Software-as-a-service (SaaS) company TechnologyOne [ASX:TNE] was recently the subject of a cyberattack encounter, but today the group had a different kind of announcement to make.
TNE has posted positive half-year results, with its annual recurring revenue (ARR) having amassed 40% at the same time last year, and profits rose 24%.
The tech stock remained mostly flat in the morning, trading for around $15.32 a share.
The stock has performed well in the year so far, having experienced a 17% increase year-to-date and a 45% increase on the wider market’s 12-month average:
Source: TradingView
TNE increase profit and revenue in another record half year
Reporting from Brisbane, TechnologyOne announced its financial results for the half year ending 31 March 2023, its 14th year of record first half profit.
The group posted the following highlights:
- Profit After Tax of $41.3m, up 24%
- Profit Before Tax of $52.7m, up 24%
- SaaS Annual Recurring Revenue (ARR)1 of $316.3m, up 40%
- Revenue from our SaaS and Continuing Business of $200.0m, up 18%
- Total Revenue of $210.3m, up 22%
- Total Expenses of $157.6m, up 21%
- Cash and Cash Equivalents of $139.1m, up 20% from 31 March 2022
- Cash Flow Generation of $1.3m as expected, and will be strong over the full year
- Interim Dividend of 4.62cps, up 10%
- R&D expenditure (before capitalisation) of $49.4m, up 19%, which is 24% of revenue
- UK profit of $3.0m, up 29%
CEO of TechnologyOne Edward Chung said the group has managed to achieve via the execution of a ‘clear and consistent strategy’, which has delivered certain value for customers and resulted in an acceleration of customers moving to the global service.
This included 189 large-scale enterprise customers that committed to the shift of the group’s global SaaS ERP solution over the last 12 months.
Mr Chung reflected:
‘Our global SaaS ERP is the future of enterprise software. It provides our enterprise customers a mission critical solution to run their entire business on any device, anywhere, at anytime. It also allows them to innovate and meet the challenges ahead with greater agility and speed, without having to worry about underlying technologies. This makes life simple for them.
‘These are strong half year results for TechnologyOne and validate the strength of our SaaS strategy, which continues our strong growth trajectory in both Australia and the UK. We continue to have many strong customer wins driving organic growth.’
The group expects to meet its 115% NRR (net recurring revenue) target for the full year and explained that in growing this number at such a rate, a doubling of the size of its business could occur every five years.
The group distributed a dividend for the half year of 4.62 cents a share, 10% more than last year.
Mr Chung said that he expects Net Profit Before Tax growth for FY23 to rise 10–15% on FY22 and continue growth in SaaS ARR of around 40%. He concluded:
‘We expect strong growth for the full year FY23, and the company sees significant growth opportunities in the coming years.
‘As we continue to win more customers and our SaaS Platform continues to scale globally, our profit margin will continue to expand.
‘We are on track to surpass Total ARR of $500m+ by FY26, from our current base of $350.6m.’
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