ASX tech shares are some of the most exciting to own because of their ability to grow revenue rapidly and also achieve strong profit margins.
Due to their intangible nature, technology companies don't have to pay certain costs that physical product businesses do such as stores, warehouses, shipping and so on.
When a business has an incredibly high profit margin, a lot of the new revenue can instantly translate into gross profit, operating profit (EBITDA) and net profit. That's why the following two ASX tech share investments are so appealing.
Airtasker Ltd (ASX: ART)
Airtasker provides a platform that allows someone who needs a job done to advertise it, and then individuals and businesses (taskers) can offer to do the work.
There is a huge array of services available such as accounting, beauticians, various trades, building and construction services, car service, carpet cleaning, pet care, various types of lessons, florist, removalist, furniture assembly, garden and many more.
The business has a gross profit margin of more than 90%, so revenue growth is extremely profitable for the business. In FY25, Airtasker marketplace revenue grew 18.3% year-over-year, and its Australia marketplaces generated $15.2 million of cash flow after covering global head office expenses.
It's also exciting to see that the company is making progress in the international markets of the UK and US. While these are still small markets for Airtasker, they're growing at a fast pace – in FY25, UK revenue rose 111% and US revenue surged 422%.
Airtasker Australia is expecting to deliver solid double-digit revenue growth in FY26, with an acceleration of the growth trajectory in the US and UK, which bodes well for the ASX tech share.
BetaShares S&P/ASX Australian Technology ETF (ASX: ATEC)
The larger ASX tech shares are mostly trading at high prices, reflecting the market's belief in their growth potential.
It may be tricky to know which one of them to invest in, so why not invest in an exchange-traded fund (ETF) that allows us to invest in them all at once?
The ATEC ETF is invested in a total of 45 names, including Computershare Ltd (ASX: CPU), Xero Ltd (ASX: XRO), Pro Medicus Ltd (ASX: PME), CAR Group Ltd (ASX: CAR), WiseTech Global Ltd (ASX: WTC) and Life360 Inc (ASX: 360).
While all of the businesses are under the umbrella of 'technology', they provide very different services, giving investors diversification.
Past performance is not a guarantee of future performance, but the ATEC ETF has returned an average of 17.25% per year since inception in March 2020. I'm not expecting the next five years to be as strong, but things are looking positive for the fund as the businesses collectively continue growing.
