The Sage Group PLC (LSE:SGE) shares fell 4.5% on Thursday morning after the accountancy software group published half-year results that seemed to be in-line or ahead of City forecasts.
An existing share buyback was increased to £400 million from £200 million.
Underlying revenue rose 9.5% to £1.24 billion in the six months to 31 March, in line with consensus expectations, with annualised recurring revenue (ARR), a key measure for the FTSE 100-listed group, up 11% to £2.45 billion.
Operating profits jumped 16.5% to £288 million, beating the expected £281 million as underlying operating profit margin widened to 23.2% from 21.8%.
Chief executive Steve Hare said the performance "reflects the strength of our accounting, HR and payroll solutions, underpinned by ongoing investment in our network platform."
He highlighted a focus on innovation and using AI-powered services, saying that one year after its launch, the Sage Copilot service is "delivering enhanced productivity and insights to thousands of customers across our portfolio, whilst paving the way for the next generation of AI accounting, powered by agentic workflows".
Against the background of a more volatile and uncertain macroeconomic environment, Sage said it continues to expect organic total revenue growth to be 9% or above for the full year.
Operating margins are expected to continue to trend upwards.
Analyst Harvey Robinson at Panmure Liberum said: "There is clearly a bit more headroom in the guidance now, particularly on margins."
He noted that margin expansion had been expected between 50 and 100 basis points, "and so far they are 140bp better this time".