Number crunching software outfit Sage fell short of revenue growth expectations.
In a trading update, the accountancy software vendor said its organic revenue growth for the six months ending 31 March 2018 was 6.3 percent, down from 7.4 percent in the same period last year. Sage has reduced its revenue growth estimate for the full year to seven percent, from eight percent.
Sage CEO Stephen Kelly said that growth in H1 2018 was lower than his expectations as the pace of execution has been slower than we planned.
“The revised revenue guidance targets for FY18 reflect both the performance in H1 2018, but also our diligence in ensuring that we focus on recurring revenue to drive sustainable acceleration throughout the rest of FY18 as a platform into FY19.”
Recurring revenue growth has been hit hardest; the trading update said, down from 11.1 percent in H1 2017 to 6.4 percent this year, which it attributed to “inconsistent operational execution”.
Software and services growth declined 0.2 percentage points, which Sage blamed on “slippages” in enterprise licensing contracts in the US, Africa, and the Middle East. However, the vendor expects some of this to be rectbe fixed in the second half of the year.
The North America market performed well, at double-digit growth, but the EMEA region disappointed.
