Technology One

SaaS powerhouse on ASX

This below media announcement caught my attention¹

Australia’s largest SaaS ERP player TechnologyOne announced it was on track to deliver $500 million Annual Recurring Revenue (ARR) by the first half of 2025, more than a year ahead of schedule, and postmarked an ambitious new goal of $1 billion ARR by 2030 at its inaugural Investor Day at its Brisbane headquarters today.

A billion dollar ARR, globally there are only a handful of companies who do this sort of revenue

What does this company do?

Technology One delivers its software through the cloud using a Software as a Service (SaaS) model. This allows users to access the software on a pay-as-you-go basis. The company began by selling financial software, which remains a key part of its business. It has since expanded into other markets, such as

• Local government

• State and federal government

• Education

• Health and community services

• Financial services

• Corporate sector

Source : Investor presentation

SaaS is a very sticky business model, but what is more impressive about this company is that who is sells these services to?

Source : Investor Presentation

• More than ~50% revenues from government

• ~35% of revenues from Health services and Education

85% of revenues are from sectors who once lock in generally dont have any incentive to change their software providers

Why the company has succeeded in past?

• "The Power of One" philosophy: This philosophy meant that TechnologyOne owned the entire sales and support cycle, from sales to implementation to after-sales service. This gave them greater control over the customer relationship and allowed them to provide a better customer experience.

• Focus on product development: From the beginning, TechnologyOne was focused on developing standardized products that could be used by many different organizations. This allowed them to scale their business and grow rapidly.

• Expansion into new markets: TechnologyOne started out by focusing on financial software, but they quickly expanded into other markets, such as higher education, local government, and health and community services. This diversification helped them to grow their revenue and reduce their reliance on any one market.

• Geographical expansion: TechnologyOne expanded internationally, first into New Zealand and then into other markets, such as Malaysia, Papua New Guinea, and the United Kingdom. This helped them to tap into new markets and grow their customer base.

• Strategic acquisitions: TechnologyOne made a number of strategic acquisitions, such as Proclaim Software, Avand, Icon Strategic Solutions, Digital Mapping Solutions, and Jeff Roorda & Associates. These acquisitions helped them to expand their product portfolio, enter new markets, and acquire new technologies.

• Early adoption of cloud computing: TechnologyOne was an early adopter of cloud computing, and they invested heavily in building their own cloud platform. This gave them a significant advantage as the industry moved to the cloud.

• Strong leadership and management: TechnologyOne has been led by a strong and visionary team, including founder Adrian Di Marco. This team has been able to make the right decisions at the right time, and they have been able to execute on their vision.