Technology One announces record interim payout

Company News

by Glenn Dyer

Shareholders in Brisbane-based tech services and software group, Technology One (ASX:TNE), will receive a record interim payout of 5.08 cents per share after the company revealed a double-digit increase in sales and profits for the six months ending on March 31.

TNE asserts it is confident it can maintain the strong first-half performance into the subsequent six-month period ending in September.

The interim payout saw a 10% increase from a year earlier, though this was smaller than the 16% rise in total revenue to $244.8 million, indicating a trajectory to surpass half a billion dollars by September year-end. Expenses also rose by 16% to $183.2 million, leaving the company with $172 million in cash and investments by March 31, a 24% increase.

Annual recurring revenue (ARR) surged by 21% to over $423.6 million in the half. CEO Ed Chung expressed his satisfaction, stating, "We are pleased to announce our 15th consecutive year of record first-half profit, revenue, and SaaS fees (Software as a Service). Our ARR growth of 21% and profit before tax growth of 17% are driven by the significant value proposition of our global SaaS ERP solution for new and existing customers."

"We are among the few companies globally that have successfully transitioned from a traditional on-premise software company to a SaaS company, with nearly all customers now utilizing SaaS," Chung continued. "Our existing customers continue to expand their use of our global SaaS ERP solution, adopting additional products and modules to streamline their operations, as evidenced by our Net Revenue Retention (NRR) of 117%. We are on track to exceed $500 million ARR by FY25, a target that was accelerated at the FY23 full-year results."

Chung further stated, “We anticipate strong growth for the full year FY24 and identify significant growth opportunities in the coming years.”

The CEO provided guidance for the full year, anticipating a 12% to 16% rise in profit. “The company is well-positioned to sustain strong growth throughout the year," he remarked. "We project Net Profit Before Tax growth for FY24 of 12% to 16% compared to FY23. We expect our ARR to continue growing robustly, increasing by 15% to 20% over the full year. As we acquire more customers and our SaaS Platform scales globally, we anticipate our net profit before tax margin to expand by approximately 1% over the full year and gradually to 35% over the medium term.”

Glenn Dyer

Glenn Dyer has been a finance journalist and TV producer for more than 40 years. He has worked at Maxwell Newton Publications, Queensland Newspapers, AAP, The Australian Financial Review, The Nine Network and Crikey.

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