S&P/ASX 200 Index (ASX: XJO) shares that can deliver significant earnings growth over the long-term are definitely ones worth buying if the valuation makes sense.
The two companies I'll highlight are both growing significantly overseas, delivering solid revenue growth and improving their profit margins over time. When you put that together, these businesses are very appealing investments.
While they're not as famous as Commonwealth Bank of Australia (ASX: CBA), I think they could deliver significantly more earnings growth over the next few years. Let's get into why they're exciting ASX 200 shares.
Breville Group Ltd (ASX: BRG)
Breville's main source of earnings is selling small kitchen appliances, particularly coffee machines. The company has a number of brands including Breville, Sage, Lelit, Baratza, Beanz and ChefSteps.
The company generates revenue from across the globe, which is a key reason why I believe it still has a lot further to run – the world is a very big market. In FY25, it reported revenue growth of 11.8% in the Americas to $822.2 million, 15.1% growth in Europe, the Middle East and Africa (EMEA) to $374.4 million and Asia Pacific growth of 10.4% to $304 million. It's pleasing to see double-digit revenue growth in percentage terms across the board.
Breville's total revenue grew 10.9% to $1.7 billion, gross profit increased 11.4% to $620.5 million and net profit increased 14.6% to $135.9 million.
FY26 could be a challenging year due to tariffs, but the company is rapidly working on shifting its manufacturing base away from China to help reduce the impact.
I believe markets like South Korea and China could be very promising for the ASX 200 share as coffee culture becomes more prominent there.
Using the earnings estimates from UBS, the Breville share price is valued at 33x FY26's estimated earnings and 18x FY30's estimated earnings. This implies a possible rise of net profit from $135 million in FY26 to $245 million in FY30.
TechnologyOne Ltd (ASX: TNE)
TechnologyOne is a technology company that provides enterprise resource planning (ERP) software to various clients including companies, government agencies, local councils and universities.
Due to the mission-critical nature of the software, the ASX 200 share has a very resilient base of earnings, with a loyal subscriber base, in my view.
TechnologyOne invests heavily in improving its software, providing more value for subscribers and unlocking higher earnings. In the FY25 half-year result it spent $68.8 million on R&D, which was a 21% year-over-year increase.
It's that constant investment that helps fend off competitors and enable the company to meet its net revenue retention (NRR) goal of 115% each year. This means achieving 15% more revenue from its existing client base than last year, which is a strong growth rate and would ensure revenue doubles in five years.
Thanks to the operating leverage of software, expenses don't grow by (as) much even if revenue jumps. TechnologyOne's HY25 result saw total revenue growth of 19% to $291.3 million and net profit after tax (NPAT) growth of 31% to $63 million, demonstrating rising profit margins.
Growth could be driven by geographic expansion. It was a natural jump for the ASX 200 share to grow in the UK and so far it's going well for the ASX 200 share. The HY25 result saw a 50% increase in UK annual recurring revenue (ARR) to $43.1 million. In five years, I think TechnologyOne is likely to be earning significantly more from the UK.
By FY25, it wants to reach $1 billion of total ARR from the HY25 base of $511 million. It also wants to reach a profit before tax margin of at least 35% in the long term.
According to UBS' projections, TechnologyOne's net profit could rise from $139 million in FY25 to $289 million in FY29. This means it's trading at 90x FY25's estimated earnings and 43x FY29's estimated earnings.
