Yesterday was not a good day for the S&P/ASX 200 Index (ASX: XJO), nor most ASX 200 shares. By the time trading closed, the ASX 200 had fallen by a nasty 1.94%, one of its largest single-day drops in 2025 to date. But that was nothing compared to the carnage that one ASX growth share endured.
That ASX growth share was TechnologyOne Ltd (ASX: TNE). Until this week, TechnologyOne was one of the stock market's most beloved darlings, rising from about $15 a share at the start of last year to the record high of $42.88 it hit back in June.
But yesterday's full-year earnings certainly took some air out of that proverbial balloon.
On the surface, it was difficult to ascertain what wasn't to like about TechnologyOne's FY2025. The company reported 18% growth in revenues to $610 million, a 19% spike in profits before tax to $181.5 million, and a net profit after tax (NPAT) of $137.6 million, up 17%.
Annual recurring revenue shot up 18% to $554.6 million, while the company's free cash flow rocketed 55% to $184.2 million.
But investors were clearly peeved about something, considering this ASX growth share plunged by a horrid 17.2% down to $29.26 a share by the close of trading yesterday afternoon.
To be fair, TechnologyOne is still trading on an eye-watering price-to-earnings (P/E) ratio of 72.3. The expectations for future growth at that kind of valuation are sky-high. And since this stock didn't give investors any growth projections yesterday, many might have felt it was time to take some profits off the table.
What makes this ASX growth share a dividend star?
But let's talk about dividends. As you may have gathered from the headline, TechnologyOne has a stellar dividend track record –don't let this company's sub-1% yield fool you. The 20 cents per share dividend that the company declared yesterday brings its total payout for the year up to 26.60 cents per share. That's a good 130% up from the $7.45 shareholders received over 2016.
But it gets better. This ASX growth stock also announced a special dividend worth another 10 cents per share. Including special dividends, TechnologyOne has increased its payouts by an average of 16% per annum over the past decade.
This ASX growth share is arguably on track to become a dividend heavyweight in the future too. TechnologyOne also informed investors that, starting from its FY2026 payouts, it will be lifting its dividend policy from paying out between 55-65% of before-tax profits as dividends to between 65-75%. As such, investors can probably expect a sizeable dividend hike this time next year. That's assuming TechnologyOne keeps its profits growing, of course.
