Sage Announces 2015 Earnings, Future Plans

Sage announced the company’s 2015 fiscal year results, reporting organic revenue growth of 6 percent globally and nearly 4 percent in North America, increasing organic recurring revenue by 9 percent over last year.

Recurring revenue for the fiscal year, ending Sept. 30, 2015, was driven by 29 percent revenue growth for software subscriptions.

Sage’s 6 percent organic growth was up from 5 percent last year. In North America, Sage also reported growth for Sage 50 and X3, with the latter achieving 19 percent revenue growth in the region.

After beginning his tenure last November, Sage CEO Stephen Kelly conducted a business review of the company’s products, organizational structure, and operating model and policies. Sage released several new products this year, including a host of offerings at Sage Summit. The company also experienced a number of executive changes, including the recent departures of chief technology officer Himanshu Palsule and Gabrielle Boko, EVP of marketing.

“For the next two to five years, we will continue to innovate at a rapid pace,” said Jennifer Warawa, Sage’s global vice president of product marketing for accountants, during accounting solutions conference Sleetercon in November, where the company showcased only cloud solutions, including the newly launched Sage Value and Sage Match. “Our foot is duct-taped to the gas pedal, and the gas pedal is taped to the floor.”

Sage is also close to launching a reimagined partner program with accountants, Warawa and Kelly said. The company has widened its ecosystem, introducing partnerships with companies like Salesforce in the past year.

“In the areas we play—accounting, payroll, accounting solutions—it’s an exciting evolution with disruptive solutions and we’ve got to be the best, to stand tall,” Kelly told me at Sleetercon. “To be in the Sage ecosystem, [the solutions] will be the best-in class. And right across our business, we reach out for open APIs.”

Sage Group reported FY15 organic revenue of $2.11 billion, with an organic operating profit of $573.93 million and profit margin of 27 percent.

“Technology disruption has accelerated,” Kelly stated in his CEO review. “The market opportunity is growing through cloud-platform, mobile-first applications, browser access to information and big data analytics. Within this context, we are prioritizing new customer acquisition to capture increased market share. Sage is seeking to ‘leap-frog’ first generation cloud competitors through integrated latest generation cloud-platform products and through scalable digital distribution channels. Digital presence is a vital enabler so we are also improving our digital marketing, including by reducing the number of website domains we operate from over 50 in support of a compelling and consistent experience.”

Sage's full fiscal year 2015 earnings report is available here.