Technology One (ASX:TNE): Is This SaaS+ Stock Is Worth Watching After a 17th Consecutive Record Half

Sonal Goyal

17 September 2026 07:34 PM AEST

Technology One (ASX:TNE): Is This SaaS+ Stock Is Worth Watching After a 17th Consecutive Record Half

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Key Highlights

Technology One Limited (ASX:TNE) reported H1 FY26 Profit Before Tax of $89.1 million, up 9% year-on-year, with shares trading at $28.845, down 0.09%, during the Trading session on 17 September 2026.
This marked the company's 17th consecutive first-half record profit, with Annualised Recurring Revenue rising 17% to $598.0 million and Net Revenue Retention of 114%.
The company declared a record Interim Dividend of 8.0 cents per share, up 21% on the prior corresponding period.
Technology One reaffirmed its upgraded full-year FY26 guidance of 18-20% profit growth and 16-18% ARR growth, issued at its February AGM.

Technology One Limited (ASX:TNE) shares traded at $28.845, down 0.09%, during the trading session on 17 September 2026. Australia's largest ERP Software as a Service company recently announced its financial results for the half year ended 31 March 2026, recording its 17th consecutive first-half record profit, record ARR and record revenue, driven by momentum from its SaaS+ strategy and the launch of new AI products.

H1 FY26 Financial Results

Technology One reported Profit Before Tax of $89.1 million for H1 FY26, up 9% on the prior corresponding period, with a PBT Margin of 28%, in line with the prior period. Profit After Tax rose 6% to $66.8 million. Annualised Recurring Revenue reached $598.0 million, up 17%, squarely within the company's full-year guidance range of 16-18%, with Net Revenue Retention of 114%. UK ARR grew 23% to $53.0 million. The company's Rule of 40 result, combining ARR growth and free Cash Flow margin, was 55%.

SaaS and Recurring Revenue rose 13% to $299.2 million, while Total Revenue increased 11% to $322.7 million. Total Expenses rose 12% to $233.6 million. Free Cash Flow declined 15% to $20.3 million, while Cash and Investments rose 16% to $245.5 million. R&D Investment before Capitalisation increased 22% to $84.1 million, representing 26% of total income.

CEO Ed Chung said the first half delivered exactly what the company had committed to at its AGM, with PBT growth reflecting planned profit phasing due to significant investment in the company's Showcase event, where its new AI products were launched. On a constant currency basis and normalising for the Showcase investment, the company said underlying ARR growth was 19%, Net Revenue Retention was 116%, and PBT growth was 21% with a 2-point margin improvement to 30%. Excluding continuing investment in the SaaS+ strategy, profit would have grown a further 2 points to $105 million at a 32% margin.

Dividend Declaration

The Board declared a record interim dividend of 8.0 cents per share, up 21% on the prior corresponding period.

AI Strategy and Reaffirmed Guidance

H1 FY26 saw the launch of Technology One's AI strategy at its Showcase event in October 2025, comprising three components: Plus, Guide and in-product AI. The company said the return on its Showcase investment has been substantial, with double the number of attendees and up to ten times the sales pipeline generated compared with the previous event. Chung described the AI strategy as representing the beginning of the company's fifth generation of ERP, designed to predict, learn, uncover and simplify customer operations rather than simply record and report.

The company reaffirmed its upgraded full-year FY26 guidance, first issued at its February AGM, of 18-20% profit growth and 16-18% ARR growth, targeting the top of both ranges, along with a target PBT margin expansion of 2 points from 30% to 32% and full-year free cash flow generation equal to net profit after tax, representing 100% cash conversion. Chung said this guidance is fully inclusive of all the company's investments, including its AI products, Showcase and SaaS+ strategy, and that the company does not guide up unless it sees consistent evidence in the pipeline.

Key Takeaways

Technology One delivered its 17th consecutive first-half record profit for H1 FY26, with ARR growth landing within its full-year guidance range and profit growth reflecting planned investment phasing tied to the launch of its new AI product suite. The reaffirmation of upgraded full-year guidance for 18-20% profit growth and 16-18% ARR growth, alongside a record interim dividend and continued strategic investment in its SaaS+ transition, points to a company maintaining its long-running pattern of consistent delivery against increasingly ambitious targets.

FAQs

Q: What was Technology One's H1 FY26 Profit Before Tax?

A: PBT rose 9% to $89.1 million, marking the company's 17th consecutive first-half record profit.

Q: How much did Technology One's ARR grow in H1 FY26?

A: Annualised Recurring Revenue grew 17% to $598.0 million, within the company's 16-18% full-year guidance range.

Q: What dividend did Technology One declare for H1 FY26?

A: The company declared a record interim dividend of 8.0 cents per share, up 21% on the prior corresponding period.

Q: What is Technology One's SaaS+ strategy?

A: SaaS+ is the company's strategy building on its transition to 100% SaaS, aiming to deliver ERP implementation in 30 days, now enhanced by newly launched AI products called Plus, Guide and in-product AI.

Q: Did Technology One reaffirm its FY26 guidance?

A: Yes, the company reaffirmed upgraded guidance of 18-20% profit growth and 16-18% ARR growth, first issued at its February AGM.

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