Revenue up 13% - SaaS working wonders for Aussie tech giant

TechnologyOne, an Australian enterprise software company, has released its financial results for the half year ending in 31 March 2017.

Licence Fees are up 30% to $24.1 million, and Profit Before Tax (PBT) up 10% to $10.3 million.

With 199 TechnologyOne Cloud customers, the company claims that the Annual Contract Value (ACV) is now at $19.9 million (recurring each year), an increase of over 93% from last year's figure of $10.3 million.

The company claims their TechnologyOne Cloud platform contributed a $937k profit in the half, compared to a $922k loss this time last year. This growth is due to the mass production of Software as a Service (SaaS) architecture.

The company expects full year profit contribution from the TechnologyOne Cloud to be $2.5 million.

Going forward, the company hopes to transition from perpetual licences to subscription licences with the aim of creating a strong longer term annuity business. The company claims that they obtained over 80% of their new business customers on subscription licences.

In addition, research and development represents 21% of revenue for the company. TechnologyOne invested $23.6 million in R-D for the half year, an increase of 9%.

Other financial highlights for half year 2017 for TechnologyOne are:

• Revenue up 13% to $113.9 million (HY16: $101 million)
• Profit Before Tax (PBT) up 10% to $10.3 million (HY16: $9.4 million)
• Total Expenses up 13% to $103.6 million (HY16: $91.5 million)
• R-D up 9% to $23.6 million (HY16: $21.8 million)
• Expenses excluding R-D up 15% to $80 million (HY16: $69.8 million)
• Operating cash flow of $2.6 million (HY16: -$3.3 million)

According to TechnologyOne, other highlights by revenue stream are:

• Initial Licence fees up 30% to $24.1 million
• Annual Licence fees up 10% to $47.9 million
• Total Consulting Services is flat with profit down $4.1 million
• Cloud Services fees up by 93% to $19.9 million (HY16: $10.3 million)