TechnologyOne CEO, Edward Chung said: “I am pleased to announce we have delivered our 14th year of record first half profit, record revenue and record SaaS fees.
“Our Profit After Tax for the half is up 24%. Our SaaS Annual Recurring Revenue (ARR) is up 40%, as we increased the number of large-scale enterprise SaaS customers by 27% to 903. Our SaaS business continues to grow strongly.
We have a clear and consistent strategy, and our team are executing very well, delivering significant value for our customers.
“We saw an acceleration of customers move to our global SaaS ERP solution, with more than 189 large enterprise customers committing to make the shift in the last 12 months, the highest number to date for any comparable period.”
“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. Twenty-five large scale enterprise customers partnered with us in the first half, including Hume City Council, City of Parramatta Council and six Victorian water authorities in Australia, Waikato District Council and Massey University in New Zealand and London Business School, Liverpool School of Tropical Medicine and Ashfield District Council in the UK. All of these organisations partnered with us to find efficiencies through transforming their operations to enable more free time and resources, which can then be invested back into their customers and community,” Mr Chung said.
Net Revenue Retention (NRR), which is the net amount of new ARR won and retained from existing customers, was 119% for the 12 months to 31 March, compared to 114% for the same period last year. This was an outstanding result given best practice in the ERP market is between 115% and 120%.
“We expect to meet our 115% target for the full year. By growing NRR at 115% we can double the size of our business every five years, which shows the strength and resilience of our strategy and deep customer relationships,” Mr Chung continued.
The UK business delivered almost the same amount of new ARR in the first half of FY23 as it did for the full year in FY22 and delivered profit before tax of $3.0m for the half-year, up 29%.
Mr Chung said: “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.”
TechnologyOne also continued significant R&D investment in platforms for growth including SaaS+ (Solution as a Service), App Builder, its Digital Experience Platform (DXP) and extending the functionality and capabilities of the company’s global SaaS ERP solution.
“Traditionally, cash flow generation for TechnologyOne is weighted to the second half, aligned with customer payment anniversary dates, resulting in negative cash flow in the first half. This half-year, we delivered a break-even cash flow generation result, with cash and cash equivalents up 20% pcp. Cash Flow Generation will be strong over the full year, and we expect it to represent approximately 90% of Net Profit After Tax. Cash Flow Generation will progressively align to NPAT from FY24,” Mr Chung said.
“In light of the company’s strong results, and our confidence going forward, the dividend for the half year has increased to 4.62 cents per share, up 10% on the prior year.”