Technology One (TNE) H1 2025 earnings summary

Executive summary

• Achieved record first-half profit, revenue, and ARR for the 16th consecutive period, with ARR surpassing $511.1 million, 18 months ahead of plan, driven by SaaS+ adoption and strong performance in local government, education, and government sectors.

• SaaS+ offering is fueling growth by enabling faster, lower-risk ERP implementations, high customer retention rates above 99%, and rapid adoption in the UK and higher education markets.

• Strategic acquisitions, notably CourseLoop (also referred to as CoreSlip), have broadened the education suite, adding $9.1 million ARR and enhancing market leadership.

• Interim dividend increased 30% to 6.6 cents per share, with a payout ratio of 35%, reflecting strong profit growth and balance sheet.

Financial highlights

• ARR reached $511.1 million, up 21% year-over-year, including $9.1 million from CourseLoop acquisition; total revenue rose 19% to $291.3 million.

• Profit before tax increased 33% to $81.9 million; profit after tax up 31% to $63.0 million.

• SaaS and recurring revenue grew 19% to $265.0 million; free cash flow was $24.0 million, up 100% from the prior year.

• Rule of 40 reached 49%, placing the company in the top quartile globally among SaaS peers.

• Basic earnings per share rose 31% to 19.26 cents.

Outlook and guidance

• FY2025 profit growth guidance raised to 13%-17%, underpinned by strong ARR momentum and margin expansion.

• Long-term target to exceed $1 billion ARR by FY2030, with plans to double in size every 5 years and expand profit before tax margin above 35%.

• Continued investment in R&D and new growth areas such as AI, DXP, App Builder, and UK expansion.