Sage Group: AI progress and stronger ARR, but unchanged structural debate

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Sage Group: AI progress and stronger ARR, but unchanged structural debate

Equity Research

European Software & Payments

22 May 2026

Sage Group

AI progress and stronger ARR, but

unchanged structural debate

The AI update was encouraging, with stronger ARR growth SGE.L/SGE LN UNDERWEIGHT

and a guided H2 slowdown that we view as largely Unchanged

European Software &

conservative. However, it is unlikely to shift the structural Payments NEUTRAL

Unchanged

debate, and while the H1 margin was solid, the pace of Price Target GBP 8.50

Unchangedimprovement remains a risk. With better opportunities

elsewhere, we remain UW. Price (20-May-26) GBP 8.97

Potential Upside/Downside -5.2%

Source: Bloomberg, Barclays Research

AI strategy focused on agents, platform and accelerated migrations...: With AI remaining a

key debate for Sage, management provided an overview of AI product launches and the Market Cap (GBP mn) 8180

pipeline, its platform and the impact of AI on migrations. Besides Copilot, Sage's AI product Shares Outstanding (mn) 912.02

strategy is focused on agentic capabilities and it highlighted three agents within its portfolio: Free Float (%) 94.62

the Close Agent which has now >500 customers following the November launch, an Assurance 52 Wk Avg Daily Volume (mn) 2.5

Agent and Accounts Payable Agent, with several other agents launched in H1. In addition, the Dividend Yield (%) 2.44

company launched Sage AI Gateway and AI Developer Solutions, which enables approved Return on Equity TTM (%) 40.71

partners to build agentic solutions on Sage's platform. According to the company, it has already Current BVPS (GBP) 0.75

received over 300 applications to develop third-party agents on the platform. Finally, Sage is Source: Bloomberg