Data#3 (ASX:DTL) Advances as FY26 Sales and Earnings Reach New Highs

Aditi Sarkar

24 August 2026 01:17 PM AEST

Data#3 (ASX:DTL) Advances as FY26 Sales and Earnings Reach New Highs

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Highlights

FY26 gross sales increased 12.7% to AUD 3.4 billion and statutory Revenue rose 6.4% to AUD 907.3 million.
EBIT increased 16.6% to AUD 69.8 million and net profit before tax rose 14% to AUD 78.8 million.
Software Solutions gross sales reached AUD 2.3 billion, while Infrastructure Solutions benefited from AI-ready data-centre and device demand.
Data#3 plans a dedicated AI Practice and a 24x7 Sovereign Security Operations Centre in FY27.

Data#3 Ltd (ASX:DTL) traded at AUD 10.98 after rising 16.68%, giving the technology-services group a Market Capitalisation of approximately AUD 1.7 billion. The shares are 37.25% higher over one year. FY26 results released on 24 August showed growth across gross sales, profit and dividends, with infrastructure and software both reaching new annual sales levels. Artificial intelligence is becoming a broader Demand driver across hardware, cloud, security and consulting rather than a standalone product line. Data#3 now plans to increase Investment in AI and sovereign cyber capability while maintaining its established Microsoft and enterprise-technology base.

Latest company developments

Data#3 reported FY26 gross sales of approximately AUD 3.4 billion, up 12.7%, while statutory revenue increased 6.4% to AUD 907.3 million. Gross Profit rose 5.3% to AUD 305.2 million and EBIT increased 16.6% to AUD 69.8 million. Net profit before tax reached AUD 78.8 million, up 14%, while Basic Earnings Per Share increased 13% to 35.16 cents. Software Solutions gross sales rose 14.1% to AUD 2.3 billion and Infrastructure Solutions gross sales increased 14.1% to AUD 651.1 million. The group also retained its whole-of-Federal-Government Microsoft position through the Digital Transformation Agency framework extending into FY31.

Financial and operating picture

Data#3 finished FY26 with approximately AUD 326 million in cash and no borrowings. The final fully franked Dividend was increased to 18.25 cents per share, taking full-year dividends to 31.75 cents, up 13%, with a Payout Ratio around 90%. Operating Cash Flow fell to AUD 23.3 million from AUD 126.3 million, which management attributed largely to timing of peak June receipts and payments. Inventory increased to AUD 73.4 million as the company managed hardware Supply and memory constraints. The lower operating cash flow makes working-capital normalisation an important point to monitor even though the Balance Sheet remains highly liquid.

What to watch next

FY27 strategy includes a dedicated Artificial Intelligence Practice and a 24x7 Sovereign Security Operations Centre. These investments are expected to have a net profitability impact of around AUD 2 million initially. Management has not issued specific group earnings guidance, so divisional trends will provide the clearest read on progress. AI, Azure, cyber security, device refresh and data-centre infrastructure remain major demand areas, while Project Services needs to recover from FY26 delays. Continued growth under the federal Microsoft agreement could also create opportunities to sell higher-margin consulting, cloud and managed services alongside licensing.

Risks

Data#3 relies heavily on major technology vendors and can be affected by changes to partner incentives, licensing models and channel economics. Microsoft incentive changes already influenced software margins during FY26. Hardware supply constraints and price increases can affect inventory and working capital. Services projects are exposed to customer procurement delays and changes in Business confidence. Staff costs are expected to rise in FY27, creating Margin risk if revenue growth slows. The high dividend payout leaves less earnings retained internally, although the cash balance currently provides significant financial flexibility.

Outlook

FY26 showed Operating Leverage across Data#3's large sales base, with EBIT and earnings per share growing faster than gross profit. The company is using that position to invest further in AI and cyber security while maintaining exposure to cloud, software and infrastructure demand. The next test is whether those investments generate higher-margin services growth without weakening cash conversion. A recovery in Project Services and normalisation of Working Capital would complement continued momentum in software and infrastructure.

FAQs

Q:What were Data#3's FY26 gross sales?

A:Data#3 reported gross sales of approximately AUD 3.4 billion, up 12.7%.

Q:How much did EBIT increase?

A:EBIT rose 16.6% to approximately AUD 69.8 million.

Q:What dividend did Data#3 declare?

A:The final fully franked dividend was 18.25 cents per share, taking full-year dividends to 31.75 cents.

Q:What is Data#3 investing in during FY27?

A:The company plans a dedicated Artificial Intelligence Practice and a 24x7 Sovereign Security Operations Centre.

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