TechnologyOne share price races 5% higher on strong FY22 growth

This tech share had a strong year in FY 2022…

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Key points

  • TechnologyOne has released its full year results for FY 2022
  • The enterprise software company deliver strong top and bottom line growth
  • This led to TechnologyOne hitting the top end of its profit before tax guidance

The TechnologyOne Ltd (ASX: TNE) share price is on the move on Tuesday morning following the release of the company's full year results.

At the time of writing, the enterprise software provider's shares are up 5% to $12.95.

TechnologyOne share price higher on strong FY 2022 growth

  • Total revenue up 18% to $369.4 million
  • Total annual recurring revenue (ARR) up 25% to $320.7 million
  • Software-as-a-Service (SaaS) ARR up 43% to $274.2 million
  • Profit before tax up 15% to $112.3 million
  • Profit after tax up 22% to $88.8 million
  • Final dividend of 10.82 cents per share
  • Special dividend of 2 cents per share

What happened in FY 2022?

For the 12 months ended 30 September, TechnologyOne reported an 18% increase in revenue to $369.4 million and a 15% increase in profit before tax to $112.3 million. The latter was at the top end of the company's guidance range.

This was driven by adoption of the TechnologyOne global SaaS ERP solution, which has been exceeding the company's expectations. Management revealed that customer adoption drove SaaS ARR of $274.2 million, up 43% year over year.

TechnologyOne now has over 800 large scale enterprise organisations, with millions of users, leveraging its fourth generation SaaS ERP, CiA, for mission critical activities. This makes TechnologyOne the largest single instance SaaS ERP offering in Australia.

The company also had a lot of success in the UK market, with its ARR almost doubling to $17.5 million.

Management commentary

TechnologyOne's CEO, Ed Chung, appeared to be rightfully very pleased with the result. He commented:

 Our ability to deliver these results is due to TechnologyOne's clear vision, strategy, culture and our significant investment in R&D.

Our strategy is clear – we strive to deliver a compelling customer proposition, providing our customers with any device, any time access from anywhere around the globe, as well as a simple and cost-effective way to run their enterprise.

We also exceeded our ambitious annual recurring revenue (ARR) targets and ended legacy licences. I'm proud to announce that we have successfully completed our strategy ahead of schedule. No other ERP company in the world has successfully made the transition to SaaS without impacting its customers and/or its profit growth.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended TechnologyOne Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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