How Is AI Driving TechnologyOne’s Bold Profit Growth Upgrade?
TechnologyOne has upgraded its FY26 profit and recurring revenue growth forecasts, citing strong confidence in AI-enhanced SaaS+ products and a robust customer pipeline across key markets.
- Profit before tax growth guidance raised to 18%-20% for FY26
- Annual recurring revenue growth forecast increased to 16%-18%
- Significant $8-9 million investment in AI product showcase events
- Strong customer pipeline in Australia, New Zealand, and the UK
- Non-executive Director Clifford Rosenberg retires after 7 years
Upgraded Guidance Signals Confidence
TechnologyOne Limited (ASX, TNE), Australia's largest enterprise resource planning (ERP) software provider, has raised its profit before tax (PBT) growth guidance for FY26 to between 18% and 20%, up from the previous 13% to 17% range. Alongside this, the company also upgraded its annual recurring revenue (ARR) growth forecast to 16%-18%. This marks a notable acceleration in growth expectations, driven primarily by the company's evolving SaaS+ platform and new AI-powered product offerings.
AI and SaaS+ as Growth Catalysts
CEO Ed Chung emphasised that the upgraded guidance is grounded in tangible customer demand and a strong sales pipeline across Australia, New Zealand, and the United Kingdom. He described the company’s transition from traditional software to SaaS, and now SaaS+, as a key factor enabling this growth. The introduction of AI-enhanced products, which are set to launch imminently, is expected to turbocharge TechnologyOne’s market position and revenue streams.
Chung also highlighted the company’s strategic investment of $8 to $9 million in AI Showcase events during the first half of FY26, held in Australia, New Zealand, and soon in London. While this investment will temper first-half profit growth to a high single-digit percentage, the company anticipates a strong rebound in the second half to meet the full-year upgraded guidance.
A History of Consistent Delivery
TechnologyOne has a track record of steadily increasing its profit growth ‘heartbeat’ over recent years, moving from a historical 10%-15% range to the current 18%-20% forecast. This disciplined approach to growth, combined with the company’s SaaS+ model, which bundles implementation, support, and upgrades into a single accountable service, positions it well for sustained expansion.
Board Changes Mark a New Chapter
In governance news, Non-executive Director Clifford Rosenberg retired after seven years on the board. His tenure coincided with TechnologyOne’s transformation from an on-premises software provider to a SaaS and SaaS+ leader. Chair Pat O’Sullivan acknowledged Rosenberg’s valuable contributions during this pivotal period, noting the company’s share price growth from $7.44 at his appointment to its current levels.
Looking ahead, TechnologyOne’s upgraded guidance and AI-driven initiatives suggest the company is poised to further consolidate its leadership in the enterprise software space, though investors will be watching closely how these investments translate into sustained profitability.
Bottom Line?
TechnologyOne’s AI-powered SaaS+ strategy is reshaping its growth trajectory, but the market will be watching H2 FY26 closely to confirm the full-year outlook.
Questions in the middle?
- How will TechnologyOne’s AI product launches impact customer acquisition and retention?
- What are the risks if AI investments delay profitability beyond H1 FY26?
- Who will fill the strategic gap left by Clifford Rosenberg’s retirement on the board?
