Key Highlights

  • Gross sales rose 12.7% to A$3.39 billion for the year to 30 June 2026.
  • Net profit after tax rose 13.1% to A$54.5 million, and basic EPS rose 13.0% to 35.16 cents.
  • Gross profit rose 5.3% to A$305.2 million, with the Margin on gross sales easing to 9.0% from 9.6%.
  • The full-year Dividend was 31.75 cents per share, fully franked, up 13.0%.

How did Data#3 Limited (ASX:DTL) deliver higher profit and dividends in the year to 30 June 2026 when its Gross Profit margin was slipping? For anyone trying to understand Australia's largest listed information technology services reseller by sales, that mix is the key to reading its results.

The central development: FY26 results

Data#3 released its FY26 results on 24 August 2026.

Gross sales (billings): A$3.39 billion, up 12.7%.

Statutory revenue: A$907.3 million, up 6.4%.

Gross profit: A$305.2 million, up 5.3%, with the margin on gross sales easing to 9.0% from 9.6%.

EBIT: A$69.8 million, up 16.6%.

Net profit before tax: A$78.8 million, up 14.0%.

Net profit after tax: A$54.5 million, up 13.1%.

Basic earnings per share: 35.16 cents, up 13.0%.

The gap between gross sales and statutory Revenue reflects accounting: where Data#3 acts as an agent, notably on many software and cloud subscriptions, only its margin is recognised as revenue, while billings are reported as gross sales.

Dividends and balance sheet

The full-year dividend was 31.75 cents per share fully franked, up 13.0%, including a final dividend of 18.25 cents. The company reported a Payout Ratio of 90.3%, a Record Date of 16 September 2026 and payment on 30 September 2026. Data#3 reports no borrowings. A high payout ratio is a deliberate feature of Data#3's approach to returns, though it also means Retained Earnings fund less of the growth.

Business and revenue drivers

Data#3 sells and supports technology for Australian and Pacific organisations, with a particular strength in Microsoft licensing and cloud. It reports three segments by gross sales:

Software Solutions: a record A$2.3 billion, up more than 14%, driven by security products, cloud and Microsoft Azure subscriptions.

Infrastructure Solutions: up more than 14%, supported by end-user devices, enterprise networking and data centre solutions.

Services: up 3.6%, with growth in managed and maintenance services.

Because software is the largest segment and carries thinner margins per dollar of sales, profit growth depends on cost discipline and on expanding higher-margin services. Management said it is taking deliberate action to grow and improve the profitability of the Services business. The company also notes that sales peak in May and June each year, so earnings are weighted to the second half of the financial year.

Outlook and initiatives

Data#3 does not provide specific FY27 earnings guidance. Its release said the company "started the new financial year encouragingly" while noting that global Supply conditions, customer procurement cycles and economic confidence could influence the year. Planned FY27 initiatives include:

Establishing a dedicated AI Practice with customer-facing delivery pods, which CEO Brad Colledge described as a more consistent, scalable and outcome-led AI go-to-market.

Launching a 24/7 sovereign Security Operations Centre in Australia, expanding its existing hybrid SOC and designed to address data residency and regulatory needs.

A software plan centred on Cloud Solution Provider arrangements, Azure and Copilot.

These are plans and intentions, not results, and their commercial contribution will only become visible in later reporting periods. Investors should therefore treat them as direction of travel rather than as numbers already in the accounts, and look for disclosure on revenue or margin contribution in future results presentations.

Sector and competitive position

Data#3 operates in a competitive market that includes global and local technology resellers, managed service providers and large consultancies. Its advantages are long-standing vendor relationships, a large installed base of government and enterprise customers and scale in Microsoft licensing. Its exposure to vendor programme changes is also a structural risk: a change in how a major vendor rewards partners, or a move by customers to buy direct, could affect margins. Demand has been supported by cloud migration, cyber security and AI interest, but those same themes attract competitors.

Risks and upcoming developments

Margin mix: software growth lifts sales but dilutes the gross margin percentage; gross margin eased from 9.6% to 9.0% in FY26.

Vendor dependence: reliance on a small number of global technology vendors and their partner terms.

Customer demand and procurement cycles: management cited economic confidence and procurement cycles, and government and corporate budgets influence timing.

Supply conditions: the company flagged global supply as a factor.

Execution of new initiatives: the AI Practice and sovereign SOC require Investment and skilled staff.

Services profitability: the services segment must convert growth into better margins.

Because earnings are weighted to the second half, the first-half result will not by itself represent the full year.