Australian software-as-a-service (SaaS) company TechnologyOne has reported an 8% increase in after-profit tax to earn nearly AU$63 million for the 2020 financial year when compared to the AU$58.5 million recorded in 2019.
Before tax, however, the company's profit increased by 13% to AU$86 million.
The increase, according to the company, was driven by TechnologyOne's SaaS ERP solution, which added 104 enterprise customers during the year, bringing the total number of "large scale" enterprise customers using the solution to 539.
Of those new deals scored during the year, TechnologyOne detailed that 40 of them were from the local government sector with total contract value worth more than AU$45 million, while another 10 with total contract value of AU$10 million were from the higher education sector.
"Our Global SaaS ERP solution is transforming our customers' business and makes life simple for them. When COVID-19 hit, our solution enabled our SaaS customers to seamlessly shift to remote working," the company stated.
"COVID-19 has reinforced the significant value proposition of our Global SaaS ERP solution which provides mission-critical systems and enables our customers' staff to work on any device, anywhere, any time, seamlessly without interruptions. This has also resonated strongly with the market driving our continuing strong results."
Closing the deal with these additional enterprise customers drove the company's SaaS annual revenue up by 32% to AU$134.6 million. This contributed to the company's total annual recurring revenue hitting AU$222 million for the 2020 financial year, with TechnologyOne highlighting that it expected to exceed AU$500 million "in the coming years".
TechnologyOne also noted that its overall profit was slightly impacted by a one-off increase in legal fees, due to an "unexpected judgement" against TechnologyOne in a civil case, which saw the Federal Court of Australia order TechnologyOne to pay AU$5.2 million to a former employee after it ruled the company acted in contravention of the Fair Work Act 2009.
Since then, the company has engaged with a "very experienced counsel" to appeal the judgement to the Full Federal Court.
"Our notice of appeal alleges 12 errors of law and fact," the company said.
The company also reported that its legacy licence deal was down 34% to AU$14.7 million as planned as it continues to transition customers to SaaS.
"The reason we are aggressively pursuing our SaaS strategy is because of the significant benefits to both our customers and TechnologyOne. We note that the recurring nature of SaaS revenue, means it is a much higher quality revenue compared to legacy licence fee revenue," the company added.
For the 12 months to 30 September 2020, the company revenue total came in 4% higher than last year's at AU$299 million; expenses were up 3% to AU$216.5 million; and R&D investment was AU$68 million.
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