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Enterprise software group TechnologyOne (ASX: TNE) has bettered forecasts to deliver a 19 per cent increase in pre-tax profit to a record $181.5 million in FY25, leading the group to reward shareholders with a special dividend.
The software-as-a-service (SaaS) group, which provides enterprise software for more than 1,300 companies and organisations globally, is paying a final dividend of 20c per share and a special dividend of 10c per share for a total payout of 36.6c in FY25, an increase of 63 per cent from a year earlier.
Despite the solid growth performance, TechnologyOne shares slumped more than 15 per cent in early trading on the ASX, hitting a low of $30.
The Brisbane-based group posted net profit after tax of $137.6 million for the year, up 17 per cent, with the result boosted by a strong performance in the UK and its acquisition last year of curriculum management business CourseLoop.
The latest result is the 16th consecutive record net profit by TechnologyOne which also saw annual recurring revenue (ARR) surge by 18 per cent to $554.6 million.
The company’s ARR topped $500 million in the first half of FY25, 18 months ahead of target, with TechnologyOne setting a new long-term target of achieving more than $1 billion in ARR by 2030.
TechnologyOne says its enhanced software-as-a-service model, SaaS+, has fuelled growth and led to record ARR, revenues and profits for the year.
“We established our visionary SaaS+ offering in 2023 by combining our mission-critical global SaaS ERP (enterprise resource planning) solution and implementation in one single fee, removing the need for traditional, complex, long, risky and expensive consulting implementations to provide faster go-lives to unlock value for our customers quickly,” says the company.
UK growth has been driven by the take-up of SaaS+ with the region delivering a 49 per cent increase in ARR and a 52 per cent lift in sales.
TechnologyOne is targeting its local government and higher education verticals for growth in the UK after achieving a number of big wins in these sectors during the year.
“The success we are having today is from our investments five years ago, and the success we will have in future is from the investments we are making now,” says Ed Chung, CEO of TechnologyOne.
“When you think of game-changing technology a few things come to mind.
“iPhones changed the market for mobile phones, Tesla changed the market for vehicles, Uber changed the market for how to catch a cab and now that we have Ai and SaaS+, TechnologyOne is changing the market for ERP and unlocking value for our customers.”
The group posted strong growth across all of its key business verticals, with local government ARR up 22 per cent by $39.4 million, higher education up 24 per cent by $27.6 million and government growing 8 per cent by $6.7 million.
Among the more than 20 major deals secured in the UK were the London boroughs of Islington London Borough Council and the Council of the Royal Borough of Greenwich, with Technology One taking the business from “global incumbent competitors”.
In Australia, the Merri-bek City Council in Melbourne chose the company to replace several ageing legacy platforms to modernise its services and strengthen digital capabilities.
Shares in TechnologyOne were trading 14 per cent lower at $30.41 at 10.38am (AEDT).
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