Good day, and thank you for standing by. Welcome to the Sage First Quarter Trading Update conference call. At this time, all participants are in listen-only mode. After the speaker's presentation, there will be the question and answer session. "To ask a question during the session, you need to press star one one" on your telephone keypad. You will then hear an automated message advising your hand is raised. "To withdraw your question, please press star one one" again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to Jonathan Howell, Chief Financial Officer. Please go ahead. Thank you very much, and good morning, everyone. I'm pleased to share with you today our Q1 trading update. As usual, I'll briefly run through the key numbers and the performance of the business, and after that, we can open for Q&A. Sage has made a strong start to the year, sustaining good momentum and performing in line with our expectations. Total revenue for the growth was up by 10% to GBP 573 million, driven by continued growth in Sage Business Cloud. Regionally, North America grew total revenue by 13% to GBP 259 million, with a good performance in Sage Intacct, together with continuing growth in Sage 50 Cloud and Sage 200 Cloud. In the UK IA region, total revenue grew by 8% to GBP 162 million. This was driven by continued success in cloud-native solutions, including Sage Intacct, Sage Accounting, and Sage Payroll, alongside growth in Sage 50 Cloud. In Europe, total revenue increased by 7% to GBP 152 million, with a strong performance, particularly in cloud-connected solutions. Turning now to the main performance drivers, Sage Business Cloud revenue grew by 18% to GBP 454 million, enabling more customers to connect to Sage's digital network. Within this, cloud-native revenue grew by 25% to GBP 174 million, reflecting continued success in new customer acquisitions. In cloud connected, revenue growth was driven by both existing and new customers. Recurring revenue increased by 11% to GBP 554 million, and now represents 97% of total revenue. This includes subscription revenue growth of 14%, resulting in subscription penetration of 81%, up from 78% this time last year. Finishing on the outlook, with first quarter growth in line with our plan, we reiterate our guidance for the full year. Therefore, we expect organic total revenue growth in FY 2024 to be broadly in line with last year, and we expect operating margins to trend upwards in FY 2024 and beyond. So in summary, we've made a strong start to the year as we continue to execute on our strategy and focus on delivering efficient growth. Thank you, and now let's open for questions. Thank you. Dear participants, as a reminder, if you wish to ask a question, "please press star one one" on your telephone keypad and wait for your name to be announced. "To withdraw your question, please press star one one" again. Please stand by while we compile the Q&A roster. This will take a few moments. Now we're going to take our first question. Just give us a moment. The question comes the line of Adam Wood from Morgan Stanley. Your line is open. Please ask your question. Hi, good morning, Jonathan. Thanks for taking the question. I guess, as always, the recurring revenue is the main driver for Sage, and the ARR is a leading indicator of that. I know you don't give the kind of formal disclosure on the quarters, but could you just give us a feel maybe for the sequential build of ARR in Q1, and whether that was, you know, in line with your expectations and supportive of the full year outlook, please? Thank you. Yes. Look, thank you, Adam, for the question. Yes, as you say, we only formally report on ARR at the half year and the full year. But we exited FY 2023 with strong ARR growth of 11%. Since then, in Q1, we've seen sequential growth of 2%, and that's absolutely in line with Q1 of last year. And as we look forward, we can see opportunities to continue to grow the business through NCA and also through cross-sell and upsell as we move customers to the Sage network. And so with that start to the year, which is very much in line with what we anticipated, you can see that we've reiterated full year guidance for FY 2024. Thank you. Perfect. It's very helpful. Thank you. Thank you. Now we're going to take our next question. The next question comes from the line of James Goodman from Barclays. Your line is open. Please ask your question. Morning, great. Thank you. Maybe just to dig into that ARR development in a little bit, more detail, could you comment on what you're seeing through the retention versus NCA? I mean, just thinking about some rising insolvencies in some of your markets. So you're not seeing any increase at all in SMB distress or any of your churn metrics? And the second question, if I can ask, just on the regional performance in the quarter, fairly consistent with Q4, but we did see a little bit of a slowdown, I think, in the U.S., offset by a little bit of a pickup in the U.K. So I just wondered if there's anything to add there in terms of context. Thank you. Yes, thanks, James. Good questions. Thank you. In terms of the renewal rate by value, so what's the return we're getting from our existing customer base? Again, we don't formally report on that, as you know, at the half year and the full year. But in FY 2023, we exited with a renewal rate by value of 102%. And then the key components of that, churn, if you recall, remained low and stable. We were seeing strong sales to existing customers through cross-sell and upsell, and we put through price increases last year of about 4-4.5%. So broadly, I can confirm that those trends that you saw throughout last year have continued in Q1. And so that should give you some good comfort around the performance in terms of the renewal rate by value. In terms of the macro, yes, we discussed this before. Our customer base, SMB customer base, has proved resilient. And, you know, and as we've discussed before, I think a couple of drivers of that. First of all, our, products in accounting, payroll, HR, are mission-critical to these businesses. And I think also, secondly, this propensity of SMBs to invest hard in digital to drive efficiencies in their back offices is, is still a strong dynamic. So we're, we're very mindful of the, macro backdrop. We, we look carefully, but at this stage, you know, we've seen no material impact. And then on regional, just in terms of, you know, the backdrop there. First of all, overall, as you can see, you know, in Q1, we've reported 10% total revenue growth, 11% recurring revenue growth. That is absolutely consistent with our plan for the year, and also is very much in line with what you'd expect with the exit ARR rate at the end of last year. In North America, we saw total revenue growth of 13%, which is a good performance. We're pleased by that. It is slightly down in terms of growth rate on the full year FY 2023. But don't forget that the full year FY 2023 took the benefit of the impact of M&A in the underlying measure, and that really relates to Lockstep and Brightpearl, which we did in the second half of FY 2022. In UKIA, good 8% total revenue growth, very much in line with what we saw last year. Last year was 9%. And then lastly, in Europe, we've seen a good acceleration there, as we anticipated, and I think we discussed, you know, in the second half of last year. And we've accelerated from 5% total revenue growth for the full year, last year in FY23, to 7% in Q1. And that's really strong demand for our products across all Sage Business Cloud, and also in particular in Cloud Connected. So all in all, a strong performance across the piece, which really supports the performance, you know, for the Q1 overall, and also our expectations for the full year. Very clear. Thank you. Thank you. Now we're going to take our next question. Just give us a moment. The question comes to the line of Toby Ogg from J.P. Morgan. Your line is open. Please ask your question. Yeah. Hey, good morning. Thanks for the question. Maybe just on, on Europe, I know you've, you've already launched, Sage Active in, in France, Spain, and Germany, I think, in that region. Could you just give us a, a bit of a feel for how, for how Sage Active has been trending? And then just on, just on the Gen AI developments, yeah, I know we've been talking more about, about Sage's Copilot, which, which you've already announced is in testing. You know, what are the next kind of milestones we should be thinking about here with respect to Sage Copilot? You know, anything around timelines, or sort of progression, within the development function? Thank you. Toby, thanks. Thanks for those questions. Yes, and I think, I think you've hit on a very important point here across Europe. We are now, you know, over the last 12-18 months, accelerated the pace of product launch and product release across Europe of our best cloud-native products. And so just to recap, in FY 2023, we launched Sage Intacct in France, and exactly as you say in the question, Sage Active in France, Germany, and Spain. And we've also expanded globally and in France our some of our core products, like Sage Intacct Manufacturing, Sage Intacct Planning, we've had new releases there, and Sage Payroll. As I said, I think, you know, at Q3 and at the year end, these are good products. They're making the start that we would expect, but it does take time to build scale and traction through the partner channel. So we have got in place now the right products for those geographic territories in Continental Europe. It is now going to take time for that to ramp. And that's exactly what we've seen in North America and UK IA in the past. And then Gen AI, you know, you've said it in your question almost. Sage Copilot is our digital assistant. It's based on generative AI, and it will provide smart analytics, which we believe will be a significant help to a Sage user. The product is currently in testing, and in due course, we will be making a full announcement about it. Thank you, Toby. Thank you. Thanks. Now we're going to take our next question. The next question comes from the line of Michael Briest from UBS. Your line is open. Please ask your question. Yes, thanks. Good morning, Jonathan. Just sort of digging a little bit deeper on the Trends on the customer base. If I, if I sort of calculate on support and subscription, it feels like support's held up better, sort of -3% or so. Subscription slowed a little bit, +14%. I'd, I'd sort of normally associate that with a more stable customer base, should we say? They're not migrating, as much as they did this time last year. Is, is that a fair assumption that there's a bit more inertia from the client base? And then just to follow up on headcount, I noticed it dropped 1% or 2% last year. What are your expectations for, for headcount through the course of 2024? Thanks. Yes. Thank, thank you, Michael. Good, good questions. Look, in terms of, subscription revenue, and, and you can link that to Sage Business Cloud revenue as well, we're, we're still seeing a very good performance. And we're and it's very much in line with our plan. The important thing to, you know, remember, as, as you mentioned in the question, is that we are now getting to the end of the transition. Sage Business Cloud penetration is, is, is 87%. We've always said, once you get to around 90%, we think that will be the, the, the, the end state. If you go back over the last 4 years, we've had considerable increases in, in, Sage Business Cloud, and subscription revenue through migration. That has come, you know, that has come almost full course. That transition is done. So when you're looking at these elements of the revenue stream, the growth going forward will be NCA, and cross-sell and upsell to our existing customer bases. So very much in line with our expectations there. In terms of headcount, we are going to continue to scale the group efficiently, and so therefore, headcount will not increase in line with revenue improvements and revenue growth. At the moment, we have about 11,500 heads, in broad terms. We don't expect that to materially change during the course of this financial year. Thank you, Michael. I hope that helps. Yes. Thanks, Jonathan. Thank you. Now we're going to take our next question. Just give us a moment. The question comes from the line of Alex Nguyen from Jefferies. Your line is open. Please ask your question. Thank you. I have two questions, please. So number one is around the UK IA. So our impression so far is that Xero has been relying more on price increase than you, at least for the past 12 months. Do you think this will continue to be the case this year, and would that, in combination with your improved offerings, will help you achieve accelerating business momentum in the UK? And then question number two would be around the competitive landscape in Europe. Would you be able to make some comments about how you think of your competitors' offerings? Will the growth in Europe be more of getting more of the white space, or it's gonna be replacing your competitors? Thank you. Sorry, Alex, I didn't quite catch the first question. Do you mind repeating it? It was a poor line. I'm sorry. Yep, no worries. So I think Xero has been more aggressive than you in terms of relying on price increase. So do you think that will continue to be the case this year, and will that help you see some business acceleration in the U.K.? Yes. Thank you. So, you're talking about the UK and competitive performance of others in the UK market. We... You know, some of our competitors have put through quite substantial price increases. We kept ours across the piece, our total portfolio of products, at around 4.5% last year. We thought that was the appropriate thing to do. We, in terms of differentials in price increases between competitors, that very rarely leads to a switch of SaaS provider by the end customer. What it does do, though, it blunts competitors' opportunities to do cross-sell and upsell. And so customers only want to feel comfortable if they're asking for payroll, HR, payments, automated posting of invoices and receipts, that cross-sell and upsell activity is very important. If you are proportionate and appropriate in your price increases, that encourages that type of behavior from your customer base. Then in terms of competitors, across the UK and Continental Europe, we've seen no material change. It's the same competitors in the same product sets. Our new products will be a combination of white space, as you say in your question, but also once you get to Sage Intacct and Sage Intacct Manufacturing, you know, you will find businesses that are scaling up and therefore require a deeper set of financial accounting capability. So in short, no material changes in the competitive landscape across the UK IA and Continental Europe. Thank you, Alex. Due to time, we are going to take our last question, and it comes from the line of Deepshikha Agarwal from Goldman Sachs. Your line is open. Please ask the question. Yeah. Hi, good morning, everyone. Thanks for taking my question. The first one is, you like acquired Corecon last year, and then there is this, small acquisition of Bridgetown Software in beginning of this year. So can you just, like, throw some light on what exactly is your strategy going forward when it comes to the theme, like, you know, base of construction software? And, second one would be just, can you, like, help us with how—like, how should we think about the shape of growth between the first half and second half, as well as margins? As in any, like, you know, any factors to keep in mind, like because other than that, it seems to be very broadly in line. Yes, and thank you. We've, as you say, we just completed a small acquisition in the construction and real estate sector in North America, called Bridgetown. We have a strong market share in North America in construction and real estate and are very prominent directly with the customer base and through the partner channel. What we are doing is investing in the product and technologies and capabilities that we need to continue the fast pace of version releases as we move that customer base to Cloud Connected and Cloud Native. And that's an important part of our North American strategy. Then in terms of guidance on full year versus half year, we only guide to the full year. As you can see, the performance in Q1 has given us confidence in the FY 2024 outlook, and we've reiterated that. In terms of margin, which you raised, at the beginning of the year, on the earnings call, we said that we expected the margin improvement to be in the range of 50-100 basis points. And what we see now as we sit here today is analyst consensus is around an 80 basis points improvement, and we're content with that, and that's all on a constant currency basis. Similarly, we're content with the full year total revenue consensus as well. Thank you so much. Thank you. And now I would like to hand the conference over to Jonathan Howell for any closing remarks. Yes. Thank you, everybody, this morning for attending, and also thank you for your very good questions. As is usual, James and his team will be available for the rest of the day and indeed, going forward, for any questions or any assistance that you may need. So thanks very much indeed. Goodbye. That does conclude our conference for today. Thank you for participating. You may now all disconnect. Have a nice day.