TechnologyOne (ASX:TNE) has flagged a "major milestone" as its cloud business brings in $2.5 million profit for the year to September, a significant change compared to the previous year $2.2 million loss.
The latest figures were outlined in the Brisbane-based software vendor's 2017 results for the financial year ended 30 September, published on 21 November.
TechnologyOne said it added 112 new customers to its cloud business in the reporting year, and now claims more than 270 enterprise customers on its cloud platform.
Edward Chung, TechOne’s CEO, said that the vendor’s cloud and mobile first strategies is driving its “continuing strong” results.
“Our cloud business continues to grow very fast with cloud annual contract value (ACV) up 69 per cent to $27 million,” Chung said. “Our target is to once again grow this business strongly with cloud ACV to reach $42 million in the next 12 months, an increase of 55 per cent.”
According to Chung, the company is on track to reach $143 million of cloud ACV 2022.
TechnologyOne's total revenue for the year was $273.2 million, a 10 per cent growth compared to the previous reporting year when the software vendor posted $249 million. Net profit after tax (NPAT) was up eight per cent, posting $44.5 million.
Founder and chairman, Adrian Di Marco, took aim at Workday, a California-based financial management and human capital management software vendor, as he talked up his company's end-to-end prowess.
“Unlike companies such as Workday, TechnologyOne is providing a full end-to-end enterprise system as a service, and our customers' data is safe, in their own database – it is not all mashed together in a multi-tenanted data store that relies on security to keep their data safe and that throws away all the advantages of a relational database that we have come to rely on,” the former CEO said.
The company closed 10 new major contracts translating into $40 million contract revenue across Queensland, New South Wales, Victoria, South Australia and Western Australia.
“TechnologyOne had a 90 plus per cent win rate. TechnologyOne secured 240 new deals across Australia, New Zealand and the UK in FY17 in local government,” Chung said.
“We have more than 300 council customers and are continuing to grow fast. We continue to deliver exceptional projects at breakneck speed with several recent SaaS go lives being implemented in less than 12 weeks.”
In early October, the company updated its expected full year results. The company had previously published expectations of up to 15 per cent growth bringing it down to between seven and nine per cent.
“This is because of the slower than anticipated return to profitability of our consulting business. The underlying profit growth excluding significant events is expected to be approximately 20 per cent,” Chung said at the time.
The Australian Securities Exchange (ASX)-listed vendor posted a loss in its consulting business of $314,000, or down by $4.1 million compared to the same period in the previous year.
The vendor expected things to improve over the course of the year forecasting as much as $8.2 million in consulting profit for the full year. However, based on preliminary results, TechnologyOne announced consulting profit to be $5.4 million.
In fact, the company's consulting profit was $5.3 million, down 46 per cent.