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.
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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.
