How TechnologyOne’s SaaS+ Model is Driving Record Profits and Rapid UK Growth

Record-Breaking Financial Performance

TechnologyOne Limited (ASX – TNE), Australia's largest enterprise software company, has reported a stellar set of results for the fiscal year ended September 30, 2025. The company posted a profit before tax of $181.5 million, marking a 19% increase and comfortably surpassing the guidance range of 13% to 17% growth set earlier in the year. This marks the 16th consecutive year of record profits, underscoring TechnologyOne's consistent growth trajectory.

Annual Recurring Revenue (ARR), a key metric for SaaS businesses, rose 18% to $554.6 million, reaching the $500 million milestone 18 months ahead of schedule. The company has ambitiously reset its long-term ARR target to exceed $1 billion by fiscal year 2030, reflecting confidence in its growth strategy and market position.

SaaS+ Innovation Fuels Growth and Efficiency

Central to TechnologyOne's success is its pioneering SaaS+ model, which integrates software, implementation, and support into a single fee. This approach eliminates the traditional complexities and delays associated with ERP implementations, enabling faster go-lives and quicker value realization for customers. The company aims to reduce ERP implementation times dramatically, targeting a 30-day rollout by 2028, a bold move that could redefine industry standards.

The SaaS+ model has also enhanced revenue quality, with recurring revenue now representing 91% of total revenue and a net revenue retention rate of 115%, indicating strong customer loyalty and upsell potential. This shift from traditional consulting revenue to high-quality recurring SaaS+ revenue is expected to drive margin expansion in the coming years.

UK Market Momentum and Strategic Acquisitions

TechnologyOne's UK operations have emerged as a significant growth engine, with ARR in the region surging 49% year-on-year. Success in the UK Local Government and Higher Education sectors, including landmark wins such as the London Boroughs of Islington and Greenwich, has propelled this momentum. The UK sales ARR grew 52%, reflecting strong demand for the SaaS+ offering and localized solutions.

In November 2024, TechnologyOne acquired CourseLoop, a leader in curriculum management software, enhancing its Higher Education suite. This acquisition complements the company's OneEducation solution, now the first SaaS platform to cover the entire student lifecycle from course design to graduation. Integration is progressing well, with expectations of earnings accretion in FY26.

Robust Capital Management and Future Outlook

The company declared a record total dividend of 36.6 cents per share, up 63% year-over-year, including a special dividend of 10 cents per share, reflecting strong cash flow and balance sheet strength. Free cash flow reached $184.2 million, exceeding net profit after tax by 34%, providing ample flexibility for ongoing R&D investment and potential acquisitions.

TechnologyOne continues to invest heavily in research and development, committing 25% of total revenue to innovation. This includes AI-driven enhancements and the launch of its new Plus product, an AI-powered platform designed to transform ERP interactions through natural language and predictive management capabilities.

CEO Ed Chung highlighted the company's long-term vision, emphasizing that current successes stem from investments made five years ago, with future growth anchored in ongoing innovation and market expansion. The company’s focus on doubling in size every five years appears well supported by its strategic initiatives and strong market execution.