The TechnologyOne Ltd (ASX: TNE) share price has dropped 13% after reporting its FY25 result.
More than 1,300 corporations, government agencies, local councils and universities use its software. It provides enterprise resource planning (ERP) software to those subscribers, which includes implementation, software and upgrades.
FY25 result
Here are the main highlights from the 12 months to 30 September 2025:
- Revenue increased 18% to $610 million
- Total annual recurring revenue (ARR) grew by 18% to $554.6 million
- Expenses rose 18% to $428.5 million
- R&D spending reached $153.7 million (25% of total revenue)
- Net profit after tax (NPAT) increased 17% to $137.6 million
- Free cashflow grew by 55% to $184.2 million
- Total dividend per share up 63% to $0.366
The company noted that its ARR growth means it’s on track to reach at least $1 billion of ARR by FY30.
TechnologyOne said that its strong UK growth continues, with its UK ARR up 49% over the year. It said that its strategic focus in the UK is now delivering strong results in both its local government and higher education segments, with significant customer wins boosting growth in FY25.
In FY25, it won the London boroughs of Islington London Borough Council and the Council of the Royal Borough of Greenwich from global incumbent competitors.
In Australia, the Central Coast Council (one of the largest in the country) signed an agreement to implement OneCouncil and Property and Rating.
During the financial year it acquired CourseLoop, which it described as a world-leader in curriculum management, which adds to its suite of products in the higher education industry and also provides improved intellectual property (IP).
The business also said that it delivered net revenue retention (NRR) of 115%, meaning it delivered 15% revenue growth from existing clients. This matched the company’s target. The average customer ARR has grown from $100,000 in FY12 to $442,500 in FY25.
Outlook for the TechnologyOne share price
The company is still aiming to double in size every five years, with a long-term target of at least $1 billion ARR by FY30 and a profit before tax margin expansion to at least 35% in the long-term.
TechnologyOne is one of the strongest businesses on the ASX, in my view. I think at this lower price it could be an appealing long-term buy and the net profit could continue growing at a pleasing double-digit pace. It’s one of the ASX growth shares I’m keeping my eye on.
