TechnologyOne has delivered its 17th consecutive first-half record profit, signaling consistent momentum in its transformation from traditional ERP software provider to a SaaS and AI-driven business. The company reported profit before tax of $89.1 million, up 9 percent, alongside record revenues of $322.7 million, up 11 percent, and annual recurring revenue of $598.0 million, up 17 percent. These results underscore the durability of the company’s shift toward SaaS-based delivery, particularly through its SaaS+ platform, which promises faster implementation and stronger customer retention.
The quality of growth is reflected in the company’s net revenue retention rate of 114 percent, meaning existing customers are expanding spending faster than the company loses customers to attrition. SaaS and recurring revenue reached $299.2 million, up 13 percent and now representing nearly 93 percent of total revenue. This concentration in recurring revenue provides the visibility and stability that traditional software licensing cannot offer, a fundamental advantage for demonstrating predictable, growing cash generation to investors.
Profitability expansion alongside heavy reinvestment distinguishes these results. Profit after tax rose 6 percent to $66.8 million despite R&D spending that jumped 22 percent to $84.1 million, now representing 26 percent of total income. The company still managed to increase its interim dividend by 21 percent to 8.0 cents per share, signaling management confidence in the business model and execution capability.
TechnologyOne reaffirmed upgraded full year FY26 guidance of 18 to 20 percent profit before tax growth and 16 to 18 percent ARR growth, targeting the upper end of both ranges. Management expects profit before tax margin expansion of 2 percentage points to reach 32 percent, alongside free cash flow generation equal to net profit after tax, representing 100 percent cash conversion. These targets encompass significant investments in AI product development and the company’s strategic UK expansion, where ARR grew 23 percent to $53.0 million.
The company’s Rule of 40 score of 55 percent places it among high-performing software companies, reflecting both growth and profitability execution. The combination of 17 consecutive record half-year profit, reaffirmed elevated guidance, and strong cash generation positions TechnologyOne as a consistently executing business navigating industry transformation.
Investors should monitor the company’s ability to achieve the upper end of its FY26 guidance, the margin expansion trajectory toward 32 percent, and customer adoption rates for AI products, which management indicates are exceeding expectations. UK market expansion and execution of the SaaS+ platform migration strategy warrant close attention. This announcement is price sensitive and has been flagged as material by the ASX.
View the full ASX announcement (PDF)
About Technology One Limited (ASX: TNE)
Technology One is a major Australian software company that develops, markets, and sells integrated enterprise resource planning software solutions. The company primarily serves government, education, and healthcare organizations across Australia, New Zealand, and the United Kingdom. With annual customer retention rates exceeding 99%, it is one of the largest publicly listed software companies in Australia.
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