The Worldwide, the United Kingdom-based company 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.
Despite the improvement, CEO Steve Kelly said during this week's earnings webcast "It's the early days" of re-inventing business.
Sage said Sage 50 in North America (the former Peachtree in the United States and Simply Accounting in Canada) showed strong growth and X3 had a 19-percent increase in revenue. The latter "gives us some encouraging signs for this region, " CFO Stephen Hare said. 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. He promised an emphasis on cross-selling Sage products.
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. Hare said that the ability to use Sage 200, sold in the United Kingdom, ends when there is no valid maintenance key. For users of Sage 50, they can continue to use the application, but they do not receive payroll tax updates.
