Sage Group Maintains Revenue Outlook, Boosted by Demand and AI

(Reuters) - British software firm Sage Group (SGPYY) retained its revenue forecast for fiscal 2025 after reporting a 10% rise in underlying first-quarter revenue. The growth was driven by increased demand, particularly in North America, Sage's fastest growing region.

Sage has invested significantly in cloud services and anticipates burgeoning demand for artificial intelligence (AI) products and services. The company aims to integrate generative AI into its offerings, empowering small business owners.

"Sage had a solid start to the year, achieving broad-based revenue growth that met expectations, despite ongoing macroeconomic uncertainties," said Jonathan Howell, Chief Financial Officer.

Sage's accountancy software serves millions of small businesses. In December, the company launched "Sage Copilot," a generative AI-powered assistant that simplifies task tracking and automation.

Despite the emergence of free AI assistants like DeepSeek's, which offers reduced data consumption at lower costs, Sage's shares have gained 5% this year. The stock has approached record highs, with analysts expressing optimism due to the company's strong earning potential and progress in AI adoption.

Sage initially projected organic revenue growth of 9% or higher for the fiscal year ending September. This compares favorably to analysts' consensus expectations of 9.2%, as compiled by the company.

For the three months ended December 31, Sage reported underlying total revenue of £612 million ($760.84 million). North America contributed to the growth with an 11% increase.