TechnologyOne shares slip as forex headwinds limit earnings beat
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More news: Shares in TechnologyOne fell in afternoon trade despite the company reaffirming its FY26 guidance and reporting a 17th consecutive record first-half profit.
Shares fell 3.07% to $27.76 at 1:24pm AEST.
RBC Capital Markets analyst Jackson Lee maintains an ‘outperform’ rating with a price target of $33, noting that the overall first-half results aligned with consensus estimates.
He added that the performance would have beaten expectations if it weren’t for the foreign exchange headwinds, particularly within the UK market as it becomes a larger segment of the business.
TechnologyOne reaffirms FY26 outlook on strong first-half profit
The news: TechnologyOne has reaffirmed its FY26 profit before tax guidance, targeting the top end of the 18% to 20% year-on-year growth range, while annual recurring revenue (ARR) growth is also projected to hit the upper bound of its 16% to 18% target range.
This follows the group’s 17th consecutive record first-half profit.
The numbers: For the first half, statutory profit after tax rose 6% year-on-year to $668 million, while ARR increased 17% to $598 million.
Total revenue climbed 11% year-on-year to $322.7 million, while free cashflow reached $20.3 million, down 15% from the previous year. The company declared an interim dividend of 8 cents per share, up 21% from the prior year.
The context: The company said the positive half-year results were driven by its successful transition into a 100% SaaS enterprise following the launch of its AI strategy in October, adding the rollout of its AI platform suites have significantly boosted its total addressable market.
The business also said revenue was further lifted by expanded partnerships across local government bodies, including Townsville City Council, Liverpool City Council and Salisbury City Council, where sustained public sector growth has established real scale and brand recognition.
