Stock Spotlight: Technology One Ltd (ASX:TNE)

About Technology One Ltd

Technology One Limited engages in the development, marketing, sale, implementation, and support of integrated enterprise business software solutions in Australia and internationally. It operates through Software and Consulting segments. The company offers various business software solutions, including business analytics, app builder, corporate performance management, curriculum, DxP local government, DxP Student, DxP Essentials, enterprise asset management, enterprise budgeting, enterprise cash receipting, enterprise content management, financials, human resources and payroll, performance planning, property and rating, spatial, student management, timetabling and scheduling, and supply chain management. It serves local government, education, government, health and community services, asset and project intensive, and financial services and corporate organizations. Technology One Limited was incorporated in 1983 and is headquartered in Fortitude Valley, Australia.

Source: EODHD

Key Stats

Source: EODHD. Data as of 19/06/26.

Growth Potential

• Our valuation work across DCF, PE-multiple and EV/EBITDA suggests TNE is trading on fairly full multiples.
• Management reaffirmed upgraded FY26 guidance of 16-18% ARR growth and 18-20% PBT growth.
• Long-term growth – TNE aims to reach $1bn+ in ARR by FY30, driven by SaaS+ adoption, UK expansion, and AI innovation.
• TNE has successfully transitioned 100% of its solutions to the single-fee SaaS+ model. This initiative has removed long, risky implementations and driven recurring revenue up to a massive 93% of total income.
• The launch of the "Plus" AI agent is acting as a "Trojan horse" for upsells, with early customer usage exceeding internal models by over 10x (such as with James Cook University).
• Potentially defensive characteristics given TNE’s core customers are non-cyclical public sector organizations.
  

Key Risks

• Valuation risk given the company trades on high multiples.
• Execution risk with expanding overseas.
• Customer concentration risk – leveraged to the Australian and New Zealand public sector (potential risk from pressures on public budget spending).
• Intensifying competitive pressures.
• AI disruption risk – potentially reducing barriers for competitors to enter the market and put pressure on pricing.
• Execution Risk on Unproven AI Commercial Models.
• Cyber security / data breach risk.