TechnologyOne Ltd (ASX: TNE) shares are rising on Tuesday morning.
At the time of writing, the ASX 200 tech stock is up 3.5% to $17.01.
This follows the release of the enterprise software company's FY 2023 results.
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ASX 200 tech stock higher on strong result
- Total revenue up 19% to $441.4 million
- Total annual recurring revenue (ARR) up 23% to $392.9 million
- Net revenue retention (NRR) of 119%
- Profit before tax up 16% to $129.9 million
- Profit after tax up 16% to $102.9 million
- Final dividend of 11.9 cents per share and special dividend of 3 cents per share
- On track to hit $500 million ARR target in FY 2025
What happened during the 12 months?
For the 12 months ended 30 September, TechnologyOne reported a 19% increase in revenue to $441.4 million. A key driver of this was its SaaS business, which delivered a 23% increase in ARR to $392.9 million.
Management advised that its ARR growth was driven by the significant value proposition of its global SaaS ERP solution for new and existing customers. In respect to the latter, it highlights that existing customers are continuing to expand their use of its solution to streamline their operations. This is evident in its NRR of 119%, which is ahead of target and industry-leading in the ERP market.
On the bottom line, the company reported profit before tax of $129.9 million and profit after tax of $102.9 million. Both were up 16% year on year and ahead of its guidance range of 10% to 15% growth.
Outlook
TechnologyOne now expects to achieve its FY 2026 $500 million target a year ahead of schedule in FY 2025.
Looking further ahead, the ASX 200 tech stock's CEO, Ed Chung, spoke positively about its outlook and investment in research and development (R&D). He said:
With strong results and a confidence in our sales pipeline, we made additional investments in all our pillars for growth to enable us to continue to double in size every five years beyond $500 million ARR. In R&D we increased investment by 21% to accelerate the development of our ground-breaking Digital Experience Platform (DxP) and our transformative AppBuilder product, the latter resonated so strongly with our customers that we are speeding up delivery to release faster than our original targets.
TechnologyOne shares are up 35% over the last 12 months.
