Software giant Sage has reported a third quarter rise in revenues driven by take up of its cloud-based products.
The North Tyneside-based plc saw total organic revenue increase 6% to £1.4bn. Recurring revenue grew 9% to £1.33bn in the nine months to the end of June, thanks to 20% growth of Sage Business Cloud to £886m.
In a trading update, Sage said its business in North America had seen recurring revenue grow 13% to £557m thanks to success with its Sage Intacct product while in northern Europe, recurring revenue grew by 7% to £311m. Internationally, recurring revenue increased 5% to £462m.
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The firm indicated it had seen success in both customer acquisition and migration to cloud-based software. However, other revenue from software and software related services (SSRS) - such as licences and training - fell 25% to £82m. Sage said this was in line with its strategy to transition away from licence sales.
Following what it called a "strong performance", Sage said it now expected organic revenue growth for the full year 2022 to be towards the top end of its guidance range, between 8-9%.
Jonathan Howell, chief financial officer, said: "Sage has performed strongly in the first nine months of the year, with momentum continuing to build, as more businesses choose Sage Business Cloud solutions to support their digital transformation.
"As a result, we now expect organic recurring revenue growth for FY22 to be towards the top end of our guidance range of 8% to 9%. While we are mindful of broader macroeconomic trends, I am confident that continued delivery against our strategic priorities will ensure Sage remains well-positioned for the future."
Earlier this year, Sage CEO Steve Hare told Business Live said the business was poised to capitalise on a growing tide of SMEs turning to digitisation to counter the impacts of an uncertain economy. He said companies that had weathered the pandemic were now looking to make efficiencies that could be supported by the type of data and insights Sage products provide.
He said: "There are some macroeconomic forces, inflationary forces and potentially recessionary forces but what's important is that when we talk to small and mid-sized businesses we can see that technology remains really critical to their growth and efficiency. Accounting and HR, payroll software are the top areas where they're continuing to look to invest. That's because investing in digitisation and investing in technology is a bit of a counterbalance to those inflationary forces because it makes you more efficient and better equipped for the future."
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