Touting success in growing its subscription revenue and cutting costs, enterprise software provider Sage Group plc today revealed first-half results in which revenue rose by 17% to £748.4 million, and earnings before interest, taxes, and amortization rose 10% to £168.4 million.
The impressive year-over-year comparison, however, hid some demand issues in the six months ended March 31, as currency fluctuations gave Sage a major boost. Stripped of the benefits of currency translation, sales for the U.K.-based software company actually declined 3% in the period.
On a constant currency basis, the revenue breakdown showed a trend that many of Sage’s business software peers have displayed: software and software-related services revenue, which includes license sales and related training and professional services, in addition to hardware sales, sank 15% year over year, while subscription revenue, including support contracts and hosted services, rose 2% in the period.
“After a robust performance last year, we are now experiencing the effects of the weakening global economy in most of our markets, with customers delaying software purchasing decisions,” said Paul Walker, Sage’s CEO.