Highlights

  • Data#3 (ASX:DTL) reported record FY26 gross sales of approximately $3.4 billion, supported by growth across major Business divisions.
  • Net profit after tax increased 13.1% to $54.5 million, while the company increased its full-year dividend.
  • Cloud, cybersecurity, artificial intelligence and infrastructure Demand remained key growth drivers.
  • A strong cash position and government technology relationships continue supporting the company’s long-term strategy.

Data#3 (ASX:DTL) delivered its FY26 full-year results on 24 August 2026, highlighting continued growth across its technology solutions business and increasing demand for digital transformation services.

The Brisbane-based technology provider recorded another year of record sales, higher Earnings and increased Shareholder distributions. The result also reflected the changing dynamics of enterprise technology spending, where artificial intelligence, cloud adoption and Cybersecurity Investment are becoming increasingly important growth areas.

FY26 Results

For the year ended 30 June 2026, Data#3 reported group gross sales of approximately $3.4 billion, representing a 12.7% increase compared with the prior year.

Statutory Revenue increased 6.4% to $907.3 million, reflecting the difference between gross sales and revenue recognition from agency and pass-through transactions.

Earnings growth exceeded revenue growth, with earnings before interest and tax (EBIT) increasing 16.6% to $69.8 million. Net profit before tax increased 14% to $78.8 million, while net profit after tax increased 13.1% to $54.5 million.

The company declared a fully franked final Dividend of 18.25 cents per share, taking total FY26 dividends to 31.75 cents per share, an increase of 13% compared with FY25.

Data#3 maintained a strong financial position, ending the year with substantial cash reserves and no borrowings, providing flexibility for investment and shareholder returns.

Financial Performance

Basic earnings per share increased 13% to 35.16 cents during FY26, reflecting improved profitability.

Gross profit increased 5.3% to $305.2 million, although growth was slower than gross sales expansion. This reflected a changing revenue mix, with increased contribution from software and subscription-related transactions that typically generate lower percentage margins.

The company’s cash position also remained an important contributor. Net interest income supported the difference between EBIT and net profit before tax, reflecting returns generated from available cash holdings.

The dividend Payout Ratio remained high at approximately 90%, demonstrating Data#3’s commitment to shareholder distributions while leaving less flexibility if earnings momentum slows.

Business Drivers

Data#3 experienced growth across its major operating segments during FY26.

Software Solutions remained the largest contributor, with gross sales increasing approximately 14% to $2.3 billion. Growth was supported by demand for cybersecurity solutions, cloud services and Microsoft Azure-related offerings.

Infrastructure Solutions also increased approximately 14% to $651.1 million, benefiting from demand for end-user devices, enterprise networking and data-centre infrastructure.

Services revenue increased 3.6% to $412.3 million, supported by contract renewals and new customer engagements. The services division remains strategically important due to its Recurring Revenue characteristics and higher-value consulting capabilities.

Artificial intelligence emerged as an increasingly important theme across the business. Data#3 highlighted AI demand across infrastructure, cloud platforms, cybersecurity solutions and consulting services rather than as a single standalone product category.

The company continues leveraging its government and enterprise customer base, including its Microsoft licensing relationship through the Digital Transformation Agency framework.

AI and Digital Strategy

Artificial intelligence is expected to remain a key growth area for Data#3 as organisations continue investing in technology upgrades and automation.

The company plans to establish a dedicated AI Practice and customer-focused AI delivery capabilities during FY27, aiming to expand advisory and implementation opportunities.

Data#3 is also developing a sovereign Security Operations Centre designed to address increasing demand for cybersecurity capabilities, data protection and regulatory requirements.

These initiatives are expected to support future growth, although they also involve upfront investment and execution requirements.

Investor Focus

Key areas investors will monitor include:

  • Progress of Data#3’s AI Practice and ability to convert AI demand into higher-value services revenue.
  • Margin trends as software and subscription-related sales continue increasing.
  • Recovery and growth of project-based services activity.
  • Performance of the cybersecurity and cloud divisions.
  • The impact of interest rates on returns generated from the company’s cash position.

Risks

Data#3 remains exposed to changes in technology spending cycles and vendor relationships.

The company’s relationship with major technology providers, particularly Microsoft, remains strategically important. Changes in licensing structures, channel arrangements or vendor Economics could affect margins.

The shift towards higher software volumes may continue supporting sales growth while placing pressure on percentage margins.

Investment in AI capabilities and cybersecurity infrastructure could also affect near-term profitability before generating longer-term benefits.

The absence of formal FY27 earnings guidance means investors will continue assessing whether current growth trends can translate into sustainable earnings expansion.

Outlook

Data#3 enters FY27 with strong momentum, supported by record sales, higher earnings and continued demand for technology transformation services.

The company’s exposure to cloud migration, cybersecurity, artificial intelligence and enterprise infrastructure provides several Long-term Growth opportunities. Its government relationships and strong Balance Sheet also provide stability.

However, future performance will depend on maintaining Margin discipline, converting technology demand into profitable services growth and successfully executing new AI-focused initiatives.

For investors following ASX technology stocks, Data#3 remains positioned around major digital transformation themes, although the next stage of growth will depend on balancing expansion with sustainable profitability.