The company is still aiming for profit before tax growth at the upper end of its 18% to 20% annual range, with annual recurring revenue also expected to hit the top of its 16% to 18% target band. Market reaction was at odds with the operational story, which remains firmly pointed toward double-digit expansion.
Management reported that statutory profit after tax for the first half rose 6% year on year to $668 million, underpinned by strong recurring software income. Annual recurring revenue grew 17% to $598 million, reflecting continued demand for its cloud products.
Total revenue increased 11% to $322.7 million, while free cash flow came in at $20.3 million, a 15% decline compared with the prior year. Shareholders are set to receive an interim dividend of 8 cents per share, which is 21% higher than the previous period.
RBC Capital Markets kept an outperform rating and a $33 price target, indicating that the broker still sees upside from current levels. Its analysis noted that the half-year numbers broadly matched market expectations and would likely have exceeded them without foreign exchange pressure.
Currency movements in the UK, now a larger contributor to group earnings, acted as a headwind to reported results. That drag partly explains why the share price softened despite another record period.
TechnologyOne linked its performance to a complete shift into a software as a service model following the launch of its AI strategy in October. New AI platform suites are expanding the company’s total addressable market, giving it more scope to grow recurring revenue over time.
Additional momentum is coming from deeper penetration in local government, with expanded arrangements across councils such as Townsville, Liverpool and Salisbury adding scale in the public sector. Analysts suggest this combination of AI-driven SaaS and entrenched government relationships positions the business for more resilient long-term growth, even if currency swings and short-term sentiment unsettle the share price.
