Technology One Limited (ASX:TNE)Technology One LimitedASX_DLY:TNEtfctingAn Australian enterprise software (SaaS) company, similar to Oracle or SAP, but focused heavily on government, councils, and universities. - It builds ERP-style software (finance, HR, payroll, asset management, student systems, etc.) - Delivered via the cloud as Software-as-a-Service (SaaS) - Customers include local governments, universities, and large institutions - Founded in Australia, listed on the ASX, and now expanding globally (UK, NZ, etc.) 1. Sticky, recurring revenue Most revenue is subscription-based (SaaS) Customers sign multi-year contracts Switching costs are high (changing ERP systems is painful) This leads to: - Predictable revenue - High retention - Compounding growth 2. Strong track record of growth Revenue growing ~18% and profit ~16% recently Long history of profitability (since 1990s) Management targets doubling size every ~5 years That consistency is rare on the ASX. 3. High-margin software business SaaS scales extremely well Once built, software is cheap to deliver Result: - Strong margins - Increasing profitability as they grow 4. Niche moat (underappreciated “quiet moat” not flashy, but very durable) They dominate spec.ific verticals: - Local councils - Universities - Government agencies These markets are: - Highly regulated - Hard to penetrate - Slow-moving (good for incumbents) 5. Low AI disruption risk (relative) Unlike generic software companies: - Their systems are deeply embedded workflows - Hard to replace with AI tools Recent commentary suggests they’re actually benefiting from AI integration, not being disrupted 6. International expansion upside - Strong push into the UK (especially councils) - Early traction but still small If successful: Big upside from scaling outside Australia Negatives: 1. Expensive valuation, PE ~65x Market already pricing in strong future growth Less margin for error 2. Slower “sex appeal” vs global tech Not like AI chips or consumer apps More like “boring but reliable” software 3. Growth vs expectations risk Even strong results can disappoint if: - SaaS growth slows slightly - ARR misses expectations Weekly chart showing a potential for 40% upside return.