​TechnologyOne posts 200 percent cloud growth for FY15

TechnologyOne has recorded its 12th consecutive year of record revenue and licence fees, reflective of the company's continued investments and the uptake of its cloud offerings in Australia.
Written by Aimee Chanthadavong, Contributor

Enterprise software company TechnologyOne has recorded its 12th consecutive year of record revenue and licence fees during the 2015 financial year, which it attributed to continued investments and the uptake of its cloud offerings.

The company reported that net profit after tax (NPAT) exceeded initial market guidance of between 10 and 15 percent. Instead for the full financial year, TechnologyOne reported NPAT increased by 16 percent on the prior full year period to AU$46.5 million. Meanwhile, total revenue for the full year was up 12 percent to AU$218 million.

The company attributed its record revenue to the 17 percent increase in initial licence fees for the year, which reached AU$49.3 million. It said the increase was supported by strong growth in its cloud business that jumped by more than 200 percent to AU$4.1 million.

During the year, the company boasted it added more than 50 new enterprise customers, including 49 enterprises for its Software-as-a-Service offering. TechnologyOne said that of the total new customers, 18 of them were for the replacement of the company's competitors' systems such as Oracle, SAP, Microsoft, and Infor.

Brisbane Council, Wellington City Council, Australian Bureau of Statistics, Department of Treasury, TAFE Queensland, and Mercy Health were among some of the new SaaS customers.

Adrian Di Marco, TechnologyOne executive chairman, said the addition of new customers highlights the market's recognition of the cloud.

"We are part of an elite group of companies globally delivering true enterprise software as a service, making our software the premier enterprise cloud offering in Australia and New Zealand. We are also the only enterprise provider offering a fully configurable solution, with a mass production line of servers running our software for our customers.

"Our cloud business is growing rapidly. The major uptake of cloud by new and existing customers has seen us double our cloud annual contract value, and we will continue to double this every year moving forward," he said.

At the same time, the company reported R&D continued to be a significant investment area where it represented 19 percent of total revenue at AU$41 million for the full year. The company said this exceeded the market average of approximately 12 percent. As a result of the R&D investment, total expenses were up 12 percent for the full year. Specific areas in which the company invested into were across the company's Ci Enterprise Suite, Ci Anywhere, and TechnologyOne Cloud.

Despite this, TechnologyOne Cloud made a loss of AU$2.5 million. However, the company assured the loss will reduce to AU$1 million next year, as the company expects to increase its cloud customer base as it progressively migrates customers to its Cloud 5.0 architecture.

R&D continued across the company, Di Marco said, noting that it is part of the company's future focus to deliver a cloud first, mobile first strategy with Ci Anywhere and TechnologyOne Cloud.

"When combined with our innovation, creativity, and substantial ongoing investment in new and emerging technologies such as cloud computing and smart mobile devices, we are all well-positioned for continuing strong growth in coming years," he said.

Another key area of investment the company made during the year was expanding its United Kingdom business, which made a loss of AU$400,000. The company highlighted it expects to execute the next part of its UK expansion next year, which will help increase numbers to more than 40 customers.

Additionally, the company reported its consulting business saw 11 percent growth during the full year. However, profit was down 3 percent, which Technology One said was due to "significant efforts required to ramp up large projects this year".

The company's Application Managed Services continued to grow strongly as it contributed revenues of AU$4.4 million, an increase of 162 percent over the last year. TechnologyOne said it expects this momentum will continue next year.

Di Marco previously told ZDNet the future growth will rely on doing the same thing over again, but better. He expects that this will help deliver a 15 percent to 20 percent growth rate annually for a "long, long time".

Earlier this year, the company bought Icon for AU$10 million to enhance its local government offering.

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