Organic recurring revenue is ahead of full-year guidance for the six months ended March 30. But in a trading update this week, the software company said license and related revenue dropped as expected with the decline accelerating toward the end of March.Sage will report actual results on May 13.
Sage expects the current crisis will impact results for the rest of the year as customers delay purchasing decisions while there will be a higher-business failure rate, which will result in an increase in churn. It said organic recurring revenue will fall below previous guidance of an increase of 8 percent to 9 percent for the year ending September 30. It also predicts the drop in license and services revenue will :accelerate significantly in the second half, with some associated impact on margin.”
The company termed disruptions to business has been minimal to date. But it noted, “Sage has identified and is implementing a range of mitigating actions to manage costs and cash in the near-term, while continuing to invest in the long-term success of the business.”