Thank you very much, and good morning to everyone. As always, thank you for joining us.

I'm really pleased to be joined this morning by Jacqui Cartin, who is our new CFO as started on the 1st of January. Without further ado, I'm going to hand over to Jacqui, who is going to talk us through the Q1 performance, and then we'll open up for some questions.

Over to you, Jacqui.

Thanks, Steve. Good morning, everyone.

I'm pleased to say that Sage has made a strong start to the year with growth strengthening across our key regions. As a result, total revenue for the group increased by 10% to 674 million.

In North America, revenue grew by 13% to 304 million. That was driven by strong performance from Sage Intacct and was supported by continued growth in Sage 200 and Sage 50.

In the UKIA region, revenue increased by 10% to 194 million. This reflects further rapid scaling of Sage Intacct and strong growth in Sage Accounting and Sage 50.

In Europe, revenue increased by 7% to 176 million with good levels of growth across our accounting, HR, and our payroll solutions. I'll turn now to performance drivers.

Sage Business Cloud revenue grew by 15% to 574 million. This reflects good strategic progress and continued investment in our cloud and AI-powered solutions.

Within this, Cloud Native revenue grew by 24% to 253 million, supported by continued strength in new customer acquisition. Cloud Connected, that has also delivered good levels of growth driven by both existing and new customers.

Recurring revenue, that increased by 10% to 655 million and reflects continued momentum in ARR. This includes subscription revenue growth of 12%, which takes subscription penetration to 84%.

On an organic basis, total revenue for the group increased to 673 million with growth accelerating to 10%. Finally, turning to the outlook.

Underpinned by a strong first quarter, we reiterate our guidance for the full year. Organic total revenue growth is expected to be 9% or above, and we expect operating margins to continue to trend upwards in FY '26 and beyond.

To conclude, Sage has made a strong start to the year. We're executing our strategy.

We're continuing to innovate across our platform, and in turn, this is driving efficient, sustainable growth for our stakeholders. Thank you very much.

Steve and I will now be delighted to take questions.

Hi, good morning, Steve. Good morning, Jacqui, and congratulations on a good first quarter and Jacqui as CFO.

Two if I could. Just first of all, could you give us a little bit more color, we've obviously seen acceleration in the business both during the fourth quarter and again in this quarter.

Maybe just give us a little bit more insight into what's changing at the product level to give us that acceleration. I'd be particularly interested in Intacct in the UK on getting anything you can help us with on scale and growth of that because that obviously seems to be impacting the business nicely now.

Then secondly, you talk about continued momentum in the ARR. We obviously saw acceleration there in the fourth quarter.

Would a reasonable read of that comment be that we've seen a further acceleration in ARR in the first quarter, please? Thank you.

Thanks for the question, Adam. I'll just touch upon first on the overall acceleration piece, and then I'll pick up on the ARR piece.

Yes, it's been a good first quarter. We're very pleased with the performance and importantly, it's very much in line with our plans at this stage of the year.

If I give you a little bit more color regionally. In North America, total revenue, as I said, is up 13% and that's in comparison to 12% in FY '25.

Underpinning that was a strong performance in Sage Intacct with good growth across new and existing customers. That has been supported by strong demand and high quality sales execution in the North American business.

As we referenced at the year-end, we're now really starting to see the investments that we have been making in our go-to-market strategy, our vertical strategy, and our people in the North American business really starting to pay off, and that is helping drive the acceleration that you're seeing here today. Alongside that, as we said in the announcement, we've seen continued momentum in Sage 50 and Sage 200, good broad-based growth in the North American business driving that acceleration.

Then if we touch upon the UKIA region, total revenue, that was up by 10% versus 9% in FY '25. As you point to, that has been supported by rapid scaling of Sage Intacct, which is now really starting to pick up traction.

In particular, we've seen strength in the NCA motion in the first quarter of the year, which is really starting to support that. We'll give you a bit more color around the growth of that at the first half, but the good performance there.

I would also call out in the UKIA region the strength that we've seen in Sage Accounting and Sage 50 in particular where we've seen really good levels of cross-sell and up-sell, which have contributed to that acceleration that you've seen overall in UKIA alongside the Intacct strength that we referenced. Then finally, in Europe, solid growth there of 7%, broadly consistent with where we were in FY '25 and in line with our plans for this stage of the year.

We've seen broad-based growth there but with particular success in Sage 200 and Sage X3 in this territory, and I would call out a good performance in particular from Iberia. All in all, it's been a good start to the year.

We've got good momentum as we enter the second quarter, and that very much supports the guidance that we've set out for the full year '26. Then if I touch upon how that sort of links through into the ARR performance, as we don't formally report ARR at the first quarter, but as you've seen in Q4 of last year, we exited with strong momentum, and that has very much carried through into the first quarter in the ways that I've just touched upon.

Sequential growth for Q1 was around 2.5%, and that's ahead of where we were this time last year at around 2%. A good start to the year gives us positive momentum and, as I say, really underpins the confidence that we have in the guidance that we've set out, but clearly we'll give you a more fulsome update at H1.

Very helpful. Thank you.

Hi. Good morning, Steve and Jacqui.

Maybe just on the organic recurring revenue growth, we've seen that accelerate now for two quarters in a row. Any particular reasons to think that that trend wouldn't continue?

Then how much would you put this down to actual AI monetization driving incremental revenue upside versus that underlying momentum you're seeing in Intacct across the US and the UK versus what you're then seeing across the Cloud Connected portfolio? Thank you.

Thanks, Toby. If I can give you a little bit of color as to how we're thinking about the guidance and the forward momentum in the business and Steve can touch a little bit upon the AI monetization strategy.

As I've touched upon and you can see, we've entered the year with really good momentum, and that's carried through into Q1, and we have seen strong demand and high quality sales execution across the business as a whole, which is promising. That really sets us up well for the remainder of FY '26.

Now as as we head into the second half of the year, we do start to lap slightly tougher comparators, and so the guidance of 9% or above that we've set out today really reflects a balanced view of these factors. The Q1 very much sets us up well to deliver that guidance and gives us good confidence and we've got strong momentum as we exit Q1.

Steve, do you want to give a bit of color on the AI monetization?

I think the way to think about it, Toby, is it's very early days. I would say that most of the momentum that you're seeing in the last couple of quarters comes just from the underlying performance of the business.

We have got some early monetization because we rolled out Sage Co-pilot bundling that into some of the plans, which we then used to put an uplift through in terms of the price of those plans. We haven't really started yet in terms of any monetization, for example, of individual agents that we're starting to launch.

Very much early days. I think you should read this as strength in the underlying performance of the business.

Toby, if I can just add, we don't give the individual components of ARR at this stage of the year, but as a reminder, in FY '25, the contribution from pricing was around 5.5%, and that was supported in particular by the rollout of AI and Copilot in the UK business. As we continue to roll out more features and functionality and enhancements through AI capabilities, we deliver more values, and in some instances, we will take price in that way.

In the first quarter of the year, we have also rolled out Copilot and the intelligent finance agent in the US and UK Intacct businesses in the first quarter, and that sets alongside the strong cross-sell and up-sell that I referenced as well as really good levels of NCA. Those combined set of factors sets us up well for the rest of FY '26 and underpin the strength of that guidance.

Great.

Thank you.

Hey, good morning, Steve and Jacqui. If I can ask two questions around GenAI, but more on the risk that the market is perceiving on the industry.

Firstly, if you can share your views on how your business is or could be impacted by either new players like Replit or some corporates deciding to leverage GenAI to change the way they deal with accounting. Second, do you start to have insights on some clients that have taken up your AI solutions?

You mentioned an uplift in price about one point last year at the group level, but have you seen some customers starting to gain efficiencies and potentially impacting negatively the number of subscriptions that they have? Any comments on that would be very helpful.

Thank you.

Yeah. Thanks for the questions.

If we start with the risks, I've talked about this before. My view is that in many ways what's happening with AI favors incumbents because we have a large installed base, we have 40 years plus of experience including compliance, including all of the insights around how our customers do business, not just their general ledger, their sort of system of record, but also their workflows, etc.

The large language models are very powerful, but my view is that you get the best outcome when you combine that with your own local domain models, which take advantage of the insights that we've built up over many years. I think there's a couple of things I would really point to.

The first is that accuracy is not up for debate. Whenever you automate processes, whenever you introduce AI into any part of the process, it has to do it accurately.

Then the second thing is, customers have to trust not just the accuracy of the day-to-day transactions, but they have to trust the compliance part of that when it comes to their tax returns, when it comes to preparing accounts, etc. All my experience tells me, and that includes regularly talking to customers at the moment, it takes a while to build that trust.

We believe that we can take our customers on a journey where they can get the benefits of AI, but they don't need to kind of throw out everything that they've built up over the last however many years they've been running their business, which brings me to the insights. I think what people are telling me is that they're experimenting, they're adopting AI, they're seeing time savings.

A number of customers have said to me that they can see 5 to 10 hours a week of savings, which are coming from us using AI to automate repetitive tasks. I think generally, and remember, we're selling to CFOs in the medium segment, and although we're selling to entrepreneurs in the small segment, those entrepreneurs are taking advice from their accountants.

Remember, I think this is a really important point, that finance people, accountants are still driving the vast majority of decision-making, and they like proven solutions. Now, of course, new competitors will come in, new competitors will obviously gain customers, but I think you can see from our results, we are delivering, and our customers are starting to adopt our solutions.

They're seeing benefits from it, and what that does is it frees up time, they can use that time to focus on growing their business. Hopefully, that's the next phase.

What we'll start to see is people using that productivity gain to really invest time and energy to accelerate the growth of their businesses.

Then the thing I would add there, Fred, just to touch upon the risk piece is whilst we don't report renewal rate by value at this stage of the year, just to give a bit of color there, we're not seeing any impact from a churn perspective as we roll out these functionalities and push price through on that. We're seeing that good uptake that Steve is talking about, and that is translating into momentum that you're seeing in that sequential growth that we've reported today.

Perfect. Many thanks.

Thank you. Morning, Steve.

Morning, Jacqui, and congrats on the results. I just had one.

Could you give us a sense on the competitive landscape in North America? Obviously, I saw you drove some acceleration, but there was a lot of talk about Intuit kind of moving upmarket.

What have you seen there? Obviously, also would love to kind of get a sense of kind of how that sort of NCA strength is carrying through and where those customers are coming from.

Thank you.

Yeah. I think look, as Mo, the competitive landscape in the US is always very competitive.

Intuit are clearly making some inroads in terms of how long they keep their own customers. What we're not seeing is any sign of them competing for new customer acquisition where we're going to market with Sage Intacct.

We also haven't seen any change in the number of QuickBooks graduates that we're taking to Intacct. We've always said about a quarter of our new customer acquisition for Sage Intacct comes from Intuit, and that has remained consistent into Q1.

Obviously, there's a number of new players, as mentioned by Frederic. Again, look, we see them in some of our verticals, particularly software.

I think software is SaaS where we see the most kind of new competitor activity. We've always taken an approach in the US of focusing very clearly on verticalization.

We continue to be very strong in construction, in non-for-profit, healthcare, financial professional services, hospitality, etc. We've also launched or relaunched X3.

We've launched X3 Cloud into the US market. We intend to really use that to double down in the manufacturing and distribution verticals.

It remains competitive, but I think you can see from the results, obviously we haven't broken out new customer acquisition and what we're getting out of existing customers. As Jackie's already alluded to, I think you can assume that it's very, very balanced growth, and we're very pleased with the NCA performance from Intacct in the US in Q1.

I would just add as well, Mo, as a reminder, in FY '25, we delivered growth in excess of 20% for Intacct in the US, over 50% in the UK, and we're now also starting to build traction with the Intacct business in Continental Europe, which is still in its early stages, but shows promising signs. Intacct is an important driver of that balanced growth that we've delivered today.

That's great. Thank you.

Thank you very much, everybody, for joining us today and for the questions. We very much look forward to speaking to you again at the interims in May.

Have a great day.