TechnologyOne floats higher on silver-lined 'cloud'

Article as published in Australian Business Acumen

ENTERPRISE software innovator TechnologyOne is reaping the benefits of its ‘cloud first’ approach to meeting the needs of its customers, exceeding expectations when it recently announced strong half-year global licence fee growth and profit results to the market.

Australian Securities Exchange (ASX:TNE) listed TechnologyOne reaffirmed its mantle as  Australia’s largest and most innovative enterprise software company, announcing half-year revenue up 13 percent, profits before tax (PBT) up 10 percent, and research and development (R&D) up nine percent. Excluding the impact of the company’s Evolve customer conference, which gathers staff and clients from all over the world every three years, PBT would have been up 41 percent.

TechnologyOne Cloud Services fees continued to grow strongly in the half, with annual contract value (ACV) now $19.9 million, recurring each year, up from $10.3 million, an increase of more than 93 percent over last year. As at March 31, 2017, there were 199 customers committed to the TechnologyOne Cloud.

“We are on track to achieve ACV of $28 million by financial year end,” a TechnologyOne report highlighted. “We expect this strong momentum to continue in the years to come and this business to generate ACV of $143 million of annual recurring revenue by 2022.”

Adrian Di Marco

Adrian Di Marco

An important goal for TechnologyOne in recent years has been to move away from perpetual licences and to move new business to subscription licences, to create a strong longer term annuity business.

“This half we achieved over 80 percent of all new business being subscription licences,” a TechnologyOne spokesman said.

A major factor in TechnologyOne’s success, from founder and executive chairman Adrian Di Marco’s first day – and increasingly as it operates through offices across six countries – has been its deep focus on R&D.

TechnologyOne continues to invest heavily in R&D, spending $23.6 million for the half year, an increase of 9 percent.  

“R&D represents 21 percent of revenue, outstripping our competitors’ average spend of 12 percent of revenue,” the spokesman said.

TechnologyOne is Australia’s largest enterprise software company and one of Australia's top 200 ASX-listed companies – and a founding and ongoing Industry Partner with Queensland Leaders.

The company participates in only eight key markets: government, local government, financial services, education, health and community services, asset intensive industries, project intensive industries and corporates. Within those markets TechnologyOne develops and supports its preconfigured enterprise solutions which reduce time, cost and risk for customers.

“For 30 years, we have been providing our customers enterprise software that evolves and adapts to new and emerging technologies, allowing them to focus on their business and not technology,” Mr Di Marco said. “Today, our software is available on the TechnologyOne Cloud and across smart mobile devices.”

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