Bob Scott reporting in his weekly Insights column.
The Sage 50 accounting software line and its X3 manufacturing application led revenue growth in North America for the year ended September 30, the Sage Group said this week. Overall, the company had its greatest rate of revenue growth in eight years, CEO Steve Kelly said during this week’s earnings webcast. That included 4-percent organic revenue increases reported on this continent. Worldwide, Sage reported net profit of roughly $347.6 million, an increase of 32.6 percent from the prior year and worldwide revenue of about $2.15 billion, an increase of 6.1 percent from fiscal 2014. North American performance was hurt by a 2-percent decline in payments revenue, but executives said steps taken have recently improved results. Sage will continue to emphasize selling maintenance and support contracts. Kelly said that overall contract renewals have improved from 83 percent to 84 percent. Kelly said the renewal rate goes to 90 percent for subscription sales and more when customers are using more than one Sage product. The company is also increasingly bundling product sales with maintenance contracts. The result for subscription products is that when customers do not renew maintenance agreements, they find their use of the product ended or hindered. The ability to use Sage 200, sold in the United Kingdom, ends when there is no valid maintenance key. Sage 50 users can continue to use the application, but they do not receive payroll tax updates.