Australia | May 29 2026
This story features TECHNOLOGY ONE LIMITED.
For more info SHARE ANALYSIS: TNE
The company is included in ASX100, ASX200, ASX300, ALL-ORDS and ALL-TECH
SaaS company TechnologyOne posted a slight revenue miss in its first half, but brokers shrug this off, focussing on the company’s AI software.
- TechnologyOne's interim slightly missed on revenue
- Record annual recurring revenue in the half
- Customer wins in government and education
- Nothing but praise and applause from analysts
By Greg Peel
TechnologyOne ((TNE)) is Australia’s largest enterprise Software as a Service (SaaS) company with offices across six countries, but the lion share of its revenues and profits are generated in Australia.
Enterprise software integrates processes such as finance, human resources, supply chain management, customer relationship management, analytics, and communication into a unified system, enabling organisations to operate efficiently and make data-driven decisions
TechnologyOne’s global SaaS solution provides a deep functionality for governments, education, health and community services, asset intensive industries, and financial services.
The company’s first half FY26 (September year-end) result was broadly consistent with consensus forecasts and guidance, albeit the group called out FX headwinds which weighed on an otherwise solid set of numbers.
A revenue increase of 11.5% year on year was around -3% below consensus while 12% earnings growth was in line.
Annual recurring revenue (ARR) of $598m was up 17% year on year, representing $43.4m of incremental ARR growth half on half. Management noted its underlying ARR growth during the half represented a record in constant currency terms, with FX causing a -2% headwind.
UK ARR grew 23% to $53.0m (9% of total ARR). UK new sales ARR was flat year on year at $4.1m, which Morgans understands was due to the timing of a large education customer win, which landed in early April.
The Good
Customer momentum was strongest in TechnologyOne’s core verticals, Morgan Stanley notes, reinforcing the depth and defensibility of the company’s sector-leading enterprise resource planning (ERP) model.
Local government ARR grew 27%, underpinned by Australian council wins at Cardinia, Liverpool, Salisbury and Ryde, while education ARR grew 15%, supported by a landmark ten-year, full-suite agreement with James Cook University in Australia on top of UK wins at University of Suffolk and Royal Holloway.
The standout commercial proof point, Morgans Stanley suggests, was City of Townsville, which returned after previously moving to a competitor, signing a new ten-year SaaS Plus agreement at a higher contract value than its prior deal.
Morgan Stanley views this as strong evidence that SaaS Plus is improving win rates and expanding contract value.
Saas Plus is the company’s agentic AI ERP platform.
The Less Than Good
TechnologyOne’s headline operating metrics were largely in line with consensus but this was not enough to impress the market, RBC Capital notes, which overlooked an even stronger underlying print and instead focused on a range of shortcomings.
The share price initially fell -5% on the result release.
Those shortcomings, RBC suggests, were no large win across London boroughs or the Australian federal government, a lack of detail on SaaS Plus customers/ARR, an optically slower UK growth rate (23% year on year versus 49% in FY25), and a revenue miss.
RBC doesn’t think any of the shortcomings are necessarily deal-breakers, and with guidance reaffirmed despite FX headwinds, believes the first half underlying performance was strong, providing a set-up for success across the second half and FY27.
It is understandable if the market was expecting a little bit more, RBC believes, as TechnologyOne has been “relatively unscathed” by the tech sell-off and now trades at a premium versus peers.
To put “relatively unscathed” into context, around last October, Wall Street, and markets across the globe, suddenly panicked, fearing the rapid development of AI would render SaaS companies redundant. By February, TechnologyOne shares had fallen -50%.
Many other SaaS companies lost a lot more value, and TechnologyOne has since recovered around half that loss as management upgraded guidance for FY26 and repeated its targets and confidence for the year(s) ahead.
Bell Potter’s analysts consider TechnologyOne the best positioned tech stock on the ASX to benefit from, rather than be disrupted by, AI.
Positive Views
Morgans believes TechnologyOne is a high quality achiever with impressive financial stature and a long-term track record of execution.
The company has consistently delivered market leading ARR and net revenue retention rates, which has seen it deliver around a 15% long term compound annual earnings growth rate.
Through SaaS Plus and Ai implementation across its ERP software, this growth trajectory is now tracking towards 15%-20% over the medium-term, which Morgans sees as an attractive proposition.
On the pullback in TechnologyOne’s share price following the result release, Morgans upgraded to Accumulate from Hold, lifting its target to $32.30 from $31.20.
There is perhaps a lack of short-term catalysts for the stock, but Bell Potter believes the stock should continue to perform well given the view, as noted, that TechnologyOne is the best positioned tech stock on the ASX to benefit from rather than be disrupted by AI.
Bell Potter also sees very little if any downside risk to current guidance given the high level of SaaS and recurring revenue (circa 93% of total revenue in the first half), good visibility and a strong pipeline. Bell Potter retains Buy and a $32.25 target.
Morgan Stanley suggests customer wins across local government and education provide tangible evidence that SaaS Plus is strengthening TechnologyOne’s competitive position, supporting larger, longer-duration and stickier contracts.
For Morgan Stanley, the Townsville “win-back” is the clearest proof point, hence Overweight retained with a $32.00 target.
The stock may no longer be cheap relative to peers, but RBC Capital thinks TechnologyOne’s AI resilience, the visibility into second half acceleration, and the long runway to $1bn-plus ARR by FY30, justify the premium.
RBC retains its $33.00 target and Outperform rating.
In Jarden’s view, TechnologyOne has the potential to accelerate profit growth from its guided 18%-20% rate in FY26 to circa 30% in FY27. Jarden lifts its target to $31.00 from $30.00 and upgrades to Overweight from Neutral.
In the aftermath of the interim result release, the share price has quickly rallied back above $30, no doubt assisted by the positive assessments by the brokers mentioned.
In recent days, with a sagging market overall, the share price has fallen closer to $29.
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