Source : Perth Now news
An Australian software company that serves hundreds of governments, universities and councils has lifted earnings after rolling artificial intelligence into its products.
Technology One, whose local-listed competitors include WiseTech Global and Xero, generated a bottom-line net profit of $66.8 million for the six months ended March, up six per cent on the prior corresponding half.
“The adoption of AI and the feedback we are receiving is surpassing our expectations,” chief executive Ed Chung said on Tuesday.
Technology One’s suite of AI-driven products, which include Plus and Guide, allows users to record and report, as well as predict, learn, and simplify their operations.
“Plus understands every aspect of a customer’s organisation – their people, processes and performance – and it responds in real time,” Mr Chung said.
The technology aligns with its cloud-based enterprise resource planning software products, which are pre-configured or specialised offerings for local councils, universities and government.
Its core offerings include management of financial information, human resources, payroll and student administration. A new product that can scan thousands of invoices was recently added.
Technology One’s share price fell by almost four per cent after the results announcement to $27.55, before extending the decline to around $27.30 in the afternoon.
Companies like Technology One, and their overseas counterparts, whose businesses are built around software as a service, or SaaS, have been under pressure this year.
Investors have been examining their responses to the rise of advanced AI agents, like Claude, which could disrupt their business models by building autonomous, bespoke software – the so-called SaaS apocalypse.
But Technology One has ridden the economic waves over the past 38 years since its start-up and emerged “stronger each time”, Mr Chung argued, noting that AI will accelerate its business model.
“The bear case (the disruption scenario) is not our case,” he told an investor briefing.
“Two years ago, we began investigating agentic AI, and we wanted to see how far we could productise agentic AI for our customers.
“We’re at the very, very beginning of this fifth generation – the AI generation – but we’re at the forefront of this tech in our industry.”
For the first half, Technology One reported several customer wins, including a 10-year deal with Queensland’s James Cook University, and strong growth in the local government sector.
Company-wide annual recurring revenue totalled $598 million, up 17 per cent.
The first-half profit on a pre-tax basis was in line with the company’s guidance at $89.1 million.
RBC Capital Markets analyst Jackson Lee said the result was “solid” overall, but noted it hasn’t had a major win in the London borough council space for some time.
Technology One reaffirmed its guidance for pre-tax profit growth of 18-20 per cent for the full year.
The Brisbane-based company will pay a higher interim dividend of eight cents per share, up 21 per cent.
