TechnologyOne (ASX:TNE) share price higher on strong FY 2020 results

The TechnologyOne Ltd (ASX:TNE) share price is pushing higher on Tuesday after beating its guidance in FY 2020…
The post TechnologyOne (ASX:TNE) share price higher on strong FY 2020 results appeared first on Motley Fool Australia. –

rise in asx tech share price represented by digitised rocket shooting out of person's hand

The TechnologyOne Ltd (ASX: TNE) share price is pushing higher this morning following the release of its full year results.

In morning trade, the enterprise software company’s shares are up 1.5% to $9.14.

How did TechnologyOne perform in FY 2020?

In FY 2020, TechnologyOne delivered a 4% increase in total revenue to $299 million. This was driven largely by its software-as-a-service (SaaS) business, which continues to growth strongly.

During the 12 months, the company reported SaaS Annual Recurring Revenue (ARR) of $134.6 million. This was a 32% increase on the prior corresponding period and up 22.1% from $110.2 million in the first half.

This was driven by the addition of 104 enterprise customers to its Global SaaS ERP solution, bringing the total to 539 large scale enterprise customers, with hundreds of thousands of users. Management notes that this makes it the largest single instance SaaS ERP offering in Australia.

On the bottom line, thanks to a combination of its SaaS growth and good cost control, the company’s underlying profit before tax came in at $82.5 million. This was up 13% year on year and compares favourably to its guidance range of 8% to 12% growth for FY 2020.

Also growing was TechnologyOne’s reported cash flows. It generated cash flow of $66.4 million, up 49% year on year. This led to its cash and cash equivalents increasing by 19% to $125.2 million.

In light of its positive performance and strong balance sheet, the TechnologyOne board declared a full year dividend of 12.88 cents per share. This is an increase of 8% year on year.


Management is expecting to see strong continuing growth in SaaS ARR and profit in FY 2021. Though, it stopped short of providing any firm guidance.

It also spoke very positively about its long term growth potential.

It commented: “As our SaaS business continues to grow quickly, the quality of this revenue stream is exceptionally high, given its recurring contractual nature, combined with our very low churn rate of <1%. Today our Total Annual Recurring Revenue (ARR) has hit $222m and is set to exceed $500m in the coming years.”

Management was equally positive on its earnings growth prospects.

“Underlying Profit Before Tax margin increased to 29%, compared to 27% pcp. We see margins continuing to improve to 35%+ in the coming years driven by the significant economies of scale from our single instance multi-tenanted Global SaaS ERP solution. We are on track to double the size of our business once again in the next five years,” it concluded.

Where to invest $1,000 right now

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.

See The 5 Stocks

*Returns as of June 30th

More reading

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post TechnologyOne (ASX:TNE) share price higher on strong FY 2020 results appeared first on Motley Fool Australia.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;

To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.

An active and funded account with a positive trading balance is required to continue to have access to the tools;

Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;

Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!