Software giant Sage has reported double-digit growth in operating profits as it says AI is opening up new opportunities for businesses.
The provider of accountancy and payroll systems said it continues to scale up its generative AI assistant, Copilot, which is available to about 150,000 customers, across a range of products and can help businesses save time on manual tasks, as well as helping them to get paid faster. Hundreds of North Tyneside-based engineers have played a major part in the development of Copilot, with Sage now plotting further agents to automate tasks across compliance, accountants payable, reconciliation and tax.
Investors on the London Stock Exchange were told the new systems include Income Tax Agent for accountants in the º£½ÇÊÓƵ and Finance Intelligence Agent for Sage Intacct customers in the US and º£½ÇÊÓƵ. AI is also being used internally by the FTSE100 business, across its engineering and customer support activities.
The update comes as Sage posted an 8% rise in revenue for the year to the end of September to £2.5bn and a 17% rise in operating profits to £530m. Bosses simultaneously announced a £300m share buyback scheme which they said reflected the firm's strong cash generation, among other factors.
Growth was led by an 12% rise in underlying total revenue in the US to £1.1bn. Here, Sage pointed to strong trading across industries such as construction and real estate, financial services and not-for-profit. In the º£½ÇÊÓƵ, Ireland and Africa region, underlying total revenue increased by 9% to £729m, with strength said to have come across Sage's suite of products.
Meanwhile, Europe saw underlying total revenue grow 7% to £646m. France and Central Europe contributed 6% total revenue growth while the Iberia region grew 10% to £167m, which was driven by renewals, higher pricing and new customers across Sage 200 and Sage 50 products.
Steve Hare, chief executive officer, said: "Financially, there are two big stand-out things: firstly we delivered double digit annualised recurring revenue growth of 11% - that's the fourth year in a row we've had double digit ARR growth and we're now up to £2.5bn of annualised recurring revenue.
"We also delivered earnings per share growth of 18% and we've delivered that growth very efficiently. The other thing is the talk about an AI bubble, but what we're doing is putting into the hands of our customers right now - it's not hype - solutions which save them time. I always say that small business owners don't say: 'Hey, I must buy more of that AI.' What they do is buy solutions that enable them to save time."
Ahead of the coming º£½ÇÊÓƵ Budget Mr Hare told BusinessLive that he had met with Prime Minister Keir Starmer and encouraged less pre-briefing of policy which he said had driven speculation and uncertainty. He acknowledged the Budget was not likely to be popular but said decisiveness was needed to create the conditions for firms to invest.
Mr Hare added: "We are excited by the pace of technological change. AI is opening up new possibilities for businesses and creating a significant opportunity for Sage, enabling us to enhance and accelerate the benefits our software provides. Sage Copilot is already creating value, helping customers make smarter decisions and be more productive, while our launch of AI agents is delivering the next wave of intelligent solutions.
"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."
