212 480,894 (380,265) (19,594) 1,260,247 Notes: • The PSP rules expired in 2025. Shareholders approved the LTIP rules at the 2025 AGM. Performance share awards were granted under the LTIP to the Executive Directors on 7 February 2025, as detailed on page 137. • No variations were made in the terms of the awards in the year. • Performance share awards for 2025 were granted to Executive Directors on 7 February 2025. The market price of the awards was £13.120. • The performance conditions for awards granted in February 2022, December 2022, December 2023, and February 2024 are set out in the respective Reports forthe year of grant. The performance conditions for awards granted in February 2025 are outlined on page 137. • The performance conditions for Steve Hare’s and Jonathan Howell’s awards that vested during 2025 are set out on page 143 of the 2024 Report. • Awards for Steve Hare granted in December 2017 and after are subject to a holding period of two years on vesting. Awards for Jonathan Howell vesting in 2020 and after are subject to a holding period of two years on vesting. • All PSP and LTIP awards were granted as conditional awards. Deferred shares (audited information) The outstanding awards granted to each Executive Director of the Company under The Sage Group Deferred Bonus Plan are as follows: Director Grant date Under award 1October 2024 number Awarded during the year number Vested during the year number Lapsed during the year number Under award 30September 2025 number Vesting date S Hare 2 December 2024 – 22,481 – – 22,481 2 December 2027 4 December 2023 28,815 – – – 28,815 4 December 2026 2 December 2022 50,785–––50,7852 December 2025 2 December 2021 35,188 – (35,188) – – 2 December 2024 114,788 22,481 (35,188) – 102,081 J Howell 2 December 2024 – 15,899 – – 15,899 2 December 2027 4 December 2023 20,050–––20,0504 December 2026 2 December 2022 35,221–––35,2212 December 2025 2 December 2021 24,754 – (24,754) – – 2 December 2024 80,025 15,899 (24,754) – 71,170 Total 194,813 38,380 (59,942) – 173,251 Notes: • Awards are not subject to further performance conditions once granted. The market price of a share on 29 November 2024, the last trading day prior to the date of the awards made in the year ended 30 September 2025, was £13.120. • No variations were made in the terms of the awards in the year. Strategic Report Governance Report Financial Statements Additional Information THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 149 There is a limit on the number of newly issued and treasury shares that can be used to satisfy awards under the Group’s share schemes in any 10-year period. The limit and the Group’s current position against that limit as at 30 September 2025 (thelast practicable date prior to publication of this Report) are set out below: Limit Current position 10% of Group’s share capital can be used for all share schemes 5.6% Notes: • The 5% dilution limit for discretionary share plans is no longer applicable, following shareholder approval of the removal of this limit at the 2025 AGM. The current position consists of shares released during the period plus committed shares inclusive of dividend equivalents accrued, with the total adjusted for forfeitures and, where applicable, performance for awards which have vested. The Company has previously satisfied all awards through the market purchase of shares or transfer of treasury shares and will continue to consider the most appropriate approach, based on the relevant factors at the time. External appointments Executive Directors are permitted, where appropriate and with Board approval, to take non-executive directorships with other organisations in order to broaden their knowledge and experience in other markets and countries. Fees received by the Directors in their capacity as directors of these companies are retained, reflecting the personal responsibility they undertake in these roles. The Board recognises the significant demands that are made on Executive and Non-executive Directors and has therefore adopted a policy that no Executive Director should hold more than one directorship of other listed companies. Except in exceptional circumstances, where approved in advance by the Chair of the Committee, if an Executive Director holds non- executive positions at more than one listed company then only the fees from one such company will be retained by the Director. Steve Hare was appointed as independent non-executive director to the board of J Sainsbury plc with effect from 3 July 2025 and assuch receives an annual fee of £78,697. Jonathan Howell was appointed as independent non-executive director to the board of Experian plc with effect from 1 May2021 and as such receives an annual fee of €179,250. He was subsequently appointed as audit committee chair with effectfrom 1 July 2022 and receives an annual fee of €54,250 accordingly. Additionally, non-executive directors required to undertake intercontinental travel to attend Board meetings receive a supplementary payment of €10,000 per trip, in addition to any travel expenses. For the year ended 31 March 2025, he received €251,000, as reported on page 143 of the Experian Annual Report 2025. This is theonly appointment of this nature he holds. No formal limit on other board appointments applies to Non-executive Directors under the Policy, but prior approval (nottobeunreasonably withheld) from the Board is required in the case of any new appointment. Unexpired term of contract table Director Date of contract Unexpired term ofcontract on 30September 2025, oron date of contractif later Notice period under contract Executive Directors S Hare 3 January 2014 12 months 12 months from the Company and/or individual J Howell 10 December 2018 12 months 12 months from the Company and/or individual Non-executive Directors J Bates 31 May 2025 2 years 8 months 1 month from the Company and/or individual J Bewes 1 April 2025 2 years 6 months 1 month from the Company and/or individual M Chan Jones 1 December 2022 2 months 1 month from the Company and/or individual A Court 1 April 2025 2 years 6 months 1 month from the Company and/or individual R Donnelly 3 February 2023 4 months 1 month from the Company and/or individual A Duff 1 May 2024 1 year 7 months 6 months from the Company and/or individual D Harding 2 March 2024 1 year 5 months 1 month from the Company and/or individual L Mitchell-Keller 7 February 2025 2 years 4 months 1 month from the Company and/or individual Directors’ Remuneration Report continued 150 THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 Consideration by the Directors of matters relating to Directors’ remuneration The following Directors were members of the Committee when matters relating to the Directors’ remuneration for the year were being considered: • Annette Court • Dr John Bates • Maggie Chan Jones (from 1 August 2025) • Roisin Donnelly (Chair) The Committee received assistance from Amanda Cusdin (Chief People Officer), Tara Gonzalez (Executive Vice President, Reward and Recognition), Vicki Bradin (General Counsel and Company Secretary), and other members of management (including the CEO and CFO), who may attend meetings by invitation, except when matters relating to their own remunerationare being discussed. External advisors The Committee continues to receive advice from Deloitte LLP, an independent firm of remuneration consultants appointed bythe Committee after consultation with the Board. During the year, Deloitte’s executive compensation advisory practice advised the Committee on developments in market practice, corporate governance, institutional investor views, the development of the Company’s incentive arrangements, and the review of the Policy. Total fees for advice provided to theCommittee during the year were £139,370 (charged on a time spent basis). The Committee is satisfied that the advice it has received has been objective and independent. Deloitte is a founding member of the Remuneration Consultants Group and adheres to its code in relation to executive remuneration consulting in the UK. Other parts of Deloitte have provided tax advice, specific corporate finance support inthe context of merger and acquisition activity, and unrelated corporate advisory services. Stitch, a Deloitte business, provided the Sage Reward team with communication support on colleague share plan communications during 2025. Statement of shareholding voting The table below sets out the results of the vote on the 2025 Policy and on the Directors’ Remuneration Report atthe 2025 AGM: Votes for number % Votes against number % Votes cast Votes withheld Remuneration Policy 655,779,523 80.72 156,636,696 19.28 812,416,219 2,511,025 Remuneration Report 789,980,030 97.00 24,471,358 3.00 814,451,388 475,856 Roisin Donnelly Chair of the Remuneration Committee 18 November 2025 Strategic Report Governance Report Financial Statements Additional Information THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 151 The Directors present their report together with the audited consolidated financial statements for the financial year ended 30 September 2025 (the ‘Annual Report and Accounts’). The Annual Report and Accounts contain statements that are not based on current or historical fact and are forward-looking innature. Please refer to the Disclaimer on pages 157 and 158. Information included in the Strategic Report The Directors’ Report, together with the Strategic Report on pages 1 to 68, represents the management report for the purpose of compliance with the Disclosure Guidance and Transparency Rules (‘DTRs’) 4.1.R. As permitted under section 414C(11) of the Companies Act 2006 (the ‘Act’), some of the matters required to be included in the Directors’ Report have instead been included in the Strategic Report, as the Board considers them to be of strategic importance. Specifically, these are: Subject matter Page reference Future business developments 12 to 14—Chief Executive’s Review Relevant information is also in the Strategic Report on pages 15 to 18 Greenhouse gas emissions, energyconsumption and energy-efficiency action 30 to 32—Sustainability and Society 35 to 44—TCFD Relevant information is also available in our Impact Book on our website www.sage.com Employment of disabled persons 24 to 29—Our people and culture Engagement with colleagues 46 and 47—Section 172(1) statement 91, 94 and 95—Colleague engagement Relevant information is also in the Corporate Governance Report on pages 98 and 99 Engagement with customers, suppliersand others 88 to 97—Stakeholder engagement Relevant information is also in this Directors’ Report on page 153 Important events affecting theGroupafter the year end 9 and 11 of the Strategic Report 155 of the Directors’ Report Note 16 of the financial statements on page 247 Corporate governance statement The DTRs require certain information to be included in a corporate governance statement in the Directors’ Report. This information can be found in the Corporate Governance report on pages 70 to 151, which is incorporated into this Directors’ Report by reference, and in the case of the information referred to in DTR 7.2.6, in this Directors’ Report. Disclosure of information under UK Listing Rule 6.6.1R Sub-section of Listing Rule 6.6.1.R Detail Page Reference 6 Allotments of shares for cash pursuant to the Group employee share schemes 234 to 239 11,12 Shareholder waiver of dividend 156 Results and dividends The results for the financial year are set out on pages 159 to 259. Full details of the proposed final dividend payment for the year ended 30 September 2025 are set out on page 242. The Board is proposing a final dividend of 14.40p per share, following the payment of an interim dividend of 7.45p per share on 27 June 2025 . The proposed total dividend for the year is therefore 21.85p per share. Directors’ Report Directors’ Report 152 THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 Going concern After making enquiries, the Directors have a reasonable expectation that Sage has adequate resources to continue in operational existence over the 18 months to 31 March 2027 (the going concern assessment period). Accordingly, they continue to adopt the going concern basis in preparing the financial statements. In reaching this conclusion, the Directors have had due regard to the following: • The Group has a robust balance sheet with £1.0bn of cash and available liquidity as at 30 September 2025 and strong underlying cash conversion of 110%, reflecting the strength of the subscription business model. Further information on the available cash resources, including the undrawn revolving credit facility and committed bank facilities, is provided in note 11 of thefinancial statements on pages 219 to 222. • The financial position of Sage, its cash flows, financial risk management policies and available debt facilities, which are described in the financial statements, and Sage’s business activities, together with the factors likely to impact its future growth and operating performance, which are set out in the Strategic Report on pages 48 to 55. • The Directors have reviewed liquidity forecasts for the Group for the period to 31 March 2027 (the going concern assessment period), which reflect the expected impact of economic conditions on trading. In doing so, the Directors have also reviewed the extent to which the macro-economic environment has been considered in building assumptions to support the forecasts. Stress testing has been performed with the impact of severe increases in churn and significantly reduced levels of new customer acquisition and sales to existing customers being considered. Viability Statement The full Viability Statement and the associated explanations made in accordance with Provision 31 of the 2018 UK Corporate Governance Code can be found on pages 67 and 68. Research and development During the year, the Group incurred a cost of £379m (2024: £344m) in respect of research and development. Please see note 3.2 of the financial statements on page 194 for further details. Political donations No political donations were made in the year. Relating to the Company’s stakeholders Employment policy The Group remains dedicated to fostering a diverse, equitable and inclusive workplace, valuing the unique culture, identity and experience that each colleague brings. This applies across all the Group’s employment activities ranging from recruitment to retirement, with candidates and colleagues treated with dignity, care and respect, regardless of their characteristics, identities, backgrounds, opportunity or lived experiences. In fostering an inclusive culture, the Group ensures that there is no bias or discrimination in the treatment of persons with disabilities. Applications for employment are welcomed from persons with disabilities and adjustments are made in consultation with the applicant to ensure that fair opportunity is given so that they can demonstrate their suitability for the role. Wherever possible, Sagewill undertake any adjustments or retraining required for any colleague who becomes disabled during theiremployment within the Group. Further details of the Board’s DEI Policy can be found on page 107, and informationregarding workforce diversity is provided on pages 27, 28, and 108. Engagement with colleagues The Group remains strongly committed to engaging with colleagues by ensuring availability of information and consulting with them on matters of concern to them. Colleagues regularly receive updates on the financial and economic factors affecting the Group, and the Group regularly seeks direct feedback from colleagues. Many colleagues choose to participate in the Company’s voluntary all-employee share plans (in eligible countries) and/or may be awarded free shares under the Company’s discretionary share plans, including a long-term performance share plan. Further details regarding colleague engagement, our Board Associate and how the Directors have had regard to colleague interests during the year are provided on pages 91, 94 and 95, and 98 and 99 respectively. Engagement with other stakeholders Details of engagement with Sage’s other key stakeholders, information on how the Directors have considered their interests and the effect of that consideration on principal decisions taken by the Board during the year are provided in the Governance report on pages 88 to 97. Strategic Report Governance Report Financial Statements Additional Information THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 153 Relating to the Company’s shares Major shareholdings As at 30 September 2025, Sage had been notified by the following investors of their interest in its ordinary share capital, inaccordance with the DTRs: Name Ordinary shares Percentage of capital 1 Nature of holding Aviva Plc 30,110,692 2.99 Direct BlackRock, Inc. 64,021,267 5.90 Indirect The Capital Group Companies, Inc. 51,198,348 5.10 Indirect Lindsell Train Limited 50,214,000 4.97 Indirect FIL Limited 2 50,373,561 4.92 Direct and Indirect FMR LLC 42,556,657 4.22 Indirect Notes: 1. Percentage as at date of notification. Notification is required when the percentage of voting rights (through shares and financial instruments) held by a person reaches, exceeds or falls below an applicable threshold specified in the DTRs. 2. In the period from 30 September 2025 to the date of this report, notification was received from FIL Limited regarding an increase in their interest to above the five per cent threshold, as duly announced on 3 October 2025. Information provided to Sage under the DTRs is publicly available via the regulatory information service and on Sage’s website at sage.com. Share capital Sage’s share capital is set out on page 233. Sage has a single class of share capital, which is divided into ordinary shares of1 4 / 77 pence each. Rights and obligations attaching to shares Voting In a general meeting of Sage, the provisions of the Companies Act 2006 apply in relation to voting rights, subject to the provisions of the articles of association and to any special rights or restrictions as to voting attached to any class of sharesin Sage (of which there are none). In summary: • On a show of hands, each qualifying person (being an individual who is a member of Sage, a person authorised to act as therepresentative of a corporation or a person appointed as a proxy of a member) shall have one vote, except that a proxy has one vote for and one vote against a resolution if the proxy has been appointed by more than one member and has been given conflicting voting instructions by those members or has been given discretion as to how to vote; and • On a poll, every qualifying person shall have one vote for every share which they hold or represent. No member shall be entitled to vote at any general meeting or class meeting in respect of any shares held by them if any callor other sum then payable by them in respect of that share remains unpaid. Currently, all issued shares are fully paid. Deadlines for voting rights Full details of the deadlines for exercising voting rights in respect of the resolutions to be considered at the Annual General Meeting to be held on 5 February 2026 will be set out in the Notice of Annual General Meeting. Dividends and distributions Subject to the provisions of the Companies Act 2006, Sage may, by ordinary resolution, declare a dividend to be paid to the members and may fix the time for payment of such dividend, but no dividend shall exceed the amount recommended by the Board. The Board may pay interim dividends, and also any fixed rate dividend, whenever the financial position of Sage justifies its payment, in the opinion of the Board. All dividends shall be apportioned and paid pro-rata according to the amounts paid up on the shares. Liquidation If Sage is in liquidation, the liquidator may, with the authority of a special resolution of Sage and any other authority required by the statutes (as defined in the articles of association): • Divide among the members in specie the whole or any part of the assets of Sage; or • Vest the whole or any part of the assets in trustees upon such trusts for the benefit of members as the liquidator shall think fit but no member shall be compelled to accept any assets upon which there is any liability. Transfer of shares Subject to the articles of association, any member may transfer all or any of their certificated shares by an instrument oftransfer in any usual form or in any other form which the Board may approve. The Board may, in its absolute discretion, decline to register any instrument of transfer of a certificated share which is not a fully paid share (although not so as to prevent dealings in shares taking place on an open and proper basis) or on which Sage has a lien. Directors’ Report continued 154 THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 The Board may also decline to register a transfer of a certificated share unless the instrument of transfer is: (i) left at Sage’s Registered Office, or at such other place as the Board may decide, for registration; and (ii) accompanied by the certificate forthe shares to be transferred and such other evidence (if any) as the Board may reasonably require to prove the title of the intending transferor or his or her right to transfer the shares. The Board may permit any class of shares in Sage to be held in uncertificated form and, subject to the articles of association, title to uncertificated shares to be transferred by means of a relevant system and may revoke any such permission. Registration of a transfer of an uncertificated share may be refused where permitted by the statutes (as provided in the articles of association). Powers of the Company to buyback its own shares In line with common practice for listed companies, Sage requests shareholder authority at its Annual General Meeting (‘AGM’) each year to permit the Company to buy back its ordinary shares of 1⁴/₇₇ pence (‘ordinary shares’) in the market (the ‘Buyback Authorities’). Sage obtained shareholder authority at the AGM held on 6 February 2025 to buy back up to 100,394,226 ordinary shares in the market (the ‘2025 Buyback Authority’). The 2025 Buyback Authority replaced the shareholder authority obtained at the AGM held on 1 February 2024 to buy back up to 102,607,262 ordinary shares in the market, which expired at the 2025 AGM (the ‘2024 Buyback Authority’). Pursuant to a share buyback programme which started on 20 November 2024 and ended on 2 June 2025 (the ‘2024/2025 Share Buyback Programme’), a total number of 32,126,997 ordinary shares were purchased of which 12,529,716 ordinary shares were purchased using the 2024 Buyback Authority and 19,597,281 ordinary shares were purchased using the 2025 Buyback Authority. The aggregate amount of consideration paid by Sage for ordinary shares purchased under the 2024/2025 Share Buyback Programme was £399,999,988.45 andthe average price paid per ordinary share was £12.45. The 2024/2025 Share Buyback Programme was extended (the ‘Extended Programme’), as announced on 15 May 2025. The Extended Programme commenced on 3 June 2025 and ended on30 July 2025, with a total of 16,082,393 ordinary shares purchased using the 2025 Buyback Authority. The aggregate amount of consideration paid by Sage for ordinary shares purchased under the Extended Programme was £199,999,996.18 and the average price paid per ordinary share was £12.44. Therefore, the total number of ordinary shares purchased under the 2024/2025 Share Buyback Programme and the Extended Programme is 48,209,390 (of which 12,529,716 ordinary shares were purchased using the 2024 Buyback Authority and 35,679,674 ordinary shares were purchased using the 2025 Buyback Authority) for an aggregate amount of £599,999,984.63. All of the purchased ordinary shares were subsequently cancelled. The shares purchased during FY25 represent approximately 4.71% of the called-up share capital of the Company as at 30 September 2025. The 2024/2025 Buyback Programme and the Extended Programme were consistent with Sage’s disciplined capital allocation policy, andreflected the Board’s confidence in Sage’s future prospects, together with Sage’s strong cash generation and robust financial position. Please refer to pages 48 to 55 and note 13.4 on page 241 for further information. Alongside our FY25 results, we are announcing a share buyback programme of up to £300 million, running from 19 November 2025 andexpected to end no later than 19 March 2026 (the ‘2025/2026 Buyback Programme’). The 2025/2026 Buyback Programme ispermitted under the 2025 Buyback Authority, which will expire at the AGM to be held in February 2026. Shareholder approval will be sought for a similar authority at the 2026 AGM. Under the terms of the Buyback Authorities, the minimum price which must be paid for each ordinary share is its nominal value and the maximum price is the higher of an amount equal to 105% of the average of the middle market quotations for anordinary share as derived from the London Stock Exchange Daily Official List for the five business days immediately before the purchase is made and an amount equal to the higher of the price of the last independent trade of an ordinary shareand the highest current independent bid for ordinary shares on the trading venue where the purchase is carried out (ineach case exclusive of expenses). The 2025/2026 Buyback Programme is consistent with the Group’s disciplined capital allocation policy, and reflects the Board’s confidence in Sage’s future prospects, together with Sage’s strong cash generation and robust financial position. Sage continues to have considerable financial flexibility to drive the execution of its growth strategy. Shares repurchased under the 2025/2026 Buyback Programme will be cancelled. Information on transactions in own shares will be made publicly available via the regulatory information service and on Sage’s website at sage.com. Amendment of Sage’s articles of association Any amendments to Sage’ s articles of association may be made in accordance with the provisions of the Companies Act 2006by way of special resolution. Sage’s articles of association were last amended by special resolution at the AGM held on4 February 2021. Strategic Report Governance Report Financial Statements Additional Information THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 155 Relating to the Company’s Board The Board of Directors The names and full biography of the current Directors are provided onpages74 to 76. Changes to the Board during the year and up to the date of this report are set out below. Name Effective date of appointment/departure Departure Sangeeta Anand 6 February 2025 Appointment Lori Mitchell-Keller 7 February 2025 In addition, as announced in March 2025, Jonathan Howell will step down from the Board on 31 December 2025 and will be succeeded as Chief Financial Officer by Jacqui Cartin, who will join the Board on 1 January 2026. Appointment and replacement of Directors Directors shall be not less than two and no more than 15 in number. Directors may be appointed by Sage by ordinary resolution or by the Board. A Director appointed by the Board holds office until the next AGM and is then eligible for election by the shareholders, in accordance with Sage’s articles of association. The Board may from time to time appoint one or more Directors to hold employment or executive office for such period (subject to the provisions of the Companies Act 2006) and on such terms as they may determine and may revoke or terminate any such appointment. Under the articles of association, at every AGM of Sage, every Director who held office as at seven days before the date of the Notice of Annual General Meeting shall retire from office (but shall be eligible for election or re-election by the shareholders). Sage may by special resolution (or by ordinary resolution of which special notice has been given) remove, and the Board may by unanimous decision remove, any Director before the expiration of his or her term of office. The office of Director shall bevacated if: (i) he or she resigns; (ii) he or she has become physically or mentally incapable of acting as a director and may remain so for more than three months and the Board resolves that his or her office is vacated; (iii) he or she is absent without permission of the Board from meetings of the Board for six consecutive months and the Board resolves that his or her office is vacated; (iv) he or she becomes bankrupt or makes an arrangement or composition with his or her creditors generally; (v) he or she is prohibited by law from being a director; or (vi) he or she is removed from office pursuant to the articles of association. Directors’ Interests A list of Directors’ interests in the ordinary share capital of Sage, their interests in its long-term Performance Share Plan andDeferred Share Bonus Plan, and details of their options over the ordinary share capital of Sage are given in the Directors’ Remuneration Report on pages 117 to 151. No Director had a material interest in any significant contract, other than a service contract or contract for services, with Sage or any of its operating companies at any time during the year. Directors Indemnities and Insurance Sage maintains Directors’ and Officers’ liability insurance, which provides appropriate cover for legal action brought against its Directors. Sage has also granted indemnities (which are qualifying third-party indemnity provisions under the Companies Act 2006) to each member of the Board, under which it has agreed to indemnify the Directors to the extent permitted by law and by Sage’s articles of association, in respect of all liabilities incurred in connection with the performance of their duties as a Director of Sage or any of its subsidiaries. These indemnities were in force throughout the financial year and remain in force as at the date of this report. Neither these indemnities, nor the Directors’ and Officers’ insurance provide cover in the event that a Director is proven to have acted fraudulently or dishonestly. Powers of the Directors The business of Sage will be managed by the Board which may exercise all the powers of Sage, subject to the provisions of Sage’s articles of association, the Companies Act 2006 and any resolution of Sage. Authority is sought from shareholders at each AGM to grant the Directors powers, in line with institutional shareholder guidelines and relevant legislation, in relation to the issue and buyback by the Company of its shares. Shares held in the Employee Benefit Trust The trustee of The Sage Group plc. Employee Benefit Trust (‘EBT’) has agreed not to vote any shares held in the EBT at any general meeting. If any offer is made to shareholders to acquire their shares, the trustee will not be obliged to accept or rejectthe offer in respect of any shares which are subject to subsisting awards, but will have regard to the interests of the award holders and will have power to consult them to obtain their views on the offer. Subject to the above, the trustee may takeaction with respect to any offer it thinks fair. The trustee has waived its right to dividends on the shares held in the EBT. Directors’ Report continued 156 THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 Relating to other matters Significant agreements The following significant agreements contain provisions entitling the counterparties to exercise termination or other rights in the event of a change of control of Sage: • Under the terms of (i) the €500m 3.820 per cent guaranteed Notes due 15 February 2028 (issued under Sage’s EMTN Programme); (ii) the £350m 1.625 per cent guaranteed Notes due 25 February 2031; (iii) the £400m 2.875 per cent guaranteed Notes due 8 February 2034,and (iv) the £300m 5.625 per cent Notes due 5 March 2037 (issued under Sage’s EMTN Programme) , which are all issued by the Company and guaranteed by Sage Treasury Company Limited, a Noteholder has the right to require theCompany to redeem or repay its Notes on a change of control of the Company where at the time of the occurrence of thechange of control: i) the Notes then in issue carry, on a solicited basis, an investment-grade credit rating, which is either downgraded to non-investment grade or withdrawn (so long as the Notes are not upgraded or reinstated to an investment-grade rating bythe relevant rating agency, or a replacement investment-grade rating of another rating agency on a solicited basis is not obtained, in each case within a set period of time), and the relevant rating agency confirms that its rating decision resulted, in whole or in part, from the occurrence of the change of control; or ii) the Notes then in issue carry a non-investment grade credit rating from each rating agency then assigning a credit rating on a solicited basis or no credit rating from any rating agency on a solicited basis. • Under the terms of the Notes, ‘change of control’ is defined as: i) any person or any persons acting in concert (as defined in the City Code on Takeovers and Mergers), other than a holdingcompany (as defined in Section 1159 of the Companies Act 2006, as amended), whose shareholders are or aretobesubstantially similar to the pre-existing shareholders of the Company, shall become interested (within themeaning ofPart 22 of the Companies Act 2006, as amended) in (x) more than 50 per cent. of the issued or allotted ordinary share capital of the Company or (y) shares in the capital of the Company carrying more than 50 per cent. of thevoting rights normally exercisable at a general meeting of the Company; or ii) Sage Treasury Company Limited ceases to be a direct or indirect subsidiary of the Company. • Under a £630m five-year multi-currency revolving credit facility agreement, dated 13 December 2022, and made between, amongst others, Sage Treasury Company Limited and the facility agent, and guaranteed by the Company, on a change of control, if any individual lender so requires and after having consulted with Sage Treasury Company Limited in good faith for not less than 30 business days following the change of control, the facility agent shall, by not less than 10 business days’ notice to Sage Treasury Company Limited, cancel the commitment of that lender and declare the participation of that lender in all outstanding loans, together with accrued interest and all other amounts accrued under the finance documents, immediately due and payable, whereupon the commitment of that lender will be cancelled and all such outstanding amounts will become immediately due and payable. In respect of this revolving credit facility agreement, “control” isdefined as per Sections 450 and 451 of the Corporation Taxes Act 2010. • The platform reseller agreement, dated 31 January 2015, relating to the Company’s strategic arrangements with Salesforce.com EMEA Limited contains a change of control right enabling Salesforce to terminate the agreement in the event there is a change of control in favour of a direct competitor of Salesforce.com EMEA Limited. The agreement contains post-termination requirements upon Salesforce to support a transition for up to a specified period. In respect of the platform reseller agreement with Salesforce.com EMEA Limited, “change of control” occurs where a corporate transaction results in the owners of the subject entity owning less than 50% of the voting interests in that entity as a result of the corporate transaction. • All of Sage’s employee share plans contain provisions relating to a change of control of The Sage Group plc. Outstanding awards and options may vest/become exercisable on a change of control, subject to the satisfaction of any applicable performance conditions and time pro-rating. Branch The Group, through various subsidiaries, has a branch in France. Further details are included in note 17 on pages 248 to 251. Financial risk management The Group’s exposure to and management of capital, liquidity, credit, interest rate and foreign currency risk are shown in note12.6 of the financial statements on pages 231 and 232. Our approach to risk management and our Principal Risks can befound onpages 56 to 66. Disclaimer The purpose of this Annual Report and Accounts is to provide information to the members of Sage. The Annual Report and Accounts has been prepared for, and only for, the members of Sage, as a body, and no other persons. Sage, its Directors and employees, agents or advisors do not accept or assume responsibility to any other person to whom this document is shown orinto whose hands it may come and any such responsibility or liability is expressly disclaimed. The Annual Report and Accounts contains certain forward-looking statements with respect to the operations, performance and financial condition Strategic Report Governance Report Financial Statements Additional Information THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 157 of the Group. By their nature, these statements involve uncertainty, since future events and circumstances can cause results and developments to differ materially from those anticipated. The forward-looking statements reflect knowledge and information available at the date of preparation of this Annual Report and Accounts, and Sage undertakes no obligation to update these forward-looking statements. Nothing in this Annual Report and Accounts should be construed as a profit forecast. Statement of Directors’ responsibilities The Directors are responsible for preparing the Annual Report and Accounts, including the Directors’ Remuneration Report and the financial statements of the Group and the Company, in accordance with applicable laws and regulations. Company law requires the Directors to prepare financial statements for each financial year. Under that law, the Directors have prepared the Group financial statements in accordance with UK-adopted International Accounting Standards (UK-IFRS) and the Company financial statements in accordance with United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including FRS102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland”. Under company law, the Directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Group and the Company and of the profit or loss of the Group and the Company for that period. In preparing these financial statements, the Directors are required to: • Select suitable accounting policies and apply them consistently; • Make judgements and estimates that are reasonable and prudent; • State whether, for the Group, applicable UK-IFRS have been followed, subject to any material departures disclosed and explained in the financial statements; • State whether, for the Company, applicable United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including FRS 102 (The Financial Reporting Standard applicable in the UK and Republic of Ireland) have been followed, subject to any material departures disclosed and explained in the financial statements; and • Prepare the financial statements on the going concern basis, unless it is inappropriate to presume that the Group and theCompany will continue in business. The Directors are responsible for the maintenance and integrity of Sage’s website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions. The Directors as at the date of this report, whose names and functions are listed on pages 74 to 76, confirm that: • To the best of their knowledge, the Group’s financial statements, which have been prepared in accordance with UK-adopted International Accounting Standards (UK-IFRS), give a true and fair view of the assets, liabilities, financial position and profit or loss of the Group; • To the best of their knowledge, the Company’s financial statements, which have been prepared in accordance with United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including FRS 102 (The Financial Reporting Standard applicable in the UK and Republic of Ireland), give a true and fair view of the assets, liabilities, financial position and profit or loss of the Company; and • To the best of their knowledge, the Directors’ Report and the Strategic Report include a fair review of the development and performance of the business and the position of the Group and the Company, together with a description of the Principal Risks and uncertainties that it faces. Each Director as at the date of this report further confirms that: • So far as the Director is aware, there is no relevant audit information of which the Group’s and the Company’s auditor is unaware; and • The Director has taken all the steps that they ought to have taken as a Director to make himself/herself aware of any relevant audit information and to establish that the Group’s and the Company’s auditor is aware of that information. This confirmation is given and should be interpreted in accordance with the provisions of section 418 of the Companies Act 2006. In addition, the Directors as at the date of this report consider that the Annual Report and Accounts, taken as a whole, is fair, balanced and understandable and provides the information necessary for shareholders to assess the Company’s and the Group’s position, performance, business model and strategy. By Order of the Board Vicki Bradin Company Secretary 18 November 2025 The Sage Group plc. Company number 02231246 Directors’ Report continued 158 THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 FINANCIAL STATEMENTS Financial statements 160 Independent Auditor’s Report to the members of The Sage Group plc. Consolidated financial statements 174 Consolidated income statement 175 Consolidated statement of comprehensive income 176 Consolidated balance sheet 177 Consolidated statement of changes in equity 179 Consolidated statement of cash flows Notes to the consolidated financial statements 180 1. Basis of preparation and accounting estimates and judgements 185 2. Segment information 191 3. Profit before income tax 201 4. Income tax expense 203 5. Earnings per share 204 6. Intangible assets 210 7. Property, plant and equipment 212 8. Working capital 215 9. Prov isions 217 10. Deferred income tax 219 11. Cash flow and net debt 223 12. Financial instruments 233 13. Equity 243 14. Acquisitions and disposals 247 15. Related party transactions 247 16. Events after the balance sheet date 248 17. Group undertakings Strategic Report Governance Report Financial Statements Additional Information THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 159 KPMG LLP’s Independent Auditor’s Report To the members of The Sage Group plc 1. Our opinion is unmodified In our opinion: • the financial statements of The Sage Group plc give a true and fair view of the state of the Group’s and of the Parent Company’s affairs as at 30 September 2025, and of the Group’s profit for the year then ended; • the Group financial statements have been properly prepared in accordance with UK-adopted international accounting standards; • the Parent Company financial statements have been properly prepared in accordance with UK accounting standards, including FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland; and • the Group and Parent Company financial statements have been prepared in accordance with the requirements of the Companies Act 2006. ADDITIONAL OPINION IN RELATION TO IFRS AS ISSUED BY THE IASB As explained in note 1 to the Group financial statements, the Group, in addition to applying UK-adopted international accounting standards, has also applied IFRS Accounting Standards as issued by the International Accounting Standards Board (“IASB”). In our opinion, the Group financial statements have been properly prepared in accordance with IFRS Accounting Standards as issued by the IASB. What our opinion covers We have audited the Group and Parent Company financial statements of The Sage Group plc (“the Company”) for the year ended 30 September 2025 (FY25) included in the Annual Report and Accounts 2025, which comprise: Group (The Sage Group plc and its subsidiaries) Parent Company (The Sage Group plc) • Consolidated income statement; • Consolidated statement of comprehensive income; • Consolidated balance sheet; • Consolidated statement of changes in equity; • Consolidated statement of cash flows; and • Notes 1 to 17 to the Group financial statements, including the accounting policies in note 1. • Company balance sheet; • Company statement of changes in equity; and • Notes 1 to 7 to the Parent Company financial statements, including the accounting policies. Basis for opinion We conducted our audit in accordance with International Standards on Auditing (UK) (“ISAs (UK)”) and applicable law. Our responsibilities are described below. We believe that the audit evidence we have obtained is a sufficient and appropriate basis for our opinion. Our audit opinion and matters included in this report are consistent with those discussed and included in our reporting to the Audit and Risk Committee (“ARC”). We have fulfilled our ethical responsibilities under, and we remain independent of the Group in accordance with, UK ethical requirements including the FRC Ethical Standard as applied to listed public interest entities. 160 THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 2. Overview of our audit Factors driving our view of risks Our assessment of risks was shaped by a dynamic external environment, including geopolitical tensions, macroeconomic shifts, and evolving stakeholder and investor expectations. Internal factors such as performance pressures also contributed to potential financial reporting and operational risks. These elements collectively informed our audit focus and risk assessment approach. The Group uses multiple IT systems to process a high volume oftransactions in order to recognise revenue for the period, resulting in an area where significant audit effort was required and, consequently, was identified as a Key Audit Matter for theGroup. The carrying amount of investments in subsidiaries held at cost in The Sage Group plc’s accounts is a material proportion of its total company assets and, hence, is a Key Audit Matter for The Sage Group plc accounts only. Key Audit Matters Item Revenue recognition (Group) 4.1 Recoverability ofinvestments insubsidiaries (ParentCompany) 4.2 Audit and Risk Committee (‘ARC’) interaction During the year, the ARC met four times. KPMG attended all ARC meetings and are provided with anopportunity to meet with the ARC in private sessions without the Executive Directors being present. For each Key Audit Matter, we have set out communications with the ARC in item 4, including matters that required particular judgement for each. The matters included in the Report of the Audit and Risk Committee on page 109 to 111 are materially consistent with our observations of those meetings. Our independence We have fulfilled our ethical responsibilities under, and weremain independent of the Group in accordance with, UKethical requirements including the FRC Ethical Standard as applied to listed public interest entities. We have not performed any non-audit services during FY25orsubsequently which are prohibited by the FRC EthicalStandard. We were first appointed as auditor by the shareholders fortheyear ended 30 September 2025. The period of total uninterrupted engagement is for the one financial year ended30 September 2025. The Group engagement partner is required to rotate every fiveyears. As these are the first set of the Group’s financial statements signed by Simon Richardson, he will be required to rotate off after the FY29 audit. All component engagement partners have a tenure of one year. Total audit fee £5.3m Audit related fees(including interim review) £0.5m Other services £Nil Non-audit fee as a % of total audit and audit related fee % 9% Date first appointed 6 February 2025 Uninterrupted audittenure 1 year Next financial periodwhich requires a tender 2035 Tenure of Group engagement partner 1 year Tenure of component engagement partners 1 year Strategic Report Governance Report Financial Statements Additional Information THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 161 KPMG LLP’s Independent Auditor’s Report To the members of The Sage Group plc continued Materiality (item 6 below) The scope of our work is influenced by our view of materiality and our assessed risk of material misstatement. We have determined overall materiality for the Group financial statements as a whole at £22.0m and for the Parent Company financial statements as a whole at £20.0m. We have determined that the Group’s normalised profit before tax from continuing operations (‘PBTCO’) is the benchmark for the Group. This is appropriate given the sector in which the Group operates, its ownership, and the focus of users. As such, we based our Group materiality on the Group’s normalised PBTCO, of which it represents 4.6%. Materiality for the Parent Company financial statements was determined with reference to a benchmark of Parent Company’s total assets, of which it represents 0.4%. Materiality levels used in our audit Group GPM AMPT HCM LCM PLC 22.0 16.5 1.1 16.0 2.4 FY25 £m 20.0 Group Group Materiality GPM Group Performance Materiality AMPT Audit Misstatement Posting Threshold HCM Highest Component Materiality LCM Lowest Component Materiality PLC Parent Company Materiality Group scope (item 7 below) We performed risk assessment procedures to determine which of the Group’s components are likely to include risks of material misstatement to the Group financial statements, what audit procedures to perform at these components and the extent of involvement required from our component auditors around the world. We scoped in: • Four components (UK, France, North America and Sage Intacct North America) as quantitatively significant components; and • Five other components where we performed procedures to obtain further audit coverage. Certain Group transactions originate in various countries and are processed at the Group’s operating centres in the US, UK and South Africa. We established audit teams to perform centralised testing on behalf ofour component teams in these locations. In addition, for the remaining components for which weperformed no audit procedures, we carried out analysis at an aggregated Group level to reassess our assessment that there is not a reasonable possibility ofa material misstatement within these components. We performed audit procedures in relation to components that accounted for 83% of Group profit before tax, and the Parent Company which accounted for 4% of the Group profit before tax. These components accounted for 89% of Group total assets (excluding goodwill and intangibles). We consider the scope of our audit, as communicated tothe Audit and Risk Committee, to be an appropriate basis for our audit opinion. Coverage of Group financialstatements Our audit procedures covered 85%ofGroup revenue: Group Revenue 85% 162 THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 The impact of climate change on our audit In planning our audit, we considered the potential impacts of risks arising from climate change on the Group’s business and its financial statements. The Group has set out its targets under its Net Zero Transition Plan to achieve Net Zero by 2040 and reduce Scope 1, 2, and 3 GHG emissions by 50% by 2030, from a 2019 base year, aligned to SBTi as disclosed on page 41. In Note 1 to the consolidated financial statements, the Group has explained how they have reflected the impact of climate change in their financial statements including how this aligns with their commitment to achieve net zero emissions by 2040. As described in Note 1, there were no factors identified that would have a material impact on the Group’s accounting estimates andjudgements in the current year. The considerations in relation to goodwill impairment testing are set out in note 6.1. We have evaluated management’s assessment of the impact of climate-related risks, physical andtransition risks and their climate-related commitments and assessed whether the impact ofclimate change has been appropriately reflected by management in reaching their judgements in relation to modelling future cash flows used in the assessments of goodwill impairment, going concern and viability and associated disclosures. As part of this evaluation, we performed our risk assessment to determine if the potential impacts of climate change may materially affect the financial statements and our audit. We did this by making inquiries of management and inspecting internal and external reports in order to independently assess the climate-related risks and their potential impact. We also held discussions with our own climate change professionals to challenge our risk assessment. Based on our work, we determined that climate-related risks did not have a significant impact onour audit and there is no significant impact of these risks on our Key Audit Matters. We have also read the Group’s disclosures of climate related information in the Strategic Report and considered consistency with the financial statements and our audit knowledge. 3. Going concern, viability and principal risks and uncertainties The directors have prepared the financial statements on the going concern basis as they do not intend to liquidate the Group or the Parent Company or to cease their operations, and as they have concluded that the Group’s and the Parent Company’s financial position means that this is realistic. They have also concluded that there are no material uncertainties that could have cast significant doubt over their ability to continue as a going concern for at least a year from the date of approval of thefinancial statements (“the going concern period”). Going concern We used our knowledge of the Group, its industry, and the general economic environment to identify the inherent risks to its business model and analysed how those risks might affect the Group’s andParent Company’s financial resources or ability to continue operations over the going concern period. The risks that we considered most likely to adversely affect the Group’s and Parent Company’s available financial resources over this period were: • Non-renewal of subscriptions by existing customers (‘churn’) • Decrease in the acquisition of new customers due to competition We considered whether these risks could plausibly affect the liquidity in the going concern period, including by assessing the degree of downside assumptions that, individually and collectively, could result in a liquidity issue, taking into account the Group’s current and projected cash and facilities (a reverse stress test). We also considered whether the going concern disclosure in note 1 tothe financial statements gives a full and accurate description of the directors’ assessment of going concern, including the identified risks, dependencies, and related sensitivities. Accordingly, based on those procedures, we found the directors’ useof the going concern basis of accounting without any material uncertainty for the Group and Parent Company to be acceptable. However, as we cannot predict all future events or conditions and assubsequent events may result in outcomes that are inconsistent with judgements that were reasonable at the time they were made, the above conclusions are not a guarantee that the Group or the Parent Company will continue in operation. Our conclusions • We consider that the directors’ use of the going concern basis of accounting in the preparation ofthe financial statements is appropriate; • We have not identified, and concur with the directors’ assessment that there is not, a material uncertainty related to events or conditions that, individually or collectively, may cast significant doubt on the Group’s or Parent Company’s ability to continue as a going concern for the going concern period; • We have nothing material to add or draw attention to in relation to the directors’ statement in note 1 to the financial statements on the use of the going concern basis of accounting with no material uncertainties that may cast significant doubt over the Group and Parent Company’s use of that basis for the going concern period, and we found the going concern disclosure in note 1 to be acceptable; and • The related statement under the UK Listing Rules set out on page 153 is materially consistent with the financial statements and our audit knowledge. Strategic Report Governance Report Financial Statements Additional Information THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 163 KPMG LLP’s Independent Auditor’s Report To the members of The Sage Group plc continued Disclosures of emerging and principal risks and longer-term viability Our responsibility We are required to perform procedures to identify whether there isa material inconsistency between the directors’ disclosures inrespect of emerging and principal risks and the viability statement, and the financial statements and our audit knowledge. Based on those procedures, we have nothing material to add or draw attention to in relation to: • the directors’ confirmation within the Viability Statement on page 153 that they have carried out a robust assessment of the emerging and principal risks facing the Group, including those that would threaten its business model, future performance, solvency and liquidity; • the Principal Risks and Uncertainties disclosures describing these risks and how emerging risks are identified and explaining how they are being managed and mitigated; and • the directors’ explanation in the Viability Statement of how they have assessed the prospects of the Group, over what period they have done so and why they considered that period to be appropriate, and their statement as to whether they have a reasonable expectation that the Group will be able to continue in operation and meet its liabilities as they fall due over the period of their assessment, including any related disclosures drawing attention to any necessary qualifications or assumptions. We are also required to review the Viability Statement set out on page 67 and 68 under the UK Listing Rules. Our work is limited to assessing these matters in the context of only the knowledge acquired during our financial statements audit. As we cannot predict all future events or conditions and as subsequent events may result in outcomes that are inconsistent with judgements that were reasonable at the time they were made, the absence ofanything to report on these statements is not a guarantee astotheGroup’s and Parent Company’s longer-term viability. Our reporting We have nothing material to add or draw attentiontoin relation to these disclosures. We have concluded that these disclosures arematerially consistent with the financial statements and our audit knowledge. 4. Key audit matters What we mean Key audit matters are those matters that, in our professional judgement, were of most significance in the audit of the financial statements and include the most significant assessed risks of material misstatement (whether or not due to fraud) identified by us, including those which had the greatest effect on: • the overall audit strategy; • the allocation of resources in the audit; and • directing the efforts of the engagement team. 164 THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 We include below the Key Audit Matters together with our key audit procedures to address those matters and our results from those procedures. These matters were addressed, and our results are based on procedures undertaken, for the purpose of our audit of the financial statements as a whole. We do not provide a separate opinion on these matters. 4.1 Revenue recognition (Group) Financial Statement Elements Our results FY25 FY24 FY25: Acceptable Revenue £2,513m £2,332m Description of the Key Audit Matter Our response to the risk Revenue Recognition Revenue mainly comprises revenue from subscription services, and maintenance and support services; and is typically recognised over the contractual term. Revenue is computed and recorded across multiple IT systems that process a high volume of relatively low-value transactions. Aggregated systematic errors in revenue recognition could result in incorrect reporting of revenue. The size of revenue, the fact that it is computed and recorded across multiple IT systems is reflected in the allocation of our resources when planning and executing the audit across the Group. Our procedures to address the risk included: • Walkthroughs and controls. We performed walkthroughs of each significant class of revenue transaction. However, we did not test the operating effectiveness of any process level controls. • Test of details (data analytics). We primarily adopted a data analytics approach for testing the revenue recognised in the UK, North America and Sage Intacct North America components. Our procedures involved testing the full population of transaction data covering the majority ofthebilling systems at these components and included acorrelation analysis between invoiced revenue, receivables, cash, deferred revenue and revenue recognised. Where any postings did not follow our expectations, we inspected their validity by agreeing a sample of transactions to underlying documents such as signed contracts, sales invoices and related cash receipt. • Test of details (non-data analytics). For all other components where revenue was in-scope, and for billing systems in the UK component not in scope for data analytics approach, we tested a statistical sample of revenue postings by inspecting their validity to underlying documents such as signed contracts or other appropriate evidence, recalculated the revenue for the period for the sample, and compared it to the revenue recognised. Communications with The Sage Group plc’s Audit and Risk Committee Our discussions with and reporting to the Audit and Risk Committee included: • Our approach to the audit of revenue including details of planned substantive procedures (including data analytics) andthe extent of our control reliance. • Our conclusions on the appropriateness of the revenue recognised for the period. Areas of particular auditor judgement We did not identify any areas of particular auditor judgement Our results The results of our testing were satisfactory and we considered the amount of revenue recognised to be acceptable. Further information in the Annual Report and Accounts: See the Report of the Audit and Risk Committee on page 112 for details on how the Audit and Risk Committee considered revenue recognition as an area of significant attention, page 192 to194 for the accounting policy on revenue recognition, and note 2.1 and 3.1 for the financial disclosures. Strategic Report Governance Report Financial Statements Additional Information THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 165 KPMG LLP’s Independent Auditor’s Report To the members of The Sage Group plc continued 4.2 Recoverability of investments in subsidiaries (Parent Company) Financial Statement Elements Our results FY25 FY24 FY25: Acceptable Investments £3,088m £3,088m Description of the Key Audit Matter Our response to the risk Low risk, high value The carrying amount of the Parent Company’s investments in subsidiaries represents 65% of theParentCompany’s total assets. Their recoverability is not at a high risk of material misstatement or subject to significant judgement. However, due to their materiality in the context of the Parent Company’s financial statements, this is considered to be the area that had the greatest effect on our overall Parent Company’s audit. We performed the tests below rather than seeking to rely on anyof the Parent Company’s controls because the nature of the balance is such that we would expect to obtain audit evidence primarily through the detailed procedures described. Our procedures included: • Assessing management’s impairment indicator assessment: We assessed management’s assessment forindicators of impairment to understand the relevance and appropriateness of factors considered by management in their investment review. • Assessing the Group goodwill impairment work: Wereferred to the conclusions reached in the Group goodwill impairment work to assess whether they gave riseto any indications of impairment which would be relevant in assessing the recoverability of Parent Company’s investment in subsidiaries. • Assessing component audits: Assessing the work performed by the component auditors on all components andconsidering the results of that work on those components’ profits and net assets. • Our sector experience: We evaluated the current level oftrading, including identifying any indications of a downturn in activity considering our knowledge of the Group and the industry. Communications with The Sage Group plc’s Audit and Risk Committee Our discussions with and reporting to the Audit and Risk Committee included: • Our approach to the audit of the recoverability of the Parent Company’s investments in subsidiaries • Our conclusion from our assessment of the impairment indicators based on the procedures stated above. Areas of particular auditor judgement We did not identify any area of particular auditor judgement. Our results The results of our testing were satisfactory and we found the Parent Company’s conclusion that there is no impairment ofits investments in subsidiaries to be acceptable. Further information in the Annual Report and Accounts: See page 255 for the accounting policy on investments in subsidiaries, and note 2 to the Parent Company’s financial statements for the financial disclosures. 166 THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 5. Our ability to detect irregularities, and our response Fraud – identifying and responding to risks of material misstatement due to fraud Fraud risk assessment To identify risks of material misstatement due to fraud (“fraud risks”) we assessed events or conditions that could indicate an incentive or pressure to commit fraud or provide an opportunity to commit fraud. Our risk assessment procedures included: • Enquiring of directors, the Audit and Risk Committee, internal audit and inspection of policy documentation as to the Group’s high-level policies and procedures to prevent and detect fraud, including the internal audit function, and the Group’s channel for “whistleblowing”, aswell as whether they have knowledge of any actual, suspected or alleged fraud. • Reading Board and Audit and Risk Committee minutes. • Considering remuneration incentive schemes and performance targets for management anddirectors. • Using analytical procedures to identify any unusual or unexpected relationships. • Using our own forensic professionals with specialised skills and knowledge to assist us inidentifying the fraud risks based on discussions of the circumstances of the Group. Risk communications We communicated identified fraud risks throughout the audit team and remained alert to any indications of fraud throughout the audit. This included communication from the Group auditor to component auditors of relevant fraud risks identified at the Group level and requesting component auditors to perform procedures at the component level to report to the Group auditorany identified fraud risk factors or identified or suspected instances of fraud. Fraud risks As required by auditing standards, and taking into account possible pressures to meet performance targets, we performed procedures to address the risk of management override ofcontrols, in particular the risk that Group and component management may be in a position tomake inappropriate accounting entries. On this audit, we do not believe there is a fraud risk related to revenue recognition because of the overall process in place for accounting for the highvolume and low value revenue transactions and relatively lower and consistent levels of manual adjustments to revenue. We did not identify any additional fraud risks. Procedures toaddress fraudrisks In determining the audit procedures, we took into account the results of our evaluation of the design of some of the Group-wide fraud risk management controls. For further details in respect of the Group-wide risk management controls refer to the report of the Audit and Risk Committee on page 114. We also performed the following procedures: • Identified journal entries and other adjustments to test at the Group level and at selected in-scope components based on a determined risk criteria, such as postings to seldom used accounts or journals posted after the closure of the general ledger, and comparing the identified entries to supporting documentation. • Assessing whether the judgements made in making accounting estimates are indicative of apotential bias. Laws and regulations – identifying and responding to risks of material misstatement relating to compliance with laws and regulations Laws and regulations risk assessment We identified areas of laws and regulations that could reasonably be expected to have a material effect on the financial statements from our general commercial and sector experience, through discussion with the directors and other management (as required by auditing standards) and from inspection of the Group’s regulatory and legal correspondence. We discussed with the directors and other management the policies and procedures regarding compliance with laws and regulations. Risk communications We communicated identified laws and regulations throughout our team and remained alert toanyindications of non-compliance throughout the audit. This included communication fromthe Group auditor to component auditors of relevant laws and regulations identified at the Group level, and a request for component auditors to report to the Group audit team any instances of non-compliance with laws and regulations that could give rise to a material misstatement at the Group level. Direct laws context and link to audit The potential effect of these laws and regulations on the financial statements varies considerably. The Group is subject to laws and regulations that directly affect the financial statements including financial reporting legislation (including related companies legislation), distributable profits legislation and taxation legislation. We assessed the extent of compliance with these laws and regulations as part of our procedures on the related financial statement items. Strategic Report Governance Report Financial Statements Additional Information THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 167 KPMG LLP’s Independent Auditor’s Report To the members of The Sage Group plc continued Most significant indirect law/ regulation areas The Group is subject to many other laws and regulations where the consequences of non-compliance could have a material effect on amounts or disclosures in the financial statements, for instance through the imposition of fines or litigation or the loss of the Group’s license to operate. Weidentified the following areas as those most likely to have such an effect: • Data protection laws (requirements from existing data privacy laws) • Anti-bribery (reflecting the Group’s use of business partners for generating revenue aswellasvarious incentive plans for business partners) • Employment law (reflecting the Group’s geographically diverse workforce) • Contract legislation (reflecting the Group’s use of trademarks, copyrights and patents) Auditing standards limit the required audit procedures to identify non-compliance with these laws and regulations to enquiry of the directors and other management and inspection of regulatory and legal correspondence, if any. Therefore, if a breach of operational regulations is not disclosed to us or evident from relevant correspondence, an audit will not detect that breach. Context Context of theability of the audit to detect fraud or breaches of law or regulation Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the financial statements, even though we have properly planned and performed our audit in accordance with auditing standards. For example, the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely the inherently limited procedures required by auditing standards would identify it. In addition, as with any audit, there remained a higher risk of non-detection of fraud, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal controls. Our audit procedures are designed to detect material misstatement. We are not responsible for preventing non-compliance or fraud and cannot be expected to detect non-compliance with all laws and regulations. 6. Our determination of materiality The scope of our audit was influenced by our application of materiality. We set quantitative thresholds and overlay qualitative considerations to help us determine the scope of our audit and the nature, timing and extent of our procedures, and in evaluating the effect of misstatements, both individually and in the aggregate, on the financial statements as a whole. £22m Materiality forthe group financial statements asawhole What we mean A quantitative reference for the purpose of planning and performing our audit. Basis for determining materiality and judgements applied Materiality for the Group financial statements as a whole was set at £22m. This was determined with reference to a benchmark of Group normalised profit before tax from continuing operations (‘PBTCO’). We determined that Group normalised PBTCO is the main benchmark for the Group as we consider profit before tax, excluding certain identified items, as a key indicator of performance and the basis for earnings, and therefore the primary focus of an investor. We normalised the Group’s PBTCO by adding back adjustments that do not represent the normal, continuing operations of the Group. The items we adjusted for were related to reversals of property restructuring costs and employee related unutilised provisions. As such, we based our Group materiality on Group normalised PBTCO of £481m. Our Group materiality of £22m was determined by applying a percentage to the Group normalised PBTCO. When using a benchmark of the Group’s normalised PBTCO to determine overall materiality, KPMG’s approach for listed entities considers a guideline range of up to 5% of the measure. In setting overall Group materiality, we applied a percentage of 4.6% to the benchmark. Materiality for the Parent Company financial statements as a whole was set at £20m, determined with reference to a benchmark of Parent Company’s total assets, of which it represents 0.4%. 168 THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 £16.5m Performance materiality What we mean Our procedures on individual account balances and disclosures were performed to a lower threshold, performance materiality, so as to reduce to an acceptable level the risk that individually immaterial misstatements in individual account balances add up to a material amount across the financial statements as a whole. Basis for determining performance materiality and judgements applied We have considered performance materiality at a level of 75% of materiality for the Group financial statements as a whole to be appropriate. The Parent Company performance materiality was set at £15m, which equates to 75% of materiality for the Parent Company financial statements as a whole. We applied this percentage in our determination of performance materiality because we did not identify any factors indicating an elevated level of risk. £1.1m Audit misstatement posting threshold What we mean This is the amount below which identified misstatements are considered to be clearly trivial from a quantitative point of view. We may become aware of misstatements below this threshold which could alter the nature, timing and scope of our audit procedures, for example if we identify smaller misstatements which are indicators of fraud. This is also the amount above which all misstatements identified are communicated to The Sage Group plc’s Audit and Risk Committee. Basis for determining the audit misstatement posting threshold and judgements applied We set our audit misstatement posting threshold at 5% of our materiality for the Group financial statements. We also report to the Audit and Risk Committee any other identified misstatements that warrant reporting on qualitative grounds. The overall materiality for the Group financial statements of £22m compares as follows to the main financial statement caption amounts: Total Group revenue FY25 Group profit before tax FY25 Total Group assets FY25 Financial statement Caption £2,513m £484m £3,713m Group Materiality as % of caption 0.9% 4.5% 0.6% 7. The scope of our audit Group scope What we mean How the Group auditor determined the procedures to be performed across the Group. We applied the revised group auditing standards in our audit of the consolidation financial statements. The revised standard changes how an auditor approaches the identification of components, and how the audit procedures are planned and executed across components. In particular, the definition of a component has changed, shifting the focus from how the entity prepares financial information to how we, as the group auditor, plan to perform audit procedures to address group risks of material misstatements (“RMMs”). Similarly, the group auditor has an increased role in designing the audit procedures as well as making decisions on where these procedures are performed (centrally and/or at component level) and how these procedures are executed and supervised. As a result, we assess scoping and coverage in a different way and comparison to prior period coverage figures are not meaningful. In this report, we provide an indication of scope coverage on the new basis. We performed risk assessment procedures to determine which of the Group’s components are likely to include RMMs to the Group financial statements and which procedures to perform at these components to address those risks. In total, we identified 85 components, having considered our evaluation of the Group’s operational structure, geographical locations, the consolidation process and our ability toperform audit procedures centrally. Of those, we identified four quantitatively significant components (UK, France, North America and Sage Intacct North America) which contained the largest percentages of either total revenue or total assets of the Group, for which we performed audit procedures. Strategic Report Governance Report Financial Statements Additional Information THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 169 KPMG LLP’s Independent Auditor’s Report To the members of The Sage Group plc continued Group scope continued Additionally, having considered qualitative and quantitative factors, we selected five additional components with accounts and/or disclosures contributing to the specific RMMs of the Group financial statements. The below summarises where we performed audit procedures: Component type Number of components where we performed audit procedures Range of materiality applied Quantitatively significant components 4 £8.1m – £16.0m Other components where we performed procedures 5 £2.4m – £10.3m Total 9 The Group also operates share service centres (‘operating centres’) that are relevant to our audit in the UK, US and South Africa. These operating centres perform accounting and reporting activities alongside related controls and support the Group’s operating entities. Together, these operating centres process a substantial portion of the Group’s transactions, the outputs of which relate to financial information of the reporting components they service and therefore they are not separate reporting components. Each of the operating centres were subject to specified risk-focused audit procedures, predominantly the testing of transaction processing and key manual process level controls operated in the operating centres. Additionally, audit procedures were also performed ontransactions directly processed at the reporting components. The combination of these audit procedures constitute the audit for group reporting purposes on those reporting components. We involved component auditors in performing the audit work on all 9 components. We performed audit procedures on the items excluded from the normalised Group profit before tax used as the benchmark for our materiality. We set the component materialities having regard to the mix of size and risk profile of the Group across the components. We also performed the audit of the parent company. Our audit procedures covered 85% of Group revenue and we performed audit procedures in relation to components that accounted for 83% of total profits and losses that made up the Group profit before tax, and the Parent Company which accounted for 4% of the Group profit before tax. These components accounted for 89% of Group total assets excluding goodwill and intangible assets. Goodwill and intangible assets accounted for 65% of Group’s total assets and procedures over these,mainly in relation to testing for impairment, were directly performed by the group auditor. We have also performed audit procedures centrally across the Group, in the following areas: • Consolidation of the financial information; • Understanding the IT environment across the Group for key billing and accounting systems; • Journal entry analysis; • For UK, North America and Sage Intacct North America components, using technology toperform a recalculation of the revenue recognised to assess the accuracy of revenue recordedfor the year and perform a matching to cash receipts to assess the existence oftheunderlying contract; • Uncertain tax positions; • Climate considerations and impact on the financial statements. We also communicated to the component auditors the result of certain audit procedures performed centrally but relevant to the component auditors, such as result of the central testing of IT systems and configurations. For the remaining components for which we performed no audit procedures, no component represented more than 1% of Group total revenue or 2% of Group total assets (excluding Goodwill &Intangibles) or more than 7% of total profits and losses that made up the Group profit before tax. We performed analysis at an aggregated Group level to re-examine our assessment that there is nota reasonable possibility of a material misstatement in these components. 170 THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 Group scope continued Impact of controls on Group audit The Group has a number of IT systems linked to financial reporting. We identified three key ledger systems relevant to the preparation of Group accounts, in addition to the consolidation system. With the assistance of our IT auditors, we obtained an understanding of these key ledger systems, which are maintained centrally and are used by many of the components where we performed audit procedures. Having considered the efficiency and effectiveness of approaches to gain the appropriate auditevidence, we took a predominantly substantive approach to the audit. This included a data-oriented approach to testing key revenue streams using analytical routines. Given that wedid not plan to rely on IT controls, a direct testing approach was used over the completeness and reliability of data used in our substantive procedures, including in relation to our testing ofautomated and manual journals. Scope of Parent Company audit We also performed the audit of the parent company. Our audit of The Sage Group plc company financial statements was undertaken to the materiality level specified in item 6 above and the scope of the audit work performed was fully substantive due to its nature of being a holding company. Group auditor oversight What we mean The extent of the Group auditor’s involvement in work performed by component auditors. As part of establishing the overall Group audit strategy and plan, we conducted the risk assessment and planning discussion meetings with component auditors to discuss Group audit risks relevant to the components, including the key audit matter in respect of the recognition of revenue. Instructions We instructed the component auditors as to the significant areas to be covered, including the relevant risks and the information to be reported back. We worked with our component auditors throughout the audit to maintain an active dialogue and to determine the overall audit response. We also released audit notices on a regular basis (as needed) to component auditors to provide continuous updates regarding the overall audit. Virtual meetings and calls We held regular virtual meetings with the component auditors across all locations in scope for group reporting. These meetings were held to understand the business, any updates to the risk assessment and any issues and findings. The findings reported to us were discussed in more detail with component auditors and any further work required was then performed either by the group auditor or by the component auditors, as appropriate. Global conferences We hosted a two-day physical conference in London, UK in January 2025 and two virtual conferences in June and September 2025. These conferences emphasised key areas of the group audit instructions, facilitated two-way communication and sharing of risk assessment considerations including group updates, and allowed us to enhance our understanding of the component audits. • In January, we held our first global conference which was attended by all in-scope component auditors. This in-person conference enhanced collaboration and the sharing of understanding of the Group, notably in our first year as the Group auditors. It also facilitated our discussions around planning and risk assessment, specifically brainstorming the fraud risk assessment, our initial scoping and an overview of data and analytics tools used in the audit. • In June, the first virtual conference covered key group developments, key messages regarding independence, data analytics, and the group team’s involvement with components, specially under ISA (UK) 600 revised. • In September, we held a second virtual conference to provide a further update on risk assessment, the Group’s year-to-date results and reminders for component reporting. Strategic Report Governance Report Financial Statements Additional Information THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 171 KPMG LLP’s Independent Auditor’s Report To the members of The Sage Group plc continued Group auditor oversight continued Site visits We visited the component auditors across all in-scope markets to assess the audit risks and strategy. At these visits, the results of the planning procedures and further audit procedures communicated to us were discussed in more detail, and any further work required by us was thenperformed by the component auditors. Inspection of work papers We inspected the work performed by the component auditors for the purpose of the Group audit and evaluated the appropriateness of conclusions drawn from the audit evidence obtained and consistencies between communicated findings and work performed, with a particular focus on areas of component level risk assessment, audit procedures performed in relation in revenue, journal entries and a selection of specific group level audit risks. 8. Other information in the Annual Report The directors are responsible for the other information presented in the Annual Report together with the financial statements. Our opinion on the financial statements does not cover the other information and, accordingly, we do not express an audit opinion or, except as explicitly stated below, any form of assurance conclusion thereon. All other information Our responsibility Our responsibility is to read the other information and, in doing so, consider whether, based on our financial statements audit work, the information therein is materially misstated or inconsistent with the financial statements or our audit knowledge. Our reporting Based solely on that work we have not identified material misstatements or inconsistencies in the other information. Strategic Report and Directors’ Report Our responsibility and reporting Based solely on our work on the other information described above we report to you as follows: • we have not identified material misstatements in the strategic report and the directors’ report; • in our opinion the information given in those reports for the financial year is consistent with the financial statements; and • in our opinion those reports have been prepared in accordance with the Companies Act 2006. Directors’ Remuneration Report Our responsibility We are required to form an opinion as to whether the part of the Directors’ Remuneration Report to be audited has been properly prepared in accordance with the Companies Act 2006. Our reporting In our opinion the part of the Directors’ Remuneration Report to be audited has been properly prepared in accordance withthe Companies Act 2006. Corporate Governance disclosures Our responsibility We are required to perform procedures to identify whether there is a material inconsistency between the financial statements and our audit knowledge, and: • the directors’ statement that they consider that the annual report and financial statements taken as a whole is fair, balanced and understandable, and provides the information necessary for shareholders to assess the Group’s position and performance, business model and strategy; • the section of the annual report describing the work of the Audit and Risk Committee, including the significant issues that the Audit and Risk Committee considered in relation to the financial statements, and how these issues were addressed; and • the section of the annual report that describes the review of the effectiveness of the Group’s risk management and internal control systems. Our reporting Based on those procedures, we have concluded that each of these disclosures ismaterially consistent with the financial statements and our audit knowledge. We are also required to review the part of the Corporate Governance Report relating to the Group’s compliance with the provisions of the UK Corporate Governance Code specified by the UK Listing Rules for our review. We have nothing to report in this respect. 172 THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 Other matters on which we are required toreport by exception Our responsibility Under the Companies Act 2006, we are required to report to you if, in our opinion:: • adequate accounting records have not been kept by the Parent Company, or returns adequate for our audit have not been received from branches not visited by us; or • the Parent Company financial statements and the part of the Directors’ Remuneration Report to be audited are not in agreement with the accounting records and returns; or • certain disclosures of directors’ remuneration specified by law are not made; or • we have not received all the information and explanations we require for our audit. Our reporting We have nothing toreport in theserespects. 9. Respective responsibilities Directors’ responsibilities As explained more fully in their statement set out on page 158, the directors are responsible for: the preparation of the financial statements including being satisfied that they give a true and fair view; such internal control as they determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error; assessing the Group and Parent Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern; and using the going concern basis of accounting unless they either intend to liquidate the Group or the Parent Company or to cease operations, or have no realistic alternative but to do so. Auditor’s responsibilities Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue our opinion in an auditor’s report. Reasonable assurance is a high level of assurance, but does not guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the financial statements. A fuller description of our responsibilities is provided on the FRC’s website at www.frc.org.uk/auditorsresponsibilities. The Company is required to include these financial statements in an annual financial report prepared under Disclosure Guidance and Transparency Rule 4.1.17R and 4.1.18R. This auditor’s report provides no assurance over whether the annual financial report has been prepared in accordance with those requirements. 10. The purpose of our audit work and towhom we owe our responsibilities This report is made solely to the Company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006 and the terms of our engagement by the Company. Our audit work has been undertaken so that we might state to the Company’s members those matters we are required to state to them in an auditor’s report, and the further matters we are required to state to them in accordance with the terms agreed with the Company, and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company’s members, as a body, for our audit work, for this report, or for the opinions we have formed. Simon Richardson (Senior Statutory Auditor) for and on behalf of KPMG LLP, Statutory Auditor Chartered Accountants 15 Canada Square London E14 5GL 18 November 2025 Strategic Report Governance Report Financial Statements Additional Information THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 173 2025 2024 Note £m £m Revenue 2.1, 3.1 2,513 2,332 Cost of sales (183) (168) Gross profit 2,330 2,164 Selling and administrative expenses (1,800) (1,712) Operating profit 2.2, 3.2 530 452 Finance income 3.5 12 19 Finance costs 3.5 (58) (45) Profit before income tax 484 426 Income tax expense 4 (115) (103) Profit for the year 369 323 Profit attributable to: Owners of the parent 369 323 Earnings per share attributable to the owners of the parent (pence) Basic 5 37.74p 32.10p Diluted 5 37.16p 31.55p All operations in the year relate to continuing operations. Consolidated income statement For the year ended 30 September 2025 174 THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 2025 2024 Note £m £m Profit for the year 369 323 Items of other comprehensive income that will not be reclassified to profit or loss, net of tax: Actuarial gain/(loss) on post-employment benefit obligations 13.4 1 (2) Fair value reassessment of equity investments (2) – (1) (2) Items that may be reclassified to profit or loss, net of tax: Exchange differences on translating foreign operations and net investment hedges 13.3 10 (101) Changes in fair value of foreign currency basis of hedge relationships 13.3 (2) – Amortisation of foreign currency basis of hedge relationships 13.3 1 – 9 (101) Other comprehensive income/(expense) for the year, net of tax 8 (103) Total comprehensive income for the year 377 220 Total comprehensive income for the year attributable to: Owners of the parent 377 220 Consolidated statement of comprehensive income For the year ended 30 September 2025 Governance Report Additional InformationStrategic Report Financial Statements THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 175 2024 2025 (restated) Note £m £m Non-current assets Goodwill 6.1 2,213 2,122 Other intangible assets 6.2 212 228 Property, plant and equipment 7 144 108 Equity investments 4 6 Trade and other receivables 8.1 144 137 Deferred income tax assets 10 101 81 Derivative financial instruments 12.5 32 29 2,850 2,711 Current assets Trade and other receivables 8.1 471 404 Current income tax asset 2 16 Cash and cash equivalents 11.3 390 508 863 928 Total assets 3,713 3,639 Current liabilities Trade and other payables 8.2 (433) (405) Current income tax liabilities (39) (26) Borrowings 11.4 (17) (15) Provisions 9 (21) (22) Deferred income 8.3 (845) (758) (1,355) (1,226) Non-current liabilities Borrowings 11.4 (1,562) (1,231) Post-employment benefits (25) (23) Deferred income tax liabilities 10 (15) (19) Provisions 9 (23) (25) Trade and other payables 8.2 (8) (3) Deferred income 8.3 (5) (6) Derivative financial instruments 12.5 – (13) (1,638) (1,320) Total liabilities (2,993) (2,546) Net assets 720 1,093 Equity attributable to owners of the parent Ordinary shares 13.1 11 11 Share premium 548 548 Other reserves 13.3 (369) (429) Retained earnings 13.4 530 963 Total equity 720 1,093 * The comparative balance sheet at 30 September 2024 has been restated as discussed within ‘Basis of preparation’ (see note 1) and adjusted for finalisation of the fair value of assets acquired and liabilities assumed in the acquisition of Infineo SAS (see notes 1 and 14) The consolidated financial statements on pages 174 to 251 were approved by the Board of Directors on 18 November 2025 and are signed on their behalf by: Jonathan Howell Chief Financial Officer Consolidated balance sheet As at 30 September 2025 176 THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 Attributable to owners of the parent Ordinary Share Other Retained Total shares premium reserves earnings equity Note £m £m £m £m £m At 1 October 2024 11 548 (429) 963 1,093 Adjustment on initial application of IFRS 9 hedge accounting – – 1 (1) – Adjusted opening shareholders’ equity 11 548 (428) 962 1,093 Profit for the year – – – 369 369 Other comprehensive income: Actuarial gain on post-employment benefit obligations – – – 1 1 Fair value reassessment of equity investments – – – (2) (2) Exchange differences on translating foreign operations and net investment hedges 13.3 – – 10 – 10 Changes in fair value of foreign currency basis of hedge relationships 13.3 – – (2) – (2) Amortisation of foreign currency basis of hedge relationships 13.3 – – 1 – 1 Total comprehensive income for the year ended 30 September 2025 – – 9 368 377 Transactions with owners: Employee share option scheme—value of employee services including deferred tax 13.4 – – – 57 57 Vesting of share awards and exercise of share options 13.3, 13.4 – – 50 (41) 9 Share buyback programme 13.4 – – – (609) (609) Dividends paid to owners of the parent 13.4, 13.6 – – – (207) (207) Total transactions with owners for the year ended 30 September 2025 – – 50 (800) (750) At 30 September 2025 11 548 (369) 530 720 Consolidated statement of changes in equity For the year ended 30 September 2025 Governance Report Additional InformationStrategic Report Financial Statements THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 177 Attributable to owners of the parent (restated) Ordinary Share Other Retained Total shares premium reserves earnings equity Note £m £m £m £m £m At 1 October 2023 12 548 (324) 1,171 1,407 Profit for the year – – – 323 323 Other comprehensive expense: Exchange differences on translating foreign operations and net investment hedges 13.3 – – (101) – (101) Actuarial loss on post-employment benefit obligations – – – (2) (2) Total comprehensive (expense)/income for the year ended 30 September 2024 – – (101) 321 220 Transactions with owners: Employee share option scheme—value of employee services including deferred tax 13.4 – – – 62 62 Vesting of share awards and exercise of share options 13.4 – – 50 (41) 9 Cancellation of ordinary shares 13.1, 13.4 (1) – 1 – – Share buyback programme 13.4 – – – (351) (351) Purchase of shares by Employee Benefit Trust 13.3, 13.5 – – (55) – (55) Dividends paid to owners of the parent 13.4, 13.6 – – – (199) (199) Total transactions with owners for the year ended 30 September 2024 (1) – (4) (529) (534) At 30 September 2024 11 548 (429) 963 1,093 * The comparative statement of changes in equity for the year ended 30 September 2024 has been restated as discussed within ‘Basis of preparation’ (see note 1) Consolidated statement of changes in equity For the year ended 30 September 2024 178 THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 2025 2024 Note £m £m Cash flows from operating activities Cash generated from continuing operations 11.1 675 625 Interest paid (46) (43) Income tax paid (101) (91) Net cash generated from operating activities 528 491 Cash flows from investing activities Purchase of equity investment – (2) Acquisition of subsidiaries, net of cash acquired 14.1 (82) (30) Purchases of intangible assets (18) (18) Purchases of property, plant and equipment 7 (41) (19) Proceeds from disposals of property, plant and equipment 7 1 9 Interest received 13 19 Net cash used in investing activities (127) (41) Cash flows from financing activities Proceeds from borrowings 11.2 297 – Repayments of borrowings 11.2 (2) – Capital element of lease payments 11.2 (17) (16) Borrowing costs (2) (1) Receipt of lease incentive 6 – Share buyback programme 13.4 (605) (348) Proceeds from issuance of treasury shares 9 9 Purchase of shares by Employee Benefit Trust 13.3, 13.5 – (55) Dividends paid to owners of the parent 13.6 (207) (199) Net cash used in financing activities (521) (610) Net decrease in cash and cash equivalents (before exchange rate movement) (120) (160) Effects of exchange rate movement 11.2 2 (28) Net decrease in cash and cash equivalents (118) (188) Cash and cash equivalents at 1 October 11.2 508 696 Cash and cash equivalents at 30 September 11.2 390 508 Consolidated statement of cash flows For the year ended 30 September 2025 Governance Report Additional InformationStrategic Report Financial Statements THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 179 1 Basis of preparation and accounting estimates and judgements Accounting policies applicable across the consolidated financial statements are shown below. Accounting policies that are specific to a component of the consolidated financial statements have been incorporated into the relevant note. Basis of preparation The consolidated financial statements of The Sage Group plc. (the Company) and together with its subsidiaries (the Group) have been prepared in accordance with UK-adopted International Accounting Standards (UK-IFRS) in conformity with the requirements of the Companies Act 2006 and also prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB). UK-IFRS can differ in certain respects from IFRS as issued by the IASB. The differences have no impact on the Group’s consolidated financial statements for the years presented. The consolidated financial statements have been prepared under the historical cost convention, except where adopted IFRS require an alternative treatment. The principal variations from the historical cost convention relate to derivative financial instruments and equity investments which are measured at fair value. In the current year, treasury share reserve and capital redemption reserve have been presented separately within other reserves (earlier combined within retained earnings). This change provides visibility and greater clarity to users of the consolidated financial statements. The consolidated financial statements of the Group comprise the financial statements of the Company and entities controlled by the Company (its subsidiaries) prepared at the end of the reporting period. The accounting policies have been consistently applied across the Group. The Company controls an entity when it is exposed, or has rights, to variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity, which is usually from the date of acquisition. All figures presented are rounded to the nearest £m, unless otherwise stated. Impact of application of hedging requirements of IFRS 9 Financial Instruments As at 1 October 2024, the Group elected to apply the hedge accounting requirements in IFRS 9 Financial Instruments instead of those in IAS 39 Financial Instruments: Recognition and Measurement. This standard introduces simplified hedge accounting through closer alignment with the entity’s risk management methodology. All existing hedge relationships were regarded as continuing hedge relationships. All such designated hedge relationships under IAS 39 as at 30 September met the criteria for hedge accounting under IFRS 9 as the Group’s risk management strategies and hedge documentation were aligned to the new standard. The Group has adopted the modified transition approach and therefore adjusted opening retained earnings and other reserve balances for the impact of adopting IFRS 9 hedge accounting and has not restated prior period comparatives. Under IAS 39 the Group included the cost of hedging within the hedge relationship. On transition, IFRS 9 allows the choice to separate aspects of the cost of hedging from the designation within a hedge relationship as part of the hedging instrument. Under IFRS 9, in relation to the cross-currency interest rate swaps that are designated in the aforementioned hedge relationships, the Group has separated the costs relating to currency basis from the hedge relationship and therefore allocates this component within a newly recognised cost of hedging reserve. On transition to IFRS 9, an equity classification adjustment was recognised for which £3m was credited to the translation reserve and £1m to the cash flow hedging reserve, offset by £4m debited to the costs of hedging reserve. The value of the cost of hedging reserve at designation of the hedge relationship is amortised to the income statement (within finance costs) over the expected life of the hedge relationship. An adjustment to retained earnings of £1m was recognised on transition to reflect the cumulative effect of hedging costs that would have been recognised under IFRS 9 over the life of the Group’s existing hedging arrangements up to the date of adoption. Other than the changes above, there are no additional accounting differences applied as a result of the adoption of IFRS 9 hedge accounting requirements when compared to the previous accounting policies under IAS 39. The impact on the year ended 30 September 2025 is not material and the transition did not result in any changes in the measurement or classification of financial instruments as at 1 October 2024. Notes to the consolidated financial statements 180 THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 1 Basis of preparation and accounting estimates and judgements continued New or amended accounting standards There are no accounting standards, amendments, or interpretations effective for the first time this financial year that have had a material impact on the Group. No standards have been early adopted during the year. The Directors also considered the impact on the Group of new and revised accounting standards, interpretations, or amendments which have been issued but were not effective for the Group for the year ended 30 September 2025. On 9 April 2024, the IASB issued a new standard, IFRS 18 “Presentation and Disclosure in Financial Statements”, which will replace IAS 1 “Presentation of Financial Statements” which if adopted by the UK Endorsement Board, will be effective for annual reporting periods beginning on or after 1 January 2027. The key new concepts introduced in IFRS18 relate to: • The structure of the statement of profit or loss; • Required disclosures in the financial statements for certain profit or loss performance measures that are reported outside an entity’s financial statements (that is, management-defined performance measures); and • Enhanced principles on aggregation and disaggregation which apply to the primary financial statements and notes in general. While IFRS 18 will not impact the recognition or measurement of items in the financial statements, it will likely result in changes to how Sage presents certain information. The Group is in the process of assessing the impact that the application of this standard will have on the Group’s financial statements when first applied. No other new or revised accounting standards, interpretations, or amendments which have been issued but were not effective are expected to have a material impact on the Group’s financial statements when first applied. Going concern The Group’s business activities, together with the factors likely to affect its future development, performance, and position, are set out in the Strategic Report on pages 1 to 68. In preparing these consolidated financial statements, the Directors have reviewed and approved a going concern assessment which considers the liquidity forecast of the Group for a period of at least 12 months from the date of the approval of these consolidated financial statements. The liquidity forecast reflects the expected impact of economic conditions on trading, including the current inflationary environment. More specifically, full consideration has been given to the potential risks and uncertainties linked to the changing macroeconomic environment, and the possible impact on the Group’s customer base. In light of this, we note that the Group’s operational and financially robust position is supported by: • High-quality recurring and subscription-based revenue; • Resilient cash generation and robust liquidity (see note 11), supported by strong underlying cash conversion of 110%, reflecting the strength of the subscription business model; and • A well-diversified small and medium-sized customer base which is geographically diverse. In preparing the going concern assessment scenario-specific stress testing has been performed, with the level of churn assumptions increasing by 75%, and a significant reduction in the level of new customer acquisition and sales to existing customers. Under these scenarios, the Group continues to have sufficient resources to continue in operational existence without the need to seek additional financing. If more severe impacts occur there are further controllable mitigating actions which can be taken to protect liquidity, including the reduction of discretionary spend. Stress testing has also been performed as part of the severe but plausible scenarios (as described within the Viability Statement on 67 to 68). The Directors have also reviewed the results of reverse stress testing performed to provide an illustration of the level of churn and deterioration in new customer acquisition which would be required to exhaust available liquidity down to minimum working capital requirements. The result of the reverse stress testing has highlighted that such a scenario would only arise following a significant deterioration in performance, well in excess of the assumptions considered in the stress testing scenarios above. The probability of these factors occurring is deemed to be remote given the resilient nature of the subscription business model, robust balance sheet, and continued strong cash conversion. After making enquiries, the Directors have a reasonable expectation that Sage has adequate resources to continue in operational existence throughout the going concern assessment period. Accordingly, the consolidated and Company financial information has been prepared on a going concern basis. Further details for adopting the going concern basis are set out in the Directors’ Report on pages 152 to 158. Governance Report Additional InformationStrategic Report Financial Statements THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 181 1 Basis of preparation and accounting estimates and judgements continued Foreign currencies The consolidated financial statements are presented in sterling, which is the functional currency of the Company and the presentation currency for the consolidated financial statements. Foreign currency transactions are recorded at the rates of exchange prevailing on the dates of the transactions. Foreign currency monetary items are translated at the rates prevailing at the end of the reporting period. Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated. Exchange differences arising on the settlement of monetary items and on the retranslation of monetary items are included in profit or loss for the period, except for foreign currency movements on intercompany balances where settlement is not planned or likely in the foreseeable future, in which case they are recognised in other comprehensive income. Foreign exchange movements on external borrowings and derivative financial instruments which are designated as a hedge of the net investment in its related subsidiaries are recognised in the translation reserve. The assets and liabilities of the Group’s subsidiaries outside the UK are translated into sterling using period-end exchange rates. Income and expense items are translated at the average exchange rates for the period. Where differences arise between these rates, they are recognised in other comprehensive income and the translation reserve. Foreign exchange movements on derivative financial instruments which are designated in cash flow hedge relationships are included in the profit or loss for the period, to offset foreign currency movements in the hedged item. When a foreign operation is partially disposed of or sold, exchange differences that were recorded in other comprehensive income are recycled in the income statement as part of the gain or loss on sale, with the exception of exchange differences recorded in equity prior to the transition to IFRS on 1 October 2004, in accordance with IFRS 1 “First-time Adoption of International Financial Reporting Standards”. Climate change In preparing the consolidated financial statements, management has considered the impact of climate change, with particular reference to the disclosures provided in the Strategic Report. As a business, we are committed to reducing our carbon emissions and target achieving net zero by 2040. We support our customers, small and mid-sized businesses, in achieving net zero by sharing the knowledge, technology and skills to be a driving force for change. We have continued to support more broadly by advocating for enabling policies and standards that support a transition to a low-carbon economy. We recognise the importance of identifying and effectively managing the physical and transitional risks that climate change poses to our operations and consider the impact of climate-related matters, including legislation, on our business. The climate change scenario analyses and financial quantification of climate risks undertaken in line with Task Force on Climate-related Financial Disclosures recommendations did not identify any material impact on the Group’s financial results, going concern or viability. More specifically: • In preparing the viability assessment, consideration has been given to the potential impact of climate change over the next three years, as set out in the Strategic Report. No material impact has been identified at this stage. • Climate change-related factors on matters including residual values, useful lives and depreciation and amortisation periods which relate to non-current assets have also been considered, with no impact identified at this stage. • In our future forecasts used for goodwill impairment and the going concern assessment, we have considered the extent to which costs associated with our climate-related commitments have been considered, as well as broader societal commitments. These commitments do not have a material impact. • We have also considered the extent to which climate change could impact longer-term economic growth, which may impact long-term growth rates used in the goodwill impairment test. Sensitivity testing demonstrates that all cash-generating units retain sufficient headroom. Notes to the consolidated financial statements continued 182 THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 1 Basis of preparation and accounting estimates and judgements continued Accounting estimates and judgements The preparation of financial statements requires the use of accounting estimates and judgements by management, including in the application of accounting policies. We continually evaluate our estimates and judgements based on available information. Management has determined that there are no areas of estimation uncertainty that could be significant under IAS 1 “Presentation of Financial Statements”, being areas of estimation uncertainty with a significant risk of a material change to the carrying value of assets and liabilities within the next financial year. Other key estimates are made when preparing the financial statements, which, while not meeting the definition of a significant estimate under IAS 1, involve the measurement of certain material assets or a higher degree of complexity. Significant judgements are those made by management in applying our accounting policies that have a material impact on the amounts presented in the financial statements. Management’s rationale in relation to these key accounting estimates and significant judgements are regularly assessed and, where material in value or in risk, are discussed with the Audit and Risk Committee. These areas are discussed in further detail below: Revenue recognition (judgement) Over a third of the Company’s revenue is generated from sales to business partners rather than end users. The key judgement is determining whether the business partner is a customer of the Group. The key criterion in this determination is whether the business partner has taken control of the product. Considering the nature of Sage’s subscription products and support services, this is usually assessed based on whether the business partner has responsibility for payment, has discretion to set prices, and takes on the risks and rewards of the product from Sage. Where the business partner is a customer of Sage, commissions are remunerated in the form of a discount and are recognised as a deduction from revenue. Where the business partner is not a customer of Sage and their part in the sale has simply been in the form of a referral, they are remunerated in the form of a commission payment. These payments are treated as contract acquisition costs (see note 8.1). Goodwill impairment (estimate) The estimates applied in calculating the value in use of the cash-generating units being tested for impairment are a source of estimation uncertainty. The key estimates considered in the calculation relate to the future performance expectations of the business and include the average medium-term revenue growth rate, the long-term growth rate of net operating cash flows and the discount rate. Further information on these key estimates, as well as the level at which goodwill is monitored and the results of sensitivity analysis are disclosed in note 6.1. Governance Report Additional InformationStrategic Report Financial Statements THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 183 1 Basis of preparation and accounting estimates and judgements continued Business combinations (judgement and estimate) When the Group completes a business combination, the consideration transferred for the acquisition and the identifiable assets and liabilities are recognised at their fair values. The amount by which the consideration exceeds the net assets acquired is recognised as goodwill. The application of accounting policies to business combinations involves judgement and the use of estimates. In the year, the Group acquired and finalised the purchase price accounting for the acquisitions of Tritium Software, S.L. ("Tritium Software") and Fyle Technologies Private Limited ("Fyle"), and finalised the purchase price accounting for Infineo SAS ("Infineo") which was acquired in the prior year. As part of finalising the purchase price accounting, external independent valuation experts were engaged to support with the identification and valuation of acquired intangible assets: • Judgement was required with respect to the identification of acquired intangible assets, with both technology and customer relationships being identified. Subsequently, the valuation of those acquired intangible assets involved key estimates. • Valuation techniques including the relief from royalty method, discounted cash flows, the multi-period excess earnings method, and the income approach were used to value the technology and customer relationships. The key estimates requiring consideration as part of the valuations included the application of a discount rate and the use of an appropriate royalty rate. • Based on the strategic intent and rationale for the acquisition, and the way in which management intends to monitor the performance of the business going forward, judgement was also required in allocating the acquired goodwill to the Cash Generating Units (CGUs). For further details on the above transactions, see note 14. Notes to the consolidated financial statements continued 184 THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 2 Segment information This note shows how Group revenue and Group operating profit are generated across the three reportable segments in which the Group operates as listed in the accounting policy below. For each reportable segment, revenue and operating profit are compared to prior year in order to understand the movements in the year. This comparison is provided for statutory, underlying, and organic revenue and statutory, underlying, and organic operating profit. • Statutory results reflect the Group’s results prepared in accordance with the requirements of UK-IFRS and IFRS as issued by the IASB. • “Underlying” and “underlying as reported” are non-GAAP measures. Underlying measures are adjusted to exclude items which in management’s judgement need to be disclosed separately by virtue of their size, nature or frequency. These measures are considered key measures within the business which aid understanding of the performance for the year and comparability between periods. The items excluded comprise both: a) recurring items which include purchase price adjustments including amortisation of acquired intangible assets and adjustments made to reduce deferred income arising on acquisitions, acquisition-related items, and unhedged foreign currency movements on intercompany balances; and b) non-recurring items that management considers to be one-off or non-operational such as gains and losses on the disposal of assets, impairment charges and reversals, and restructuring-related costs. Management applies judgement in determining which items should be excluded from underlying performance. See note 3.6 for details of these adjustments. In addition, underlying measures are presented on a constant currency basis with prior year amounts translated at current year exchange rates. Prior year underlying amounts at prior year exchange rates are “underlying as reported”; prior year and current year underlying amounts at current year exchange rates are “underlying”. • “Organic” is a non-GAAP measure. In addition to the adjustments made to the underlying measures, the contributions from discontinued operations, disposals, and assets held for sale of standalone businesses in the current and prior period are removed so that results can be compared to the prior year on a like-for-like basis. Results from acquired businesses are excluded in the year of acquisition. Adjustments are made to the comparative period to present prior period acquired businesses as if these had been part of the Group throughout the prior period. Acquisitions and disposals which occurred close to the start of the opening comparative period where the contribution impact would be immaterial are not adjusted. In addition, the following reconciliations are made in this note to the extent adjustments have arisen: • Statutory revenue per segment reconciled to the statutory revenue for the year as per the income statement. • Statutory operating profit per segment reconciled to the statutory operating profit for the year as per the income statement. • Statutory revenue reconciled to underlying revenue per segment (detailing the adjustments made). • Statutory operating profit reconciled to underlying operating profit per segment (detailing the adjustments made). Non-GAAP measures should not be viewed in isolation, nor are considered as a substitute for measures reported in accordance with IFRS. Governance Report Additional InformationStrategic Report Financial Statements THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 185 2 Segment information continued Accounting policy In accordance with IFRS 8 “Operating Segments”, information for the Group’s operating segments has been derived using the information used by the Chief Operating Decision Maker (CODM). The Group’s Executive Leadership Team (ELT) has been identified as the CODM, in accordance with their designated responsibility for the allocation of resources to operating segments and assessing their performance through the Monthly Performance Reviews. The ELT uses organic and underlying data to monitor business performance. Operating segments are reported in a manner which is consistent with the operating segments produced for internal management reporting. The Group is organised into three key operating segments: • North America • United Kingdom, Ireland, Africa and APAC (UKIA) • Europe For reporting under IFRS 8, each of the three operating segments above represents a reportable segment. Segment reporting The tables overleaf show a segmental analysis of the results for continuing operations. The revenue analysis in the table overleaf is based on the location of the customer, which is not materially different from the location where the order is received and where the assets are located. Revenue categories are defined in note 3.1. Notes to the consolidated financial statements continued 186 THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 2 Segment information continued 2.1 Revenue by segment Year ended 30 September 2025 Change Statutory and Organic Underlying adjustments Organic £m £m £m Statutory Underlying Organic Recurring revenue by segment North America 1,110 (2) 1,108 8% 12% 11% UKIA 714 – 714 9% 9% 9% Europe 612 (5) 607 7% 8% 7% Recurring revenue 2,436 (7) 2,429 8% 10% 9% Other revenue by segment North America 28 – 28 13% 17% 17% UKIA 15 – 15 (3%) (2%) (2%) Europe 34 – 34 (5%) (4%) (4%) Other revenue 77 – 77 1% 3% 3% Total revenue by segment North America 1,138 (2) 1,136 8% 12% 11% UKIA 729 – 729 9% 9% 9% Europe 646 (5) 641 6% 7% 6% Total revenue 2,513 (7) 2,506 8% 10% 9% Year ended 30 September 2025 Change Statutory and Organic Underlying adjustments Organic £m £m £m Statutory Underlying Organic Total revenue by type Software Subscription Revenue 2,093 (7) 2,086 10% 12% 11% Other Recurring Revenue 343 – 343 (1%) 1% 1% Recurring revenue 2,436 (7) 2,429 8% 10% 9% Other revenue 77 – 77 1% 3% 3% Total revenue 2,513 (7) 2,506 8% 10% 9% Note: * Adjustments relate to the acquisition of Tritium Software and Fyle. Governance Report Additional InformationStrategic Report Financial Statements THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 187 2 Segment information continued 2.1 Revenue by segment continued Year ended 30 September 2024 Statutory and Impact of Underlying as foreign Organic reported exchange Underlying adjustments Organic £m £m £m £m £m Recurring revenue by segment North America 1,028 (34) 994 5 999 UKIA 655 (2) 653 – 653 Europe 574 (6) 568 1 569 Recurring revenue 2,257 (42) 2,215 6 2,221 Other revenue by segment North America 24 – 24 – 24 UKIA 15 – 15 – 15 Europe 36 – 36 – 36 Other revenue 75 – 75 – 75 Total revenue by segment North America 1,052 (34) 1,018 5 1,023 UKIA 670 (2) 668 – 668 Europe 610 (6) 604 1 605 Total revenue 2,332 (42) 2,290 6 2,296 Year ended 30 September 2024 Statutory and Impact of Underlying foreign Organic as reported exchange Underlying adjustments Organic £m £m £m £m £m Total revenue by type Software Subscription Revenue 1,910 (34) 1,876 6 1,882 Other Recurring Revenue 347 (8) 339 – 339 Recurring revenue 2,257 (42) 2,215 6 2,221 Other revenue 75 – 75 – 75 Total revenue 2,332 (42) 2,290 6 2,296 Note: * Adjustments relate to the acquisition of Infineo and Anvyl, Inc. (“Anvyl”) in the previous year. Notes to the consolidated financial statements continued 188 THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 2 Segment information continued 2.2 Operating profit by segment Year ended 30 September 2025 Change Underlying Underlying and Statutory adjustments Organic £m £m £m Statutory Underlying Organic Operating profit by segment North America 231 26 257 21% 14% 15% UKIA 182 25 207 17% 12% 12% Europe 117 19 136 12% 31% 28% Total operating profit 530 70 600 17% 17% 16% Year ended 30 September 2024 Impact of Underlying Underlying as foreign Organic Statutory adjustments reported exchange Underlying adjustments Organic £m £m £m £m £m £m £m Operating profit by segment North America 192 43 235 (11) 224 (1) 223 UKIA 155 33 188 (3) 185 – 185 Europe 105 1 106 (2) 104 3 107 Total operating profit 452 77 529 (16) 513 2 515 Note: * Adjustments relate to the acquisition of Infineo and Anvyl in the previous year. The results by segment from continuing operations were as follows: North America UKIA Europe Group Year ended 30 September 2025 Note £m £m £m £m Revenue 1,138 729 646 2,513 Segment statutory operating profit 231 182 117 530 Finance income 3.5 12 Finance costs 3.5 (58) Profit before income tax 484 Income tax expense 4 (115) Profit for the year 369 Governance Report Additional InformationStrategic Report Financial Statements THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 189 2 Segment information continued 2.2 Operating profit by segment continued Reconciliation of underlying operating profit to statutory operating profit: North America UKIA Europe Group Year ended 30 September 2025 Note £m £m £m £m Underlying operating profit 257 207 136 600 Amortisation of acquired intangible assets 3.6 (18) (18) (6) (42) Other acquisition-related items 3.6 (10) (7) (14) (31) Non-recurring items 3.6 2 – 1 3 Statutory operating profit 231 182 117 530 The results by segment from continuing operations were as follows: North America UKIA Europe Group Year ended 30 September 2024 Note £m £m £m £m Revenue 1,052 670 610 2,332 Segment statutory operating profit 192 155 105 452 Finance income 3.5 19 Finance costs 3.5 (45) Profit before income tax 426 Income tax expense 4 (103) Profit for the year 323 Reconciliation of underlying operating profit to statutory operating profit: North America UKIA Europe Group Year ended 30 September 2024 Note £m £m £m £m Underlying operating profit as reported 235 188 106 529 Amortisation of acquired intangible assets 3.6 (24) (20) (4) (48) Other acquisition-related items 3.6 (19) (13) (2) (34) Non-recurring items 3.6 – – 5 5 Statutory operating profit 192 155 105 452 No impairment losses are reported by the Group during the year (2024: £nil). Notes to the consolidated financial statements continued 190 THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 2 Segment information continued 2.3 Analysis by geographic location Management considers countries which generate 10% or more of total Group revenue to be material. Additional disclosures have been provided below to show the proportion of revenue from these countries. 2025 2024 Revenue by individually significant countries £m £m USA 997 918 UK 525 479 France 324 309 Other individually immaterial countries 667 626 2,513 2,332 Management considers countries which contribute 10% or more to total Group non-current assets to be material. Additional disclosures have been provided below to show the proportion of non-current assets from these countries. Non-current assets presented below exclude deferred tax assets and financial instruments. 2025 2024 Non-current assets by geographical location £m £m USA 1,566 1,491 UK 536 551 France 293 280 Other individually immaterial countries 313 268 2,708 2,590 Note: * Adjusted for finalisation of the fair value of assets acquired and liabilities assumed in the acquisition of Infineo SAS (see notes 1 and 14) 3 Profit before income tax This note sets out the Group’s profit before tax, by looking in more detail at the key operating costs, including a breakdown of the costs incurred as an employer, research and development costs, the cost of the external audit of the Group’s financial statements, and finance costs. This note also sets out the Group’s revenue recognition policy. In addition, this note explains the accounting applied to leases entered into by the Group as a lessee and analyses the amounts recognised for leases on the balance sheet and in the income statement. Governance Report Additional InformationStrategic Report Financial Statements THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 191 3 Profit before income tax continued 3.1 Revenue Accounting policy The Group reports revenue under two revenue categories and the basis of recognition for each category is described below: Category and examples Accounting treatment Recurring revenue Recurring revenue is revenue earned from customers for the provision of a good or Software subscription revenue service over a contractual term, with the customer being unable to continue to Other subscription revenue benefit from the full functionality of the good or service without ongoing payments. Other recurring revenue Subscription revenue is recurring revenue earned from customers for the provision of a service over a contractual term. In the event that the customer stops paying, they lose the legal right to use the software, and the Group has the ability to restrict the use of the product or service. Other recurring revenue primarily comprises maintenance and support revenue provided over a contractual term. In the event that the customer stops paying, they lose access to technical product support as well as any non-specified updates, upgrades and enhancements. Other recurring revenue also includes transaction and agent fees for transactional services which are billed on a consumption or per-unit basis. Subscription revenue and other recurring revenue are usually recognised on a straight-line basis over the term of the contract as control is transferred to the customer (including non-specified upgrades, when included). An exception is revenue from term licences embedded within a subscription contract for software with significant standalone functionality which are expected to recur upon renewal of the subscription offering. Revenue for these term licences is recognised when control is transferred at inception of each subscription contract period. Further, revenue billed on a consumption or per-unit basis is recognised as the services are utilised. Other revenue Revenue relating to perpetual software licences with significant standalone Software and software- functionality and upgrades to such licenses is recognised when the control relating related services to the licence has been transferred, which is typically when electronic delivery has taken place. • Perpetual software licences • Upgrades to perpetual licences Professional services and training revenue is usually recognised when delivered, • Professional services or by reference to the stage of completion of the transaction at the end of the reporting period. This assessment is made by comparing the proportion of • Training contract costs incurred to date to the total expected costs to completion. Identification of performance obligations When the Group enters into an agreement with a customer, goods and services deliverable under the contract are identified as separate performance obligations to the extent that the customer can benefit from the goods or services on their own and that the separate goods and services are considered distinct from other goods and services in the agreement. Where individual goods and services do not meet the criteria to be identified as separate performance obligations, they are aggregated with other goods and/or services in the agreement until a separate performance obligation is identified. Typically, the products and services outlined in the categories of revenue section qualify as separate performance obligations and the portion of the contractual fee allocated (or allocated based on the standalone selling prices) to them is recognised separately. However, certain on-premise subscription contracts, which combine the delivery of on-premise software and maintenance and support services, require unbundling. Sage’s cloud native services do not require unbundling as the terms do not provide the customer with a right to terminate the hosting contract and take possession of the software. Notes to the consolidated financial statements continued 192 THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 3 Profit before income tax continued 3.1 Revenue continued Determination of transaction price and standalone selling prices The Group determines the transaction price it is entitled to in return for providing the promised obligations to the customer based on the committed contractual amounts, net of sales taxes and discounts. Contract terms generally are monthly or annual, and customers either pay up-front or over the term of the related service agreement. The transaction price is allocated between the identified obligations according to the relative standalone selling prices (SSPs) of the performance obligations. The SSP of each performance obligation deliverable in the contract is determined according to the prices that the Group would obtain by selling the same goods and/or services included in the performance obligation to a similar customer on a standalone basis. The Group has established a hierarchy to identify the SSPs that are used to allocate the transaction price of a customer contract to the performance obligations in the contract. Where SSPs for on-premise offerings are observable and consistent across the customer base, SSP estimates are derived from pricing history. Where there are no directly observable estimates available, comparable products are utilised as a basis of assessment or the residual approach is used. Under the residual approach, the SSP for the offering is estimated to be the total transaction price less the sum of the observable SSPs of other goods or services in the contract. Timing of recognition Revenue is recognised when the respective performance obligations in the contract are delivered to the customer and payment remains probable. • Licences for standard on-premise software products are typically delivered by providing the customer with access to download the software. The licence period starts when such access is granted and the customer therefore has control over the software. For licences which are dependent on updates for ongoing functionality, the Group recognises revenue rateably over the term of the contract. Typically, this includes our payroll and tax compliance software. • Where the Group’s performance obligation is the grant of a right to continuously access a cloud offering for a certain term, revenue is recognised rateably over the term of the contract. • Maintenance and support revenue is typically recognised based on time elapsed and thus rateably over the term of the support arrangement. Typically, the Group’s performance obligation is to stand ready to provide technical product support and unspecified updates, upgrades, and enhancements on a when-and-if-available basis. The customers simultaneously receive and consume the benefits of these services. • Professional services and classroom training revenue are typically recognised as they are delivered. Where the Group stands ready to provide the service (such as access to learning content), revenue is recognised based on time elapsed and thus rateably over the service period. • Consumption-based services are recognised as the services are utilised. Where revenue is recognised over time in accordance with IFRS 15, it is typically recorded on a daily basis to reflect the continuous transfer of control. In certain cases, a monthly recognition approach is applied where it provides a reliable representation of the performance obligation pattern and aligns with the substance of the contractual arrangement. Identification of contract with the customer When the Group sells goods or services through a business partner, a key consideration is determining whether the business partner or the end user is Sage’s customer. The key criterion in this determination is whether the business partner has taken control of the product. Considering the nature of Sage’s subscription products and support services, this is usually assessed based on whether the business partner has responsibility for payment, has discretion to set prices, and takes on the risks and rewards of the product from Sage. See “Accounting estimates and judgements” in note 1 for details. Governance Report Additional InformationStrategic Report Financial Statements THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 193 3 Profit before income tax continued 3.1 Revenue continued 3.2 Operating profit Accounting policy Cost of sales includes items such as third-party royalties, hosting costs, transaction, and credit card fees related to the provision of payment processing services and the cost of hardware and inventories. These also include the third-party costs of providing training and professional services to customers. All other operating expenses incurred in the ordinary course of business are recorded in selling and administrative expenses. The following items have been included in arriving at operating profit from continuing 2025 2024 operations Note £m £m Staff costs 1,030 1,006 Depreciation of property, plant and equipment 7 30 29 Amortisation of intangible assets 6.2 60 67 Customer acquisition amortisation expense 8.1 164 157 Other M&A activity-related items 3.6 31 34 The Group incurred £379m (2024: £344m) of research and development expenditure in the year, of which £302m (2024: £300m) relates to total Group staff costs included above. See note 6.2 for the research and development accounting policy. Services provided by the Group’s auditor and network firms During the year, the Group obtained the following services from the Group’s auditor at costs as detailed below: 2025 2024 £m £m Fees payable to the Group’s auditor for the audit of the Company and the consolidated accounts 3 3 Fees payable to the Group’s auditor for the audit of the Company’s subsidiaries 3 3 Total fees 6 6 Fees payable to the Group’s auditor for audit-related assurance services (including costs relating to the half-year review) and other non-audit services were less than £1m (2024: less than £1m). Fees payable in the prior year were those paid to Ernst & Young LLP as the previous incumbent auditor. A summary of the Board’s policy in respect of the procurement of non-audit services for the Group’s auditor is set out on pages 115 and 116. Principal versus agent considerations When the Group has control of third-party goods or services prior to delivery to a customer, then the Group is the principal in the sale to the customer. As a principal, receipts from customers and payments to suppliers are reported on a gross basis in revenue and cost of sales. If the Group does not have control of third-party goods or services prior to transfer to a customer, then the Group is acting as an agent for the supplier and revenue in respect of the relevant obligations is recognised net of any related payments to the supplier and reported revenue represents the margin earned by the Group. Whether the Group is considered to be the principal or an agent in the transaction depends on analysis by management of both the legal form and substance of the agreement between the Group and its supplier. This takes into account whether Sage bears the price, inventory, and performance risks associated with the transaction. Practical expedients As the majority of contracts have a term of one year or less, the Group has applied the following practical expedients: • The aggregate transaction price allocated to the unsatisfied or partially unsatisfied performance obligations at the end of the reporting period is not disclosed. • Any financing component is not considered when determining the transaction price. Notes to the consolidated financial statements continued 194 THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 3 Profit before income tax continued 3.3 Employees and Directors 2025 2024 Average monthly number of people employed (including Directors) number number By segment: North America 2,757 2,662 UKIA 4,889 5,008 Europe 3,428 3,326 11,074 10,996 2025 2024 Staff costs Note £m £m Wages and salaries 891 907 Social security costs 123 118 Post-employment benefits 32 31 Share-based payments 13.2 51 56 1,097 1,112 Staff costs include a total of £67m of capitalised commission costs which are amortised over the expected contract life including probable contract renewals (2024: £67m); see note 8.1. Post-employment benefits include £1m of costs related to defined benefit plans (2024: £2m) and £31m (2024: £29m) in relation to defined contribution plans. The associated defined benefit liability is £25m (2024: £23m) and an actuarial gain was recognised in the period of £1m (2024: £3m loss) in other comprehensive income, gross of a £nil tax charge (2024: £1m benefit). 2025 2024 Key management compensation £m £m Salaries and short-term employee benefits 10 12 Share-based payments 8 8 18 20 Key management personnel are deemed to be members of the Group’s Executive Leadership Team and the Non-executive Directors as shown on pages 74 to 79. Governance Report Additional InformationStrategic Report Financial Statements THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 195 3 Profit before income tax continued 3.4 Leases Accounting policy The Group as lessee The Group recognises lease assets and lease liabilities on the balance sheet for most of its leases to account for the right to use leased items and the obligation to make future lease payments. Lease liabilities are measured at the present value of future lease payments over the lease term. The lease term is determined as the non-cancellable term of the lease, together with any periods covered by an option to extend the lease if the option is reasonably certain to be exercised, or any periods covered by an option to terminate the lease, if the option is reasonably certain not to be exercised. Lease payments normally include fixed payments (including in-substance fixed payments), a deduction for any lease incentives receivable and variable lease payments that depend on an index or a rate. In the event that a lease includes an exercise price for a purchase option that is reasonably certain to be exercised, or a termination penalty that is reasonably certain to be incurred, these too are included in lease payments as are any amounts expected to be paid under any residual value guarantees. Variable lease payments that do not depend on an index or a rate are not included in the lease liability but are recognised as an expense when incurred. Lease payments are discounted using the incremental borrowing rate applicable to the lease at the lease commencement date, as the rate implicit in the lease cannot normally be readily determined. Lease assets are recognised at the amount of the lease liability, adjusted where applicable for any lease payments made or lease incentives received before commencement of the lease, direct costs incurred at the commencement of the lease and estimated restoration costs to be incurred at the end of the lease. Right-of-use assets are presented within property, plant and equipment, and depreciated on a straight-line basis over the shorter of their useful life and the lease term. Their carrying amounts are measured at cost less accumulated depreciation and impairment losses. Lease liabilities are presented within current and non-current borrowings. Over the lease term, the carrying amounts of lease liabilities are increased to reflect interest on the liability and reduced by the amount of lease payments made. A lease liability is remeasured if there is a modification, a change in the lease term or a change in lease payments. The costs of these leases are recognised in the income statement split between the depreciation of the lease asset and the interest charge on the lease liability. Depreciation is presented within selling and administrative expenses and interest charges within finance costs. This policy applies mainly to the Group’s leases for properties and vehicles. For short-term leases with a lease term of 12 months or less and leases of low-value items, the Group has elected to apply the exemptions available under the standard. For these leases, rentals payable are charged to the income statement on a straight-line basis as an operating expense presented within selling and administrative expenses. Where rent payments are prepaid or accrued, their balances are reported under prepayments and accruals respectively. The low-value exemption has been applied to most of the Group’s leases of IT and other office equipment. The Group leases various offices and vehicles under non-cancellable lease agreements. Leases of properties have a range of lease terms, up to a maximum of 15 years. Other leases are generally for lease terms of 3 or 4 years. Property leases include various contractual terms, most commonly variable lease payments and termination and extension options. Notes to the consolidated financial statements continued 196 THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 3 Profit before income tax continued 3.4 Leases continued The carrying amounts of right-of-use assets and their movements during the year are presented in note 7. The carrying amounts of lease liabilities and their movements during the year are below. 2025 2024 Note £m £m At 1 October 90 86 Additions 30 24 Disposals (7) – Interest charge in the year 3.5 5 2 Payment of lease liabilities (21) (18) Lease incentives 6 – Exchange movement – (4) At 30 September 103 90 Presented as: Borrowings—current 11.4 17 15 Borrowings—non-current 11.4 86 75 The maturity analysis of lease liabilities is included in note 12.2. Amounts recognised in the income statement for leases are as follows: 2025 2024 Note £m £m Depreciation of right-of-use assets 7 15 14 Interest expense charge on lease liabilities 3.5 5 2 Lease expense from short-term leases and leases of low-value assets 2 5 (included in selling and administrative expenses) 22 21 Total cash outflows for leases in the year, including interest payments and outflows related to short-term leases and leases of low-value assets, was £23m (2024: £23m). Cash flows in relation to short-term leases and leases of low value assets are reported as part of cash flows from operating activities. The Group is exposed to potential future increases in variable lease payments that are based on an index or rate, which are initially measured as at the commencement date, with any future changes in the index or rate excluded from the lease liability until they take effect. If adjustments to lease payments based on an index or rate take effect, the lease liability will be reassessed and adjusted against the right-of-use asset. Governance Report Additional InformationStrategic Report Financial Statements THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 197 3 Profit before income tax continued 3.5 Finance income and costs Accounting policy Finance income and costs are recognised using the effective interest method. Finance costs are recognised in the income statement simultaneously with the recognition of an increase in a liability or the reduction in an asset. Derivative financial instruments are measured at fair value through profit or loss, within finance income and costs, unless they are designated as a hedging instrument. Where derivative financial instruments have been designated as hedging instruments in a cash flow hedge, and the hedging relationship is effective, gains and losses on those instruments are accumulated in the cash flow hedge reserve. The amount accumulated in the hedging reserve is reclassified to finance income or costs in the same period or periods during which the expected future cash flows affect the profit or loss. Any ineffective portion of changes in the fair value of the derivative financial instrument is recognised immediately in finance income or costs. Where derivative financial instruments have been designated as hedging instruments in a net investment hedge, gains or losses on those instruments are recognised in finance income and costs only to the extent the hedging relationship is ineffective. Where the hedging relationship is effective, gains or losses are accumulated in the foreign currency translation reserve. Foreign currency movements on intercompany balances are recognised in the income statement unless settlement is not planned or likely in the foreseeable future, in which case they are recognised in other comprehensive income. 2025 2024 £m £m Finance income: Interest income on short-term deposits 12 19 Finance income 12 19 Finance costs: Finance costs on bond notes (46) (37) Finance costs on bank borrowings (4) (4) Interest charge on lease liabilities (5) (2) Amortisation of issue costs (2) (2) Amortisation of foreign currency basis of hedge relationships (1) – Finance costs (58) (45) Finance costs—net (46) (26) Notes to the consolidated financial statements continued 198 THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 3 Profit before income tax continued 3.6 Adjustments between underlying and statutory results Accounting policy The business is managed and measured on a day-to-day basis using underlying results. To arrive at underlying results, certain adjustments are made for items that are individually important (due to their size, nature, or frequency). Management applies judgement in determining which items should be excluded from underlying performance. Recurring items These are items which occur regularly, but the exclusion of which management considers necessary to aid understanding of the underlying results of the Group. These items mainly relate to merger and acquisition (M&A)-related activity. By its nature, M&A activity is variable in its impact but is likely to include amortisation of acquired intangible assets, adjustments to acquired deferred income and acquisition and disposal-related costs, including integration costs relating to an acquired business and acquisition-related remuneration (which are typically incurred over a period of one year or more). Unhedged foreign currency movements on intercompany balances that are charged through the income statement are excluded from underlying results, so that exchange rate impacts do not affect comparisons. Recurring items are adjusted each year irrespective of materiality to ensure consistent treatment. Non-recurring items These are items which are non-recurring and are adjusted on the basis of either their size or their nature. These items can include, but are not restricted to, gains and losses on the disposal of assets, impairment charges and reversals, and restructuring-related costs. Whilst these items are described as non-recurring, similar costs, for example in relation to different restructuring programmes or impairments of other assets, may arise in future periods. As these items are one- off or non-operational in nature, management considers that their exclusion aids understanding of the Group’s underlying business performance. Operating Profit Operating Profit profit before tax profit before tax 2025 2025 2024 2024 £m £m £m £m Statutory measures 530 484 452 426 Recurring Amortisation of acquired intangibles 42 42 48 48 Other M&A activity-related items 31 31 34 34 Foreign currency movements on intercompany balances – 1 – (1) Non-recurring Reversal of property restructuring costs (2) (2) – – Reversal of restructuring costs (1) (1) (2) (2) Reversal of employee-related costs – – (3) (3) Underlying (as reported) measures 600 555 529 502 Impact of foreign exchange – – (16) (16) Underlying measures 600 555 513 486 Governance Report Additional InformationStrategic Report Financial Statements THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 199 3 Profit before income tax continued 3.6 Adjustments between underlying and statutory results continued Recurring items Recurring items impacting operating profit (reported within selling and administrative costs) and profit before tax comprise: • Acquired intangibles are assets which have previously been recognised as part of business combinations or similar transactions. These assets are predominantly customer relationships and technology rights. Further details including specific accounting policies in relation to these assets can be found in note 6.2. • Other M&A activity-related items relate to advisory, legal, accounting, valuation, and other professional or consulting services which are related to M&A activity as well as acquisition-related remuneration and directly attributable integration costs. £15m (2024: £5m) of these costs have been paid in the year, while the remainder is expected to be paid in subsequent financial years. Non-recurring items Non-recurring items impacting operating profit (reported within selling and administrative costs) and profit before tax comprise: • Reversal of property restructuring costs £2m (2024: £nil) arising as a result of a sub-lease entered into for a property site in North America, which had previously been exited. • Reversal of restructuring costs of £1m (2024: £2m) relates to unutilised provisions previously recognised. • Reversal of employee-related costs of £3m in the prior year relates to unutilised employee-related provisions recognised in previous years for French payroll taxes. In total for the year ended 30 September 2025, cash paid in respect of recurring and non-recurring items (some of which was incurred in prior periods) of £41m, comprised £33m of other M&A activity-related items and £8m of employee-related costs. (For the year ended 30 September 2024, cash paid in respect recurring and non-recurring items of £44m comprised £39m of other M&A activity-related items, £3m of restructuring costs and £2m of property restructuring costs.) The tax impact of recurring and non-recurring adjustments between statutory and underlying profit before tax is £17m, of which £18m relates to recurring items and £1m tax credit relates to non-recurring items. (For the year ended 30 September 2024 the tax impact is £17m, of which all £17m relates to recurring items.) For the impact of these on the effective tax rates, see note 4. Notes to the consolidated financial statements continued 200 THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 4 Income tax expense This note analyses the tax expense for this financial year which includes both current and deferred tax. Current tax expense represents the amount payable on this year’s taxable profits and any adjustments relating to prior years. Deferred tax is an accounting adjustment to recognise liabilities or benefits that are expected to arise in the future due to differences between the carrying values of assets and liabilities and their respective tax bases. This note outlines the tax accounting policies, analyses the current and deferred tax expenses in the year and presents a reconciliation between profit before tax in the income statement multiplied by the UK rate of corporation tax and the tax expense for the year. Accounting policy The taxation expense for the year represents the sum of current tax and deferred tax. The expense is recognised in the income statement, in the statement of comprehensive income or in equity according to the accounting treatment of the related transaction. Current tax is based on the taxable income for the period and any adjustment in respect of prior periods. Current tax is calculated using tax rates that have been enacted or substantively enacted at the end of the reporting period. Deferred tax arises due to certain temporary differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases (note 10). 2025 2024 Analysis of expense in the year Note £m £m Current income tax Current tax on profit for the year 144 126 Adjustment in respect of prior years (2) (1) Current income tax 142 125 Deferred tax Origination and reversal of temporary differences (28) (21) Adjustment in respect of prior years 1 (1) Deferred tax 10 (27) (22) The current year tax expense is split into the following: Underlying tax expense 132 120 Tax credit on adjustments between the underlying and statutory operating profit (17) (17) Income tax expense reported in income statement 115 103 2025 2024 Tax charge/(benefit) recognised directly in other comprehensive income £m £m Current income tax Foreign currency derivatives – 2 Deferred tax Actuarial gain on post-employment benefit obligations – (1) Foreign currency derivatives – (2) Total tax recognised in other comprehensive income – (1) Governance Report Additional InformationStrategic Report Financial Statements THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 201 4 Income tax expense continued The effective tax rate for the year is lower (2024: lower) than the rate of UK corporation tax applicable to the Group of 25% (2024: 25%). The differences are explained below: 2025 2024 £m £m Profit before income tax 484 426 Statutory profit before income tax multiplied by the rate of UK corporation tax of 25% (2024: 25%) 121 106 Tax effects of: Adjustments in respect of prior years (1) (2) Foreign tax rates in excess of UK rate of tax – 1 US tax reform (5) (4) Non-deductible expenses and permanent items 9 13 Other corporate taxes (withholding tax, business tax) 5 5 Tax incentive claims (14) (16) At the effective income tax rate of 24% (2024: 24%) 115 103 Income tax expense reported in the income statement 115 103 The underlying effective tax rate for the year is lower (2024: lower) than the rate of UK corporation tax applicable to the Group of 25% (2024: 25%). The differences are explained below: 2025 2024 £m £m Underlying profit before income tax 555 502 Underlying profit before income tax multiplied by the rate of UK corporation tax of 25% (2024: 25%) 139 125 Tax effects of: Adjustments in respect of prior years (1) (3) Foreign tax rates in excess of UK rate of tax 1 1 US tax reform (5) (4) Non-deductible expenses and permanent items 7 12 Other corporate taxes (withholding tax, business tax) 5 5 Tax incentive claims (14) (16) At the effective income tax rate of 24% (2024: 24%) 132 120 Underlying tax expense 132 120 The effective tax rate on statutory profit before tax was 24% (2024: 24%), whilst the effective tax rate on underlying profit before tax on continuing operations was 24% (2024: 24%). The statutory and underlying effective tax rates are lower than the UK corporation tax rate applicable to the Group, primarily due to the innovation tax credits for registered patents and software, and research and development activities which attract government tax incentives in a number of operating territories. The Group recognises certain provisions and accruals in respect of tax which involve a degree of estimation and uncertainty where the tax treatment cannot finally be determined until a resolution has been reached by the relevant tax authority. This approach resulted in a provision of £39m at 30 September 2025 (2024: £39m). 2025 2024 Tax charge/(benefit) recognised directly in retained earnings £m £m Current tax Employee benefits (7) (7) Deferred tax Employee benefits 1 1 Income tax expense reported in retained earnings (6) (6) Notes to the consolidated financial statements continued 202 THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 4 Income tax expense continued The tax provision is sensitive to a number of issues which are not always within the control of the Group and are often dependent on the efficiency of the legal processes in the relevant taxing jurisdictions in which the Group operates. Issues can take many years to resolve and assumptions on the likely outcome have therefore been made by management. Management has applied the principles set out in IFRIC 23 in determining the measurement of uncertain tax positions. In making these estimates, management’s judgement was based on various factors including: • The status of recent and current tax audits and enquiries; • The results of previous claims; and • Any changes to the relevant tax environment. When making this assessment, the Group utilises our specialist in-house tax knowledge and experience of similar situations. These judgements also, where appropriate, take into consideration specialist tax advice provided by third-party advisors. Management continually assesses the impact of legislative developments in the jurisdictions in which we operate. The Group is in scope of the OECD’s Pillar Two global tax reform for the financial year ended 30 September 2025. An assessment of this legislation has been completed, and it is not expected to materially impact the Group’s effective tax rate in future periods. 5 Earnings per share This note sets out how earnings per share (EPS) is calculated. EPS is the amount of post-tax profit attributable to each ordinary share. Diluted EPS shows what the impact would be if all potentially dilutive ordinary shares in respect of exercisable share options were exercised and treated as ordinary shares at the year end. This note also provides a reconciliation between the statutory profit figure, which ties to the consolidated income statement, and the Group’s internal measure of performance, underlying profit. See note 3.6 for details of the adjustments made between statutory and underlying profit before tax and note 4 for the tax impact on these adjustments. Accounting policy Basic earnings per share is calculated by dividing the profit for the year attributable to owners of the parent by the weighted average number of ordinary shares in issue during the year, excluding those held as treasury shares and held by the Employee Benefit Trust, which are treated as cancelled, until reissued. For diluted earnings per share, the weighted average number of ordinary shares in issue is adjusted to assume conversion of all potentially dilutive ordinary shares, exercisable at the end of the year. The Group has one class of dilutive potential ordinary shares which are share options granted to employees where the exercise price is less than the average market price of the Company’s ordinary shares during the year, where the vesting criteria are achieved at year end. Governance Report Additional InformationStrategic Report Financial Statements THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 203 5 Earnings per share continued Underlying as Underlying reported Underlying Statutory Statutory Reconciliations of the earnings and weighted average number of shares 2025 2024 2024 2025 2024 Earnings attributable to owners of the parent (£m) Profit for the year 423 382 370 369 323 Number of shares (millions) Weighted average number of shares 978 1,007 1,007 978 1,007 Dilutive effects of shares 15 18 18 15 18 993 1,025 1,025 993 1,025 Earnings per share attributable to owners of the parent (pence) Basic earnings per share 43.19 37.91 36.73 37.74 32.10 Diluted earnings per share 42.52 37.25 36.09 37.16 31.55 Notes: * Underlying as reported is at 2024 reported exchange rates. ** All operations in the years relate to continuing operations. 2025 2024 Reconciliation of earnings £m £m Statutory profit for the year attributable to owners of the parent 369 323 Adjustments: Amortisation of acquired intangible assets 42 48 Other M&A activity-related items 31 34 Reversal of property restructuring costs (2) – Reversal of restructuring costs (1) (2) Reversal of employee-related costs – (3) Foreign currency movements on intercompany balances 1 (1) Taxation on adjustments between underlying and statutory profit before tax (17) (17) Net adjustments 54 59 Underlying profit for the year (before foreign exchange movement) 423 382 Foreign exchange movement – (16) Taxation on foreign exchange movement – 4 Net foreign exchange movement – (12) Underlying profit for the year (after foreign exchange movement) attributable to owners of the parent 423 370 Exchange movement relates to the retranslation of prior year results to current year exchange rates, as shown in the table on page 55 within the Financial review. 6 Intangible assets This note provides details of the non-physical assets used by the Group to generate revenues and profits. These assets include items such as goodwill, and other intangible assets such as brands, customer relationships, computer software, in-process R&D and technology which have predominantly been acquired as part of business combinations. These assets are initially measured at fair value, which is the price that would be received to sell an asset in an orderly transaction between market participants at the measurement date. Goodwill represents the excess of the amount paid to acquire a business over the fair value of the identifiable net assets of that business at the acquisition date. This section also explains the accounting policies applied and the specific judgements and estimates made by management in arriving at the carrying value of these assets. Notes to the consolidated financial statements continued 204 THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 6 Intangible assets continued 6.1 Goodwill Accounting policy Goodwill arising from the acquisition of a subsidiary represents the excess of the consideration transferred, the amount of any non-controlling interest in the acquiree and the acquisition date fair value of any previous equity interest in the acquiree over the fair value of the Group’s total identifiable net assets acquired. Goodwill is carried at cost less accumulated impairment losses. Goodwill previously written off directly to reserves under UK GAAP prior to 1 October 1998 has not been reinstated and is not recycled to the income statement on the disposal of the business to which it relates. Goodwill is tested for impairment annually and when circumstances indicate that it may be impaired. Goodwill is assessed for the purpose of impairment testing, at either the individual cash-generating unit (CGU) level or group of CGUs, consistent with the level at which goodwill is monitored internally. Impairment is determined by assessing the recoverable amount of each CGU or group of CGUs to which the goodwill relates. When the recoverable amount of the CGU or group of CGUs is less than its carrying amount, an impairment loss is recognised. At recognition, goodwill is allocated to those CGUs expected to benefit from the synergies of the combination. 2025 2024 Note £m £m Cost and net book amount at 1 October 2,122 2,245 Acquisition of subsidiaries 14.1 74 24 Exchange movement 17 (147) Cost and net book amount at 30 September 2,213 2,122 Note: * Adjusted for finalisation of fair value of assets acquired and liabilities assumed in the acquisition of Infineo in the prior year. There are no accumulated impairment charges within goodwill for any of the years presented. Cash-generating units The following table shows the allocation of the carrying value of goodwill at the end of the reporting period by CGU or group of CGUs: 2025 2024 £m £m North America 1,375 1,331 UK & Ireland 354 354 France 246 234 Iberia 159 126 Central Europe 55 53 Africa and the Middle East 24 24 2,213 2,122 Note: * Adjusted for finalisation of the fair value of assets acquired and liabilities assumed in the acquisition of Infineo (see notes 1 and 14.2) and allocation of previously unallocated goodwill to the France CGU (£32m), with the remainder allocated to other intangible and deferred tax liabilities (see note 14.2) Governance Report Additional InformationStrategic Report Financial Statements THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 205 6 Intangible assets continued 6.1 Goodwill continued Annual goodwill impairment tests The recoverable amount of a CGU or group of CGUs is determined as the higher of its fair value less costs of disposal and its value in use. In determining value in use, estimated future cash flows over a three-year period are discounted to their present value, with a terminal value based on the cash flows in the third year and an assumed long-term growth rate. The Group performed its annual test for impairment as at 30 June 2025. In all cases, the financial forecasts contained in the Group’s three-year financial plan form the basis for the cash flow projections for a CGU or a group of CGUs, which is aligned with the Group’s three-year strategic planning horizon. Net operating cash flows over the three-year plan period reflect the Group’s current assessment of climate change for each CGU or group of CGUs. This includes the potential impact on both revenue and cost, including the cost of any associated commitments made by the Group, which at this stage are not material. Consideration has also been given to the potential longer-term impacts which are reflected in the long-term growth rates since they are based on independently sourced longer- term Consumer Prices Index (CPI) forecasts. Reasonably possible changes in the long-term growth rates, considering the potential impact of climate change, do not materially impact the impairment test. The key assumptions in the value in use calculations include the discount rate, average medium-term revenue growth rates and the long-term growth rates of net operating cash flows: • The average medium-term revenue growth rates represent the compound annual revenue growth for the first three years. The average medium-term revenue growth rate applied to each CGU’s cash flow projections for plan periods of three years are calculated using the specific rates used in the preparation of the Group’s three-year plan and reflects rates applicable to each territory. • Long-term growth rates of net operating cash flows are assumed to be in line with the long-term CPI forecasts of the country in which the CGU’s operations are primarily undertaken, reflecting the specific rates for each territory. Average medium-term operating margins are equal to the expected operating margin across the three-year plan period. The operating margins over the three-year plan period are based on historical margins specific to each CGU with modest improvements from expected efficiencies in scaling the business. Range of rates used across the different CGUs 2025 2024 Average medium-term revenue growth rates 6%–14% 8%–15% Long-term growth rates to net operating cash flows 2%–4% 2%–5% Note: * Current year average medium-term revenue growth is based on three (2024: three) year compound annual revenue growth and excludes intercompany revenue. Notes to the consolidated financial statements continued 206 THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 6 Intangible assets continued 6.1 Goodwill continued In accordance with IAS 36, key assumptions for the value in use calculations are disclosed for those CGUs and groups of CGUs where significant goodwill is held. These are deemed by management to be CGUs or groups of CGUs holding 10% or more of total goodwill. The discount rate, average medium-term revenue growth rate and long-term growth rate assumptions used for the value in use calculation for these are shown below: Approximate local Average Local discount Long-term medium-term discount rate rate (pre-tax) growth revenue 2025 (post-tax) equivalent rate growth rate North America 9.8% 13.1% 2.3% 14.3% UK & Ireland 9.9% 13.3% 2.0% 14.0% France 8.8% 11.7% 1.8% 9.4% Approximate Average Local local discount Long-term medium-term discount rate rate (pre-tax) growth revenue 2024 (post-tax) equivalent rate growth rate North America 10.1% 13.5% 2.2% 15.0% UK & Ireland 10.1% 13.3% 2.0% 12.6% France 8.9% 11.9% 1.8% 11.3% Note: * Current year average medium-term revenue growth is based on three (2024: three) year compound annual revenue growth and excludes intercompany revenue. Discount rate The Group uses a discount rate based on a local Weighted Average Cost of Capital (WACC) for each CGU or group of CGUs, applying local government bond yields and specific tax rates to each CGU or group of CGUs. The discount rate applied to a CGU or group of CGUs represents a post-tax rate that reflects the market assessment of the time value of money as at 30 June 2025 and the risks specific to the CGU of group of CGUs, through the inclusion of a country risk premium. As the net operating cash flows for each CGU or group of CGUs include the expected impact of inflation, a nominal post-tax discount rate is used. Use of a post-tax discount rate is consistent with the use of post-tax cash flows in the calculations and produces a result that is not materially different from applying the equivalent pre-tax rate to pre-tax cash flows. For comparison, the equivalent pre-tax rate has been estimated by grossing up the post-tax rate and is considered to provide a reasonable approximation of the rate that would have been used if calculations were on a pre-tax basis considering there are no significant timing differences. The post-tax discount rates applied to CGUs or group of CGUs were in the range of 8.1% (2024: 8.4%) to 16.1% (2024: 17.7%), reflecting the specific rates for each territory. Sensitivity analysis A sensitivity analysis was performed for each of the significant CGUs or groups of CGUs and management concluded that no reasonably possible change in any of the key assumptions would result in the carrying value of the CGU or group of CGUs exceeding its recoverable amount. Sensitivity testing assumed a reasonably possible reduction in both average medium-term revenue growth rates and average medium-term operating margins, as well as an increase in the discount rate. Impairment charge No impairment charge was recognised in the year (2024: £nil). The Group performed its annual test for impairment for all CGUs as at 30 June 2025. The recoverable amount exceeded the carrying value for each CGU or group of CGUs; accordingly no impairment charge has been recognised in the year. Governance Report Additional InformationStrategic Report Financial Statements THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 207 6 Intangible assets continued 6.2 Other intangibles Accounting policy Intangible assets arising on business combinations are recognised initially at fair value at the date of acquisition. Subsequently they are carried at cost less accumulated amortisation and impairment charges. The main intangible assets recognised are brands, technology, in-process R&D, computer software, and customer relationships. Amortisation is charged to the income statement on a straight-line basis over their estimated useful lives. The estimated useful lives are as follows: Brand names 1 to 20 years Customer relationships 4 to 15 years Technology/In-process R&D (IPR&D) 3 to 8 years Computer software 2 to 7 years Other intangible assets that are acquired by the Group are stated at cost, which is the asset’s purchase price and any directly attributable costs of preparing the asset for its intended use, less accumulated amortisation and impairment losses if applicable. The carrying value of intangibles is reviewed for impairment whenever events indicate that the carrying value may not be recoverable. The recoverable amount is considered to be the higher of the fair value less costs of disposal and value in use. Internally generated software development costs qualify for capitalisation when the Group can demonstrate all of the following: • The technical feasibility of completing the intangible asset so that it will be available for use or sale; • Its intention to complete the intangible asset and use or sell it; • Its ability to use or sell the intangible asset; • How the intangible asset will generate probable future economic benefits; • The existence of a market or, if it is to be used internally, the usefulness of the intangible asset; • The availability of adequate technical, financial and other resources to complete the development and to use or sell the intangible asset; and • Its ability to measure reliably the expenditure attributable to the intangible asset during development. Generally, commercial viability of new products is not proven until all high-risk development issues have been resolved through testing pre-launch versions of the product. As a result, technical feasibility is proven only after completion of the detailed design phase and formal approval, which occurs just before the products are ready to go to market. Accordingly, development costs have not been capitalised. However, the Group continues to assess the eligibility of development costs for capitalisation on a project-by-project basis. Costs which are incurred after the general release of internally generated software or costs which are incurred in order to enhance existing products are expensed in the period in which they are incurred and included within research and development expense in the financial statements. Notes to the consolidated financial statements continued 208 THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 6 Intangible assets continued 6.2 Other intangibles continued Internal Computer Customer Brands Technology IPR&D software relationships Total £m £m £m £m £m £m Cost at 1 October 2024 32 335 3 182 203 755 Additions – – – 14 – 14 Acquisition of subsidiaries – 27 – – 1 28 Disposals – (2) – (40) – (42) Exchange movement 1 3 – – 3 7 At 30 September 2025 33 363 3 156 207 762 Accumulated amortisation at 1 October 2024 32 218 3 136 138 527 Charge for the year – 27 – 18 15 60 Disposals – (2) – (40) – (42) Exchange movement 1 2 – 1 1 5 At 30 September 2025 33 245 3 115 154 550 Net book amount at 30 September 2025 – 118 – 41 53 212 Internal Computer Customer Brands Technology IPR&D software relationships Total £m £m £m £m £m £m Cost at 1 October 2023 34 333 3 184 216 770 Additions – 7 – 14 – 21 Acquisition of subsidiaries – 8 – – 1 9 Disposals – – – (10) – (10) Exchange movement (2) (13) – (6) (14) (35) At 30 September 2024 32 335 3 182 203 755 Accumulated amortisation at 1 October 2023 33 196 3 134 130 496 Charge for the year 1 31 – 19 16 67 Disposals – – – (10) – (10) Exchange movement (2) (9) – (7) (8) (26) At 30 September 2024 32 218 3 136 138 527 Net book amount at 30 September 2024 – 117 – 46 65 228 Note: * Adjusted for finalisation of fair value of assets acquired and liabilities assumed in the acquisition of Infineo in the prior year. All amortisation charges in the year have been charged through selling and administrative expenses. Of these amortisation charges, those relating to acquired intangibles of £42m (primarily technology and customer relationships) have been classified as a recurring adjustment (2024: £48m); see note 3.6. Governance Report Additional InformationStrategic Report Financial Statements THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 209 7 Property, plant and equipment This note details the physical assets used by the Group to operate the business and generate revenues and profits. Assets are shown at their purchase price less depreciation, which is an expense that is charged over the useful life of these assets to reflect annual usage and wear and tear, and impairment. Accounting policy Property, plant and equipment are stated at cost less accumulated depreciation and impairment losses. Depreciation on property, plant and equipment is provided on a straight-line basis to write down an asset to its residual value over its useful life as follows: Freehold buildings Up to 50 years Long leasehold buildings and improvements Shorter of associated lease term and useful life Plant and equipment 2 to 7 years Motor vehicles 4 years Office equipment 2 to 7 years Right-of-use lease assets Shorter of lease term and useful life Freehold land is not depreciated. An item of property, plant and equipment is reviewed for impairment whenever events indicate that its carrying value may not be recoverable. Further information on the policy applied to right-of-use lease assets is included in note 3.4. Notes to the consolidated financial statements continued 210 THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 7 Property, plant and equipment continued Motor vehicles Right-of- Right-of- Plant and and office use assets: use assets: equipment equipment Property Vehicles Total £m £m £m £m £m Cost at 1 October 2024 120 23 150 8 301 Additions 39 2 28 2 71 Disposals (23) (1) (9) – (33) Exchange movement (2) 5 2 – 5 At 30 September 2025 134 29 171 10 344 Accumulated depreciation at 1 October 2024 77 19 90 7 193 Charge for the year 13 2 14 1 30 Disposals (23) (1) (3) – (27) Exchange movement 1 1 2 – 4 At 30 September 2025 68 21 103 8 200 Net book amount at 30 September 2025 66 8 68 2 144 Motor vehicles Right-of- Right-of- Land and Plant and and office use assets: use assets: buildings equipment equipment Property Vehicles Total £m £m £m £m £m £m Cost at 1 October 2023 13 124 27 134 7 305 Additions – 18 1 23 1 43 Disposals (13) (13) (4) (1) – (31) Exchange movement – (9) (1) (6) – (16) At 30 September 2024 – 120 23 150 8 301 Accumulated depreciation at 1 October 2023 6 83 23 83 6 201 Charge for the year – 14 1 13 1 29 Disposals (6) (13) (4) (1) – (24) Exchange movement – (7) (1) (5) – (13) At 30 September 2024 – 77 19 90 7 193 Net book amount at 30 September 2024 – 43 4 60 1 108 All depreciation charges in the years presented have been charged through selling and administrative expenses. In the prior year, the Group disposed of its Beaverton property site with a carrying value of £7m, which was part of the North America operating segment, for proceeds of £9m. The profit on disposal of the site was recognised through selling and administrative expenses and proceeds from the sale were recognised through cash flows from investing activities. Governance Report Additional InformationStrategic Report Financial Statements THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 211 8 Working capital This note provides the amounts invested by the Group in working capital balances at the end of the financial year. Working capital is made up of trade and other receivables, trade and other payables, and deferred income. Trade and other receivables are made up of amounts owed to the Group by customers, amounts that we pay to our suppliers in advance, and incremental costs to acquire a contract. Trade receivables are shown net of an allowance for expected credit losses. Our trade and other payables are amounts we owe to our suppliers that have been invoiced to us or accrued by us. They also include amounts due in relation to taxes and social security from our role as an employer. This note also gives some additional detail on the age and recoverability of our trade receivables, which provides an understanding of the credit risk faced by the Group as a part of everyday trading. Credit risk is further disclosed in note 12.6. 8.1 Trade and other receivables Accounting policy Trade receivables and contract assets Trade receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method, less an allowance for expected credit losses. The Group uses the term “Trade receivables” for contract receivables. These are recognised when the right to consideration is unconditional. Typically, the Group invoices fees for perpetual licences on contract closure and delivery. For performance obligations satisfied over time, judgement is required in determining whether a right to consideration is unconditional. In such situations, a receivable is recognised for the transaction price of the non-cancellable portion of the contract when the Group starts satisfying the performance obligation, including arrangements where customers pay over time taking into consideration the contractual terms and the nature of the customer’s payment arrangements. When revenue recognised in respect of a customer contract exceeds amounts received or receivable from the customer a contract asset is recognised. The carrying amounts of trade receivables and contract assets are reduced by allowances for expected credit losses using the simplified approach under IFRS 9. The Group uses a matrix approach to determine the allowance, with default rates assessed for each country in which the Group operates. The default rates applied are based on the ageing of the receivable, past experience of credit losses, and forward-looking information. An allowance for a receivable’s estimated lifetime expected credit losses is first recorded when the receivable is initially recognised, and subsequently adjusted to reflect changes in credit risk until the balance is collected. In the event that management considers that a receivable cannot be collected, the balance is written off. Incremental costs of obtaining customer contracts The incremental costs of obtaining customer contracts are capitalised under IFRS 15. Contract acquisition costs primarily consist of sales commissions earned by the Group’s sales force and business partners. Judgement is required in determining the amounts to be capitalised, particularly where the commissions are based on cumulative targets. The Group capitalises such cumulative target commissions for all customer contracts that count towards the cumulative target but only if nothing other than obtaining customer contracts can contribute to achieving the cumulative target. The capitalised assets are amortised over the period during which the related revenue is recognised, which may extend beyond the initial contract term where the Group expects to benefit from future renewals as a result of incurring the costs. Typically, either the Group does not pay sales commissions for customer contract renewals or such commissions are not commensurate with the commissions paid for new contracts. Consequently, the Group amortises sales commissions paid for new customer contracts on a straight-line basis over the expected contract life including probable contract renewals. Judgement is required in estimating these contract lives. In exercising this judgement, the Group considers respective renewal history adjusted for indications that the renewal history is not fully indicative of future renewals. The amortisation periods range from one year to eight years depending on the type of commission arrangement. Amortisation of the capitalised costs of obtaining customer contracts is reported within selling and administrative expenses. Notes to the consolidated financial statements continued 212 THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 8 Working capital continued 8.1 Trade and other receivables continued 2025 2024 Non-current: £m £m Customer acquisition costs 135 131 Other receivables 5 5 Prepayments 4 1 144 137 2025 2024 Current: £m £m Trade receivables 318 275 Less: allowance for expected credit losses (9) (10) Trade receivables—net 309 265 Other receivables 27 24 Prepayments 86 69 Customer acquisition costs 49 46 471 404 The Group has incurred £170m (2024: £164m) to obtain customer contracts and an amortisation expense of £164m (2024: £157m) was recognised in operating profit during the year. There were no material contract assets. 2025 2024 Movements on the Group allowance for expected credit losses of trade receivables were as follows: £m £m At 1 October 10 10 Increase in allowance for expected credit losses 3 4 Receivables written off during the year as uncollectable (4) (4) At 30 September 9 10 The Group’s credit risk on trade and other receivables is primarily attributable to trade receivables. The Group has no significant concentrations of credit risk since the risk is spread over a large number of unrelated counterparties. The Group’s businesses implement policies, procedures, and controls to manage customer credit risk. Outstanding balances are regularly monitored and reviewed to identify any change in risk profile. The Group recognises a loss allowance against trade receivables using the simplified approach under IFRS 9. The amount of the allowance reflects the lifetime expected credit losses measured using historical payment default rates determined for each geographical market in which the Group operates. The historical default rates are adjusted where necessary if they do not reflect the level of future expected credit losses, for example because of changes in the local economy or other commercial considerations. The allowance for expected credit losses is calculated using a provision matrix. The amount of the allowance increases as outstanding balances age. A customer balance is written off when it is considered that there is no reasonable expectation that the amount will be collected and legal enforcement activities have ceased. Governance Report Additional InformationStrategic Report Financial Statements THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 213 8 Working capital continued 8.1 Trade and other receivables continued An analysis of the gross carrying amount of trade receivables showing credit risk exposure by age of the outstanding balance is as follows: 1–30 days 31–60 days 61–90 days 91+ days Not yet due overdue overdue overdue overdue Total Trade receivables at 30 September 2025 £m £m £m £m £m £m Expected credit loss rate 1% 3% 8% 13% 41% – Estimated total gross carrying amount at default 276 19 6 4 13 318 Expected credit loss (3) (1) – – (5) (9) 1–30 days 31–60 days 61–90 days 91+ days Not yet due overdue overdue overdue overdue Total Trade receivables at 30 September 2024 £m £m £m £m £m £m Expected credit loss rate 1% 3% 9% 16% 59% Estimated total gross carrying amount at default 239 17 6 3 10 275 Expected credit loss (2) (1) (1) – (6) (10) Included in selling and administrative expenses in the income statement is a debit of £7m (2024: debit of £6m) in relation to receivables credit losses. The maximum exposure to credit risk at the end of the reporting period is the fair value of each class of receivables mentioned above. The Group held no collateral as security. The carrying value of trade receivables approximate their fair value. 8.2 Trade and other payables Accounting policy Trade payables and other payables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method. 2025 2024 Current trade and other payables can be analysed as follows: £m £m Trade payables 52 38 Other tax and social security payable 47 39 Other payables 38 50 Accruals 296 278 433 405 2025 2024 Non-current trade and other payables can be analysed as follows: £m £m Other payables 8 3 Notes to the consolidated financial statements continued 214 THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 8 Working capital continued 8.3 Deferred income Accounting policy If amounts received or receivable from a customer exceed revenue recognised for a contract, a contract liability is recognised. The Group uses the term “deferred income” for a contract liability. Contract liabilities primarily reflect invoices due or payments received in advance of revenue recognition. Deferred income is unwound as related performance obligations are satisfied. In all material respects, current deferred income at 1 October 2024 was recognised as revenue during the year and the current deferred income recorded at 30 September 2025 is expected to be recognised as revenue in the next financial year. Deferred income presented in non-current liabilities is expected to be recognised as revenue in more than 12 months. Other than the recognition and unwind of deferred income from the sale of subscription and maintenance and support contracts, there were no significant changes in contract liability balances during the year. 9 Provisions This note provides details of the provisions recognised by the Group, where a liability exists of uncertain timing or amount. The main estimates in this area relate to legal exposure, employee severance, onerous contracts, interest on uncertain tax provisions and dilapidation charges. This section also explains the accounting policies applied and the specific judgements and estimates made by the Directors in arriving at the value of these liabilities. Accounting policy A provision is recognised only when all three of the following conditions are met: • The Group has a present obligation (legal or constructive) as a result of a past event; • It is probable that an outflow of resources embodying economic benefits will be required to settle the obligation; and • A reliable estimate can be made of the amount of the obligation. The amount recognised as a provision is the present value of the best estimate of the expenditure required to settle the present obligation at the end of the reporting period, i.e. the present value of the amount that the Group would rationally pay to settle the obligation at the balance sheet date or to transfer it to a third party. Governance Report Additional InformationStrategic Report Financial Statements THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 215 9 Provisions continued Restructuring Legal Building Other Total £m £m £m £m £m At 1 October 2024 7 15 18 7 47 Additional provision in the year – 6 2 2 10 Provision utilised in the year (2) (8) (2) – (12) Unused amount reversed (1) (1) (1) – (3) Exchange movement – 1 1 – 2 At 30 September 2025 4 13 18 9 44 Restructuring Legal Building Other Total £m £m £m £m £m Maturity profile < 1 year – 9 3 9 21 1–2 years 1 4 4 – 9 2–5 years 3 – 8 – 11 > 5 years – – 3 – 3 At 30 September 2025 4 13 18 9 44 Restructuring provisions are for the estimated costs of Group restructuring activities and mainly relate to employee severance which remains unpaid at the balance sheet date. These provisions will be utilised as obligations are settled which is currently expected to be within five years. This includes the non-recurring restructuring costs recognised in previous years, of which £1m was utilised in the year, which remain unpaid at the balance sheet date. Legal provisions have been made in relation to ongoing disputes with third parties and other claims against the Group. The amount and ageing of legal provisions is assessed regularly, based upon internal and external legal advice, as required. Building provisions relate to dilapidation charges and property-related contracts that have become onerous. The timing of the cash flows associated with building provisions is dependent on the timing of lease agreement termination. Other provisions comprise mainly the interest related to uncertain tax penalties and those for the costs of warranty cover provided by the Group in respect of products sold to third parties. The timing of the cash flows associated with warranty provisions is spread over the period of warranty with the majority of the claims expected in the first year. Notes to the consolidated financial statements continued 216 THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 10 Deferred income tax Deferred income tax is an accounting adjustment to recognise liabilities or benefits that are expected to arise in the future due to differences in the carrying value of assets and liabilities and their respective tax bases. In this note we outline the accounting policies, movements in the year on the deferred tax account and the net deferred tax asset or liability at the year end. A deferred tax asset represents a tax reduction that is expected to arise in a future period. A deferred tax liability represents taxes which will become payable in a future period as a result of a current or previous transaction. Accounting policy Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary difference arises from goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit. Deferred tax liabilities are recognised for taxable temporary differences arising on investments in subsidiaries, except where the Group is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset realised based on tax rates that have been enacted or substantively enacted at the end of the reporting period. Tax assets and liabilities are offset when there is a legally enforceable right and there is an intention to settle the balances net. Other intangible Share assets Accounting options (excluding Tax provisions/ Deferred and Capitalised goodwill) losses accruals Goodwill revenue awards R&D Other Total Deferred tax £m £m £m £m £m £m £m £m £m At 30 September 2023 (45) 23 10 (24) 16 20 37 1 38 Income statement credit/(debit) 11 (2) (5) (1) (13) 4 27 1 22 Acquisition or disposal of subsidiaries (1) 1 – – – – 1 – 1 Other comprehensive income movement – – – – – (1) – 4 3 Exchange movement 2 (1) 1 1 – – (4) (1) (2) At 30 September 2024 (33) 21 6 (24) 3 23 61 5 62 Income statement credit/(debit) 12 (2) 6 2 12 (2) 7 (8) 27 Acquisition or disposal of subsidiaries (5) 4 – – – – – – (1) Exchange movement (1) – – – – – – (1) (2) At 30 September 2025 (27) 23 12 (22) 15 21 68 (4) 86 Note: * Adjusted for finalisation of fair value of assets acquired and liabilities assumed in the acquisition of Infineo in the prior year. Governance Report Additional InformationStrategic Report Financial Statements THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 217 10 Deferred income tax continued 2025 2024 The net deferred tax asset at the end of the year is analysed below: £m £m Deferred tax assets 101 81 Deferred tax liabilities (15) (19) Net deferred tax asset 86 62 Note: * Adjusted for finalisation of fair value of assets acquired and liabilities assumed in the acquisition of Infineo in the prior year. Deferred tax assets have been recognised in respect of tax losses and other temporary differences giving rise to deferred tax assets because it is probable that these assets will be recovered. Each of these assets are reviewed to ensure there is sufficient evidence to support their recognition. Deferred tax liabilities for the taxable temporary differences associated with the Group’s investments in subsidiaries have been appropriately recognised to the extent that it is probable that the temporary differences will reverse in the future. Deferred taxes have been provided for the future tax impact of repatriating the Group’s undistributed earnings, which is consistent with the position in the prior year. The movements in deferred tax assets and liabilities (prior to the offsetting of balances within the same jurisdiction as required by IAS 12 “Income Taxes”) during the year are shown in the above table. Deferred tax assets and liabilities are only offset where there is a legally enforceable right of offset and there is an intention to settle the balances net. Deferred tax assets and liabilities categorised as “other” in the above table include various balances in relation to the following items: 2025 2024 £m £m Unremitted earnings (6) (7) Lease liability 12 18 Right-of-use lease assets (5) (12) Other amounts (5) 6 (4) 5 The Company has unrecognised carried forward losses of £122m (2024: £134m) available to reduce certain future taxable profits. Deferred tax assets of £28m (2024: £32m) have not been recognised in respect of these losses due to uncertainty regarding whether suitable profits will arise in future periods against which the deferred tax asset would reverse. Of these, £18m (2024: £18m) relate to UK capital losses that are available indefinitely but cannot be used to offset UK trading profit. In July 2023, the UK Endorsement Board adopted “International Tax Reform-Pillar Two Model Rules (Amendments to IAS 12)” as issued by the IASB, which introduced a mandatory temporary exception in IAS 12, prohibiting both the recognition and disclosure of deferred tax assets and deferred tax liabilities that arise from the implementation of the OECD Pillar Two Model Rules. The Group has applied the mandatory exception under IAS 12 within the consolidated financial statements for the year ended 30 September 2025. Notes to the consolidated financial statements continued 218 THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 11 Cash flow and net debt This note analyses our operational cash generation, shows the movement in our net debt in the year, and explains what is included within our cash balances and borrowings at the year end. Cash generated from operations is the starting point of our consolidated statement of cash flows. This section outlines the adjustments for any non-cash accounting items to reconcile our accounting profit for the year to the amount of cash we generated from our operations. Net debt represents the amount of cash held less borrowings and overdrafts. Borrowings are mostly made up of fixed-term external debt which the Group has taken out for general corporate purposes, including the refinancing of debt and acquisitions. Borrowings also include lease liabilities. 11.1 Cash flow generated from continuing operations 2025 2024 Reconciliation of profit for the year to cash generated from continuing operations £m £m Profit for the year 369 323 Adjustments for: Income tax 115 103 Finance income (12) (19) Finance costs 58 45 Amortisation of intangible assets 60 67 Depreciation of property, plant and equipment 30 29 Gain on disposal of property, plant and equipment (1) (2) R&D tax credits (3) (2) Equity-settled share-based transactions 51 56 Exchange movement – (4) Changes in working capital: Increase in trade and other receivables (68) (48) (Decrease)/increase in trade and other payables and provisions (3) 20 Increase in deferred income 79 57 Cash generated from continuing operations 675 625 11.2 Net debt 2025 2024 Reconciliation of net cash flow to movement in net debt £m £m Cash outflows in the year (pre-exchange movements) (123) (164) Cash (inflows)/outflows from loans and lease liabilities (280) 18 Change in net debt resulting from cash flows (403) (146) Cash and lease liabilities recognised from acquisitions of subsidiaries or similar transactions 1 4 Other non-cash movements (30) (28) Exchange movement (19) (7) Movement in net debt in the year (451) (177) Net debt at 1 October (738) (561) Net debt at 30 September (1,189) (738) Governance Report Additional InformationStrategic Report Financial Statements THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 219 11 Cash flow and net debt continued 11.2 Net debt continued At At 1 October Non-cash Exchange 30 September 2024 Cash flow Acquisition movements movement 2025 Analysis of change in net debt £m £m £m £m £m £m Cash and cash equivalents 508 (123) 3 – 2 390 Borrowings Loans due after more than one year (1,156) (295) (2) (2) (21) (1,476) Lease liabilities due within one year (15) 15 – (17) – (17) Lease liabilities after more than one year (75) – – (11) – (86) (1,246) (280) (2) (30) (21) (1,579) Total (738) (403) 1 (30) (19) (1,189) At At 1 October Non-cash Exchange 30 September 2023 Cash flow Acquisition movements movement 2024 Analysis of change in net debt £m £m £m £m £m £m Cash and cash equivalents 696 (164) 4 – (28) 508 Borrowings Loans due after more than one year (1,171) – – (2) 17 (1,156) Lease liabilities due within one year (14) 18 – (20) 1 (15) Lease liabilities after more than one year (72) – – (6) 3 (75) (1,257) 18 – (28) 21 (1,246) Total (561) (146) 4 (28) (7) (738) Notes to the consolidated financial statements continued 220 THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 11 Cash flow and net debt continued 11.3 Cash and cash equivalents Accounting policy For the purpose of preparation of the consolidated statement of cash flows and the consolidated balance sheet, cash and cash equivalents include cash at bank and in hand, money market funds (MMFs) and short-term deposits with an original maturity period of three months or less. Bank overdrafts that are an integral part of a subsidiary’s cash management are included in cash and cash equivalents where they have a legal right of set-off and there is an intention to settle net, against positive cash balances, otherwise bank overdrafts are classified as borrowings. Cash and cash equivalents are measured at amortised cost. 2025 2024 £m £m Cash at bank and in hand 251 292 MMFs and short-term bank deposits 139 216 390 508 The credit risk on liquid funds is considered to be low, as the Board-approved Group treasury policy limits the value that can be invested with each approved counterparty to minimise the risk of loss. The Group treasury policy is to place cash and cash equivalents with counterparties which are well-established banks with high credit ratings where available. Cash and cash equivalents are classified and measured at amortised cost under IFRS 9 and are therefore subject to the expected loss model requirements of that standard. However, no material expected credit losses have been identified. At 30 September 2025, 97% (2024: 99%) of the cash and cash equivalents balance was deposited with financial institutions rated at least A- by Standard & Poor’s. The Group’s maximum exposure to credit risk in relation to cash and cash equivalents is their carrying amount on the balance sheet. 11.4 Borrowings Accounting policy Interest-bearing borrowings are recognised initially at fair value less attributable issue costs, which are amortised over the period of the borrowings. Subsequent to initial recognition, interest-bearing borrowings are stated at amortised cost with any difference between cost and redemption value being recognised in the income statement over the period of borrowing on an effective interest basis. Further information on the policy applied to lease liabilities is included in note 3.4. Governance Report Additional InformationStrategic Report Financial Statements THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 221 11 Cash flow and net debt continued 11.4 Borrowings continued 2025 2024 Current borrowings at book value £m £m Lease liabilities 17 15 2025 2024 Non-current borrowings at book value £m £m Sterling denominated bond notes 1,041 743 Euro denominated bond notes 436 414 Lease liabilities 86 75 Unamortised RCF loan costs (1) (1) 1,562 1,231 Interest 2025 2024 Borrowings at nominal value Year issued coupon Maturity £m £m Bonds GBP 350m bond notes 2021 1.63% 25-Feb-31 350 350 GBP 400m bond notes 2022 2.88% 8-Feb-34 400 400 EUR 500m bond notes 2023 3.82% 15-Feb-28 437 416 GBP 300m bond notes 2025 5.63% 5-Mar-37 300 – Note: * This does not include the impact of cross-currency interest rate swaps entered into in relation to the GBP 350m bond notes and EUR 500m bond notes. The Group’s debt is sourced from sterling and euro denominated bond notes, with a syndicated multi-currency Revolving Credit Facility (RCF) also available. Bond notes at 30 September 2025 were £1,477m (30 September 2024: £1,157m), comprised of sterling denominated bond notes £1,041m (30 September 2024: £743m) and euro denominated bond notes £436m (30 September 2024: £414m). In November 2024, a one-year extension was agreed to the Group’s RCF, resulting in a new maturity in December 2029. At 30 September 2025, £nil of the RCF was drawn down (30 September 2024: £nil). During the period, the Group issued sterling denominated bond notes for a nominal amount of £300m with a maturity date of March 2037. Net cash proceeds from the issuance were £297m. Further information on lease liabilities is included in note 3.4. Notes to the consolidated financial statements continued 222 THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 12 Financial instruments This note shows details of the fair value and carrying value of short- and long-term borrowings, trade and other payables, trade and other receivables, derivative financial instruments, equity investments, short-term bank deposits, and cash and cash equivalents. These items are all classified as “financial instruments” under accounting standards. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. In order to assist users of these consolidated financial statements in making an assessment of any risks relating to financial instruments, this note also sets out the maturity of these items and analyses their sensitivity to changes in key inputs, such as interest rates and foreign exchange rates. An explanation of the Group’s exposure to, and management of, capital, liquidity, credit, interest rate, and foreign currency risk is set out in the financial risk management section at the end of this note. Accounting policy Financial assets and financial liabilities are recognised on the Group’s balance sheet when the Group becomes a party to the contractual provisions of the instrument. Financial assets are derecognised when the rights to receive cash flows from the asset have expired, or when the Group has transferred those rights and either has also transferred substantially all the risks and rewards of the asset or has neither transferred nor retained substantially all the risks and rewards of the asset but no longer has control of the asset. Financial liabilities are derecognised when the obligation specified in the contract is discharged, cancelled, or expires. The Group may use derivative financial instruments to manage its exposures to fluctuating foreign exchange rates and foreign currency cash flows in relation to external borrowings. These instruments are initially recognised at fair value on the date the contract is entered into and are subsequently remeasured at their fair value. The method of recognising the resulting gain or loss depends on whether the derivative is designated as a hedging instrument and, if so, the nature of the item being hedged. At the inception of designated hedge relationships, the Group documents its risk management objectives and strategy for undertaking various hedging transactions. The Group also documents its assessment, both at hedge inception and on an ongoing basis, of whether the derivatives that are used in hedging transactions are highly effective in offsetting changes in fair values of hedged items. Governance Report Additional InformationStrategic Report Financial Statements THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 223 12 Financial instruments continued The amounts on the consolidated balance sheet that are accounted for as financial instruments, and their classification under IFRS 9, are as follows: IFRS 9 classification At fair value At fair value At Derivatives through through other amortised used for profit or comprehensive cost hedging loss income Total As at 30 September 2025 Note £m £m £m £m £m Non-current assets Equity investments – – – 4 4 Trade and other receivables: other receivables 8.1 3 – 2 – 5 Derivative financial instruments—cross-currency interest rate swaps – 32 – – 32 Current assets Trade and other receivables: trade receivables 8.1 309 – – – 309 Trade and other receivables: other receivables 8.1 26 – 1 – 27 Cash and cash equivalents 11.3 390 – – – 390 Current liabilities Trade and other payables excluding other tax and social security 8.2 (386) – – – (386) Borrowings 11.4 (17) – – – (17) Non-current liabilities Borrowings 11.4 (1,562) – – – (1,562) Trade and other payables: other payables (8) – – – (8) (1,245) 32 3 4 (1,206) IFRS 9 classification At fair value Derivatives At fair value through other At amortised used for through comprehensive cost hedging profit or loss income Total As at 30 September 2024 Note £m £m £m £m £m Non-current assets Equity investments – – – 6 6 Trade and other receivables: other receivables 8.1 3 – 2 – 5 Derivative financial instruments—cross-currency interest rate swaps – 29 – – 29 Current assets Trade and other receivables: trade receivables 8.1 265 – – – 265 Trade and other receivables: other receivables 8.1 23 – 1 – 24 Cash and cash equivalents 11.3 508 – – – 508 Current liabilities Trade and other payables excluding other tax and social security 8.2 (366) – – – (366) Borrowings 11.4 (15) – – – (15) Non-current liabilities Borrowings 11.4 (1,231) – – – (1,231) Trade and other payables: other payables (3) – – – (3) Derivative financial instruments—cross-currency interest rate swaps 12.5 – (13) – – (13) (816) 16 3 6 (791) Notes to the consolidated financial statements continued 224 THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 12 Financial instruments continued 12.1 Fair values of financial instruments The carrying amounts of the following financial assets and liabilities approximate to their fair values: trade and other payables excluding tax and social security, trade and other receivables excluding prepayments and accrued income, lease liabilities, and short-term bank deposits, and cash and cash equivalents. Borrowings (excluding lease liabilities) The fair value of the sterling and euro denominated bond notes are determined by reference to quoted market prices and therefore can be considered as a level 1 fair value as defined within IFRS 13. The Group does not hold any financial liabilities whose fair value would be considered as a level 3 fair value as defined within IFRS 13. The respective book and fair values of bond notes are included in the table below: 2025 2024 Book value Fair value Book value Fair value Note £m £m £m £m Long-term borrowing (excluding lease liabilities) 11.4 1,476 1,400 1,156 1,065 Contingent consideration receivable The Group recognises contingent consideration receivable of £3m (2024: £3m) relating to the disposal of Sage Payroll Solutions in the year ended 30 September 2019. This is classified as a financial asset measured at fair value through profit or loss. Its fair value is determined using a discounted cash flow valuation technique. The main inputs to the calculation for which assumptions have been made are the discount rate and the period over which the consideration will be received. This is a level 3 fair value under IFRS 13. Equity investments The fair value of the unlisted equity investments held by the Group is determined using a market-based valuation approach. The significant unobservable inputs used in level 3 fair value measurement are transaction prices paid for identical or similar instruments of the investee and revenue growth factors. Derivative financial instruments—cross-currency interest rate swaps The fair value of the cross-currency interest rate swaps held by the Group is determined using a discounted cash flow valuation technique at market rates and therefore can be considered as a level 2 fair value as defined within IFRS 13. Governance Report Additional InformationStrategic Report Financial Statements THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 225 12 Financial instruments continued 12.2 Maturity of financial liabilities The maturity profile of the undiscounted contractual amount of the Group’s financial liabilities (excluding cross-currency interest rate swaps) at 30 September was as follows: 2025 Trade and other payables Borrowings: excluding other Borrowings: lease tax and social bond notes liabilities security Total £m £m £m £m In less than one year 52 19 386 457 In more than one year but not more than five years 600 66 8 674 In more than five years 1,200 35 – 1,235 1,852 120 394 2,366 2024 Trade and other payables Borrowings: excluding other Borrowings: lease tax and social bond notes liabilities security Total £m £m £m £m In less than one year 34 18 366 418 In more than one year but not more than five years 527 62 3 592 In more than five years 808 31 – 839 1,369 111 369 1,849 The maturity profile of the undiscounted contractual amounts of the Group’s cross-currency interest rate swaps, including expected interest payments, at 30 September was as follows: 2025 Receipts Payments Total £m £m £m In less than one year 11 (13) (2) In more than one year but not more than five years 596 (585) 11 In more than five years 356 (327) 29 963 (925) 38 2024 Receipts Payments Total £m £m £m In less than one year 29 (33) (4) In more than one year but not more than five years 605 (612) (7) In more than five years 361 (336) 25 995 (981) 14 Notes to the consolidated financial statements continued 226 THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 12 Financial instruments continued 12.3 Borrowing facilities The Group has the following undrawn committed revolving credit facility available at 30 September in respect of which all conditions precedent had been met at that date: 2025 2024 £m £m Expiring in more than one year but not more than five years 630 630 The facility has been arranged to help finance the expansion of the Group’s activities. This facility incurs commitment fees at market rates. In November 2024, a one-year extension was agreed to the Group’s RCF, resulting in a new maturity in December 2029. 12.4 Market risk sensitivity analysis Financial instruments affected by market risks include borrowings and deposits. The following analysis is intended to illustrate the sensitivity to changes in market variables, being sterling/US dollar and sterling/euro exchange rates. The sensitivity analysis assumes reasonable movements in foreign exchange rates before the effect of tax. Sensitivity to movements in sterling/US dollar and sterling/euro exchange rates of 10% are shown, reflecting changes of reasonable proportion in the context of movement in those currency pairs over the last year. Using the above assumptions, the following table shows the illustrative effect on equity resulting from changes in sterling/US dollar and sterling/euro exchange rates: 2025 2024 Equity Equity gains/(losses) gains/(losses) £m £m 10% strengthening of sterling versus the US dollar 50 50 10% strengthening of sterling versus the euro (9) (9) 10% weakening of sterling versus the US dollar (65) (62) 10% weakening of sterling versus the euro 10 11 Governance Report Additional InformationStrategic Report Financial Statements THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 227 12 Financial instruments continued 12.5 Hedge accounting Accounting policy As at 1 October 2024, the Group elected to apply the hedge accounting requirements in IFRS 9 Financial Instruments instead of those in IAS 39 Financial Instruments: Recognition and Measurement. The Group applies hedge accounting to external borrowings and cross-currency interest rate swap contracts that are designated as a hedge of a net investment in foreign operations. The portion of the gain or loss on an instrument used to hedge a net investment in a foreign operation which is determined to be an effective hedge is recognised in other comprehensive income and accumulated in the foreign currency translation reserve. The ineffective portion is recognised immediately in profit or loss. On disposal of the net investment, the foreign exchange gains and losses on the hedging instrument are recycled to the income statement from equity. Where borrowings denominated in a currency other than sterling, or cross-currency interest rate swap contracts, are used to hedge the Group’s exposure to foreign currency exchange movements of its net investment in its subsidiaries, these relationships are designated as net investment hedges for accounting purposes. The hedges are documented and assessed for effectiveness on an ongoing basis. The Group has separated the costs relating to currency basis from the hedge relationship and therefore allocates this component within the cost of hedging reserve. The value of the cost of hedging reserve at designation of the hedge relationship is amortised to the income statement (within finance costs) over the expected life of the hedge relationship. The Group applies hedge accounting to certain exchange differences arising between the functional currencies of a foreign operation and Company, regardless of whether the net investment is held directly or through an intermediate parent. The Group applies cash flow hedge accounting to cross-currency interest rate swap contracts that are designated as a hedge of cash flows arising from foreign currency denominated borrowings. The effective portion of changes in the fair value of such a derivative is recognised in other comprehensive income and accumulated in the hedging reserve. The effective portion of changes in fair value of the derivative that is recognised in other comprehensive income is limited to the cumulative change in fair value of the hedged item, determined on a present value basis, from inception of the hedge. Any ineffective portion of changes in the fair value of the derivative is recognised immediately in profit or loss. If the hedged future cash flows are no longer expected to occur, then the amounts that have been accumulated in the hedging reserve are immediately reclassified to profit or loss. The Group designates the change in fair value of the forward element of forward exchange contracts as the hedging instrument in cash flow hedging relationships. The amount accumulated in the hedging reserve is reclassified to profit or loss in the same period or periods as the hedged expected future cash flows affect profit or loss. Notes to the consolidated financial statements continued 228 THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 12 Financial instruments continued 12.5 Hedge accounting continued Net investment hedges The Group hedges the risk exposure to foreign currency exchange movements of its net investment in its subsidiaries in the US and Eurozone. A portion of the Group’s external euro denominated borrowings, relating to the EUR 500m bond, are designated as hedging instruments. The underlying risk of the hedging instruments exactly matches the hedged risk as the borrowings and net investments in subsidiaries are denominated in the same currencies, giving a hedge ratio of 1:1. Hedge ineffectiveness will arise if the carrying amount of the net investment falls below the carrying amount of the designated borrowings. The Group designates certain USD cross-currency interest rate swap contracts totalling £557m (USD 750m) (2024: £560m, USD 750m) as hedging instruments to hedge risk exposure to foreign currency exchange movements of its net investment in its subsidiaries in the US. Sources of ineffectiveness on this hedge relationship will arise from a difference in credit ratings between the counterparties and modifications to the terms of either the hedged item or the instrument. During the year, £nil (2024: £nil) has been recognised in the income statement as ineffective. Changes in the carrying amount of the loan notes relate to foreign exchange movements recognised through other comprehensive income. The change in the carrying amount of the derivative financial instrument is due to fair value movements also recognised through other comprehensive income. The impact of the hedging instrument on the consolidated balance sheet is as follows: Change in carrying amount as a result of Carrying movements in the year amount recognised in OCI As at 30 September 2025 Nominal amount £m £m Non-current borrowings EUR bond notes EUR 70m 61 – Derivative financial instruments Cross-currency interest rate swap USD 429m (7) (1) Derivative financial instruments Cross-currency interest rate swap USD 321m (25) (2) 29 (3) Change in carrying amount as a result of Carrying movements in the year amount recognised in OCI As at 30 September 2024 Nominal amount £m £m Non-current borrowings EUR bond notes EUR 156m 130 (6) Derivative financial instruments Cross-currency interest rate swap USD 429m (6) (24) Derivative financial instruments Cross-currency interest rate swap USD 321m (23) (22) 101 (52) Notes: * Liability/(asset) position. ** Hedge relationship was designated effective from 30 September 2025. *** Hedge relationship was de-designated effective from 30 September 2024. Governance Report Additional InformationStrategic Report Financial Statements THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 229 12 Financial instruments continued 12.5 Hedge accounting continued The cumulative impact of the hedged item on the consolidated balance sheet is as follows: 2025 2024 Foreign currency Foreign currency translation reserve translation reserve £m £m Net investment in foreign subsidiaries—USD (32) (29) Net investment in foreign subsidiaries—EUR (–) (9) (32) (38) The change in value of the hedged item, being the Group’s net investment in its USD and EUR subsidiaries, recorded through OCI in the year was £3m (2024: £46m) and £nil (2024: £6m) respectively. Cash flow hedges The Group hedges the risk exposure to foreign currency exchange movements of its foreign currency borrowings. The Group has designated cross-currency interest rate swap contracts (to receive fixed euro and pay fixed sterling) as the hedging instruments in a cash flow hedge relationship, to mitigate the risk of changes in the denominated cash flows attributable to the exchange rate related to EUR 300m of the EUR 500m bond notes, for which hedge accounting has been applied. The underlying risk of the hedging instruments exactly matches the hedged risk as the hedging instrument and euro borrowings are arranged on the same payment profile, for the same interest rate and nominal amount, giving a hedge ratio of 1:1. Hedge ineffectiveness will arise if the carrying amount of the euro borrowings falls below the amount of the cross-currency swap contract, for example on early repayment of the euro borrowings. Sources of ineffectiveness on this hedge relationship will arise from a difference in credit ratings between the counterparties and modifications to the terms of either hedged item or instrument. At 30 September 2025, £nil (2024: £nil) has been recognised in profit or loss due to ineffectiveness. The hedges are documented and are assessed for effectiveness on an ongoing basis. Gains and losses initially recognised in other comprehensive income on cross-currency swap contracts are recognised in profit or loss (within finance costs) in the periods in which the hedged forecast transaction affects profit or loss. A reconciliation of movements in the hedging reserve in relation to the cash flow hedging instrument is provided in note 13.3. The impact of the hedging instrument on the consolidated balance sheet is as follows: Change in carrying Change in carrying amount as a result amount as a result of net movements of net movements Carrying in the year in the year amount recognised in OCI recognised in P&L As at 30 September 2025 Nominal amount £m £m £m Derivative financial Cross-currency instruments interest rate swap EUR 300m – – (13) Change in carrying Change in carrying amount as a result of amount as a result of net movements in net movements in Carrying the year recognised the year recognised amount in OCI in P&L As at 30 September 2024 Nominal amount £m £m £m Derivative financial Cross-currency instruments interest rate swap EUR 300m 13 – 11 Note: * Liability position. Further information on the Group’s exposure to foreign currency risk and how the risk is managed is included in note 12.6. Notes to the consolidated financial statements continued 230 THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 12 Financial instruments continued 12.6 Financial risk management The Group’s exposure to and management of capital, liquidity, credit, interest rate and foreign currency risk are summarised below. Capital risk The Group’s objectives when managing capital (defined as net debt plus equity) are to safeguard its ability to continue as a going concern in order to provide returns to shareholders and benefits for other stakeholders, while maintaining an appropriate balance of debt and equity funding. The Group manages its capital structure through regular review by the Board and makes adjustments to it with respect to changes in economic conditions and our strategic objectives. Priorities for capital allocation are organic and inorganic investment, including through acquisitions of complementary technology and partnerships; the progressive growth of the dividend; and the return of surplus capital to shareholders, if appropriate. Over the medium term, the Group plans to operate in a broad range of 1–2x net debt to underlying EBITDA, with flexibility to move outside this range as the business needs require. A reconciliation of the net debt/underlying EBITDA ratio is provided as part of the capital allocation disclosure within the Financial review on page 54. Liquidity risk The Group manages its exposure to liquidity risk by reviewing cash resources required to meet business objectives through both short- and long-term cash flow forecasts. The Group has committed facilities which are available to be drawn for general corporate purposes including working capital. The Treasury function has responsibility for optimising the level of cash across the business. Credit risk The Group’s credit risk primarily arises from trade and other receivables. The Group has a low operational credit risk due to the transactions being principally of a high-volume, low-value, and short maturity. The Group has no significant concentration of operational credit risk, with the exposure spread over a large number of well-diversified counterparties and customers. The credit risk on liquid funds is considered to be low, as the Board-approved Group treasury policy limits the value that can be invested with each approved counterparty to minimise the risk of loss. All counterparties must meet minimum credit rating requirements or be specifically authorised as an exception. Further information on the credit risk management procedures applied to trade receivables is given in note 8.1 and to cash and cash equivalents in note 11.3. The carrying amounts of trade receivables and cash and cash equivalents shown in those notes represent the Group’s maximum exposure to credit risk. Governance Report Additional InformationStrategic Report Financial Statements THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 231 12 Financial instruments continued 12.6 Financial risk management continued Interest rate risk The Group’s borrowings at 30 September 2025 principally comprise sterling and euro denominated bond notes, which are at fixed interest rates, and a bank RCF, which is subject to floating interest rates. Additionally, the Group is exposed to interest rate risk on floating rate deposits. The Group regularly reviews forecast debt, cash and cash equivalents, and interest rates to monitor this risk. Interest rates on debt and deposits are fixed when management decides this is appropriate. At 30 September 2025, the Group had £390m (2024: £508m) of cash and cash equivalents, while its borrowings comprised: • Sterling denominated bond notes of £1,041m (2024: £743m), comprising a nominal £350m bond issued in 2021, a nominal £400m bond issued in 2022 and a nominal £300m bond issued in 2025. The Group is also party to a cross-currency interest rate swap in relation to the £350m bond, as a result of which the bond had an effective average fixed interest rate of 2.45% (2024: 2.45%). The £400m bond has an fixed coupon of 2.88% (2024: 2.88%) and the £300m bond has an effective average fixed coupon rate of 5.63%. • Euro denominated bond notes of £436m (2024: £414m). The Group is also party to cross-currency interest rate swaps in relation to EUR 300m of this nominal EUR 500m bond, as a result of which the bond had an effective average fixed interest rate of 4.52% (2024: 4.53%). • Undrawn bank RCF (2024: undrawn). See note 11.4 for more information. Foreign currency risk Although a substantial proportion of the Group’s revenue and profit is earned outside the UK, operating companies generally only trade in their own currency. The Group is therefore not subject to any significant foreign exchange transactional exposure within these subsidiaries. The Group’s principal exposure to foreign currency lies in the translation of overseas profits into sterling; this exposure is not hedged. During the year a portion of the Group’s external euro denominated borrowings (EUR 70m of a nominal EUR 500m) were designated as a hedge of the net investment in its EUR functional entities effective from 30 September 2025. During the prior year a portion of the Group’s external euro denominated borrowings (EUR 156m of a nominal EUR 500m) were also designated as a hedge of the net investment in its subsidiaries in the Eurozone. This hedge relationship was de-designated effective from 30 September 2024. The Group has cross-currency swap contracts to receive fixed sterling and pay fixed US dollars (£350m, USD 429m; £264m USD 321m), as well as receive fixed euros and pay fixed sterling (EUR 300m, £264m). The euro-sterling swap contracts have been designated as the hedging instruments in a cash flow hedge relationship to mitigate the risk of changes in the cash flows related to the remaining euro denominated borrowings attributable to changes in exchange rate. The average interest rate of the euro-sterling swap contracts is 4.98%, fixed for the lifetime of the instrument. See note 12.5. The US dollar-sterling swap contracts have been designated as a hedge of the Group’s net investment in its subsidiaries in the US. See note 12.5. Certain of the Group’s intercompany balances have been identified as part of the Group’s net investment in foreign operations. Foreign exchange effects on these balances that remain on consolidation are also reflected in the translation reserve. The Group’s other currency exposures comprise those currency gains and losses recognised in the income statement, reflecting other monetary assets and liabilities of the Group that are not denominated in the functional currency of the entity involved. At 30 September 2025 and 30 September 2024, these exposures were immaterial to the Group. Notes to the consolidated financial statements continued 232 THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 13 Equity This note analyses the movements recorded through shareholders’ equity that are not explained elsewhere in the consolidated financial statements, being changes in the amount which shareholders have invested in the Group. The Group utilises share award plans as part of its employee remuneration package. These are set out in more detail below, along with the costs incurred, and the number of shares outstanding. Share award plans primarily include: • Performance Share Awards– Previously awards were granted under the Sage Group Performance Share Plan (“PSP”), with the last awards granted in December 2024. The Sage Group Long Term Incentive Plan (“LTIP”) was approved in February 2025 and allows for grants of both performance awards and time-based awards. Subsequently, performance awards for Directors and senior executives are granted under the LTIP. • Restricted Share Awards– Previously awards were granted under the Sage Group Restricted Share Plan, with the last awards granted in December 2024. The LTIP was approved in February 2025 and allows for grants of both performance awards and time-based awards. Subsequently, restricted awards for colleagues who contribute to Sage’s strategic outcomes are granted under the LTIP. • Other Plans–The Sage Save and Share Plan (the “Save and Share Plan”) for employees in eligible countries of the Group and the Colleague Stock Purchase Plan (the “CSPP Plan”) for US-based employees. This note also shows the dividends paid in the year and any dividends that are to be proposed and paid post-year end. Dividends are paid as an amount per ordinary share held. 13.1 Ordinary shares Accounting policy Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new ordinary shares or options are shown in equity as a deduction, net of tax, from the proceeds. Where any Group company purchases the Company’s equity share capital (treasury shares), the consideration paid, including any directly attributable incremental costs (net of income taxes), is deducted from equity attributable to the owners of the Company until the shares are cancelled or reissued. The balance on the share premium account represents the amounts received in excess of the nominal value of the ordinary shares. 2025 2025 2024 2024 Issued and fully paid ordinary shares of 1 4/77 pence each shares £m shares £m At 1 October 1,071,499,517 11 1,100,789,295 12 Cancellation of shares (48,209,390) – (29,289,778) (1) At 30 September 1,023,290,127 11 1,071,499,517 11 Note: * Cancellation of shares in the current year resulted in a reduction of the nominal value of ordinary shares of less than £1m. Governance Report Additional InformationStrategic Report Financial Statements THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 233 13 Equity continued 13.2 Share-based payments Accounting policy Equity-settled share-based payments are measured at fair value (excluding the effect of non-market-based vesting conditions) at the date of grant. The fair value determined at the grant date of the equity-settled share-based payments is expensed on a straight-line basis over the vesting period, based on the Group’s estimate of the shares that will eventually vest allowing for the effect of non market-based vesting conditions. Fair value is measured using the Black-Scholes or the Monte Carlo pricing models, based on observable market prices. The expected life used in the model has been adjusted, based on management’s best estimate, for the effects of non- transferability, exercise restrictions and behavioural considerations. All outstanding PSPs and performance awards granted from February 2025 under the LTIP are subject to some non-market performance conditions. The element of the income statement charge relating to market performance conditions is fixed at the grant date. At the end of the reporting period, the Group revises its estimates for the number of awards expected to vest. It recognises the impact of the revision to original estimates, if any, in the income statement, with a corresponding adjustment to equity. The total charge for the year relating to employee share-based payment plans was £51m (2024: £56m), all of which related to equity-settled share-based payment transactions. 2025 2024 Plans £m £m Performance Share Awards 5 5 Restricted Share Awards 43 48 Other Plans 3 3 Total 51 56 £5m of the charge for the year (2024: £11m) relates to acquisition-related remuneration and is reported as a recurring adjustment within other M&A activity-related items. See note 3.6. Performance Share Awards Annual grants of performance shares are normally made to Executive Directors and senior executives after the preliminary declaration of the annual results. Under Performance Share awards, 875,535 (2024: 755,730) awards were made during the year. Awards for 2023 These performance shares are subject to a service condition and three performance conditions. Performance conditions are weighted 50% on the achievement of a financial performance target, 30% on the achievement of a TSR target, and 20% on the achievement of ESG targets. The financial performance target is based on the achievement of Sage Business Cloud (SBC) Penetration targets for the final year of the performance period. Where SBC Penetration is between prescribed targets, the extent to which the financial performance condition is satisfied will be calculated on a straight-line, pro-rata basis within a defined range. 2023 awards Range 1 Range 2 SBC Penetration (%) 85%–89% 89%–92% Performance condition satisfied (%) 10%–40% 40%–50% The performance target relating to TSR measures share price performance against a designated comparator group. Where TSR is between median and upper quartile, the TSR vesting percentage will be calculated on a straight-line, pro-rata basis between 6% and 24%, and where TSR is between upper quartile and upper decile, the TSR vesting percentage will be calculated on a straight-line, pro-rata basis between 24% and 30%. The comparator group for awards granted for 2023 onwards is the companies comprised in the FTSE 100 Index at the start of the performance period, excluding financial services and extraction companies. The performance targets relating to ESG are based on the achievement of targets relating to (i) a Protect the Planet condition, (ii) a Tech for Good condition, and (iii) two Diversity, Equity and Inclusion conditions. Where attainment of each of the ESG condition are between prescribed targets, the extent to which the ESG performance conditions are satisfied will be calculated on a straight-line, pro-rata basis within defined ranges as detailed below. Notes to the consolidated financial statements continued 234 THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 13 Equity continued 13.2 Share-based payments continued The Protect the Planet condition will be measured by reference to the reduction in the Group’s Scope 1, 2 and 3 carbon emissions during the performance period. 2023 awards Range 1 Range 2 Reduction in carbon emissions (%) 6.9%–13.8% 13.8%–20.7% Performance condition satisfied (%) 1.5%–6% 6%–7.5% The Tech for Good condition will be measured by reference to the number of Sage products that have embedded functionality for carbon accounting at the end of the performance period. 2023 awards Range 1 Range 2 Number of products (number) 3–6 6–8 Performance condition satisfied (%) 1%–4% 4%–5% The Diversity, Equity and Inclusion conditions will be measured by reference to (i) the inclusion score in the employee engagement survey undertaken in the last financial year of the performance period, and (ii) the percentage of leadership teams meeting Sage’s global gender diversity target at the end of the performance period. 2023 awards Range 1 Range 2 Inclusion score (number) 82–84 84–86 Performance condition satisfied (%) 0.75%–3% 3%–3.75% Percentage of teams (%) 50%–65% 65%–80% Performance condition satisfied (%) 0.75%–3% 3%–3.75% Awards for 2024 These performance shares are subject to a service condition and three performance conditions over the 3-year length of the performance period. Performance conditions are weighted 50% on the achievement of a financial performance target, 30% on the achievement of a TSR target, and 20% on the achievement of ESG targets. The financial performance condition is based on the achievement of underlying earnings per share targets at the end of the performance period. Where underlying EPS is between prescribed targets, the extent to which the financial performance condition is satisfied will be calculated on a straight-line, pro-rata basis within a defined range. 2024 awards Range 1 Range 2 Underlying EPS (pence) 37.0–43.0 43.0–46.0 Performance condition satisfied (%) 10%–40% 40%–50% The performance target relating to TSR measures share price performance against a designated comparator group. Where TSR is between median and upper quartile, the TSR vesting percentage will be calculated on a straight-line, pro-rata basis between 6% and 24%, and where TSR is between upper quartile and upper decile, the TSR vesting percentage will be calculated on a straight-line, pro-rata basis between 24% and 30%. The comparator group for awards granted for 2024 onwards is the companies comprised in the FTSE 100 Index at the start of the performance period, excluding financial services and extraction companies. The performance targets relating to ESG are based on the achievement of targets relating to (i) a Protect the Planet condition, (ii) a Tech for Good condition, and (iii) two Diversity, Equity and Inclusion conditions. The Protect the Planet condition will be measured by reference to the reduction in the Group’s Scope 1, 2, and 3 carbon emissions during the performance period. 2024 awards Range 1 Range 2 Reduction in carbon emissions (%) 8.1%–16.2% 16.2%–24.3% Performance condition satisfied (%) 1.5%–6% 6%–7.5% Governance Report Additional InformationStrategic Report Financial Statements THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 235 13 Equity continued 13.2 Share-based payments continued The Tech for Good condition will be measured by reference to the Sage suites that have embedded functionality for carbon accounting at the end of the performance period. Performance condition 2024 awards Access to carbon accounting functionality through Sage suites satisfied (%) Threshold 1 No suites 0% Threshold 2 Sage for Small Business suite 1% Threshold 3 Sage for Small Business suite and Sage for Accountants suite 4% Threshold 4 Sage for Small Business suite, Sage for Accountants suite, 5% and Sage for Medium Business suite The Diversity, Equity and Inclusion conditions will be measured by reference to (i) the percentage of ethnically diverse colleagues in senior leadership teams, and (ii) the percentage of leadership teams in the top four levels of Sage meeting the global gender diversity target, at the end of the performance period. 2024 awards Range 1 Range 2 Percentage of teams—ethnicity (%) 13.0%–16.5% 16.5%–20.0% Performance condition satisfied (%) 0.75%–3% 3%–3.75% Percentage of teams—gender (%) 50%–65% 65%–80% Performance condition satisfied (%) 0.75%–3% 3%–3.75% Awards for 2025 These performance shares are subject to a service condition and three performance conditions over the 3-year length of the performance period. Performance conditions are weighted 60% on the achievement of a financial performance target, 30% on the achievement of a TSR target, and 10% on the achievement of ESG targets. The financial performance condition is based on the achievement of underlying earnings per share targets at the end of the performance period. Where underlying EPS is between prescribed targets, the extent to which the financial performance condition is satisfied will be calculated on a straight-line, pro-rata basis within a defined range. 2025 awards Range 1 Underlying EPS (pence) 47.5–58.0 Performance condition satisfied (%) 12%–60% The performance target relating to TSR measures share price performance against a designated comparator group. Where TSR is between median and upper quartile, the TSR vesting percentage will be calculated on a straight-line, pro-rata basis between 6% and 24%, and where TSR is between upper quartile and upper decile, the TSR vesting percentage will be calculated on a straight-line, pro-rata basis between 24% and 30%. The comparator group for awards granted for 2025 onwards is the companies comprised in the FTSE 100 Index at the start of the performance period, excluding financial services and extraction companies. The performance targets relating to ESG are based on the achievement of targets relating to (i) a Protect the Planet condition and (ii) a Tech for Good condition. The Protect the Planet condition will be measured by reference to the reduction in the Group’s Scope 1, 2, and 3 carbon emissions during the performance period. 2025 awards Range 1 Range 2 Reduction in carbon emissions (%) 8.6%–17.2% 17.2%–25.8% Performance condition satisfied (%) 1%–4% 4%–5% Notes to the consolidated financial statements continued 236 THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 13 Equity continued 13.2 Share-based payments continued The Tech for Good condition will be measured by reference to the Sage suites that have embedded functionality for carbon accounting at the end of the performance period. Performance condition 2025 awards Access to carbon accounting functionality through Sage suites satisfied (%) Threshold 1 No Sage Active suites 0% Threshold 2 Sage for Sage Active suite in France 1% Threshold 3 Sage for Sage Active suite in France, Spain, and Germany 4% Threshold 4 Sage for Sage Active suite in France, Spain, and Germany, and Sage Distribution 5% and Manufacturing Operations (SDMO) suite Awards were valued using the Monte Carlo option pricing model. Performance conditions were included in the fair value calculations, which were based on observable market prices at grant date. All options granted under performance share awards have an exercise price of £nil. The fair value per awards granted and the assumptions used in the calculation are as follows: December February Grant date 2024 2025 Share price at grant date (£) 13.12 13.12 Number of employees 7 3 Shares under award 390,906 484,630 Vesting period (years) 3 3 Expected volatility 25.3% 24.3% Award life (years) 3 3 Expected life (years) 3 3 Risk-free rate 3.98% 3.98% Fair value per award (£) 9.78 9.73 December February May Grant date 2023 2024 2024 Share price at grant date (£) 11.30 11.74 10.87 Number of employees 8 1 2 Shares under award 466,758 241,514 47,458 Vesting period (years) 3 3 3 Expected volatility 23.4% 23.0% 24.3% Award life (years) 3 3 3 Expected life (years) 3 3 3 Risk-free rate 4.17% 3.72% 4.25% Fair value per award (£) 8.82 8.91 10.00 The expected volatility is based on historical volatility over the last three years. The expected life is the average expected period to exercise. The risk-free rate of return is the yield on zero-coupon UK government bonds of a term consistent with the assumed award life. Governance Report Additional InformationStrategic Report Financial Statements THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 237 13 Equity continued 13.2 Share-based payments continued A reconciliation of award movements over the year is shown below: 2025 2024 Weighted Weighted average average exercise exercise Number price Number price ’000s £ ’000s £ Outstanding at 1 October 2,842 – 2,447 – Awarded 876 – 756 – Forfeited (44) – (210) – Exercised (546) – (151) – Outstanding at 30 September 3,128 – 2,842 – Exercisable at 30 September – – – – 2025 2024 Weighted Weighted average average remaining remaining life years life years Range of exercise prices Expected Contractual Expected Contractual N/A 0.9 0.9 0.9 0.9 Restricted Share Awards Restricted Share Awards granted under the Group’s RSP and LTIP are issued to colleagues who contribute to Sage’s strategic outcomes. These contingent share awards are made primarily with service conditions. Executive Directors are not permitted to participate in the RSP and shares are either purchased in the market or treasury shares are utilised to satisfy vesting awards. These awards primarily have service conditions, and their fair values are equal to the share price on the date of grant. During the year 4,274,238 (2024: 4,115,981) awards were made, with fair values ranging from 12.30p to 13.12p. A reconciliation of award movements over the year is shown below: 2025 2024 Weighted Weighted average average exercise exercise Number price Number price ’000s £ ’000s £ Outstanding at 1 October 15,043 – 18,634 – Awarded 4,274 – 4,116 – Forfeited (975) – (1,372) – Exercised (4,807) – (6,335) – Outstanding at 30 September 13,535 – 15,043 – Exercisable at 30 September – – – – 2025 2024 Weighted Weighted average average remaining remaining life years life years Range of exercise prices Expected Contractual Expected Contractual N/A 1.1 1.1 1.3 1.3 Notes to the consolidated financial statements continued 238 THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 13 Equity continued 13.2 Share-based payments continued Other Plans Other plans comprise The Sage Save and Share Plan (the “Save and Share Plan”), the Colleague Stock Purchase Plan (the “CSPP”) and acquisition options. These are not considered to be material to the Group’s overall share-based payment arrangements. The key aspects of the Group’s share option arrangements are explained below. The Save and Share Plan is a savings-related share option plan for employees of the Group and is available to employees in the majority of countries in which the Group operates. The UK plan is an HMRC-approved savings-related share option scheme, and similar arrangements apply in other countries where they are available. The fair value of the options is expensed over the service period of three years, with a forfeiture assumption included for any anticipated lapses as employees leave the Group. During the year, 1,132,772 (2024: 1,423,017) options were granted under the terms of the Save and Share Plan. The CSPP is an employee share purchase plan and is available to employees within the USA. The fair value of the options is expensed over the service period of six months, with a forfeiture assumption included for any anticipated lapses as employees leave the Group. During the year, 201,585 (2024: 197,730) shares were purchased under the terms of the CSPP. As part of certain acquisitions, the Group awards certain employees with options proportional to previously held options in the company acquired. No (2024: nil) options have been granted in the year and no (2024: £nil) costs have been incurred to the income statement in respect of these acquisition options. A reconciliation of historic acquisition award movements over the year is shown below: 2025 2024 Weighted Weighted average average exercise exercise Number price Number price ’000s £ ’000s £ Outstanding at 1 October 533 3.62 705 3.28 Forfeited (29) 0.92 (42) 0.83 Exercised (232) 5.08 (130) 2.66 Outstanding at 30 September 272 3.37 533 3.62 Exercisable at 30 September 272 3.37 533 3.62 2025 2024 Weighted Weighted average average remaining remaining life years life years Range of exercise prices Expected Contractual Expected Contractual 72p–702p – 1.5 – 1.5 Governance Report Additional InformationStrategic Report Financial Statements THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 239 13 Equity continued 13.3 Other reserves All components of other reserves are presented on a consolidated basis on the face of the consolidated statement of changes in equity. On transition to IFRS 9, an equity classification adjustment was recognised for which £3m was credited to the translation reserve and £1m to the cash flow hedging reserve, offset by £4m debited to the cost of hedging reserve. An adjustment between the cost of hedging reserve and retained earnings of £1m was also recognised on transition to reflect the cumulative effect of hedging costs that would have been amortised to the income statement under IFRS 9 over the life of the Group’s existing hedging arrangements up to the date of adoption. Cash flow Cost of Treasury Capital Translation hedging hedging Merger share Redemption reserve reserve reserve reserve reserve reserve Total Other reserves can be analysed as follows: £m £m £m £m £m £m £m At 1 October 2024 23 4 – 61 (520) 3 (429) Adjustment on initial application of IFRS 9 hedge accounting 3 1 (3) – – – 1 At 1 October 2024—adjusted 26 5 (3) 61 (520) 3 (428) Exchange differences on translating foreign 10 – – – – – 10 operations and net investment hedges Changes in fair value of foreign currency basis of hedge relationships – – (2) – – – (2) Amortisation of foreign currency basis of hedge – – 1 – – – 1 relationships Vesting of share awards and exercise of share options – – – – 50 – 50 At 30 September 2025 36 5 (4) 61 (470) 3 (369) Cash flow Treasury Capital Translation hedging Merger share Redemption reserve reserve reserve reserve reserve Total Other reserves can be analysed as follows: £m £m £m £m £m £m At 1 October 2023 124 4 61 (515) 2 (324) Exchange differences on translating foreign operations and net investment hedges (101) – – – – (101) Vesting of share awards and exercise of share options – – – 50 – 50 Cancellation of ordinary shares – – – – 1 1 Purchase of shares by Employee Benefit Trust – – – (55) – (55) At 30 September 2024 23 4 61 (520) 3 (429) * The comparatives at 30 September 2024 have been restated as discussed within ‘Basis of preparation’ (see note 1) This note further explains the nature and purpose of the translation, hedging, and merger reserves. Translation reserve The translation reserve represents the accumulated exchange differences arising since the transition to IFRS from the following sources: • The impact of the translation of subsidiaries with a functional currency other than sterling; and • Exchange differences arising on hedging instruments that are designated hedges of a net investment in foreign operations, net of tax where applicable. Cash flow hedging reserve The hedging reserve comprises the effective portion of the cumulative net change in the fair value of hedging instruments used in cash flow hedges pending subsequent recognition in profit or loss. Notes to the consolidated financial statements continued 240 THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 13 Equity continued 13.3 Other reserves continued Cost of hedging reserve The cost of hedging reserve includes the effects of changes in fair value of the foreign currency basis spread of a financial instrument when the foreign currency basis spread of a financial instrument is excluded from the designation of that financial instrument as the hedging instrument (consistent with the Group’s accounting policy to recognise non-designated component of foreign currency derivative in equity). The changes in fair value of the foreign currency basis spread of a financial instrument, in relation to a transaction-related hedged item accumulated in the cost of hedging reserve, are reclassified to profit or loss only when the hedged transaction affects profit or loss, or included as a basis adjustment to the non-financial hedged item. The changes in fair value of the time value of the foreign currency basis spread of a financial instrument, in relation to a time-period related hedged item accumulated in the cash flow hedging reserve, are amortised to profit or loss on a rational basis over the term of the hedging relationship. Merger reserve Merger reserve brought forward relates to the merger reserve which was present under UK GAAP and frozen on transition to IFRS. Treasury share reserve Treasury share are shares in the Company which are owned by the Company itself. At 30 September 2025, the Group held 59,869,507 (2024: 66,725,007) treasury shares. During the year, the Group agreed to satisfy the vesting of certain share awards, utilising a total of 6,855,500 (2024: 7,181,463) treasury shares. Capital redemption reserve The balance on the capital redemption reserve represents the aggregate nominal value of all the ordinary shares repurchased and cancelled. 13.4 Retained earnings 2025 2024 Retained earnings Note £m £m At 1 October 963 1,171 Adjustment on initial application of IFRS 9 hedge accounting (1) – At 1 October—adjusted 962 1,171 Profit for the year 369 323 Actuarial gain/(loss) on post-employment benefit obligations, net of tax 1 (2) Fair value reassessment of equity investments (2) – Employee share option scheme-value of employee services, net of tax 57 62 Vesting of share awards and exercise of share options (41) (41) Share buyback programme (609) (351) Dividends paid to owners of the parent 13.6 (207) (199) At 30 September 530 963 Share buyback On 19 November 2024, the Group entered into a non-discretionary share buyback programme to purchase up to £400m of its own shares. As announced on 15 May 2025, the programme was extended by up to £200m. The extended programme completed in July 2025, for a total consideration of £600m plus expected associated fees and taxes, corresponding to the £609m recognised through retained earnings at the balance sheet date, of which £605m was paid in the current year. During the year, the Group repurchased a total of 48,209,390 ordinary shares as part of the programme, all of which were subsequently cancelled. In the prior year, the Group purchased a total of 29,289,778 ordinary shares as part of a non-discretionary share buyback programme entered into on 22 November 2023 and completed in April 2024. Consideration of £348m for this share buyback programme was paid in the prior year. Governance Report Additional InformationStrategic Report Financial Statements THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 241 13 Equity continued 13.5 Employee Benefit Trust The Employee Benefit Trust (EBT) holds shares in the Company and was set up for the benefit of Group employees. The EBT purchases the Company’s shares in the market or is gifted these by the Company for use in connection with the Group’s share- based payments arrangements. These shares are accounted for as treasury shares. Once purchased, shares are not sold back into the market unless required to settle employee tax liabilities in respect of their share awards. The EBT holds 8,064,848 ordinary shares in the Company (2024: 8,473,802) at a cost of £72m (2024: £77m) with £nil of shares purchased during the year (2024: £55m), funded by the Company, and a nominal value of £nil (2024: £nil). During the year, the EBT satisfied the vesting of certain share awards utilising 420,118 ordinary shares (2024: 1,381,398). The EBT received £nil (2024: £nil) additional funds for future purchase of shares in the market. The costs of funding and administering the EBT are charged to the income statement of the Group in the period to which they relate. The market value of the shares of the Company held by the EBT at 30 September 2025 was £89m (2024: £87m). 13.6 Dividends Accounting policy Dividends are recognised through equity when approved by the Company’s shareholders or on payment, whichever is earlier. 2025 2024 £m £m Final dividend paid for the year ended 30 September 2024 of 13.50p per share 135 – (2024: final dividend paid for the year ended 30 September 2023 of 12.75p per share) – 129 Interim dividend paid for the year ended 30 September 2025 of 7.45p per share 72 – (2024: interim dividend paid for the year ended 30 September 2024 of 6.95p per share) – 70 207 199 In addition, the Directors are proposing a final dividend in respect of the financial year ended 30 September 2025 of 14.40p per share which will absorb an estimated £138m of shareholders’ funds. The Company’s distributable reserves are sufficient to support the payment of this dividend. If approved at the AGM on 5 February 2026 the dividend will be paid on 10 February 2026 to shareholders who are on the register of members on 9 January 2026. These consolidated financial statements do not reflect this proposed dividend payable. Notes to the consolidated financial statements continued 242 THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 14 Acquisitions and disposals The following note outlines acquisitions and disposals during the year and the accompanying accounting policies. Each acquisition or disposal during the year is discussed and the effects on the results of the Group are highlighted. Additional disclosures are presented for disposals and planned disposals that qualify as businesses held for sale or for presentation as discontinued operations. Accounting policy Acquisitions The acquisition of subsidiaries is accounted for using the acquisition method. The cost of an acquisition is measured as the aggregate of the consideration transferred, which is measured at acquisition date fair value, and the amount of any non-controlling interests in the acquiree. The acquiree’s identifiable assets, liabilities and contingent liabilities that meet the conditions for recognition under IFRS 3 “Business Combinations” are recognised at their fair values at the acquisition date. Any contingent consideration to be transferred by the Group is recognised at fair value at the acquisition date. Subsequent changes to the fair value of the contingent consideration that is deemed to be an asset or liability are recognised in the income statement. Contingent consideration that is classified as equity is not remeasured, and its subsequent settlement is accounted for within equity. Goodwill represents the excess of the consideration transferred, the amount of any non-controlling interest in the acquiree and the acquisition date fair value of any previous equity interest in the acquiree over the fair value of the Group’s total identifiable net assets acquired. If, after reassessment, the Group’s interest in the net fair value of the acquiree’s identifiable assets, liabilities and contingent liabilities exceeds the cost of the business combination, the difference is recognised directly in the consolidated income statement. Any subsequent adjustment to reflect changes in consideration arising from contingent consideration amendments is recognised in the consolidated income statement. On an acquisition-by-acquisition basis, the Group recognises any non-controlling interest in the acquiree either at fair value or at the non-controlling interest’s proportionate share of the acquiree’s net assets. Acquisition-related items such as legal or professional fees are expensed to the income statement as incurred. Acquisitions of certain legal entities can be accounted for as an asset acquisition, rather than a business combination, when they satisfy the “concentration test” exemption under IFRS 3 “Business Combinations”. This is often the case where the value of the acquired legal entity largely comprises a single asset or technology. Where this is applied, no goodwill is recognised as part of the acquisition accounting. Businesses held for sale and discontinued operations The Group classifies the assets and liabilities of a business as held for sale if their carrying amounts will be recovered principally through a sale of the business rather than through continuing use. These assets and liabilities are measured at the lower of their carrying amount and fair value less costs to sell. The criteria for classification as held for sale are met only when the sale is highly probable and the business is available for immediate sale in its present condition. Actions required to complete the sale must indicate that it is unlikely that significant changes will be made to the plan or that the decision to sell will be withdrawn. Management must be committed to the sale and completion must be expected within one year from the date of the classification. Property, plant and equipment and intangible assets are not depreciated or amortised once classified as held for sale. Assets and liabilities classified as held for sale are presented separately as current items in the consolidated balance sheet. A business qualifies as a discontinued operation if it is a component of the Group that either has been disposed of, or is classified as held for sale, and: • Represents a separate major line of business or geographical area of operations; and • Is part of a single co-ordinated plan to dispose of a separate major line of business or geographical area of operations. Discontinued operations are excluded from the results of continuing operations in both the current and prior years and are presented as a single amount in the consolidated income statement as profit or loss on discontinued operations. Governance Report Additional InformationStrategic Report Financial Statements THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 243 14 Acquisitions and disposals continued 14.1 Acquisitions Tritium Software On 29 October 2024, the Group acquired 100% equity capital and voting rights of Tritium Software, S.L (“Tritium Software”), a company based in Spain, for a total consideration of £30m. Tritium Software provides a cloud-native, mobile workforce management solution for field-based sales teams through its main product, Sage Sales Management (previously branded as ForceManager). Total Summary of acquisition £m Cash consideration 28 Deferred consideration 2 Acquisition-date fair value of consideration 30 Fair value of identifiable net assets (5) Goodwill 25 Total Fair value of identifiable net assets acquired £m Acquired intangible assets 6 Other net liabilities (1) Fair value of identifiable net assets acquired 5 A summary of the acquired intangible assets is set out below: Useful Valuation economic life Acquired intangible assets £m (years) Customer relationships 1 10 Technology 5 7 Acquired intangible assets 6 Acquired goodwill of £25m comprises the fair value of the acquired control premium, workforce in place and the expected synergies. The goodwill has been allocated to the Iberia CGU where the underlying benefit arising from the acquisition is expected to be realised. No goodwill is expected to be deductible for tax purposes. The results of the business are allocated to the Europe operating segment in line with the underlying operations. The outflow of cash and cash equivalents on the acquisition is as follows: Total £m Cash consideration (28) Cash and cash equivalents acquired 1 Net cash outflow (27) Transaction costs of £5m relating to the acquisition have been included in selling and administrative expenses, classified as other M&A activity-related items within recurring adjustments between underlying and statutory results. These costs relate to advisory, legal, and other professional services. See note 3.6. Arrangements have been put in place for retention payments to remunerate employees of Tritium Software for future services. The total cost of these arrangements will be recognised in future periods over the retention period, contingent on employment. The consolidated income statement includes revenue and loss after tax relating to Tritium Software for the period since the acquisition date, of which both are immaterial. Notes to the consolidated financial statements continued 244 THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 14 Acquisitions and disposals continued 14.1 Acquisitions continued Fyle Technologies On 24 July 2025, the Group acquired a 100% controlling interest in Fyle Technologies Private Limited (“Fyle”). Fyle provides an AI-powered expense management platform which transforms how SMBs track and manage expenses, with an existing customer base in the United States. Total Summary of acquisition £m Cash consideration 56 Deferred consideration 3 Holdback consideration 4 Acquisition-date fair value of consideration 63 Fair value of identifiable net assets (14) Goodwill 49 Total Fair value of identifiable net assets acquired £m Acquired intangible assets 22 Deferred tax liability (5) Other net liabilities (3) Fair value of identifiable net assets acquired 14 A summary of the acquired intangible assets is set out below: Useful Valuation economic life Acquired intangible assets £m (years) Technology 22 8 Acquired intangible assets 22 Acquired goodwill of £49m comprises the fair value of the acquired control premium, workforce in place and the expected synergies. The goodwill has been allocated to the North America CGU where the underlying benefit arising from the acquisition is expected to be realised. No goodwill is expected to be deductible for tax purposes. The results of the business are allocated to the North America operating segment in line with the underlying operations. The outflow of cash and cash equivalents on the acquisition is as follows: Total £m Cash consideration (56) Cash and cash equivalents acquired 2 Net cash outflow (54) Transaction costs of £5m relating to the acquisition have been included in selling and administrative expenses, classified as other M&A activity-related items within recurring adjustments between underlying and statutory results. These costs relate to advisory, legal and other professional services. See note 3.6. Arrangements have been put in place for retention payments to remunerate employees of Fyle for future services, classified as other M&A activity-related items. The total cost of these arrangements will be recognised in future periods over the retention period, contingent on employment. The consolidated income statement includes revenue and loss after tax relating to Fyle for the period since the acquisition date, of which both are immaterial. Governance Report Additional InformationStrategic Report Financial Statements THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 245 14 Acquisitions and disposals continued 14.2 Measurement adjustments to business combinations reported using provisional amounts On 9 September 2024, the Group acquired 100% equity capital and voting rights of Infineo SAS (“Infineo”), for total cash consideration of £34m. The net assets acquired and recognised in the financial statements for the year ended 30 September 2024 were based on a provisional assessment of their fair value while the Group undertook a valuation of the acquired intangible assets. Given the timing of the acquisition, the acquisition accounting had not been finalised by the date the financial statements for the year ended 30 September 2024 were approved for issue by the Board of Directors. During the period, the valuation and acquisition accounting were completed and approved. The intangible assets identified and subsequently valued as at the date of acquisition include: Useful Valuation economic life Acquired intangible assets £m (years) Customer relationships 1 10 Technology 8 6 Acquired intangible assets 9 The 2024 comparative information has been adjusted to reflect the adjustment to the provisional amounts. As a result of the recognition of intangible assets of £9m, there was an increase in the deferred tax liability of £1m and a corresponding decrease of £8m to goodwill. Acquired goodwill of £24m comprises the fair value of the acquired control premium, workforce in place and the expected synergies. The goodwill has been allocated to the France CGU where the underlying benefit arising from the acquisition is expected to be realised. No goodwill is expected to be deductible for tax purposes. The results of the business are allocated to the Europe operating segment in line with the underlying operations. No other adjustments have been made to the provisional fair value of assets and liabilities reported at 30 September 2024, as set out below: Previously reported Measurement Final fair provisional fair values adjustments values Fair value of identifiable net assets acquired £m £m £m Intangible assets – 9 9 Deferred tax liability – (1) (1) Other identifiable net assets 2 – 2 Fair value of identifiable net assets acquired 2 8 10 Goodwill 32 (8) 24 Total consideration 34 – 34 The increase in amortisation charge on the intangible assets from the acquisition date to 30 September 2024 was not material and therefore no adjustment has been made for this. No changes have been identified to the directly attributable-acquisition related costs which were included during the financial year ended 30 September 2024 in relation to the acquisition. Notes to the consolidated financial statements continued 246 THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 15 Related party transactions This note provides information about transactions between the Group and its related parties. A group’s related parties include any entities over which it has control, joint control, or significant influence, and any persons who are members of its key management personnel. The Group’s related parties are its subsidiary undertakings and its key management personnel, which comprises the Group’s Executive Leadership Team members and the Non-executive Directors. Transactions and outstanding balances between the Company and its subsidiaries within the Group and between those subsidiaries have been eliminated on consolidation and are not disclosed in this note. Remuneration paid to the Executive Leadership Team is disclosed in note 3.3. No other related party transactions occurred during the current year or the prior year. 16 Events after the balance sheet date Acquisition of Criterion Inc On 2 October 2025, the Group acquired 100% equity capital and voting rights of Criterion Inc (“Criterion”), a company based in the United States, for fixed initial consideration of £33m and additional variable consideration of up to £16m, linked to the future performance of the business. Criterion provides a unified human capital management (HCM) platform which will enhance Sage’s offering to mid-sized businesses. Due to the timing of the acquisition being after 30 September 2025, the results of Criterion are not included in our financial statements for the year ended 30 September 2025 and the acquisition accounting has not yet been completed. In line with IFRS 3, the purchase price accounting for the acquisition will be finalised within 12 months of the acquisition date. Share buyback programme On 18 November 2025, The Sage Group plc. approved a share buyback programme of its ordinary shares of up to £300m, which is expected to commence on 19 November 2025, and end no later than 19 March 2026. Governance Report Additional InformationStrategic Report Financial Statements THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 247 17 Group undertakings While we present consolidated results in these financial statements, our structure is such that there are a number of different operating and holding companies that contribute significantly to the overall result. Our subsidiaries are located around the world and each contributes to the profits, assets, and cash flow of the Group. The entities listed below and on the following pages are subsidiaries of the Company or the Group. The Group percentage of equity capital and voting rights is 100% for all subsidiaries listed below unless indicated otherwise. The results for all of the subsidiaries have been consolidated within these financial statements. Country Name Registered Office address Australia Brightpearl Pty Limited Suite 60 Level 2, 2 O'Connell Street, Parramatta NSW 2150, Australia Australia Ocrex Australia Pty. Limited Level 17, 100 Barangaroo Avenue, Barangaroo NSW 2000, Australia Australia Sage Business Solutions Pty Ltd Level 17, 100 Barangaroo Avenue, Barangaroo NSW 2000, Australia Australia Sage Intacct Australia Pty Limited Level 17, 100 Barangaroo Avenue, Barangaroo NSW 2000, Australia Australia Snowdrop Systems Pty Ltd Level 17, 100 Barangaroo Avenue, Barangaroo NSW 2000, Australia Austria Sage GmbH Stella-Klein-Löw-Weg 15, AT-1020, Wien, Austria Bahamas Intelligent Apps Holdings Ltd #2 Bayside Executive Park, West Bay Street & Blake Road, Nassau, N.P., The Bahamas, Bahamas Belgium Sage S.A. Rue Picard, 7 boite 100, 1000 Bruxelles Belgique, Belgium Botswana Sage Software Botswana (Pty) Ltd 1 Plot 50371, Fairground Office Park, Gaborone, Botswana Canada Sage Software Canada Ltd 111, 5th Avenue SW, Suite 3100-C, Calgary AB T2P 5L3, Canada Colombia ForceManager Colombia, SAS CRA 21, Number 134-61 apt 805 Bogotá France Sage Holding France SAS 10 Place de Belgique, 92250, La Garenne-Colombes, Paris, France France Sage Overseas Limited (Branch Registration) 10 Place de Belgique, 92250, Le Garenne Colombes, Paris, France France Sage SAS 10 Place de Belgique, 92250, La Garenne-Colombes, Paris, France Germany Best Software (Germany) GmbH Franklinstraße 61-63 60486, Frankfurt am Main, Germany Germany eWare GmbH Untere Weidenstr. 5, c/o RAè Becker & Koll., 81543, München, Germany Germany Sage bäurer GmbH Josefstraße 10, 78166, Donaueschingen, Germany Germany Sage CRM Solutions GmbH Franklinstraße 61-63, 60486, Frankfurt am Main, Germany Germany Sage GmbH Franklinstraße 61-63 60486, Frankfurt am Main, Germany Germany Sage Management & Services GmbH Franklinstraße 61-63 60486, Frankfurt am Main, Germany Germany Sage Services GmbH Karl-Heine-Straße 109-111, 04229, Leipzig, Germany India Corecon Technologies India Private Limited The Atrium at Quark City, Zone-D, Lower Ground Floor, Plot No. A-45, Industrial Focal Point, Chandigarh Sector 59, Rupnagar, S.A.S.Nagar (Mohali), 160059, Punjab, India India Fyle Technologies Private Limited 550, 11th Cross, 2nd Main, MICO Layout, BTM 2nd Stage, Bengaluru 560 076, Karnataka India Intacct Software Private Limited No 501 & 502, Tower C, 5th Floor, The Millenia, No. 1 & 2, Murphy Road, Bangalore, Karnataka, 560 008, India India Lockstep Network India Pvt. Ltd. 1st and 2nd Flr Sky Loft, Creaticity Mall Opp Golf Course, Shastrinagar Yerwada, Pune, 411006, India India Sage Business Technology (India) The Atrium at Quark City, Zone -D, Second Floor, A-45, Private Limited Industrial Focal Point, Phase VIII B, Mohali, 160059, India Notes to the consolidated financial statements continued 248 THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 17 Group undertakings continued Country Name Registered Office address India Sage Software India Pvt Ltd (in liquidation) N-34, Lower Ground Floor, Kalkaji, New Delhi, 110 019, India India VV Finly Technology Pvt. Ltd. 1st Floor, Gopala Krishna Complex, #45/3 Residency Road, MG Road, Bangaluru, Karnataka- 560025 India Ireland Ocrex Limited Number One, Central Park, Leopardstown, Dublin 18, Ireland Ireland Sage Global Services (Ireland) Limited Number One, Central Park, Leopardstown, Dublin 18, Ireland Ireland Sage Hibernia Limited Number One, Central Park, Leopardstown, Dublin 18, Ireland Ireland Sage Irish Finance Company Unlimited Deloitte House, 29 Earlsfort Terrace, , Dublin 2 DO2 AY28 Company (in liquidation) Ireland Sage Technologies Limited Number One, Central Park, Leopardstown, Dublin 18, Ireland Ireland Sage Treasury Ireland Unlimited Company 1 Central Park, Leopardstown, Dublin 18, Dublin, D18NH10, Ireland Israel Budgeta Technologies Ltd 144 Begin Menachem Rd, Tel Aviv, 6492102, Israel Italy Sellf S.r.l. (dissolved 2/10/2025) Via Sile 41, Roncade, Treviso, Italy Kenya Sage Software East Africa Limited 1 114 & 115, 1st Floor, Nivina Towers, LR NO. 1870/IX/96, Westlands Road, Nairobi, Kenya Latvia CakeHR SIA (in liquidation) Brivibas iela 40-27, Riga, LV-1050, Latvia Malaysia Sage Malaysia Business Solutions Sdn. Bhd. Level 11, 1 Sentral, Jalan Rakyat, Kuala Lumpur Sentral, 50470 Kuala Lumpur, Malaysia Mexico ForceManager S de RL de CV Avenida Cafetales 1702, Hacienda de Coyoacán,, Coyoacán, CDMX, 04970, Mexico Morocco Sage Software SARL Tour Crystal 1, Niveau 9, Bd Sidi Mohamed Ben Abdellah, Casablanca, 20030, Morocco Namibia Sage Software Namibia (Pty) Ltd 344 Independence Avenue, Windhoek, P O BOX 1571, Namibia Nigeria Sage Software Nigeria Limited 1 Landmark Towers, 5B Water Corporation Road, Victoria Island, Lagos, Nigeria Poland Sage Software Poland sp. z o.o. ul. Towarowa 28, 00-839, Warsaw, Poland Portugal Sage Portugal – Software, S.A. Edifício Porto Office Park. Avenida de Sidónio Pais, 153, 4.º piso, 4100-467, Porto, Portugal Romania Intacct Development Romania SRL clădirea C-D, The Office, Etaj 1, Cluj-Napoca, Judet Cluj, Bulevardul 21 DECEMBRIE 1989, Nr. 77, camera C.1.2, Romania Singapore Sage Singapore Pte. Ltd. 7 Straits View # 12-00, Marina One East Tower, Singapore, 018936, Singapore South Africa Sage Alchemex (Pty) Ltd 23A Flanders Drive, Mount Edgecombe, Durban, 4321, South Africa South Africa Sage South Africa (Pty) Ltd Floor 6 Gateway West, 22 Magwa Crescent, Waterfall 5-1R, Midrand, Gauteng, 2066, South Africa Spain Sage Spain Holdco S.L. Moraleja Building One – Planta 1, Parque Empresarial de La Loraleja, Avenida de Europa no19, 28108 Alcobendas, Madrid, Spain Spain Sage Spain SL 1 Moraleja Building One – Planta 1, Parque Empresarial de La Moraleja, Avenida de Europa no19, 28108 Alcobendas, Madrid, Spain Switzerland Sage Bäurer AG c/o Legalis Consulting GmbH, Suurstoffi 29, 6343, Rotkreuz, Switzerland United Arab Emirates Sage Software Middle East FZ-LLC Premises: 116-120, Floor: 01, Building: 11, Dubai, United Arab Emirates United Kingdom Brightpearl Limited C23 - 5 & 6 Cobalt Park Way, Cobalt Park, Newcastle upon Tyne, NE28 9EJ, United Kingdom Governance Report Additional InformationStrategic Report Financial Statements THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 249 17 Group undertakings continued Country Name Registered Office address United Kingdom ForceManager Ltd (in liquidation) C23 - 5 & 6 Cobalt Park Way, Cobalt Park, Newcastle upon Tyne, NE28 9EJ, United Kingdom United Kingdom HR Bakery Ltd (in liquidation) C23 - 5 & 6 Cobalt Park Way, Cobalt Park, Newcastle upon Tyne, NE28 9EJ, United Kingdom United Kingdom Interact UK Holdings Limited C23 - 5 & 6 Cobalt Park Way, Cobalt Park, Newcastle upon Tyne, NE28 9EJ, United Kingdom United Kingdom Ocrex UK Ltd C23 - 5 & 6 Cobalt Park Way, Cobalt Park, Newcastle upon Tyne, NE28 9EJ, United Kingdom United Kingdom Sage (UK) Ltd C23 - 5 & 6 Cobalt Park Way, Cobalt Park, Newcastle upon Tyne, NE28 9EJ, United Kingdom United Kingdom Sage Euro Hedgeco 1 C23 - 5 & 6 Cobalt Park Way, Cobalt Park, Newcastle upon Tyne, NE28 9EJ, United Kingdom United Kingdom Sage Euro Hedgeco 2 C23 - 5 & 6 Cobalt Park Way, Cobalt Park, Newcastle upon Tyne, NE28 9EJ, United Kingdom United Kingdom Sage Far East Investments Limited C23 - 5 & 6 Cobalt Park Way, Cobalt Park, Newcastle upon Tyne, NE28 9EJ, United Kingdom United Kingdom Sage Global Services Limited C23 - 5 & 6 Cobalt Park Way, Cobalt Park, Newcastle upon Tyne, NE28 9EJ, United Kingdom United Kingdom Sage Holding Company Limited C23 – 5 & 6 Cobalt Park Way, Cobalt Park, Newcastle upon Tyne, NE28 9EJ, United Kingdom United Kingdom Sage Holdings Limited C23 – 5 & 6 Cobalt Park Way, Cobalt Park, Newcastle upon Tyne, NE28 9EJ, United Kingdom United Kingdom Sage Irish Investments LLP (in liquidation) 3 Field Court, Gray's Inn, London, WC1R 5EF, United Kingdom United Kingdom Sage Irish Investments One Limited 3 Field Court, Gray's Inn, London, WC1R 5EF, United Kingdom (in liquidation) United Kingdom Sage Irish Investments Two Limited 3 Field Court, Gray's Inn, London, WC1R 5EF, United Kingdom (in liquidation) United Kingdom Sage Online Holdings Limited C23 – 5 & 6 Cobalt Park Way, Cobalt Park, Newcastle upon Tyne, NE28 9EJ, United Kingdom United Kingdom Sage Overseas Limited C23 – 5 & 6 Cobalt Park Way, Cobalt Park, Newcastle upon Tyne, NE28 9EJ, United Kingdom United Kingdom Sage People Limited C23 – 5 & 6 Cobalt Park Way, Cobalt Park, Newcastle upon Tyne, NE28 9EJ, United Kingdom United Kingdom Sage Treasury Company Limited C23 – 5 & 6 Cobalt Park Way, Cobalt Park, Newcastle upon Tyne, NE28 9EJ, United Kingdom United Kingdom Sage US LLP C23 – 5 & 6 Cobalt Park Way, Cobalt Park, Newcastle upon Tyne, NE28 9EJ, United Kingdom United Kingdom Sage USD Hedgeco 1 C23 – 5 & 6 Cobalt Park Way, Cobalt Park, Newcastle upon Tyne, NE28 9EJ, United Kingdom United Kingdom Sage USD Hedgeco 2 C23 – 5 & 6 Cobalt Park Way, Cobalt Park, Newcastle upon Tyne, NE28 9EJ, United Kingdom United Kingdom Sage Whitley Limited C23 – 5 & 6 Cobalt Park Way, Cobalt Park, Newcastle upon Tyne, NE28 9EJ, United Kingdom United Kingdom Sagesoft C23 – 5 & 6 Cobalt Park Way, Cobalt Park, Newcastle upon Tyne, NE28 9EJ, United Kingdom United Kingdom Snowdrop Systems Limited C23 – 5 & 6 Cobalt Park Way, Cobalt Park, Newcastle upon Tyne, NE28 9EJ, United Kingdom United States Brightpearl, Inc. Brandywine Plaza, 1521 Concord Pike, Suite 201, Wilmington, New Castle County, DE 19803, United States United States Fyle, Inc. Brandywine Plaza, 1521 Concord Pike, Suite 201, Wilmington, New Castle County, Delaware, 19803 United States Ocrex, Inc. Brandywine Plaza, 1521 Concord Pike, Suite 201, Wilmington, New Castle County, DE 19803, United States United States Sage Budgeta, Inc. Brandywine Plaza, 1521 Concord Pike, Suite 201, Wilmington, New Castle County, DE 19803, United States United States Sage Global Services US, Inc Brandywine Plaza, 1521 Concord Pike, Suite 201, Wilmington, New Castle County, DE 19803, United States Notes to the consolidated financial statements continued 250 THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 17 Group undertakings continued Country Name Registered Office address United States Sage Intacct, Inc. Brandywine Plaza, 1521 Concord Pike, Suite 201, Wilmington, New Castle County, DE 19803, United States United States Sage People, Inc. Brandywine Plaza, 1521 Concord Pike, Suite 201, Wilmington, New Castle County, DE 19803, United States United States Sage Software Holdings, Inc. Brandywine Plaza, 1521 Concord Pike, Suite 201, Wilmington, New Castle County, DE 19803, United States United States Sage Software International, Inc. 425 West Washington Street #4, Suffolk, Suffolk (Independent City), VA 23434, United States United States Sage Software, Inc. 425 West Washington Street #4, Suffolk, Suffolk (Independent City), VA 23434, United States United States Sage Software North America Brandywine Plaza, 1521 Concord Pike, Suite 201, Wilmington, New Castle County, DE 19803, United States United States Sage Tempus, Inc. Brandywine Plaza, 1521 Concord Pike, Suite 201, Wilmington, New Castle County, DE 19803, United States United States Softline Holdings USA, Inc. Brandywine Plaza, 1521 Concord Pike, Suite 201, Wilmington, New Castle County, DE 19803, United States United States Softline Software, Inc. Brandywine Plaza, 1521 Concord Pike, Suite 201, Wilmington, New Castle County, DE 19803, United States United States Softline Software USA, LLC Brandywine Plaza, 1521 Concord Pike, Suite 201, Wilmington, New Castle County, DE 19803, United States United States South Acquisition Corp. Brandywine Plaza, 1521 Concord Pike, Suite 201, Wilmington, New Castle County, DE 19803, United States Notes: * Direct subsidiary. 1 Group holding in the subsidiary is ≥99% and <100%. Governance Report Additional InformationStrategic Report Financial Statements THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 251 COMPANY STATEMENTS Company financial statements 253 Company balance sheet 254 Company statement of changes in equity 255 Company accounting policies Notes to the Company financial statements 257 1. Dividends 257 2. Investments 257 3. Cash and cash equivalents 257 4. Debtors 258 5. Trade and other creditors 258 6. Borrowings 258 7. Equit y 252 THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 Note 2025 £m 2024 (restated) £m Non-current assets Investments 2 3,088 3,088 Debtors 4 437 417 Deferred tax assets 3 2 3,528 3,507 Current assets Cash and cash equivalents 3 1 21 Debtors 4 1,229 1,229 1,230 1,250 Current liabilities Trade and other creditors 5 (52) (35) Non-current liabilities Borrowings 6 (1,477) (1,157) Net assets 3,229 3,565 Capital and reserves Called up share capital 7.1 11 11 Share premium account 548 548 Other reserves 7.2 (406) (456) Profit and loss account 3,076 3,462 Total shareholders’ funds 3,229 3,565 * The comparative balance sheet at 30 September 2024 has been restated as discussed within “Company accounting policies” The Company’s profit for the year was £420m (2024: £58m). The financial statements on pages 253 to 259 were approved by the Board of Directors on 18 November 2025 and are signed on its behalf by: Jonathan Howell Chief Financial Officer Company’s registered number 02231246 Company balance sheet At 30 September 2025 Governance Report Additional InformationStrategic Report Financial Statements THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 253 Attributable to owners of the parent Called up share capital £m Share premium £m Other reserves £m Profit and loss account £m Total equity £m At 1 October 2024 11 548 (456) 3,462 3,565 Profit for the year – – – 420 420 Total comprehensive income for the year ended 30 September 2025 – – – 420 420 Transactions with owners: Employee share option scheme—value of employee services – – – 51 51 Vesting of share awards and exercise of share options – – 50 (41) 9 Share buyback programme – – – (609) (609) Dividends paid to owners of the parent – – – (207) (207) Total transactions with owners for the year ended 30 September 2025 – – 50 (806) (756) At 30 September 2025 11 548 (406) 3,076 3,229 Attributable to owners of the parent (restated) Called up share capital £m Share premium £m Other reserves £m Profit and loss account £m Total equity £m At 1 October 2023 12 548 (452) 3,939 4,047 Profit for the year – – – 58 58 Total comprehensive income for the year ended 30 September 2024 – – – 58 58 Transactions with owners: Employee share option scheme—value of employee services – – – 56 56 Vesting of share awards and exercise of share options – – 50 (41) 9 Purchase of shares by Employee Benefit Trust – – (55) – (55) Cancellation of ordinary shares (1) – 1 – – Share buyback programme – – – (351) (351) Dividends paid to owners of the parent – – – (199) (199) Total transactions with owners for the year ended 30 September 2024 (1) – (4) (535) (540) At 30 September 2024 11 548 (456) 3,462 3,565 * The comparative statement of changes in equity for the year ended 30 September 2024 has been restated as discussed within “Company accounting policies” Company statement of changes in equity 254 THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 Statement of compliance These financial statements were prepared in accordance with Financial Reporting Standard 102 (FRS 102) “The Financial Reporting Standard applicable in the UK and Republic of Ireland”. Basis of accounting These financial statements are prepared on the going concern basis, under the historical cost convention, and in accordance with the Companies Act 2006. The going concern basis is set out in note 1 of the Group consolidated financial statements. A summary of the more important Company accounting policies, which have been consistently applied to all periods presented, is set out below. The Sage Group plc. (the “Company”), a public company limited by shares, is deemed a qualifying entity under FRS 102, and so may take advantage of the reduced disclosures permitted under the standard. As a result, the following disclosures have not been provided: • A statement of cash flows and related disclosures under Section 7 Statement of Cash Flows and Section 3 Financial Statement Presentation paragraph 3.17(d); • Disclosures about financial instruments under Section 11 Basic Financial Instruments and Section 12 Other Financial Instruments Issues paragraphs 12.26 (in relation to those cross-referenced paragraphs from which a disclosure exemption is available), 12.27, 12.29(a), 12.29(b), and 12.29A; this exemption is permitted as equivalent disclosures are included in the consolidated financial statements; • Disclosures about share-based payments under Section 26 Share-based Payment paragraphs 26.18(b), 26.19 to 26.21 and 26.23; this exemption is permitted as the Company is an ultimate parent, the share-based payment arrangements concern its own equity instruments, its separate financial statements are presented alongside the consolidated financial statements of The Sage Group plc. and equivalent disclosures are included in those consolidated financial statements; and • Key management personnel compensation in total under Section 33 Related Party Disclosures paragraph 33.7. In the Company’s financial statements for the year ended 30 September 2024, the amount paid of £351m relating to a share buyback was disclosed as a component of treasury shares. As the shares were cancelled upon repurchase, £351m should have been deducted from the profit and loss reserve. An adjustment has been recognised in these financial statements. The comparative disclosures in these financial statements have been adjusted as set out in the Company balance sheet, the Company statement of changes in equity and note 7.2 “Other reserves”. There is no impact on the Group’s consolidated financial statements. Foreign currencies The Company is a UK registered company with both a functional and presentational currency of sterling. Monetary assets and liabilities expressed in foreign currencies are translated into sterling at rates of exchange prevailing at the balance sheet date. Transactions in foreign currencies are converted into sterling at the rate prevailing at the dates of the transactions. All differences on exchange are taken to the profit and loss account. Investments Investments are stated at cost less provision for any diminution in value. Any impairment is charged to the profit and loss account as it arises. Company profit and loss account No profit and loss account is presented for the Company as permitted by section 408 of the Companies Act 2006. Details of the average number of people employed by the Company and the staff costs incurred by the Company are as follows: Average monthly number of people employed (including Directors) 2025 number 2024 number By segment: UKIA 12 14 Staff costs 2025 £m 2024 £m Wages and salaries 5 5 Social security costs 2 2 7 7 Staff costs are net of recharges to other Group companies. Company accounting policies Governance Report Additional InformationStrategic Report Financial Statements THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 255 Auditor’s remuneration The audit fees payable in relation to the audit of the financial statements of the Company are £47,000 (2024: £50,600). Directors’ remuneration Details of the remuneration of Executive and Non-executive Directors and their interest in shares and options of the Company are given in the audited part of the Directors’ Remuneration Report on pages 117 to 151. Share-based payments The Company issues equity-settled share-based payments to certain employees and employees of its subsidiaries. Equity- settled share-based payments granted to employees of the Company are measured at fair value (excluding the effect of non- market-based vesting conditions) at the date of grant. The fair value determined at the grant date of the equity-settled share- based payments is expensed on a straight-line basis over the vesting period, based on the Company’s estimate of the shares that will eventually vest allowing for the effect of non-market-based vesting conditions. Fair value is measured using the Black-Scholes or the Monte Carlo pricing models. The expected life used in the model has been adjusted based on management’s best estimate, for the effects of non-transferability, exercise restrictions and behavioural considerations. The Company also provides certain employees and employees of its subsidiaries with the ability to purchase the Company’s ordinary shares at a discount to the current market value at the date of the grant. For awards made to its own employees, the Company records an expense, based on its estimate of the discount related to shares expected to vest, on a straight-line basis over the vesting period. At the end of each reporting period, the entity revises its estimates for the number of options expected to vest. It recognises the impact of the revision to original estimates, if any, in the profit and loss account, with a corresponding adjustment to equity. For awards made to subsidiary employees, the fair value of awards made is recognised by the Company through the profit and loss account. Intergroup recharges to the employing subsidiary, up to the fair value of awards made to employees of that subsidiary, subsequently reverse the decrease to the profit and loss account. The proceeds received net of any directly attributable transaction costs are credited to share capital (nominal value) and share premium when the options are exercised. Financial instruments The Company only enters into basic financial instrument transactions that result in the recognition of basic financial assets and liabilities, including trade and other receivables and payables and loans to and from related parties. These transactions are initially recorded at transaction price, unless the arrangement constitutes a financing transaction where the transaction is measured at the present value of the future receipt discounted at a market rate of interest, and subsequently recognised at amortised cost. Financial assets At the end of each reporting period financial assets measured at amortised cost are assessed for objective evidence of impairment. If an asset is impaired the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in comprehensive income or expense. Financial assets are derecognised when (a) the contractual rights to the cash flows from the asset expire or are settled, or (b) substantially all the risks and rewards of the ownership of the asset are transferred to another party, or (c) control of the asset has been transferred to another party who has the practical ability to unilaterally sell the asset to an unrelated third party without imposing additional restrictions. Financial liabilities Financial liabilities are derecognised when the liability is extinguished, that is when the contractual obligation is discharged, cancelled or expired. Dividends Dividends are recognised through equity when approved by the Company’s shareholders or on payment, whichever is earlier. Employee Benefit Trust The Company’s Employee Benefit Trust is considered an extension of the Company and therefore forms part of these financial statements. Company accounting policies continued 256 THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 1 Dividends 2025 £m 2024 £m Final dividend paid for the year ended 30 September 2024 of 13.50p per share 135 – (2024: final dividend paid for the year ended 30 September 2023 of 12.75p per share) – 129 Interim dividend paid for the year ended 30 September 2025 of 7.45p per share 72 – (2024: interim dividend paid for the year ended 30 September 2024 of 6.95p per share) – 70 207 199 In addition, the Directors are proposing a final dividend in respect of the financial year ended 30 September 2025 of 14.40p per share which will absorb an estimated £138m of shareholders’ funds. The Company’s distributable reserves are sufficient to support the payment of this dividend. If approved at the AGM on 5 February 2026 the dividend will be paid on 10 February 2026 to shareholders who are on the register of members on 9 January 2026. These financial statements do not reflect this proposed dividend payable. 2 Investments Equity interests in subsidiary undertakings are as follows: 2025 £m 2024 £m Cost 3,097 3,097 Provision for diminution in value (9) (9) Net book value 3,088 3,088 The Directors believe that the carrying value of the investments is supported by their underlying net assets. Subsidiary undertakings, included in the Group financial statements for the year ended 30 September 2025, are shown in note 17 of the Group financial statements. All of these subsidiary undertakings are wholly owned, unless otherwise indicated in note 17 of the Group financial statements. Subsidiaries are engaged in the development, distribution, and support of business management software and related products and services for small and medium-sized businesses. All subsidiaries’ results are included in the Group financial statements. The accounting reference date of all subsidiaries is 30 September. 3 Cash and cash equivalents 2025 £m 2024 £m Cash and cash equivalents 1 21 4 Debtors 2025 £m 2024 £m Prepayments and accrued income 1 – Amounts owed by Group undertakings 1,662 1,646 Current tax assets 3 – 1,666 1,646 Of amounts owed by Group undertakings £437m (2024: £417m) is due greater than one year. Amounts owed by Group undertakings are unsecured and attract a rate of interest of 3.8% and SONIA plus 1.6% respectively (2024: 3.8% and SONIA plus 1.6%). Notes to the Company financial statements Governance Report Additional InformationStrategic Report Financial Statements THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 257 5 Trade and other creditors 2025 £m 2024 £m Amounts owed to Group undertakings 1 – Accruals 51 35 52 35 Amounts owed to Group undertakings are unsecured and non-interest bearing. 6 Borrowings 2025 £m 2024 £m Sterling denominated bond notes 1,041 743 Euro denominated bond notes 436 414 1,477 1,157 During the year, bond notes were issued in March 2025 for a nominal amount of £300m with a maturity date of March 2037. Net cash proceeds from the issuance were £297m. For further information, see note 11.4 of the Group consolidated financial statements. 7 Equity 7.1 Called up share capital Issued and fully paid ordinary shares of 1 4/77 pence each 2025 shares 2025 £m 2024 shares 2024 £m At 1 October 1,071,499,517 11 1,100,789,295 12 Cancellation of shares (48,209,390) – (29,289,778) (1) At 30 September 1,023,290,127 11 1,071,499,517 11 Note: * Cancellation of shares in the current year resulted in a reduction of the nominal value of ordinary shares of less than £1m. See note 13.1 of the Group consolidated financial statements. 7.2 Other reserves Treasury share reserve £m Merger reserve £m Capital redemption reserve £m Total other reserves £m At 1 October 2024 (520) 61 3 (456) Vesting of share awards and exercise of share options 50 – – 50 At 30 September 2025 (470) 61 3 (406) Treasury share reserve (restated) £m Merger reserve £m Capital redemption reserve £m Total other reserves (restated) £m At 1 October 2023 (515) 61 2 (452) Vesting of share awards and exercise of share options 50 – – 50 Cancellation of ordinary shares – – 1 1 Purchase of shares by Employee Benefit Trust (55) – – (55) At 30 September 2024 (520) 61 3 (456) Note: * The comparative treasury share reserve for the year ended 30 September 2024 has been restated as discussed within “Company accounting policies”. Notes to the Company financial statements continued 258 THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 7 Equity continued 7.2 Other reserves continued Treasury shares Purchase of treasury shares At 30 September 2025, the Company held 59,869,507 (2024: 66,725,007) treasury shares. During the year, the Company agreed to satisfy the vesting of certain share awards, utilising a total of 6,855,500 (2024: 7,181,463) treasury shares. Shares purchased under the Company’s buyback programme are either cancelled or are retained in treasury and reissued in the future. Where the shares are retained as treasury shares, they represent a deduction from equity attributable to owners of the Company. On 19 November 2024, the Company entered into a non-discretionary share buyback programme to purchase up to £400m of its own shares. As announced on 15 May 2025, the programme was extended by up to £200m. The extended programme completed in July 2025, for a total consideration of £600m plus expected associated fees and taxes, corresponding to the £609m recognised through retained earnings at the balance sheet date, of which £605m was paid in the current year. During the year, the Company repurchased a total of 48,209,390 ordinary shares as part of the programme, all of which were subsequently cancelled. In the prior year, the Company purchased a total of 29,289,778 ordinary shares as part of a non-discretionary share buyback programme entered into on 22 November 2023 and completed in April 2024. Consideration of £348m for this share buyback programme was paid in the prior year. Employee Benefit Trust The Employee Benefit Trust (EBT) holds shares in the Company and was set up for the benefit of Group employees. The EBT purchases the Company’s shares in the market or is gifted these by the Company for use in connection with the Group’s share- based payments arrangements. Once purchased, shares are not sold back into the market unless required to settle employee tax liabilities in respect of their share awards. The EBT holds 8,064,848 ordinary shares in the Company (2024: 8,473,802) at a cost of £72m (2024: £77m) with £nil of shares purchased during the year (2024: £55m), funded by the Company, and a nominal value of £nil (2024: £nil). During the year, the EBT utilised 420,118 shares it held to satisfy the vesting of certain share awards (2024: 1,381,398). The EBT received £nil (2024: £nil) additional funds for future purchase of shares in the market. The costs of funding and administering the EBT are charged to the profit and loss account of the Company in the period to which they relate. The market value of the shares of the Company held by the EBT at 30 September 2025 was £89m (2024: £87m). Governance Report Additional InformationStrategic Report Financial Statements THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 259 ADDITIONAL INFORMATION Additional information 261 Glossary 264 Shareholder information 260 THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 Glossary Alternative Performance Measures Alternative Performance Measures are used by the Group to understand and manage performance. These are not defined underInternational Financial Reporting Standards (IFRS) or UK-adopted International Accounting Standards (UK-IFRS) and are not intended to be a substitute for any IFRS or UK-IFRS measures of performance but have been included as management considers them to be important measures, alongside the comparable GAAP financial measures, in assessing underlying performance. Wherever appropriate and practical, we provide reconciliations to relevant GAAP measures. The table below sets out the basis of calculation of the Alternative Performance Measures andthe rationale for their use. Measure Description Rationale Underlying (revenue and profit) measures Underlying measures are adjusted to exclude items which in management’s judgement need to be disclosed separately by virtue of their size, nature or frequency toaid understanding of the performance for the year orcomparability between periods: • Recurring items include purchase price adjustments including amortisation of acquired intangible assets and adjustments made to reduce deferred income arising on acquisitions, acquisition-related items, and unhedged FX on intercompany balances; and • Non-recurring items that management judge to be one-off or non-operational such as gains and losses onthe disposal of assets, impairment charges andreversals, and restructuring related costs. Recurring items are adjusted each period irrespective of materiality to ensure consistent treatment. Underlying basic EPS is also adjusted for the tax impact of recurring and non-recurring items. All prior period underlying measures (revenue and profit) are retranslated at the current year exchange rates to neutralise the effect of currency fluctuations. Underlying measures allow management and investors to compare performance without theeffects of foreign exchange movements orrecurring or non-recurring items. By including part-period contributions fromacquisitions, discontinued operations, disposals and assets held for sale of standalone businesses in thecurrent and/or prior periods, the impact of M&A decisions onearnings per share growth can be evaluated. Organic (revenueand profit) measures In addition to the adjustments made for Underlying measures, Organic measures: • Exclude the contribution from discontinued operations, disposals and assets held for sale ofstandalone businesses in the current and priorperiod; and • Exclude the contribution from acquired businesses until the year following the year of acquisition; andAdjust the comparative period to present prior period acquired businesses as if they had been partofthe Group throughout the prior period. Acquisitions and disposals where the revenue andcontribution impact would be immaterial arenotadjusted. Organic measures allow management and investors to understand the like-for-like revenue and current period margin performance of the continuing business. Underlying CashFlow from Operations Underlying Cash Flow from Operations is Underlying Operating Profit adjusted for non-cash items, net capital expenditure (excluding business combinations and similar items) and changes in working capital. To show the cash flow generated by theoperations and calculate underlying cashconversion. Strategic Report Governance Report Financial Statements Additional Information THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 261 Measure Description Rationale Underlying CashConversion Underlying Cash Flow from Operations divided byUnderlying (as reported) Operating Profit. Cash conversion informs management and investors about the cash operating cycle of the business and how efficiently operating profit is converted into cash. Underlying EBITDA Underlying EBITDA is Underlying Operating Profit excluding underlying depreciation, amortisation andshare basedpayments. Underlying depreciation and amortisation is the statutory equivalent measure, adjusted for the amortisation of acquired intangibles. Underlying share based payments is the statutory equivalent measure, adjusted for M&A-related share based payment charges included within other M&A activity related items. To calculate the Net Debt to underlying EBITDAleverage ratio and to show profitability before the impact of majornon-cashcharges. Annualised recurring revenue Annualised recurring revenue (“ARR”) is the normalised recurring revenue in the last month of the reporting period, adjusted consistently period to period, multiplied by twelve. Adjustments to normalise reported recurring revenue involve adjusting for certain components (such asnon-refundable contract sign-up fees) to ensure the measure reflects that part of the revenue base which (subject to ongoing use and renewal) can reasonably beexpected to repeat in future periods. ARR represents the annualised value ofthe recurring revenue base that is expected to becarried into future periods, and its growth is aforward- looking indicator of reporting recurring revenue growth. Renewal Rate byValue The ARR from renewals, migrations, upsell and cross-sell of active customers at the start of the year,divided by the opening ARR for the year. As an indicator of our ability to retain and generate additional revenue from our existing customer base through upand cross sell. Free Cash Flow Free Cash Flow is Underlying Cash Flow from Operationsminus net interest paid, derivative financialinstruments and income tax paid, and adjustedfor non-recurring cash items (which excludesnet proceeds on disposals of subsidiaries) andprofit and loss foreign exchange movements. To measure the cash generated by theoperating activities during the period thatis available to repay debt, undertake acquisitions or distribute toshareholders. % Subscription Penetration Underlying software subscription revenue asapercentage of underlying total revenue. To measure the migrationour customer basefromlicence and maintenance toasubscription relationship. % Sage BusinessCloud Penetration Underlying recurring revenue from the Sage Business Cloud as a percentage of the underlying recurring revenue of the Future Sage Business Cloud Opportunity. To measure the progress in the migration ofour revenue base to the Sage Business Cloudby connecting our solutions to the cloudand/or migrating our customers to cloudconnected and cloud native solutions. Return on Capital Employed (ROCE) ROCE is calculated as underlying operating profit, minus amortisation of acquired intangibles, the resultbeing divided by capital employed, which istheaverage (of the opening and closing balance fortheperiod) totalnet assets excluding net debt, derivative financialinstruments, provisions for non-recurring costs, financial liability for purchase ofownshares andtax assets or liabilities. As an indicator of the current period financial return on the capital invested in the company. ROCE is used as an underpin in the FY23, FY24 and FY25 PSP awards. Net debt Net debt is cash and cash equivalents less current andnon-current borrowings. To calculate the Net Debt to underlying EBITDA leverage ratio and an indicator of ourindebtedness. Glossary continued 262 THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 AGM Annual General Meeting AI Artificial Intelligence API Application Program Interface CAGR Compound Annual Growth Rate CDP Carbon Disclosure Project CEO Chief Executive Officer CFO Chief Financial Officer CGU Cash Generating Unit CRM Customer Relationship Management DTR Disclosure Guidance and Transparency Rules EBITDA Earnings Before Interest Taxes Depreciation and Amortisation ED Executive Director ELT Executive Leadership Team EPS Earnings Per Share ERP Enterprise Resource Planning EU European Union FCF Free Cash Flow FY23 Financial year ending 30 September 2023 FY24 Financial year ending 30 September 2024 FY25 Financial year ending 30 September 2025 GHG Greenhouse Gas HCM Human Capital Management HR Human Resources IFRS International Financial Reporting Standards ISV Independent Software Vendor KPI Key Performance Indicator LLM Large Language Model LSE London Stock Exchange LTIP Long Term Incentive Plan ML Machine Learning MTD Making Tax Digital NED Non-Executive Director NPS Net Promoter Score PBT Profit Before Tax PSP Performance Share Plan R&D Research and Development SBC Sage Business Cloud SaaS Software as a Service SSRS Software & Software Related Services TSR Total Shareholder Return Strategic Report Governance Report Financial Statements Additional Information THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 263 Financial calendar 1 Annual General Meeting 5 February 2026 Dividend payments 2 FY25 final payable 10 February 2026 Interim payable 3 July 2026 Results announcements Q1 FY26 trading update 27 January 2026 H1 FY26 interim results 21 May 2026 Q3 FY26 trading update 29 July 2026 FY26 full-year results 19 November 2026 Note: 1. Please note that these dates are provisional and subject to change. Please access our financial calendar on www.sage.com, which is updated regularly. 2. All dividend payments are subject to Board and, in the case of the final dividend, shareholders’ approval. Shareholder and investor information online More information about our business, products, investors, media, sustainability, and careers at Sage can be found on our website at www.sage.com A dedicated investor information page can be found at www.sage.com/investors Enquiries can be directed to Investor Relations via our website. Electronic shareholder information Equiniti, the registrar of The Sage Group plc., is able to notify shareholders by email of the availability of shareholder information online. Whenever new shareholder information becomes available, such as Sage’s full-year results, those shareholders opted in to the scheme will receive an email notification from Equiniti, enabling them to access, read and print documents at their convenience. To take advantage of this service, shareholders should go to www.shareview.co.uk, where full details of the shareholder portfolio services are provided. When registering for this service, shareholders will need to have their 11-character Shareholder Reference Number to hand, which is shown on the dividend tax voucher, share certificate or Form of Proxy. Should shareholders decide at a later date that they do not want to receive these emails, they may amend their request by accessing the Shareview Portfolio online and amending their preferred method of communication. Annual General Meeting We consider the Annual General Meeting to be an important event in our calendar and a significant opportunity to engage with our shareholders. The 2026 AGM will be held on 5 February 2026. Further details will be set out in the Notice of Annual General Meeting that accompanies this report and will be available on our website at www.sage.com. Advisors Corporate brokers and financial advisors J.P. Morgan Cazenove Limited 25 Bank Street, Canary Wharf, London, E14 5JP Morgan Stanley & Co. International plc 25 Cabot Square, Canary Wharf, London, E14 4QA Solicitors Allen Overy Shearman Sterling LLP One Bishops Square, London, E1 6AD Principal bankers Lloyds Bank plc 25 Gresham Street, London, EC2V 7HN Independent auditor KPMG LLP 15 Canada Square, London, E14 5GL Registrars Equiniti Limited Highdown House, Yeoman Way, Worthing, West Sussex, BN993HH www.shareview.co.uk Tel: +44 (0)371 384 2030 Lines are open 8.30 am to 5.30 pm UK time, Monday to Friday (excluding public holidays in England and Wales). The Sage Group plc. Registered Office: C23—5 & 6 Cobalt Park Way, Cobalt Park, Newcastle Upon Tyne, United Kingdom, NE28 9EJ Registered in England Company number 02231246 Shareholder information 264 THE SAGE GROUP PLC. ANNUAL REPORT AND ACCOUNTS 2025 Consultancy, design and production www.luminous.co.uk www.sage.com The Sage Group plc. C23—5 & 6 Cobalt Park Way, Cobalt Park, Newcastle upon Tyne, NE28 9EJ. Registered in England Company number 2231246 Sage exists to knock down barriers so everyone canthrive, starting with the millions of small and mid-sized businesses (SMBs) served by us, our partners andaccountants. Customers trust our finance, HR andpayroll software tomake work and money flow. Bydigitalising business processes and relationships withcustomers, suppliers, employees, banks and governments, our AI-powered platform connects SMBs, removing friction and delivering insights. Knocking downbarriers also means we use ourtime, technology andexperience to tackle digital inequality, economic inequality and the climate crisis.
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