TechnologyOne pins AU$17.9m net profit on record SaaS fees

The company's annual contract value for its SaaS business increased 45% to AU$85.8 million

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Software-as-a-service (SaaS) company TechnologyOne has reported after-tax profit of AU$17.9 million for the half year ended 31 March, more than doubling the AU$8.2 million after-tax profit it made a year prior, attributing the gains to record SaaS fees.

Revenue for the half-year also went up to AU$129.3 million, a slight jump from the AU$123.6 million recorded in the same period last year. This comprised of AU$37.5 million in SaaS fees, AU$61.8 million in licence fees, and AU$29 million in consulting fees.

The company's annual contract value for its SaaS business is AU$85.8 million, which is a 45% increase. One of those contracts is a five-year deal, signed in July last year, to a implement Human Resources and Payroll (HRP) SaaS solution across three New Zealand government agencies.

According to TechnologyOne's H1 2019 results presentation, the company currently has 389 enterprise customers, which is a 39% increase from the 280 customers it had in the previous corresponding period.

See: Top cloud providers 2019: AWS, Microsoft Azure, Google Cloud; IBM makes hybrid move; Salesforce dominates SaaS

"Our SaaS offering is delivering a compelling value proposition for our customers providing them 'any device, anytime access from anywhere around the globe', defence-in-depth security as well as a simple and cost-effective way to run their enterprise," CEO Edward Chung said.

"This allows our customers to innovate and meet the challenges ahead with greater agility and speed, without having to worry about underlying technologies. We take care of everything for our customers, making life simple for them."

Variable costs increased slightly to AU$18.4 million, while its total operating costs for the half year decreased by AU$8.6 million to AU$86.4 million.

Employee wages and benefits were the primary operating costs of TechnologyOne, amounting to AU$59.1 million.

Research and development continues to be a significant investment for TechnologyOne at AU$27.8 million for the half year, up 7% year on year.

TechnologyOne's UK arm continues to report a net loss, but its losses have reduced from AU$3.2 million to AU$900,000 year on year. In FY18, the company's UK segment had reported a AU$4.1 million loss, which was a jump from the AU$1 million loss it reported in FY17.

"We will continue to grow quickly, and like we have in the past 32 years, we expect to double in size again in the next 5 years," Chung said.

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