Technology One (TNE) Investor Day 2024 summary

Strategic vision and growth targets

• Committed to doubling in size every five years, targeting AUD 1 billion+ ARR by FY30, accelerated from the previous AUD 500 million ARR goal, now expected in the first half of FY25.

• Growth is driven by seven platforms: existing customer expansion, APAC and UK whitespace, R&D-driven new products, SaaS Plus, acquisitions, new customer logos, and significant UK market opportunity.

• Focuses on six core verticals: local government, education, government, health and community services, asset-intensive industries, and financial services.

• Maintains a Blue Ocean Strategy, emphasizing deep, mission-critical ERP solutions for selected verticals.

• Net revenue retention rate is strong at 115-120%.

SaaS Plus business model and innovation

• SaaS Plus is a game-changing model, bundling SaaS and implementation into a single recurring fee, simplifying ERP adoption and creating long-term revenue and profit tailwinds.

• SaaS Plus lifts ARR by 40%, enables ERP implementation in as little as 30 days, and reduces customer effort by 56% compared to traditional models.

• The model leverages the Power of One, providing end-to-end ownership of product, implementation, and support, resulting in high customer retention (99%+ over 37 years).

• TechnologyOne is the only vendor in its markets to develop, sell, implement, support, and run its fully integrated suite without third-party partners.

• SaaS Plus drives a strategic focus on productivity and long-term revenue and profit tailwinds.

Financial performance and guidance

• Upgraded net profit before tax (PBT) growth guidance from 10-15% to 12-16%, with expectations for continued margin expansion despite SaaS Plus transition.

• ARR growth is targeted at 15% per annum, supporting the five-year doubling objective.

• Medium-term PBT margin target is set at 35%+, up from 30% in FY23, with a focus on balancing R&D investment and profitability.

• FY23 ARR reached $392.9m, up 23% year-on-year; SaaS and continuing business revenue was $426.4m, up 19%.

• R&D investment increased 21% to $112m, representing over 20% of revenue.