Good morning and welcome to Sage's Full-Year Results. I'm pleased to be joined by Jonathan Howell, our CFO.

Now I'm going to start with an overview of our key messages. FY '24 was a successful year for Sage as we continue our strong trajectory of growth.

We achieved double-digit ARR growth for the third consecutive year. And this drove robust broad-based revenue growth with good performance in all regions.

Disciplined cost control, together with operating efficiencies enabled us to deliver a record operating profit with margin expansion being particularly strong. And excellent cash conversion drove a significant uplift in free cash flow.

This strong growth is underpinned by our resilient business model as more small and midsized businesses turn to Sage to become more productive and efficient. Secondly, our progress is supported by continued development and innovation, enhancing productivity and insights for customers as well as for ourselves.

We're investing in our core products, providing better functionality that's more tailored to customer needs. And we're integrating our solutions into suites to simplify our proposition and drive greater value.

And we're building AI into more business workflows. This year, we introduced Sage Copilot, our Gen AI-powered digital assistant, and we're already seeing strong engagement and adoption.

And finally, our performance is driven by consistent strategic execution. We continue to focus on efficiently scaling the Group, driving top line growth to enable more investment, whilst at the same time expanding the margin.

This is helping us build a scalable platform for strong sustainable growth. And as our market evolves, we've simplified our strategic framework to ensure a continued sharp focus on our key growth drivers and we're well-positioned for the opportunity ahead of us.

So I'll talk more about our progress later in the presentation, but for now, I'm going to hand over to Jonathan for the financial review.

Thanks, Steve, and good morning, everyone. I'm pleased to share with you today our full year results and the outlook for the year ahead.

In summary, we've delivered strong financial results and we've built good momentum for FY ‘25. So let's start with the highlights.

We've achieved revenue growth of 9%, reflecting the continued strength of our subscription-based model. Our operating profit margin was 22.7% with strong expansion of 220 basis points as we scale the business and deliver efficiencies.

This has led to a strong increase in EPS of 23%. And finally, we delivered excellent cash conversion of 123%, driven by growth in subscription revenue and good working capital management.

Let's turn now to ARR growth. Renewal rate by value was 101%.

This reflects strong retention rates and a good level of upsell to existing customers, together with targeted price rises. And we've seen sustained levels of growth from new customer acquisition.

As a result, ARR increased by almost GBP230 million to GBP2.3 billion. That's up 11% compared to last year.

Importantly, this growth continues to be well-balanced between new and existing customers. So turning to the P&L.

Total revenue growth of 9% was underpinned by recurring revenue, which grew by 10%. Sage is a 97% recurring- revenue business.

And this shows the high quality and resilient nature of the Group. Operating profit grew by 21% to GBP529 million, reflecting continued top line growth and strong margin expansion.

As Steve said earlier, this represents a record operating profit for Sage. Profit after tax increased by 21% to GBP382 million, leading to strong growth in underlying EPS of 23% to 37.9 pence.

And we've increased the final dividend to 13.5 pence, taking the full year dividend to 20.45 pence, which is up 6%. Cloud products continue to be a significant driver of growth with Sage Business Cloud revenue increasing by 16%.

This reflects good strategic progress as we further expand our global cloud solutions. Within this, cloud-native revenue increased by 23%, driven by strong growth from new and existing customers, particularly in Sage Intacct.

Subscription penetration also continued to increase and now stands at 82%. Moving now to our regional performance, starting with North America, which represents just under half of Group revenue.

Here we delivered revenue of more than GBP1 billion for the first time, following growth of 12%, driven mainly by the Medium segment. Sage Intacct continued to deliver significant growth, reflecting further success in new customer acquisition, together with strong sales to existing customers.

Our performance was also driven by Sage 200 and Sage 50. The UKIA region represents almost a third of Group revenue and grew at 8%, with a good performance across the portfolio.

The U.K. and Ireland increased by 7%.

Revenue from Sage Intacct grew by two-thirds compared with the prior year, reflecting continued strong new customer wins. Further growth was achieved in small business solutions, including Sage Accounting.

And this was supported by good performance in both Sage 50 and Sage 200. In Africa and APAC, growth of 11% was driven by strength in Sage Accounting and payroll, together with Sage Intacct.

And finally, in Europe, which now represents over a quarter of Group revenue, growth was 6%. This reflects a strong performance across our cloud solutions.

In France, growth of 6% was driven by strength in Sage 200 and Sage X3. Central Europe also increased revenue by 6% with strong growth in Cloud HR and payroll.

And in Iberia, growth of 7% was driven mainly by Sage 200 and Sage 50. As we said previously, our focus is on efficiently scaling the Group.

As we grow the top line, operating leverage together with disciplined cost control means we can invest more and expand the margin. This in turn leads to sustainable growth.

In FY ‘24, we achieved strong margin growth of 220 basis points to 22.7%. This was driven by significant operating cost savings, especially in G&A, which is now running at 8% of revenue.

Importantly, we continue to drive investment with sales and marketing at 39% of total revenue. And investments in R&D, which is up 15%, is a key priority for the Group.

Moving on to cash generation, which remains a core strength of Sage. Here you can see how the higher profits flow through to cash flow.

During the year, the Group generated GBP649 million of cash from underlying operations, resulting in excellent cash conversion of 123%. And free cash flow was GBP524 million, net of interest and tax.

That's up 30% on the prior year. The Group has a strong balance sheet with GBP1.1 billion of cash and available liquidity.

Our leverage ratio of 1.2 remains well within our mid-term target range of one to two times. In line with our disciplined approach to capital, this morning we announced a share buyback program of up to GBP400 million.

This reflects our strong cash generation and robust financial position, together with our confidence in Sage's future prospects. Importantly, we retain significant capacity to support growth.

We will do this in line with our capital allocation policy, which remains unchanged. So what does that mean for the outlook?

We have good momentum as we enter the new financial year. Therefore, we expect organic total revenue growth in FY ‘25 to be 9% or above.

And we expect operating margins to trend upwards in FY ‘25 and beyond, as we focus on efficiently scaling the Group. Thank you.

And now back over to Steve.

Thanks, Jonathan. As I said earlier, our performance has been driven by consistent strategic execution.

So I wanted to reflect on our achievements over the last few years. By focusing on the value that we deliver to customers, we're scaling Sage with ARR up by almost 40% since FY ‘21.

We've increased investment and capacity in R&D as the Group has grown, enabling us to innovate and enhance the customer experience. This is reflected in high levels of growth across all of our cloud solutions.

And we've delivered this growth efficiently with a headcount that is lower in FY ‘24 than it was in FY ‘21, driving a strong increase in operating profits and cash flows. So looking ahead, our focus is to scale our platform, investing for growth while increasing profits and creating value for all of our stakeholders.

And this starts with our customers, small and mid-sized businesses, which are at the heart of our economy and vital for our communities. We recently spoke to over 12,000 SMBs across North America, Europe, and South Africa, and we found that despite political and economic uncertainties, they remain resilient, agile, and confident in their future success.

They're investing more in digital technology to address challenges such as rising costs in recruitment and to free up their time for higher-value tasks. SR Vet Group shown here on the slide told us Sage for Small Business gives them the data that they need to make smart decisions about how they run their business.

Entrepreneurs and finance professionals alike are eager to leverage new technologies in order to save time and elevate their work. So reflecting these customer needs and building on our progress to date, we've evolved and simplified our strategy to ensure a continued focus on our key growth drivers.

Our purpose is unchanged, to knock down barriers, so that everyone can thrive. And we do this for all of our stakeholders, starting with millions of SMB customers every day.

We've updated our ambition, which is now to create the world's most trusted and thriving network for SMBs, powered by Sage Copilot. This reflects the importance of our growing digital network and the increasing role of AI in driving customer value.

And, while consistent with our existing priorities, our evolved framework is centered on three strategic focus areas: connecting SMBs through our trusted and thriving network; growing by winning new customers and delighting our existing ones; and delivering productivity and insights driven by AI. And finally, we've now included partners in our formal list of stakeholders.

This recognizes the crucial role that resellers, accountants, and developers play in building our ecosystem and supporting our customers. So let's turn to look at each of our three focus areas in more detail.

Firstly, connect. The Sage Network is our platform of cloud products and services that digitally transform customers' workflows across their ecosystem.

By connecting customers through our network to their training partners, suppliers, tax authorities, and banks, we can streamline their interactions and save them time and money. During the year, we connected more customers to network services, such as accounts payable automation.

This service has grown threefold in the last 12 months, processing almost 300,000 invoices worth over $1 billion for Sage Intacct customers in October alone. We enable new services like e-invoicing to prepare businesses in multiple markets for government requirements.

And we've expanded our partnership with Stripe, making it easier for SMBs to pay and get paid. Purple Creative, a Sage 50 customer shown here on the slide, uses the Sage network to reconcile transactions and improve their invoicing process.

And they told us that Sage streamlines their day-to-day activities, saving them time and helping them to make more informed decisions. Looking ahead, our aim for this focus area is to drive the adoption of more network services, bringing scale to the network, productivity to customers, and data and insights to Sage.

On to the second focus area, which is growth. Our overarching aim is to expand revenue across all products and services.

And in particular, we're focused on the following objectives. Further scaling Sage Intacct in North America and UKIA.

Growing our small business solutions, especially through accountants. Getting Sage Intacct and Sage Active well-established in Europe and delivering more value to customers through cross-sell and upsell.

Sage Intacct is our largest contributor to growth with ARR up by almost a quarter in the US and by 60% elsewhere in the Group. Progress has been strong.

We now have around 1,800 Intacct customers outside the US, of which two-thirds are in the UK. And I spoke with one of them recently, Tom Lewis from allmanhall, and he told me how much he values the multidimensional ledger to track what's happening in his business.

And we're seeing early momentum for Sage Intacct and Sage Active in France and Germany. In Small, we're building out solutions across the Group, launching Sage for Small Business suite, and growing Sage for Accountants in multiple markets.

We're also winning more customers earlier in their life cycle through our partnership with Tide, the U.K. small business banking platform.

And we're growing sales to existing customers through add-ons and deeper functionality. Our future focus in this area is to continue our momentum with new and existing customers and make it easier for them to access products and services through suites.

So finally, our third focus area, deliver. Here, new AI capabilities are helping to bolster our customers' growth.

Sage Copilot is our new human-centric Gen AI-powered productivity assistant. It streamlines routine tasks, saving customers' time and providing business insights when they need them.

During the year, we focused on creating a strong value proposition with early adopters, trialing first of all with Sage Accounting customers in the UK and then expanding to Sage for Accountants and Sage Active. Next, we will focus on Sage Intacct and Sage 50 customers.

As we've developed Sage Copilot, we've been guided by detailed feedback from customers to make sure the solution really meets their needs. And so for small businesses, it helps manage invoices and payments and generates tailored insights and recommendations.

And for mid-sized businesses, it transforms the month-end process and the sharing of financial data. We recently interviewed John Stableforth from Dans La Cuisine, an early adopter of Sage Copilot, who told us it really feels like having another person working with him in the office.

So far, we've made Sage Copilot available to over 8,000 customers and accountants and we're getting high engagement levels as it delivers real-time savings and cash flow benefits. We're also collaborating with AWS to launch a domain-specific large language model for accounting and compliance, which will further support our customers.

And our future focus here is to roll out Sage Copilot more widely and invest further in AI, differentiating our products by focusing on real-world benefits, starting with saving time. Now our success depends on our ability to deliver for our stakeholders.

For our customers, we deliver great technology like Sage Intacct, which was ranked first for customer satisfaction in the most recent G2 Fall report for accounting software. We support SMBs at all levels, for example, by offering a free solution for UK sole traders to make basic tax submissions under Making Tax Digital.

And we champion SMB's interests, such as lobbying for a more favorable small-business environment, including e-invoicing, so that SMBs get paid faster. And for partners, we've made it simpler to work with Sage.

For example, we've implemented Sage Partner Central, a single global platform that accelerates partner onboarding and speed to market. And for colleagues, we foster a high-performing accountable and inclusive culture.

As a result, we were recognized as one of the World's Best Employers by Forbes and as a Diversity Leader by the Financial Times. Onto society where we aim to multiply our impact by helping SMBs to be more sustainable as well as ourselves.

Through the Sage Foundation, we've enabled loans and grants to thousands of entrepreneurs worldwide and we made Sage Earth our carbon accounting tool, more widely available through the AWS marketplace. And for shareholders, our overriding objective is to create sustainable growth in shareholder value.

The way we do this is by growing revenue and by doing so more efficiently over time. Our evolved strategy is delivering growth in all of our regions.

We're leveraging our scale by rolling out global solutions. We're enhancing our vertical and functional capabilities and bringing them together in simplified integrated suites.

And we're scaling the Sage Network platform to deliver innovative AI solutions like Sage Copilot, which helps our customers save time and gain valuable insights. Sage is differentiated by our leading technology.

We have deep local expertise across financials, payroll, and HR, serving a wide range of SMBs across diverse regions. We work with an extensive network of partners, accountants, resellers, and ISVs who expand our reach and enrich our ecosystem, and we're proud of the human element in our customer service and support.

And finally, as we grow, we're creating the headroom to increase investment and expand margins, driving sustained, efficient growth. So in conclusion, Sage had a successful FY ‘24.

We delivered strong sustainable growth with disciplined cost management driving a very significant uplift in margin. We continue to invest in innovation to lead our growth in the future, and we're making good, strategic and operational progress, leaving us well-positioned for continued delivery in FY ‘25 and beyond.

So that concludes today's presentation. Thank you very much for watching.

And Jonathan and I would now be very happy to take your questions.

Hi, good morning, Steve, Jonathan. Congratulations on a good end to the year.

For me, just on the ARR build, you don't obviously give the year-on-year in Q3, but it looks from the numbers as if there has been a little bit of acceleration in Q4 versus the third quarter. Could you just talk a little bit about the sequential ARR build and if there's any differences by geography, that would be interesting.

And maybe secondly, obviously, a very strong end to the year-on margins. Could you just talk a little bit more about the phasing of investments?

Are we being a little bit cautious on investing to the year-end and waiting to see on top line and now maybe we can go a little bit more on the investment side? Just help on the timing of phasing would be useful.

Thank you very much.

Thanks, Adam. It's Jonathan here.

Yes. So in terms of ARR, obviously, it's been a strong year overall.

We've exited with an ARR growth rate of 11%. And as you say in the question, there has been a strong close to the year.

Sequential ARR growth through the year, Q1, Q2, and Q3, we've seen ARR growth of between 2% and 2.5% in the first three quarters. In Q4, that picked up to 3.5%.

So that was a nice step-up and it was also higher than the sequential growth in the prior year for Q4. And I think there are two key drivers of that.

One was very focused sales execution across the portfolio and geographies and particularly in the US. And then secondly, Europe, where we've seen a very good performance, particularly in Q4.

And I think the important thing from this is it gives us good momentum as we exit FY ‘24. And therefore, that really underpins the guidance that we've given for FY ‘25 in terms of revenue growth.

And then in terms of margin, it was a strong performance in profit, GBP530 million, up 21%, margin of 22.7%. And that's an expansion of 220 basis points on a constant currency basis and that's up from 160 basis points improvement at the first half.

And I think the first thing to say, it proves that we can successfully drive growth and margin at the same time. We've delivered strong operating efficiencies during the year, and much of that has come from tight headcount control.

And that's an important part of scaling the Group efficiently. And then strong margin expansion as well, which has meant that we've been able to drive investments in the business in line with our plans, whilst at the same time taking the opportunities to scale efficiently.

We are growth-led and so our priority is to put investment behind the business to drive top line, but where we see the opportunities to dynamically reallocate, we will do that during the course of the year. I hope that answers the question.

Very helpful. Thank you.

Yes, hi, morning, Steve and Jonathan. Thanks for the questions.

Couple from me. Perhaps just firstly on the revenue growth outlook of 9% or above.

You talked about the ARR exit pick up there in Q4, which I imagine will help feed into confidence. But how are you thinking about the underlying kind of macro assumptions built into that pricing and then dynamics across the recurring and the other revenue side?

And then just secondly, on the -- on Sage Copilot. You talk in the release about the focus for FY ‘25 being to scale the solution to more products and customers.

Could you give us a sense for how monetization is working today, how you intend that to evolve going forward? And then just how you're thinking about the speed at which this solution could scale through '25 and beyond?

Thank you.

Sure. Thanks, Toby.

I'll take the second one and then Jonathan will cover the first one. Maybe I'll just give a bit of extra context.

So on Copilot, we have about 8,000 customers and accountants who are an early adopter. So they're not paying for it at the moment.

They're an early adopter giving us feedback and we will start monetizing probably in the next month or two. And then we will do the same with Medium.

So we've just started an early adopter with Sage Intacct and it -- just to emphasize, this is not trial product, this is real product. We're just taking the opportunity to get customer feedback on the use cases.

And then we'll go through the same thing with Intacct. So we probably won't monetize Intacct until probably the second half of the financial year.

I think we'll, obviously, build it very gradually and we will do it in a number of different ways. We may incorporate into suite -- into different tiers of suites.

We may do some separate charging for it, but we will monetize. We will just monetize in a number of different ways depending on the product and the type of customer.

Just before Jonathan goes through the revenue growth, just to give a -- maybe just a little bit of context. Obviously, there's still quite a bit of uncertainty around.

We've had -- at least we've had the elections in the U.S. and the U.K., so people know kind of the likely -- what they're dealing with from a macro perspective.

But there is still quite a lot of uncertainty that SMBs are having to deal with. When we do our surveying and we've just done a big survey of over 12,000 SMBs, they remain pretty optimistic, they remain pretty confident, but they have got a number of things to grapple with.

And, obviously, what we're trying to do is deliver to them productivity, save them time, so that they can really focus on growing their businesses. And so, there's kind of potentially a range of outcomes for FY ‘25.

But what we're trying to do is kind of give confidence on the starting point. But Jonathan will give you a bit more on that.

Yes. So in terms of revenue, as you say, we're guiding to total revenue growth for FY ‘25 to be 9% or above.

And I think there are two important things to note. First of all, we've got an ARR exit rate of 11% as we enter FY ‘25.

That gives us good momentum at the start of the year. Secondly, the guidance that we are providing is based upon what we can see in the current pipeline and also current deal closure rates.

And therefore, those two things give us real confidence in the guidance that we set out today. As you'd expect at this stage in the year very early on, the guidance is realistic, but cautious and we'll update you as we move through the year.

And then lastly, you touched on other revenue growth. As you can see, that declined by 11% for the full year.

That was in line with our expectations and in line with the strategic transition that we've seen over the last six years. As we move forward, we expect that rate of decline to reduce and therefore, will have a continuing less impact on the total revenue growth.

And it's probably just worth reminding ourselves, Sage is now a 97% recurring revenue business. This other revenue line accounts for 3%, and therefore, is by the month becoming less material.

That's great. Thank you.

Yes, good morning and thank you. I have two questions.

In terms of the renewal rate of 101%, could you just give me a sense in terms of how it disaggregate in terms of pricing versus cross-sell and versus churn. We have seen it's 101%, compared to last year 102%.

So basically just want to understand what has changed in terms of the delta there. That's my first question.

The second question in terms of the NCA activity of 190 million. Could you again, please, if you could disaggregate into maybe growth into the new products with basically Sage Intacct in Europe and basically also the NCA activity in the core products and maybe NCA activity in North America in general, apart from -- just wanted to get a bit more sense around what the NCA activity levels are across different products if that's possible.

Thank you.

Yes, look, thank you. So renewal rate by value.

Overall, it's a solid performance. We've reported 101% for the year.

As you say, that's slightly down on what we saw in the first half. And to break that down into its components, retention rates remain very strong.

Churn continues to be low and stable as we've seen for the last four years. Price increases across the whole portfolio for the year were about 5%.

And again, that's extremely consistent with what we've seen over the last three years. And then to your question, we've seen a slightly softer element coming from cross-sell and upsell in North America, as we referenced at the half-year and Q3.

And that's just really consistent with CFOs in North America taking slightly longer to make those investment decisions. And then we've had robust NCA, in line with last year at about 190 million.

And therefore, that takes you back to the 11% ARR growth. In terms of NCA, the big driver for that, obviously, is Intacct in North America.

That's off a much larger base successively over the last five or six years. And so, as you can see, we've reported today that that's growing at 24% for the full-year.

And Intacct in U.K, is doing very well now as well. That grew at over 60% for the full year off a smaller base and we now have over 1,200 customers.

So NCA at 190 million, consistent with last year, and we're very satisfied that we're making the right investment decisions in sales and marketing and product to continue to drive efficient growth there. Thank you.

Thank you.

Hey, good morning, Steve and Jonathan. Thanks for taking the question.

So first of all, I'd love to hear your thoughts about the competitive environment. We're hearing a lot from Intuit and trying to be -- to move to towards SMBs, SAP with GROW and a kind of simpler product.

Keen to hear your thoughts on how you see competition shaping up. One question on the US.

I mean, we see some of your peers growing very strongly, some of your larger peers. So are you satisfied with the level of growth you see in the region?

What do you think are the kind of challenges there? Is it a question of distribution and marketing or product suite?

And then if we can spend a moment as well -- I mean, you mentioned traction of HR payroll, et cetera in all the regions, but would be interested to hear the state of penetration of the suite and if you're -- there are some areas or some regions where you see more upside for further upsell? Thank you.

Sure. So I'll start with the competition.

And yes, I mean, a number of the competitors quite into it. SAP are obviously seeking to expand more into that medium space where traditionally, our strongest competitor to Sage Intacct has been Oracle NetSuite, and that continues to be the case.

I think there's a couple of different dynamics here. I think what we see with Intuit is, they are seeking to hold on to their customers for longer.

So, historically, QuickBooks graduates, particularly in the U.S., is a place where we get a lot of our Sage Intacct new customers, and both through QuickBooks Advanced and also through the newly-launched enterprise suite, I think they're using that to try and hold on to their customers longer. We don't really see them at all when it comes to competing for new customers.

So we don't see them. If we're in a process to acquire new customers, the consistent competitor is Oracle NetSuite, we don't really see Intuit.

I think it's -- and also in the U.S., we would almost never see SAP. Where we come across SAP more would be in Europe and also in South Africa.

But that dynamic hasn't changed enormously. They are, as you say, trying to simplify the product.

But for mid-market, it's still quite a big investment. It's still quite a big investment, particularly in terms of implementation.

So I would summarize the competitive dynamics as, yes, it's a competitive market. It's not particularly intensifying and customers are moving just as we are.

And I think if you look at what we're doing with Sage Copilot, what we're doing with AI, I think -- and compare us to our competitors, I would say we're leading. I think in terms of growth rates, am I happy with our growth rate?

I mean, we are very focused on seeking to grow faster and investing for growth. I think what you have to do is look a little bit at our different elements of our business.

So as Jonathan has already said, if you look at Sage Intacct, which is probably the product that compares most -- is the best match in many ways for a number of our peers, that is growing at 25%. Blended, obviously, we're growing slower but that's because we have a number of more traditional products which we are now addressing and we'll be able to accelerate growth through offering more cloud services through the Sage Network platform.

And also, we are starting to see more consistent growth geographically. So we're quite pleased with the progress that we've seen in Europe.

And then on suite penetration, very early days. I mean, we've only just really started in the second half really launching suites.

So the penetration levels are relatively low. But we see that as a good driver for growth because it's a much simpler way for our customers to buy our products.

And we have high hopes that it will drive greater penetration, as you say, across HR and payroll. But at this stage, very early stages.

Thank you very much.

Great. Good morning, guys.

Thanks very much. Just two questions from me.

Firstly, a higher-level strategic question on how you're thinking about the right blend between margin and growth at the moment. It's, obviously, nice to see the profit upside, but against the backdrop of companies like Intuit doing a 10% restructuring to double down in AI, is there a case here for accelerating investments harder than you're doing at the moment?

And if I just extend that to 2025, given the strong margin performance that we've seen from '24, is it unrealistic to expect another 50 to 100 basis points in '25, or should we assume that you can still achieve that? And then just as a small follow-up, you've done a couple of small acquisitions recently, just to help us with the modeling, can you just size those acquisitions and help us with the inorganic contribution for '25?

Thanks.

Yes, so I'll take the strategic one first. I mean, we are investing for growth first.

Although this is not a guidance because we don't give medium guidance, we've been very open about the fact that we aspire to get the business to the Rule of 40, which in our case is ARR growth plus EBITDA margin. If you look at where we are today, it's 11% ARR, plus 27% EBITDA.

So we're about 38. And our first priority is to continue to accelerate that revenue growth.

And I think there's two areas which you point to, which we're constantly assessing whether we need to invest more. One is in sales and marketing, as in expanding.

So not so much sales and marketing in terms of doing more of the same. But for example, expanding Intacct into new markets.

So we've launched in France, we've launched in Germany. We're looking to always expand those global products and that has some costs, some cost of launch, in terms of go-to-market, brand expenditure, etc.

So we're looking closely at that. And then the other one is obviously R&D capacity.

And as you say, Charlie, looking at whether we have the right capacity, particularly around AI, and we feel we do at the moment. We're also taking advantage of our partnerships with AWS and Microsoft.

But we will constantly look at that. And if at any point we feel we need to invest more heavily there, we will.

So I mean, Jonathan can talk a little bit about the guidance, but I'm very much in the place that whilst we will continue to make progress on the margin, this kind of 50 to 100 basis points, I really feel for '25, you be at the bottom end of that range because we are going to prioritize investment. But maybe, Jonathan, you want to say a bit more about that?

No, really -- to really just confirm what Steve has just said on margin. You can see the last three years, in line with our guidance, we've expanded the margin.

And so, this is the fourth consecutive year that we are guiding that margin will continue to trend upwards. That comes through scale and operating efficiencies.

And as we start this financial year, we would very much guide back towards the bottom of the range to 50 to 100 basis points. We will continue to invest heavily in Copilot and new cloud product launches.

And we also expect headcount to grow slightly during FY ‘25, albeit at a slower rate of growth than revenue. And as we always do, we'll keep you updated on margin as we move through the year.

And then in terms of M&A, good question. As you know, it's an important part of our strategy.

It provides us with complementary technology and skills. And during this year, we've completed three relatively small transactions.

Bridgetown, which is in the CRE space; Infineo, which is a French ISV, and Anvyl, which is a supply chain software business, all of them relatively small. In terms of impact on our underlying revenue for FY ‘24, it was very small.

And impact on ARR at the year-end was only about GBP5 million. We will continue to explore M&A opportunities but really only in the context of the disciplined approach that we have to capital allocation, which we've set out for you on a number of occasions in the past.

Thank you.

Yes, good morning. A couple from me.

Just on Intacct, I mean, it looks like in North America, obviously, it's getting a bigger business, but it slowed to about 21% in the second half. I mean, you're sounding quite optimistic, Steve.

Are you now expecting that to reaccelerate back towards the mid-20s range? And then, Jonathan, on the margin, I couldn't help but notice R&D, actually was down about a percentage point relative to sales.

Is that sort of intended? Was that challenging to hire or something?

Would you expect that to go up to 16%? And G&A at 8% is a very good performance.

Is there more you can get out of that cost line?

Yes. Thanks, Michael.

So I think on Intacct, as we said at the half, we have seen a little bit of CFOs taking a bit more time to make decisions, which has had an impact in terms of the NCA growth rate, which although it's still strong, has been a bit tempered. And then as Jonathan referred to when he was answering the question about renewal rate by value, we have seen a similar impact in terms of sort of upsell and cross-sell.

So that's also been a little bit more tempered. I think if you take a kind of medium-term view, we still see a very sizable addressable market in the U.S.

and we are very focused on the verticals where we are strongest, so non-for-profit, construction, software, financial services, healthcare, et cetera. And then longer term, we are also expanding our capability into distribution and manufacturing.

And so, obviously, you have a lot of big numbers here. So the kind of percentages I'll sort of steer away from.

But I see us having the capability to grow more strongly with Intacct, both in the US and elsewhere. And Jonathan will answer the question about -- as you say, about margin in R&D, but just one comment on that.

I think what's important on R&D is to emphasize that we have continued to increase our capacity. So obviously, a big driver of R&D investment is people cost, and Walid has continued to hire in lower-cost locations, including hiring in -- Newcastle hiring in Barcelona rather than hiring on the West Coast.

And so, there's a bit of a mix effect really in terms of that total. But I wouldn't want anyone to think that we're not investing in capacity in R&D because we absolutely are and we will continue to do that.

But Jonathan, do you want to add?

Yes, just to a couple of small additional comments. Intacct is really important and it's absolute right to focus on that.

But if you just step back a bit, the strategic part of the business, sorry, so as I was saying, Intacct is important. It's critical that we focus on that.

But if you step back and look at the strategic part of the business -- sorry. So as I was saying, Intacct is important.

It's critical that we focus on that. But if you step back and look at the strategic part of the business, Sage Business Cloud grew at 16% for the full year.

Within that, cloud-native grew at 23%. So we now have over a third of total Group revenue growing at more than 20%.

And so, there are a lot of other products in the Sage Business Cloud that are driving strong growth as well. In terms of R&D, there is no shortage of investment that we're willing to put behind R&D.

We are investing heavily, as you know, in Sage Copilot, Sage Network, and the global cloud products. And as Steve said, Walid has adopted a very flexible lower-cost resourcing model, where engineering teams from around the world are working together, and also we're identifying those global locations where we get the best value for money in terms of engineering capability.

And then in terms of G&A, yes, we've come in at 8%. That compares, I think, well with many of our peers and competitors.

At this stage, we don't anticipate that that as a percentage will get any lower. Thank you.

Thank you. And just on pricing, I think on the last call you talked about 3% to 5% being sort of a go-forward rate.

Do you have a more sort of precise expectation for 2025 now?

Well, I think we're probably -- as Jonathan said earlier, I think for '24, we've had about 5% price. We've got slightly lower inflation this year across our markets, although it does seem to be edging up slightly.

So probably I'll narrow the range slightly for you. It's probably more like 4% to 5% than 3% to 5%.

But we'll be thoughtful in terms of -- our customers have got a number of cost pressures. And as we did over the last 12, 18 months when inflation ran a bit higher, we try and really give our customers a fair value exchange and not just crank the price up.

But I think 4% to 5% is probably a good reasonable assumption.

Okay. Thank you.

Well done.

Thanks very much. So thank you very much.

Thanks everyone for dialing in and we look forward to updating you again at the end of Q1.