Highlights

  • Data#3 (ASX:DTL) reported FY26 gross sales of $3.39 billion, up 12.7%
  • Net profit after tax rose 13.1% to $54.5 million, with basic earnings per share of 35.16 cents
  • Total FY26 dividends reached 31.75 cents per share fully franked, including a final dividend of 18.25 cents
  • Recurring gross sales made up 70% of the total, and the company reported no borrowings

Data#3 is an Australian IT services and solutions provider that helps organisations use technology across software, infrastructure and services to address business challenges.

Company Business

Data#3 operates through three functional areas: Software Solutions, Infrastructure Solutions and Services. Software Solutions covers licensing and cloud subscriptions, with a significant focus on Microsoft platforms including Azure and Copilot. Infrastructure Solutions supplies end-user devices, enterprise networking and data centre equipment. Services includes advisory, project, managed and maintenance services. The company also runs Business Aspect, a consulting business that operates independently within the group structure.

The business serves corporate and government customers and operates across eight regions, combining product supply with the delivery and support services that customers need to deploy and manage technology over time. A large share of its activity is recurring in nature, with recurring gross sales, mainly from Software Solutions and Managed Services, representing 70% of total gross sales in FY26.

Recent Developments

In late August 2026, Data#3 (ASX:DTL) released its full-year result for the twelve months to June 2026, which management described as another record. The board declared a final dividend of 18.25 cents per share, fully franked, which was paid at the end of September 2026.

Alongside the result, the company outlined its plans for FY27. These include establishing a dedicated AI Practice with customer-facing AI delivery pods, and launching a new 24/7 sovereign Security Operations Centre in Australia to expand managed security services. The Services plan focuses on advisory work, annuity contracts, managed platforms and sales discipline. In Software, growth efforts centre on Microsoft's Cloud Solution Provider program, Azure, Copilot and mid-market platforms, while Infrastructure is targeting AI-ready infrastructure, end-user computing, hybrid cloud and networking.

Managing Director and CEO Brad Colledge credited customer and vendor relationships, the company's diversified model and cost discipline for the result, and said the business had started FY27 well. The company's annual general meeting is the next scheduled corporate event for holders.

Financial Performance and Sector Context

Gross sales increased 12.7% to $3,385.3 million in FY26. After IFRS adjustments for agency sales, statutory revenue rose 6.4% to $907.3 million. Gross profit grew 5.3% to $305.2 million, although the gross margin on gross sales eased to 9.0% from 9.6%, reflecting sales mix.

Earnings before interest and tax increased 16.6% to $69.8 million, net profit before tax rose 14.0% to $78.8 million, and net profit after tax climbed 13.1% to $54.5 million. Basic earnings per share increased 13.0% to 35.16 cents. Return on equity held at 57.3%, and finance income was $10.1 million.

By segment, Software Solutions recorded record gross sales of $2.3 billion, up more than 14%, supported by security, cloud and Azure subscriptions. Infrastructure Solutions gross sales also grew by more than 14%, driven by end-user devices, enterprise networking and data centre solutions. Services gross sales rose 3.6%, with growth in Managed Services and Maintenance Services.

Total FY26 dividends were 31.75 cents per share, fully franked, up 13.0% from 28.10 cents, representing a payout ratio of 90.3%. The company reported no borrowings at year end.

Risks to Consider

Data#3 operates on relatively thin margins on gross sales, and the decline in gross margin during FY26 shows its sensitivity to sales mix. The company has flagged global supply conditions, customer procurement cycles and economic confidence as risks for the year ahead. Its reliance on key vendor relationships, particularly Microsoft, means changes to vendor programs or incentive structures could affect earnings. Sales also tend to peak in May and June, so results are weighted to the second half and can be influenced by government and enterprise budget timing. Investment in new AI and security capabilities adds cost before revenue from those areas is established at scale.

What to Watch Next

Data#3 does not provide specific earnings guidance, consistent with previous years. Items to monitor include commentary at the annual general meeting, the half-year result due in early 2027, progress on the AI Practice and sovereign Security Operations Centre, and whether gross margin stabilises. The interim dividend declared with the half-year result will also be of interest given the 90.3% payout ratio in FY26.

Key Insights

Data#3 (ASX:DTL) delivered higher gross sales, profit and dividends in FY26, with net profit after tax up 13.1% and fully franked dividends up 13.0%. A recurring base of 70% of gross sales and a debt-free balance sheet underpin the business, while margin pressure and second-half weighting remain features of its earnings profile. FY27 priorities focus on AI, managed security, cloud and advisory services.