Accounting and payroll software leader Sage has delivered a robust first quarter performance, reporting a significant 10% increase in total revenue across its global operations. The Newcastle-based technology firm, headquartered at Cobalt Business Park in North Tyneside, achieved total revenue of £647 million for the three months ending September, demonstrating strong momentum across all key markets.
Regional Performance Highlights Strong Growth
The company's North American division led the impressive results with a substantial 12% organic revenue increase, reaching £304 million. This growth was primarily driven by strong sales of Sage Intacct alongside continued expansion of the Sage 200 and Sage 50 product lines. Meanwhile, the UK, Ireland, Africa and APAC territories collectively achieved a 10% organic revenue rise to £194 million, supported by Sage Intacct growth and successful sales of small business solutions. European operations contributed a solid 7% increase, generating £176 million in revenue.
Cloud Solutions Drive Business Expansion
The majority of Sage's growth originated from its comprehensive Sage Business Cloud suite, which encompasses cloud-based accounting, payroll, and business management software. This strategic product range experienced impressive 14% organic growth, reaching £574 million. The company reported balanced expansion from both new and existing customers, with cloud native revenue surging by 24% to £253 million, compared to £205 million during the same period last year.
Recurring revenue demonstrated strong performance with a 10% increase to £655 million, while software subscription revenue grew by 12% to £568 million. This resulted in subscription penetration reaching 84%, representing a slight improvement from the 83% recorded in the first quarter of 2025.
Strategic Focus on Artificial Intelligence Innovation
Chief Financial Officer Jacqui Cartin emphasised the company's commitment to technological advancement, stating: "Sage delivered a strong start to FY26, with Q1 organic revenue growth accelerating to 10%, supported by the continued execution of our growth strategy. We are investing in innovation across our AI-powered platform, helping small and mid-sized businesses solve their day-to-day challenges and work more productively."
The company has reaffirmed its full-year guidance as previously outlined in its FY25 results announcement, maintaining focus on driving efficient, sustainable growth and creating long-term value for all stakeholders. This follows a successful 2025 financial year during which Sage achieved a notable 17% increase in operating profit, reaching £530 million.
AI Development and Future Prospects
Sage has intensified its focus on artificial intelligence development, both for creating new customer products and enhancing internal operational efficiency. The company continues to expand its generative AI assistant, Copilot, which is currently available to approximately 150,000 customers. This innovative technology is specifically designed to help businesses save valuable time on routine manual tasks through automation.
Engineers based at the company's North Tyneside headquarters have played a crucial role in developing Copilot, with additional AI agents reportedly in development. Chief Executive Officer Steve Hare has highlighted how Sage's AI tools are helping small and medium-sized enterprises address productivity challenges and combat the persistent issue of late payments within the business community.
The strong first quarter performance establishes a solid foundation for Sage's continued growth trajectory, combining robust financial results with strategic investment in cutting-edge artificial intelligence technology that supports businesses in improving operational efficiency and financial management.
