TechnologyOne has upgraded its FY26 profit before tax (PBT) growth guidance to 18% to 20%, a material lift from the prior range of 13% to 17%, citing confidence driven by customer pipeline visibility across Australia, New Zealand, and the UK. The TechnologyOne AI Guidance Upgrade (ASX: TNE) announcement, made at the company’s Annual General Meeting on 18 February 2026, also guides Annual Recurring Revenue (ARR) growth of 16% to 18%. Management stated it is targeting the top end of both guidance ranges.
TechnologyOne lifts profit guidance as AI-powered products fuel pipeline growth
The upgraded guidance represents a five-percentage-point increase to the bottom of the PBT growth range, reflecting what CEO Ed Chung described as “confidence in our customer pipeline,” rather than optimism. The upgrade is underpinned by three factors: the momentum of the company’s SaaS+ business model, customer response to Plus products, and upcoming AI product launches.
TechnologyOne guided ARR growth of 16% to 18% for FY26, with management targeting the top end of this range alongside the PBT guidance. The company’s track record of delivering at the upper end of guidance ranges supports the credibility of these targets, according to management commentary.
The TechnologyOne AI Guidance Upgrade (ASX: TNE) follows a period of strategic investment in AI Showcase events held across Australia and New Zealand, with a London event scheduled for the week following the announcement. These events are positioned as commercially focused product launches, not general marketing activities.
What is SaaS+ and why is it driving TechnologyOne’s growth?
TechnologyOne describes itself as “the world’s first SaaS+ company.” The SaaS+ model is a Solution as a Service offering that includes implementation, support, and ongoing upgrades, with TechnologyOne taking full accountability for outcomes rather than simply providing software licences.
This model differentiates the company from traditional enterprise resource planning (ERP) software providers by embedding services directly into the recurring revenue stream. For investors, the SaaS+ structure creates more predictable revenue visibility and stickier customer relationships compared to perpetual licensing models, which can support higher valuation multiples and reduce earnings volatility.
The company’s ability to consistently raise guidance ranges over consecutive financial years suggests the SaaS+ model is delivering operating leverage as the customer base scales. Management attributed the upgraded FY26 guidance directly to the momentum of this model, combined with customer response to Plus products and AI-enhanced offerings.
The rhythm shift: from 10-15% to 18-20% PBT growth
CEO Ed Chung framed the guidance upgrade using the company’s internal language of “heartbeats and rhythms.” According to Chung, TechnologyOne’s long-term PBT growth rhythm was 10% to 15%, a range the company maintained through disciplined execution. The transition to a SaaS and subsequently SaaS+ business model has enabled systematic expansion of this range.
The table below shows the progression of TechnologyOne’s PBT growth guidance ranges across recent financial years:
| Financial Year | PBT Growth Guidance Range | Guidance Evolution |
|---|---|---|
| Prior baseline | 10% to 15% | Long-term heartbeat |
| FY24 | 12% to 16% | First lift |
| FY25 | 13% to 17% | Continued expansion |
| FY26 | 18% to 20% | Current upgrade |
The systematic raising of guidance floors demonstrates management’s growing confidence in the scalability of the SaaS+ model and the operating leverage inherent in recurring revenue businesses. Chung noted the company’s “strong track record” of achieving the top of guidance ranges, which provides a performance benchmark for investors assessing execution risk.
H1 FY26 phasing: strategic AI investment front-loaded
Management provided explicit guidance on first-half phasing to set investor expectations. TechnologyOne invested $8 million to $9 million in AI Showcase product launches during H1 FY26, which will result in first-half PBT growth of high single digit percentage. This investment is tied to specific commercial opportunities rather than general research and development spending.
The H2 FY26 period is expected to deliver strong PBT growth, enabling the company to achieve the upgraded full-year guidance of 18% to 20% PBT growth. This phasing reflects a deliberate strategic choice to front-load investment in AI product launches, with the commercial return weighted to the second half.
Ed Chung, CEO
“There is a phasing point I want to be clear about. We have strategically invested in our AI Showcase product launches in the first half of FY26, held in Australia and New Zealand and next week in London. These are significant events held against a clear commercial opportunity. In the order of $8 million to $9 million has been invested in these events which will result in first-half PBT growth coming in at high single digit percentage growth. H2 FY26 PBT will be strong, delivering the full-year step-up consistent with upgraded guidance of 18% to 20% PBT growth.”
Investors should not extrapolate H1 results to the full year, as the phasing is explicitly non-linear. The transparency around this phasing provides a framework for interpreting interim results when they are released.
Geographic pipeline strength underpins confidence
The guidance upgrade is supported by customer pipeline visibility across three geographies: Australia, New Zealand, and the UK. The AI Showcase events completed in Australia and New Zealand, along with the upcoming London event, are positioned as catalysts for pipeline conversion.
Management identified three drivers of growth confidence:
- Momentum of the SaaS+ model
- Customer response to Plus products
- Upcoming AI product launches
The geographic diversification reduces concentration risk, while the UK expansion represents a large addressable market for TechnologyOne’s sector-specific solutions. The company serves over 1,300 corporations, government agencies, local councils, and universities.
Board transition: Clifford Rosenberg retirement
Non-executive Director Clifford Rosenberg will retire at the conclusion of the Annual General Meeting after 7 years of service, having been appointed in February 2019. Chair Pat O’Sullivan noted that Rosenberg’s tenure spanned a period of significant business model transformation, from an on-premises software business to a SaaS and subsequently SaaS+ company.
The share price was $7.44 when Rosenberg was appointed in February 2019, providing a measure of value creation during his tenure. The board transition is routine and framed by management as a celebration of service during a successful transformation period, rather than a governance concern.
What this means for TechnologyOne investors
The TechnologyOne AI Guidance Upgrade (ASX: TNE) provides a clear framework for assessing execution over the coming reporting periods. The combination of upgraded earnings growth, recurring revenue visibility through the SaaS+ model, and AI optionality creates a multi-layered investment case.
Management’s track record of delivering at the top of guidance ranges, combined with the systematic expansion of PBT growth ranges over consecutive years, supports the credibility of the upgraded targets. The explicit H1/H2 phasing guidance reduces the risk of negative interim result surprises.
The pipeline visibility across three geographies, combined with commercial AI product launches, positions the company to convert confidence into reported results.
Ed Chung, CEO
“We don’t guide up unless we can see it in the numbers.”
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