‘We’ve finally made it’: TechOne CEO lauds growth

Edward Chung says a decade-long journey has paid off for TechnologyOne, as its founder prepares to depart.

Ten years of hard work has paid off according to TechnologyOne chief executive Edward Chung, with his company lifting its revenue by 19 per cent and profits by 18 per cent as it completes a years-long shift to a subscription-based business model, and as its founder prepares to depart.

TechnologyOne its half-year results on Tuesday reported a net profit for the six months through March of $33.2m, compared with $28.2 million a year earlier, while revenue climbed 19 per cent to $172m.

The Brisbane-based company, which services schools, hospitals and government agencies with resource planning software, said annual recurring revenue jumped by 44 per cent on-year to $225.1m, a number that it expects to rise by more than 40 per cent over the whole of fiscal 2022. It said 97 per cent of its customers are now using the company’s cloud-based subscription model.

It raised its interim dividend to 4.2 cents per share, up from 3.82 cents a year earlier.

Shares in the company, which is listed on the ASX, dipped slightly to $10.27 per share, down 1.34 per cent at 2.30pm AEST.

“It’s one of those moments, all our hard work over the past 10 years is paying off,” Mr Chung said. ”We have transitioned from an on-premise business to a SaaS (software-as-a-service) business without skipping a beat, without stuffing our customers up, without stuffing the market up, we have had consistent 10 to 15 per cent profit growth and now we’re here.

“There’s a lot of hard work still to get to $500m annual recurring revenue but to be honest it’s locked and loaded with our customers, and we can see a clear path to that now.

“We can finally say we made it.”

Despite completing a long road to providing cloud-based software for its customers, Mr Chung said TechnologyOne would still be able to continue its strong growth trajectory in the years to come.

“Customers intend to come with us on a long-term journey,” he said.

“They might buy one product, then two, then three, and while SaaS is driving growth, it’s just a point in time.

“Existing customer are continuing to buy more stuff from us but we are winning new logos in Australia and the UK, and maybe in the US in future years, we’re starting to make some investments there now.”

TechnologyOne founder Adrian Di Marco, who currently serves as executive chairman, is stepping down next month and Mr Chung described the transition as ‘happy and sad’. Mr Di Marco is leaving TechnologyOne to spend more time with his family and investing in technology start-ups.

“It‘s one of those moments that is both happy and sad. You know, happy for him, and sad to see him go,” Mr Chung said.

Adrian Di Marco, former CEO of TechnologyOne. Lyndon Mechielsen/The Australian

“We‘ve probably got the best succession planning of any company on the planet. So you can see that over five years ago, Adrian must have had this in his mind. I became the CEO, and the exec team has evolved and grown over that time. They’re the probably the strongest, most cohesive exec team that I’ve seen and while Adrian has been our key visionary and the architect of our culture, it’s been very well planned and we’re feeling good in terms of it’s been handed over in such a carefully and considered way.

“The team is primed, prepped, capable and ready to take the company forward and continue growing it and doubling in size every five years.”

Additional reporting: Dow Jones