The Sage Group (SGE) H1 2026 earnings summary

Executive summary

• Achieved double-digit revenue growth of 11% year-over-year in H1 FY2026, driven by strong demand for key products, AI integration, and new customer acquisition.

• Operating profit grew 15% to £326m, with EPS up 16% and margins expanding by 80 basis points to 23.9%.

• Strong cash generation with cash conversion at 116% and free cash flow of £241m.

• AI embedded in workflows, with over 500,000 customers using AI-powered features and rapid scaling of agentic solutions.

• Continued investment in R&D, tuck-in acquisitions, and partnerships to strengthen product portfolio and AI capabilities.

Financial highlights

• Total revenue rose 11% year-over-year to £1,363m, with recurring revenue also up 11% to £1,323m.

• 97% of revenue is now recurring, reflecting a resilient business model.

• Profit after tax rose 10% to £224m; interim dividend increased by 8% to 8.05p per share.

• Sage Business Cloud revenue grew 15%, with cloud native up 25% and cloud connected led by Sage 50.

• ARR increased by £275m to £2.7bn, up 11% year-over-year.

Outlook and guidance

• Upgraded FY2026 organic revenue growth guidance to above 9%.

• Operating margins expected to trend upwards in FY2026 and beyond.

• Balanced growth expected from both new customer acquisition and net revenue retention.