T1NA (Tech1: No Alternative)

Tech1 is Australia's largest enterprise SaaS company, delivering vertical-specific ERP software focused on local government, government, and education.

• AI is accelerating growth: Tech1 revealed their AI suite in Oct25. Initial modelling on base usage and moderate adoption showed AI could drive a 4% uplift on FY25-29e CAGR. Six months on at TNE's 1H26 results record levels of adoption and materially larger than base level usage was announced. This has raised our growth estimates of AI tailwind to 12% FY25-29e CAGR (Fig ?).
• SaaS+: Launched in 2022, the revenue model creates short-term profit headwinds of ~4 years offset by a secular tailwind for profit growth (Fig ?). Tech1 is now exiting peak headwind, and we forecast SaaS+ to drive incremental tailwinds of 11% CAGR over the coming few years on the revised portfolio unit economics.
• ERP in 30 Days: Tech1's Power of One (Po1) business model is a double-edged sword providing consistent growth but limiting scalability. We think implementation of the "ERP in 30 Days" strategy could drive a 6% CAGR in new logos between FY25-29e (Fig ?).

Recommendation: Tech1 has consistently provided conservative guidance, achieving at or above the top end of their guidance for over a decade (Fig ?). Our bottom-up build of its profit drivers suggests they can continue to accelerate guidance over the coming few years. We think the company's consistent and accelerating earnings growth, and drivers for this to continue provide the visibility and confidence to see Tech1 outperform going forward. We initiate with a valuation of A$39/share.

Fig 1: TechOne's Gen5 software×AI will drive accelerating growth

Source: Homodeus research