Technology One (TNE) H2 2024 earnings summary

Executive summary

• Achieved 15th consecutive year of record profit, with profit before tax up 18% to $152.9m and ARR up 20% to $470.2m, both exceeding guidance, driven by SaaS Plus and strong UK performance.

• SaaS Plus and UK operations were key growth drivers, with UK ARR sales up 70% year-over-year and total UK ARR up 31% to $34.7m.

• Completed the acquisition of CourseLoop for $60m, adding curriculum management to the education suite and $9m ARR growing at 25% per year.

• Maintained a clear strategy focused on vertical markets: local government, education, government, health, and infrastructure.

• R&D investment grew 14% to $128.0m, representing 25% of revenue, supporting ongoing innovation and growth.

Financial highlights

• Profit before tax increased 18% to $152.9m, ahead of 12%-16% guidance; net profit after tax rose 15% to $118.0m.

• SaaS and recurring revenue grew 19% to $466.3m; SaaS fees up 20% to $425.1m.

• Net revenue retention (NRR) reached 117%, above the 115% long-term target; churn below 1.8%.

• Cash and investments increased 25% to $278.7m; net assets up 24% to $379.3m.

• FY24 total dividend of 22.45 cps, up 15% on FY23, with a payout ratio of 62% of EBITDA.

Outlook and guidance

• On track to surpass $500m+ ARR by H1 FY25; new long-term target set at $1b+ ARR by FY30.

• Strong ARR and profit growth expected for FY25, with continued margin improvement from SaaS Plus and economies of scale.

• R&D investment to remain at 20%-25% of revenue, supporting ongoing innovation and growth.

• Plan to double in size every 5 years through organic growth and strategic acquisitions.