Good morning and welcome to Sage's full year results. I'm pleased to be joined by Jonathan Howell, our CFO. I hope you enjoyed that preview of the Sage Finance Intelligence Agent. I'm going to start with an overview of our key messages. Firstly, Sage delivered another strong performance in FY2025. For the fourth consecutive year, we achieved a double-digit increase in underlying ARR, testament to the resilience of our model and our durable growth. Through cost discipline, together with operating leverage, we've delivered strong profit margin and EPS expansion, and we've converted this into robust cash flows, supporting organic and inorganic investment and enabling strong shareholder returns. Secondly, our performance is driven by our relentless focus on delivering customer value. From the launch of Sage Intacct Suites to our new cloud-native version of Sage X3, we are accelerating the pace of innovation at Sage.
Through our AI-powered platform, customers are saving time and making smarter decisions. The future is exciting, with AI set to revolutionize the way businesses operate. With AI agents, we're delivering the next wave of intelligent solutions, transforming how SMBs manage their finance, HR, and payroll processes. Finally, our progress is underpinned by consistent, focused execution. In recent years, we've transformed our portfolio to meet and exceed our customers' needs. Today, as a result, we have around GBP 1 billion of cloud-native ARR growing over 20%. We've enhanced go-to-market with new systems and processes to drive efficient growth, and we're investing with purpose in our technology, our people, and our communities to ensure that Sage continues to deliver for the long term. 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 enter FY2026 well-positioned for further success. Looking back, we have a good track record of strong and consistent financial performance, which highlights our continued strategic progress. As a result, since FY2022, we've grown revenue at an average of 10% per year and operating profit at 18%, converting to strong EPS growth of 21%. Moving on to the highlights for FY2025, we've achieved revenue growth of 10%, reflecting the strength of our subscription-based model. Our operating profit margin was 23.9%, an expansion of 150 basis points as we scale the business and deliver efficiencies. This has led to a strong increase in EPS of 18%.
Finally, we delivered cash conversion of 110%, 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. We have seen good levels of growth from new customer acquisition. As a result, ARR increased by GBP 245 million to GBP 2.6 billion. That is up 11% compared to last year. Importantly, this growth continues to be well-balanced between new and existing customers. Turning to the P&L, total revenue growth of 10% was underpinned by recurring revenue, which also grew by 10%. Sage is a 97% recurring revenue business, demonstrating the high quality and resilient nature of the group. Operating profit grew by 17% to GBP 600 million, reflecting continued top-line growth and strong margin expansion.
Profit after tax increased by 14% to GBP 423 million, leading to strong growth in underlying EPS of 18% to 43.2 pence. We have increased the final dividend to 14.4 pence, taking the full year dividend to 21.85 pence, which is up 7%. Cloud products continue to be a significant driver of growth, with Sage Business Cloud revenue increasing by 13%. This reflects good strategic progress as we continue to 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 83%. Moving now to our regional performance, starting with North America, which represents just under half of group revenue. Here we delivered revenue growth of 12%, driven mainly by the medium segment.
Sage Intacct continued to perform well, with strength across key industry verticals, including not-for-profit and financial services. Sage 200, Sage 50, and Sage X3 also supported growth across the region. The UKIA region represents almost a third of group revenue and grew at 9%, with a good performance across the portfolio. The U.K. and Ireland increased by 10% as revenue from Sage Intacct continued to scale rapidly. Further growth was achieved in small business solutions, including Sage Accounting and Sage 50. This was supported by good performance in Sage 200. In Africa and APAC, growth of 7% was driven by strength in Sage Accounting and payroll, together with Sage Intacct. Finally, in Europe, which represents over a quarter of group revenue, growth was 7%. This reflects a strong performance across our cloud solutions. In France, growth of 6% was driven by strength in Sage X3 and Sage 200.
Iberia also increased revenue by 10%, with strong growth in Sage 200 and Sage 50, together with the acquisition of ForceManager in October last year. In Central Europe, growth of 6% was driven mainly by cloud HR and payroll. As we've 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 fiscal year 2025, we achieved strong margin growth of 150 basis points to 23.9%. This was underpinned by efficiencies, especially in G&A, which is running at 8% of revenue. Importantly, we continue to drive investment with sales and marketing at 40% of total revenue. Investment in R&D at 15% remains a key priority for the group.
Turning to earnings per share, which grew double-digit for the third consecutive year. Underlying operating profit grew at 17%, following good revenue growth and margin expansion. Net finance costs increased following new debt issuance, while the effective tax rate remained constant at 24%. Together with the benefit of recent share buybacks, this led to EPS growth of 18% to 43.2 pence. Moving on to cash generation, which remains a core strength of Sage. During the year, the group generated GBP 660 million of cash from underlying operations, resulting in cash conversion of 110%. This is now the seventh consecutive year of cash conversion above 100%. Free cash flow was GBP 517 million net of interest and tax. The group has a strong balance sheet with GBP 1 billion of cash and available liquidity. Our leverage ratio of 1.7 remains within our midterm 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 GBP 300 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. 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 2026 to be 9% or above. We expect operating margins to continue trending upwards in FY 2026 and beyond as we focus on efficiently scaling the group. Thank you. Now back over to Steve.
Thanks, Jonathan. Our performance is anchored in our strategic framework for growth. It starts with our purpose to knock down barriers so that everyone can thrive, as we aim to create the world's most trusted and thriving network for SMBs powered by AI. We deliver on this through our three strategic focus areas: connect, grow, and deliver, which I'll say more about shortly. Through this framework, we serve the interests of our stakeholders in line with our values, starting with our customers, small and mid-sized businesses. SMBs make up 99% of all businesses in our end markets. They are the lifeblood of our economy, providing employment and creating wealth for millions. Our small business tracker analyzes data from 140,000 SMBs, and it shows that despite the external backdrop, SMBs have again proved resilient and increasingly profitable during 2025.
They continue to face barriers such as weak productivity and late payments, with the challenge of remaining competitive and compliant. They want effective, integrated solutions from a trusted vendor, and Sage provides these solutions, helping SMBs to knock down barriers, automating processes, speeding up cash flows, and delivering business insights. LA Opera, shown here on the slide, told us that Sage Intacct has completely transformed their finance function, with its AI capabilities helping to save 10-15 hours a week. As we roll out Sage Copilot and AI features more widely, we're opening up new possibilities for SMBs and accelerating customer benefits. The way we're doing this is through the Sage platform. This platform provides a secure, scalable foundation for all of our products. It connects customers to their suppliers, banks, tax authorities, and partners, automating transactions and speeding up compliance and improving cash flow.
At the heart of the platform is the Sage AI factory, the infrastructure that drives Sage Copilot, powered by our LLM-backed proprietary intelligence engine. It is supported by our data hub and core experience and network services that enhance security and automate workflows. The system is already operating at scale, with over 40,000 models in production, generating 3.5 billion predictions annually. Designed to support rapid innovation, the platform has enabled us to bring Sage Copilot from inception to market in less than a year and to scale it across the portfolio. We are now focused on leading the way in agentic AI, both by launching our own agents and by integrating trusted third-party agents in a secure ecosystem governed by Sage. For customers, this means greater choice, more intelligence, and faster innovation within the Sage products that they already know and trust.
We've been building AI into our products for years through successive technologies, first predictive, then generative, and now agentic AI. Through these waves of innovation, we've created a powerful and differentiated proposition, combining our experience, extensive data sets, and connected ecosystem to deliver trusted domain-specific AI at scale. Sage Copilot is our intuitive assistant and the primary way through which customers experience our latest innovations. This is powered by Sage AI, our intelligence engine. Built on deep domain expertise, our models are trained on rich proprietary data sets from years of experience and fine-tuned to ensure relevant and precise responses. This specialism makes them more accurate and efficient than off-the-shelf models, while industry partnerships, such as our collaboration with the American Institute of CPAs, promise to further enhance their performance.
Increasingly, AI agents handle specialist work, taking care of repetitive tasks that weigh businesses down, but always ensuring the human stays in control. The Sage platform provides the environment for our AI to operate, bringing applications, workflows, and data together. Guiding all of this is our underlying philosophy, authentic intelligence, meaning our AI is built to be ethical, transparent, and human-first. These pillars underpin our progress towards our ambition to create the world's most trusted and thriving AI-powered network for SMBs. Let's now turn to look at our progress in more detail through our three strategic focus areas. First, connect, where we aim to grow our platform by connecting more products, enabling us to serve customers better by expanding the scale and scope of services we provide.
This drives the network effect, where every connection and every transaction that flows across the platform makes the system smarter for everyone. During the year, we scaled services such as accounts payable automation, with monthly transaction value tripling over the past 12 months to $2.3 billion, thanks to continued adoption by customers such as Greenwich in the U.S., shown here on the slide. They told us that Sage AP Automation has enabled them to double the number of invoices they process without increasing headcount. We also grew our accounts receivable service, and we launched our e-invoicing portal in France, helping customers prepare for upcoming compliance requirements. Through the acquisitions of File and Criterion, we expanded in expense management and HCM, enabling us to streamline and automate these critical processes for SMBs.
We're also innovating to expand our reach by delivering a growing set of services embedded into other platforms, such as fintechs and banks, plugging into the apps that SMBs already use. We partner with Tide to deliver bookkeeping, Monzo for making tax digital, NatWest for carbon accounting, and Capital One for expense management, extending our ecosystem to win customers earlier in their life cycle and acting as a trusted partner to regulated service providers who are looking to innovate. Looking ahead, our aim in this focus area is to drive the adoption of more network services, bringing productivity to customers and data and insights to Sage. Our second focus area is to grow by winning new customers and delighting our existing ones. The biggest contributor to growth is Sage Intacct, our flagship mid-market solution.
In the U.S., Sage Intacct grew ARR by over 20%, with Q4 a record quarter in volume terms. This was driven by strength in key verticals and supported by investment in go-to-market and the expansion of suites. Outside the U.S., ARR increased by around 50%, with standout momentum in the U.K., where Sage Intacct now serves over 1,600 customers. During the year, we replatformed Sage X3 to deliver a full cloud-native experience, where we saw acceleration driven by strong demand in manufacturing and distribution. Through Sage X3, we can serve customers better, like Grupo Intaf in Spain, shown here on the slide, who told us that Sage has improved their efficiency and helped drive collaboration. For small businesses and accountants, we've expanded through product and package improvements, including in Sage Accounting, Sage 50, and Sage Active.
We have reinforced our relationships with accountants by delivering tools that streamline their work and free up time to grow their business. Our future focus in this area is to drive momentum with new and existing customers and continue to make it easier for them to access products and services. Our third focus area is to deliver productivity and insights driven by AI. Over the year, we have significantly scaled Sage Copilot in availability and usage. Initially focused on Sage Accounting, we quickly expanded it to Sage 50, growing availability to around 150,000 customers, including Adam Williams of Tyne Chease, shown here on the slide. I met with Adam earlier this year, and he told me that Sage Copilot is saving them over 12 hours of admin per week and helping them to get paid up to seven days earlier.
Other customers have told us it's doubled productivity in accounts payable while reducing manual data entry by up to 90%. We have also expanded Sage Copilot to Sage for Accountants, Sage X3, and Sage Intacct, where it's rapidly becoming an important tool for customers. Over 26,000 Sage Intacct users worldwide have so far accessed features such as Search Help, which seamlessly guides them through key workflows. The Sage Finance Intelligence Agent, which we showed in the video at the start of the presentation, handles natural language questions like a human finance assistant. These solutions drive real value for customers, not just streamlining processes, but transforming their operations and making them more productive. We expect that this over time will create monetizable opportunities for Sage through features, pricing, and lifetime value. As well as driving productivity for customers, we are also leveraging AI for colleagues at Sage.
In engineering, AI is accelerating code generation, saving hundreds of thousands of hours. In customer support, it's driving a 70% resolution rate with high satisfaction levels. In go-to-market, AI agents are helping to generate, qualify, and convert sales leads. We're doubling down on internal adoption, encouraging and empowering colleagues across the group to use AI to simplify and amplify their work. With hundreds of new use cases being assessed, the potential ahead is considerable. Our future focus in this area is to continue to scale Sage Copilot, embedding it into the core user experience across our portfolio, while further developing our agentic capabilities, accelerating benefits, and unlocking ROI for customers and for Sage. Our success depends on our ability to deliver for our stakeholders.
For customers, we're committed to excellence, with Sage ranked by G2 as the number one software company in the U.K. for 2025 and in the top 25 globally based on user reviews. We continue to champion policies that our customers care about, from partnering with the U.K. government on AI skills to advocating SMB access to green finance across the EU. For partners, we've launched AI developer solutions, enabling ISVs to build and deploy AI agents on our platform. Our new partner portal streamlines partner onboarding, provisioning, and support, making it easier for them to work with Sage. For colleagues, we foster a high-performance culture and an innovative mindset. We're pleased that we've been recognized by Forbes as one of the world's best employers. Turning to society, where we aim to multiply our impact by helping SMBs to be more sustainable.
In FY2025, we launched our entrepreneurship program to support purpose-driven startups around the world. Sage Foundation celebrated a decade of impact, during which time we've raised over $5 million and enabled 1.4 million volunteering hours. For shareholders, our objective is to deliver sustainable growth in shareholder value. We do this by growing revenue and by doing so more efficiently over time. The key to this is rooted in our strategy, our competitive positioning, and financial model. We have a clear strategic focus, which guides our decisions and ensures we align with the needs of our customers and the expectations of our shareholders. We are differentiated from competitors by our AI-powered platform, global products, and geographic reach, with deep domain expertise across financials, payroll, and HR. We are diversified through our broad customer base and ecosystem.
Finally, our resilient financial model is built on high-quality recurring revenue, providing stability and visibility with growth driving both investment and margin. In conclusion, Sage delivered a strong performance in FY 2025, underpinned by continuing durable growth. Smart investments are driving an accelerated pace of innovation, particularly through AI. With good progress in execution, we enter FY 2026 with confidence and momentum. Before we move to Q&A, I'd like to say a big thank you to Jonathan, who's been a fantastic support to me and the broader Sage team over the last 12 years. He hands over the financial reins to Jacqui Cartin in great shape. I'm looking forward to welcoming Jacqui to the CFO role from the 1st of January. That concludes today's presentation. Thank you very much for watching. Jonathan and I would now be very happy to take your questions. Thank you.
To ask a question, please press star 11 on your telephone and wait for your name to be announced. To whisper your question, please press star 11 again. We will now take the first question from the line of Adam Wood from Morgan Stanley. Please go ahead.
Hi, good morning. First of all, congratulations on the results and also best wishes from me, Jonathan. I know you've got a few weeks left, but yeah, best wishes from my side when that time comes up. I've got two questions, please. Just first of all, we saw a nice tick up in the ARR growth in the fourth quarter. And could you just talk a little bit about what the drivers of that improvement in ARR were at the end of the year, please?
Maybe just secondly, when in the commentary around North America, you talked about the introduction of multi-year customer contracts as a driver of growth. I guess from an Intacct side, that's a pure SaaS business. Multi-year contracts would not bring any revenue forward. I am just curious if you could maybe expand a bit on how that was a driver for North American revenue, please. Thank you.
Adam, yes, thank you. Thank you for your questions and thank you for your comments. First of all, if we just stand back and look at ARR for the full year, we exited with growth of around 11%. That was in line with the first half ARR exit rate. Looking at sequential growth, Q1, Q2, Q3, we saw between 2-2.5%. To your question, in Q4, that picked up to around 4%.
That was a very strong result, and particularly if you—
One moment, please. Your conference will resume shortly.
Hello, sorry, we lost the line for a moment then. Just to recap to make sure everybody gets it. Q4, we saw a sequential growth of 4%. That was a strong result and significantly above the 3.5% that we saw in Q4 of the prior year. That has been driven by North America and UKIA, particularly across the medium segment and primarily Intacct, where we saw a very strong performance in Q4 in both new customer acquisition and upsell and cross-sell. I think it is probably just worth noting that we are now beginning to see the benefit from the ongoing investment that we have made in products, people, and go-to-market in those regions in the medium segment.
That underpins our guidance for FY2026 as we exit this year with good momentum. Suites and multi-year contracts, Adam, you mentioned that they simplify our proposition for customers and improve the sales motion. We expect over those multi-year contracts to be able to increase customer lifetime value over that extended period. That provided a bit of an impact in Q4, but really the whole performance was underpinned by strong execution in new customer acquisition. Thank you.
Thank you.
Thank you. We will now take the next question from the line of Frédéric Boulan from Bank of America. Please go ahead.
Hi, thank you very much. Thank you, Steve and Jonathan, for taking the question. If I may, firstly around AI, I mean, you kind of discussed your pipeline and the kind of innovation you've been pushing.
Can you spend a minute around the impact on the business from a revenue standpoint, what you've been doing from a pricing standpoint, and any early insights on what you've seen in your U.K. portfolio in particular? Secondly, it would be good to have an update on the competitive dynamics, especially versus Intuit in the U.S. Are you seeing any of the QuickBooks graduate funnels starting to dry out, or on the contrary, I mean, U.S. performance seems to remain very, very healthy? Any comment there would be great. Thank you.
Yeah, thanks, Frederic. Start with the AI. We have, as we've said before, been deploying AI for many years. What we're doing now is both with Sage Copilot and now increasingly with AI agents starting to create more standalone capability that takes advantage of generative AI.
With Sage Copilot, we've now deployed that to around 150,000 customers. In terms of how we're monetizing, we're doing it in a number of different ways. With Copilot, we're tending to bundle it into the existing plans and then use that to increase the price. In the U.K., for example, with Sage Accounting, we put Sage Copilot into the plus tier, and then we increased the price of that tier by around 25-30% and made it available to all those customers. With some of the agents, for example, with accountants, we've launched a VAT agent, which does what it kind of says on the tin, which is it helps to prepare VAT returns. For those sorts of agents, we may well charge for those separately, because they're doing a particular task.
I think my kind of overriding message here would be that the commercial models have not really been completely written. I think if you ask us or you ask anyone else, we're all looking for different ways to monetize what is considerable value for our customers. We are saving our customers a tremendous amount of time. We've had feedback from small customers that Sage Copilot is saving them 10-12 hours a week. I think it'll build over time, and these sorts of calls will give you transparency in terms of how it's being monetized, but it may not be an entirely kind of linear journey. There'll be different ways that we do things for different parts. As far as the competitive situation is concerned, look, I mean, I think it's very similar to how it's been in the past.
I think our differentiation is that whether it be in the U.S. or elsewhere, we're being very clear that what we're doing with AI is we are driving a platform strategy where we're using our proprietary data sets to train our models to ensure that we get the accuracy that's required in a finance payroll environment. If we're automating workflows, in the case of mid-size businesses with Intacct, we're seeking to automate the close, save time by deploying AI in the close process. All of these things have to be accurate. The way we make them accurate is because we have domains, our developing domain-specific LLMs. We've said in the press release, we have over 40,000 training models currently learning from our 40-plus years of experience and our proprietary data. We think that is the way forward. Jonathan?
Yes, just to add a little bit more color on the pricing impact. As Steve said, we've seen price increases put through for Sage Accounting and Sage 50 in the U.K. only in relation to the introduction of Copilot. If you look back over the last four years, across our portfolio, on a weighted average, our price increases have been between 4-5%. For this year in FY2025, that's ticked up to 5.5%. A significant component of that does come from this impact from pricing in response to the introduction of Copilot. That's just the start. As Steve said, it's not going to be linear necessarily, but we are optimistic given that Sage Copilot and other AI enablement will begin to be rolled out across other products and other territories outside of the U.K.
Thank you very much.
Thank you. We will now take the next question from the line of Toby Ogg from JP Morgan. Please go ahead.
Yeah, hi. Hi, morning, Steve and Jonathan. And Jonathan, best wishes from me as well. Just on the 9% or above growth guidance for 2026, could you just help us with the framing around the sort of recurring revenue growth versus the other revenue? I think for 2025, you saw about a 30 basis points or so headwind between that organic recurring revenue growth and the total organic revenue growth. How should we think about that dynamic for 2026? And then also, you obviously mentioned 5.5% contribution from pricing in 2025. How are you thinking about the pricing contribution embedded in the 2026 guide? Thank you.
Yeah, so in terms of the guidance for the year, if we just step back, for FY2026, we are using the same form of guidance that we've used for the last year, which is 9% organic total revenue growth of 9% or above. We are confident in that guidance given the momentum that we take with us as we exit the year. We've invested in key products, particularly Sage Intacct and Copilot. And we've also seen, really in Q4 and continuing this year, good sales execution. We've got a solid sales pipeline and robust closure rates. We see overall the guidance as realistic but cautious. Needless to say, we will continue to update you as we move through FY2026.
In terms of the various components of revenue, I think the most important thing to note is that other revenue, which we have seen as part of our strategy, a significant run-off over the last five years as we exit the licensed business, that part is done. We still have an element of maintenance and support and an element of professional services, which has now stabilized. The professional services in particular is an important contributor because that provides us with flexibility for implementation and new customer acquisition in the direct channel. In those two lines, that quite strong strategic run-off that we've seen in recent years has stabilized, and there'll be some variability there going forward. It is important to note that the other revenue line is very small. That's only 3%, but it does have an impact.
The maintenance support is a larger line and has a little bit more of an impact in supporting those numbers. I think that's answered your question.
Yeah, thanks, Jonathan. Just on the pricing contribution for 2026, anything you could say on that?
Oh, sorry, Toby, yes. At this stage, no. We are always testing and seeking to optimize the fair value exchange that we have with our customers with existing products and new products. Therefore, we're constantly assessing the take-up and adoption of these new products versus the additional pricing that we're asking for it. At this stage, we have it baked into our plans, but we're not sort of giving forward guidance on what to expect. Clearly, you'll see the impact of any additional pricing as we get through Q1 and H1.
That's great. Thank you.
Thank you. We will now take the next question from the line of Charles Brennan from Jefferies, please go ahead.
Great. Good morning. Just a couple from my side. Firstly, on Intacct, it sounds like that was the biggest driver of momentum at the end of the year. I'm under the understanding that where you provide some customer incentives to onboard new customers, that's typically in Intacct. And those discounts don't necessarily get reflected in ARR. Can you just talk about the volume of discounting at the end of the year relative to the previous year? When we think about the gap between ARR growth and recurring revenue growth, last year, I think you exited at ARR of 10.5%, and we saw just over a percentage point of dilution to get to recurring revenue growth. What do you think that delta looks like this year?
And then just as a small follow-up, I did not quite catch the point on the multi-year contracts. I know you said it was immaterial, but is there any pull forward of revenue recognition under a multi-year contract? Thank you.
Yes. First of all, in terms of your opening remark around Intacct, yes, that is the very significant driver that we have seen, obviously, over the last two to three years, but particularly in Q4. Just to deconstruct that a bit, we have seen total revenue growth for Intacct in the US, which is about a $650 million base now, of 23%. In H2, that was 25%. That underpins the overall performance that we have seen. Ex-US, that total revenue base is about GBP 50 million, and that is growing up between 50% and 60%.
Your reference on discounting, the level of discounting provided on a customer basis in Q4 of this year was not too dissimilar to what we were providing towards the back end of FY2024 and is part of the normal sort of sales cycle of both direct and partner channels, particularly in North America. Multi-year contracts, you sort of referenced that. First of all, multi-year contracts are important because that enables us to acquire a new customer, onboard that customer with a good assessment of the capability and functionality that they need, but then gives us a three-year period in which to assess and upsell and cross-sell into their needs rather than necessarily the other way around, where there is a big sale upfront and then an assessment in subsequent years of whether all of that capability is needed. That is the important thing about multi-year contracts.
It makes it both easier for the buyer of our products and for us as a provider of capabilities to our customers. In terms of revenue recognition, the impact is that any upfront discount is therefore spread over a three-year period as opposed to a one-year period. There is an element of revenue improvement as a result of that. I do stress it is the performance of the underlying sales motion and our customer approval of our products, which is driving what we are seeing at the moment. To give you an example, in North America, I think we have just had our highest volume month ever for Sage Intacct. This is underpinned by real volume coming through. In terms of ARR to RR, that sort of difference, we always expect them to be close, as you referenced in your question, but not necessarily the same.
This is consistent with other corporates and companies that use this measure. The reason is, as you know, an ARR is a point-in-time metric while revenue is booked over an extended period. Any divergence that we see is mainly caused by the timing of revenue growth. That is sort of compressed slightly in recent quarters. It will vary and fluctuate. We are not giving forward-looking guidance on that gap because it depends upon the cadence of growth rate and when acceleration occurs. Charlie, just to add, just to be helpful, I think, with the dynamics around Sage Intacct, just to emphasize what Jonathan said, in Q4 and in September, particularly, we did see very strong volume growth in the U.S. with Intacct. We saw that consistently both direct and also through the channel.
It was a pretty consistent theme in terms of that volume growth.
Thank you. We have time for one final question. From the line of Balaji Thirupathi from Citi, please go ahead.
Hello. Thank you. Congratulations on your results. And Jonathan, best wishes and thank you from my side as well. Two questions from my side, if I may. Firstly, on the topic of AI, one of your key peers announced deal with OpenAI yesterday. Do you see merit for Sage to also target similar integration of its portfolio with frontier models to allow customers access to more customized services? Second question on margins. With puts and takes around AI in particular, productivity gains internally and need for investment as well. Do you see the view of 50-100 basis point per year margin expansion staying intact in 2026 and beyond? Thank you.
Thanks. Yeah, on AI, I mean, I'll start with how do people access the capability? I think people will increasingly want to access capability, do their kind of daily tasks, approving invoices, doing all the workflow type stuff in a number of different environments, right? Today, if you want to approve an invoice, for example, typically you have to go into the application, log on to the application, do it in the application. In the future, you might do that in Teams, you might do that in Outlook, you'll do that on an app on your phone, whatever it might be. Therefore, to sign up or to partner with some of the larger players like a ChatGPT, if the intention is to create that flexibility to access, makes a lot of sense.
The one warning I would give is we're very clear that the way that we produce accuracy is we have data on our platform, proprietary data on our platform, which our learning models are using to create accurate automated workflows. We're also very protective of that data because that's customer data. We would not, for example, want to share that data with others. Now, I can't comment on the detail of what other competitors are doing because there isn't enough information in the public domain to make an assessment. What I can say is we're very clear that our AI is learning in a secure environment where we are effectively a private network with a gateway so that developers can come in and develop their own agents on our platform.
It has to be curated and controlled by Sage because that ensures the integrity of the data and the integrity of the outcome. I'll let Jonathan talk a little bit about margin, but let me just start by saying that I think in the same way that we're selling AI and productivity to our customers, we're obviously seeking to get productivity internally. We've seen a number of areas which have already contributed to the expansion in margin this year, for example. For example, in areas like customer services, we're already deploying significant AI to get higher first-time resolution through AI rather than human-to-human conversations. If you look at it at a very high level, we've grown Sage this year revenue 10%. Our headcount is broadly the same as it was 12 months ago.
We're starting to see the benefits, the early benefits of some of that investment. Jonathan, do you want to? Yes. I think the important point is that Steve just raised is that with the internal adoption of AI, there are significant savings that can be achieved. We've seen those in customer support and also in R&D and engineering. Just to stand back to your question, this is now the third consecutive year of margin expansion. We've guided for fiscal year 2026 for margin to continue to be trending upwards. That will be the fourth consecutive year. This is driven by growth and established patterns of achieving operating efficiencies. At this stage, we expect to be at the lower end of the usual 50-100 basis points range as we continue to invest in growth.
As I always say on these earnings calls, we will, though, as we move through the year, continue to dynamically reallocate spend during the course of the year to maximize that trade-off between top-line growth and margin expansion, depending upon the circumstances and the opportunities that present themselves to us as we move through the year. Thank you very much. And also thank you for your kind comments.
Thank you.
Thank you. I would now like to turn the conference back to Steve Hare for closing remarks.
Thank you very much. And thank you, as always, everyone, for listening. As I said in the presentation, but again, just to add my thanks to Jonathan for the huge contribution that he has made to Sage. We look forward to welcoming Jacqui to the next call in January. Thank you very much, and have a good day, everyone.
This concludes today's conference call. Thank you for participating. You may now disconnect.