TNE Technology 1
04/07/26
ASX TNE (Technology One) is an Australian enterprise software company that develops, sells, and supports cloud-based Enterprise Resource Planning (ERP) software. It provides integrated business solutions for finance, HR, payroll, and asset management, primarily serving local governments, universities, healthcare organizations, and financial services in Australia, New Zealand, and the UK. [1, 2, 3, 4]
Their software-as-a-service (SaaS) model provides tools designed to automate and manage mission-critical operations for these specific industries. You can find out more about their enterprise platforms by visiting the TechnologyOne investor center. [1]
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Over the last 5 years, ASX:TNE (TechnologyOne) has achieved consistent double-digit compound annual growth (CAGR) in both revenue and profit, successfully transitioning to a highly profitable SaaS model. It maintains a completely debt-free, net-cash balance sheet, though its Return on Equity (ROE) has compressed slightly over the period. [1, 2, 3, 4]
A breakdown of its 5-year financial performance shows the following:
- Profit & Revenue: The company has delivered consecutive record profits and consistent ~15% to 18% annual growth. Annual Recurring Revenue (ARR) and Earnings Per Share (EPS) have seen strong double-digit growth year-over-year. [1, 2, 3]
- Debt & Liquidity: TNE operates with zero long-term debt. Its balance sheet is extremely robust, ending its recent half-year period with robust cash and investments. [1]
- Return on Equity (ROE): While exceptionally high, TNE’s ROE has trended down over the last 5 fiscal years, compressing from a peak of 43.7% in 2021 to around 33.2% to 33.5%. Despite this compression, it remains well above the industry average. [1]
Charts
buy at the $25 or $20 levels if it ever gets here.
Dividends are only partly franked, so would be better to buy in super
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The 10-year historical Price-to-Earnings (P/E) ratio for TechnologyOne Limited (ASX: TNE) reflects a structural multi-year re-rating, with its valuation expanding from the low-30s in 2016 to peak over 90x in late 2025 as the business successfully transitioned to a SaaS recurring revenue model. [1, 2]
Historical Annual P/E Ratio Breakdown
| Financial Year [1, 2, 3, 4, 5, 6, 8] | Trailing P/E Ratio | Valuation Context & Drivers |
|---|---|---|
| 2026 (Mid-Year Trailing) | 69.1x | Multiples compress slightly due to global tech valuation corrections. |
| 2025 | 91.4x | Peak valuation driven by high SaaS ARR growth and market indexing. |
| 2024 | 66.2x | Strong enterprise cloud adoption expanding profit margins. |
| 2023 | 50.4x | Post-pandemic digital transformation spending acceleration. |
| 2022 | 41.2x | Macro interest rate hikes contract tech industry multiples. |
| 2021 | 38.6x | Core SaaS transition passes 50% completion milestone. |
| 2020 | 50.3x | Defensiveness of government/council recurring software contracts. |
| 2019 | 45.8x | Re-rating begins as pure-play cloud SaaS revenue scales up. |
| 2018 | 31.5x | Compression from legacy contract disputes and slower growth. |
| 2017 | 33.0x | Hybrid licensing era with higher upfront professional service fees. |
| 2016 | 35.9x | Standard legacy ERP developer software multiples. |
Summary Statistics (10-Year Period)
Key Analytical Takeaways
- SaaS Re-Rating: The structural move from a 30x multiple to a ~70x+ average multiple directly traces TNE switching off lump-sum upfront licensing fees. This swap created highly predictable, higher-margin recurring cloud revenues. [1]
- Premium Sector Valuation: TNE historically trades at an aggressive premium relative to the broader ASX market average P/E and international peers due to its dominant moat in the ANZ local government and higher education sectors. [1, 2, 3]
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