Investors are often guided by the idea of discovering ‘the next big thing’, even if that means buying ‘story stocks’ without any revenue, let alone profit. But the reality is that when a company loses money each year, for long enough, its investors will usually take their share of those losses. While a well funded company may sustain losses for years, it will need to generate a profit eventually, or else investors will move on and the company will wither away.

Despite being in the age of tech-stock blue-sky investing, many investors still adopt a more traditional strategy; buying shares in profitable companies like Technology One (ASX:TNE). While profit isn’t the sole metric that should be considered when investing, it’s worth recognising businesses that can consistently produce it.

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Generally, companies experiencing growth in earnings per share (EPS) should see similar trends in share price. So it makes sense that experienced investors pay close attention to company EPS when undertaking investment research. We can see that in the last three years Technology One grew its EPS by 15% per year. That’s a good rate of growth, if it can be sustained.

One way to double-check a company’s growth is to look at how its revenue, and earnings before interest and tax (EBIT) margins are changing. EBIT margins for Technology One remained fairly unchanged over the last year, however the company should be pleased to report its revenue growth for the period of 18% to AU$599m. That’s progress.

The chart below shows how the company’s bottom and top lines have progressed over time. To see the actual numbers, click on the chart.

earnings-and-revenue-history

ASX:TNE Earnings and Revenue History December 10th 2025

Check out our latest analysis for Technology One

In investing, as in life, the future matters more than the past. So why not check out this free interactive visualization of Technology One’s forecast profits?

We would not expect to see insiders owning a large percentage of a AU$9.2b company like Technology One. But we are reassured by the fact they have invested in the company. Notably, they have an enviable stake in the company, worth AU$842m. Investors will appreciate management having this amount of skin in the game as it shows their commitment to the company’s future.

While it’s always good to see some strong conviction in the company from insiders through heavy investment, it’s also important for shareholders to ask if management compensation policies are reasonable. Our quick analysis into CEO remuneration would seem to indicate they are. For companies with market capitalisations between AU$6.0b and AU$18b, like Technology One, the median CEO pay is around AU$4.0m.

Technology One offered total compensation worth AU$3.4m to its CEO in the year to September 2024. That is actually below the median for CEO’s of similarly sized companies. CEO remuneration levels are not the most important metric for investors, but when the pay is modest, that does support enhanced alignment between the CEO and the ordinary shareholders. It can also be a sign of good governance, more generally.

One positive for Technology One is that it is growing EPS. That’s nice to see. The growth of EPS may be the eye-catching headline for Technology One, but there’s more to bring joy for shareholders. With a meaningful level of insider ownership, and reasonable CEO pay, a reasonable mind might conclude that this is one stock worth watching. One of Buffett’s considerations when discussing businesses is if they are capital light or capital intensive. Generally, a company with a high return on equity is capital light, and can thus fund growth more easily. So you might want to check this graph comparing Technology One’s ROE with industry peers (and the market at large).

Although Technology One certainly looks good, it may appeal to more investors if insiders were buying up shares. If you like to see companies with more skin in the game, then check out this handpicked selection of Australian companies that not only boast of strong growth but have strong insider backing.

Please note the insider transactions discussed in this article refer to reportable transactions in the relevant jurisdiction.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.