1、 EQUITIES SOFTWARE SAGE GROUP OUTPERFORM PRICE*1,212p TARGET PRICE 1,600p(UPSIDE 32%)TARGET PRICE EPS 09/25e EPS 09/26e unchanged -4%-3%(more than a)FQ325 preview:Copilot vs.bps growth dilemma 7 JULY 2025 Securities Research Report Production time:05:40*(London time)Research Analysts&Publishing Enti

2、tiesResearch Analysts&Publishing Entities Sage to report FQ325 trading update on Wednesday 30-Jul pre-market Sage shares have lagged ytd(5)%vs.SXXE+12%as concerns over slowing US SMB ecosystem weighing on New Customer Acquisition(NCA),DOGE risk from its non-profit exposure and therefore decelerating

3、 organic growth trajectory have outweighed the continued margin outperformance and successful GenAI product rollout.As usual the FQ3 trading update will only provide Revenue disclosure,therefore will not capture the two metrics with more positive catalyst opportunity disclosed only at HY/FY:ARR grow

4、th(which would capture Copilot monetisation)and operating margins.Another laser focus on growth trajectory with positively skewed KPIs not disclosed until FY We expect the focus on Group Organic Revenue growth,having decelerated 10.0%.With NCA flatlining,Sage needs to rely on improving its Net Renew

5、al Rate of 101-102%through Copilot monetisation,price uplifts and x-selling which we anticipate can materialise from H225 onwards.We update estimates:FX and net interest costs driving low-single digit%cuts to reported EPS on broadly unch.underlying estimates.We continue to like Sages total return pr

6、ofile relative to its 5%FCF yield as a cheaper alternative to other quality European Software vendors SAP and Nemetschek(both rated+).GBp1,600 TP unch.Ben Castillo-Bernaus BNP Paribas London Branch(+44)203 430 8527 ben.castillo- Ines Mao BNP Paribas London Branch+44 207 595 6564 ESG RATING&KEY TOPIC