TechnologyOne shares soar on full-year profit boost
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More news: TechnologyOne shares climbed in early trading on the ASX after the software-as-a-service company reported a 15% rise in full-year profit.
Shares were up 7% to $28.63 by 10:45am AEDT, having advanced more than 85% since January.
UBS analyst Apoorv Sehgal said the result was "strong" and that support the view that its profit before tax growth was likely to move towards 20% per annum over the next few years.
UBS has a 'buy' rating on the stock with a target price of $26.20.
TechnologyOne reports 15% profit boost, beats FY guidance
The news: Enterprise software company TechnologyOne reported a 15% rise in full-year profit after tax to $118 million.
The numbers: Profit before tax, the company's preferred measure, was up 18% to $152.9 million, beating guidance of 12% to 16%.
Total annual recurring revenue (ARR) climbed 20% to $470.2 million, with total revenue up 17% to $515.4 million.
The company declared a full-year dividend of 22.45 cents per share, up 16% on last year.
The context: TechnologyOne, which describes itself as Australia's largest enterprise resource planning (ERP) software-as-a-service (SaaS) company, credited the revenue surge to its "game-changing SaaS+ offering", which delivers the implementation of SaaS products for customers under a single yearly fee.
During the year, the company upgraded its medium-term target for the second time to surpass $500 million in ARR by the first half of FY25, brought forward from FY26, then from the end of FY25. In July, TechnologyOne also announced a new long-term target of $1 billion in ARR by FY30.
What they said: "Our ARR growth of 20% and profit growth of 18% is not only driven by the significant value proposition of our global SaaS ERP solution for new and existing customers, it is driven by our game-changing SaaS+ offering and the acceleration of our UK business," TechnologyOne CEO Ed Chung said.
"A year ago, we established our visionary SaaS+ offering, becoming the world's first SaaS+ ERP company, by combining our mission-critical global SaaS ERP solution and implementation in one single fee, removing the need for traditional, complex, long, risk and expensive consulting implementations to provide faster go-lives and therefore unlocking value for our customers more quickly."
The source: ASX announcement
