FedGov wins buoy TechnologyOne's record half

Software-as-a-service ERP specialist TechnologyOne has reported record revenue and profit for the first half, thanks to big wins with the Federal Government.

In the half-year ended 31 March 2021, TechOne reported revenue of $144.3 million, up 5 percent year over year, and profit after tax of $28.2 million, up 48 percent. Annual recurring SaaS revenue is also up 41 percent to $155.8 million.

TechOne chief executive Edward Chung said it was the company’s 12th year of record first half profit, revenue and SaaS fees.

Chung credited the results to TechOne’s recent momentum in the federal government sector.

“We had many significant wins in the first half. Momentum in the Federal Government sector
continues with our Global SaaS ERP, chosen by the Australian Department of Agriculture, Water and the Environment to streamline and modernise their business. This was a significant win against SAP,” Chung said.

“In addition, TechnologyOne and the NZ Ministry of Business Innovation and Employment announced a new procurement framework which will pave the way for 20+ NZ government agencies to transition to SaaS.”

The company also reduced expenses by 5 percent despite increasing research and development expenses by 14 percent, as TechOne extended the functionality and capabilities of its ERP, including the new Local Government - Digital Experience Platform.

TechnologyOne chairman Adrian Di Marco said, “Our results are due to the continuing strong
demand for our global SaaS ERP solution. Today 85+ percent of our revenue is recurring subscription revenue.”

“In light of the company’s strong results, and our confidence going forward, the dividend for the half year has increased to 3.82 cents per share, up 10 percent on the prior year.”

Looking ahead, TechOne expects to continue growing its SaaS business while reducing its legacy licence fee business, specifically around $7 million over the full year. The full profit guidance for the whole financial year is between $94.3 million to $98.6 million.

“TechnologyOne is well positioned as the markets we serve are resilient. Our global SaaS ERP solution is mission critical to our markets and enables any device, any time access from anywhere around the world,” Chung said.

“We expect to see our SaaS ARR continuing to grow strongly, up more than 35+ percent over the full year.”