The TechnologyOne Ltd (ASX: TNE) share price is under the spotlight after the ASX tech share announced its FY26 half-year result.
TechnologyOne provides enterprise resource planning (ERP) software to businesses, government agencies, local councils and universities.
TechnologyOne HY26 result
Here are some of the highlights from the six months to 31 March 2026:
- Total revenue grew 11% to $322.7 million
- Annual recurring revenue (ARR) up 17% to $598 million
- Total expenses rose 12% to $233.6 million
- Profit before tax up 9% to $89.1 million
- Net profit after tax (NPAT) rose 6% to $66.8 million
- Free cashflow down 15% to $20.3 million
- Interim dividend per share up 21% to $0.08
What happened during the period?
The company reported a number of positives on the revenue side of things.
For example, UK ARR – an important growth area for the business – rose by 23% to $53 million. TechnologyOne noted that its growth in the UK means foreign exchange changes can have a greater impact on the statutory result, which happened in this report due to the strengthening of the Australian dollar against the UK pound.
Also, net revenue retention (NRR) – how much revenue its existing client base is paying this year compared to last year – was 114%, a solid level of growth.
It also said that it invested heavily in showcase events during the first half.
The ASX tech share said that on an underlying basis (excluding forex effects and showcase investment), ARR grew 19%, NRR was 116% and profit before tax rose 21%.
It’s expecting that the UK local government sector could deliver accelerated growth in future years because smaller councils to form “larger, economically viable councils”.
Outlook for the TechnologyOne share price
The business is aiming for at least $1 billion of ARR by FY30, supported by its new AI strategy and ongoing development investing in new products and modules.
TechnologyOne noted that customers continue to adopt products and modules faster than they had historically as on-premise customers, while the AI strategy is further driving increased adoption.
I think it’s a good sign that the City of Townsville decided to come back to TechnologyOne after realising a competitor could not provide what was needed, so has signed a new 10-year agreement which represented increased value compared to the previous agreement.
In the long-term, the business is expecting its profit before tax margin to increased to at least 35% in the long-term.
In FY26, it’s targeting profit growth of between 18% to 20%, with ARR growth of between 16% to 18%.
Overall, I think this business has a very promising future, which is why I’m a shareholder. It’s one of the leading ASX growth shares from the tech sector, in my view.
In the last few months, I thought it looked very good value, though it has bounced significantly off those lows. I still have a very positive view of its long-term profit growth potential, though it’ll be important to monitor its ARR growth rate and see it’s not being significantly challenged by existing (or new) competitors.
