Key Highlights

• Recurring gross sales, mainly from Software Solutions and Managed Services, made up 70% of total gross sales in FY26.

• In its FY26 result, announced on 24 August 2026 for the year ended 30 June 2026, the technology services and software reseller reported net profit after tax of $54.5 million and gross sales and other Revenue of $3.39 billion.

• The FY26 figures, as reported in coverage of the company's results release, were:.

• The gap between gross sales and revenue is central to understanding Data#3.

How is Data#3 Limited (ASX:DTL) turning a record year of technology sales into earnings, and where does it want growth to come from next? In its FY26 result, announced on 24 August 2026 for the year ended 30 June 2026, the technology services and software reseller reported net profit after tax of $54.5 million and gross sales and other revenue of $3.39 billion. It also set out FY27 priorities that lean on artificial intelligence, cyber security, cloud, data and managed services. The result is useful for investors because it shows both the scale of the company's reseller activity and the much smaller profit that the Business keeps from it.

The central development: record sales, double-digit profit growth

The FY26 figures, as reported in coverage of the company's results release, were:

- Gross sales and other revenue: $3.39 billion, up 12.7% and described as a record.

- Revenue: $917.4 million, up 6.3%.

- Earnings before tax: $78.8 million, up 14%.

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

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

- Total fully franked dividends: 31.75 cents per share, up 13.0%, including a final dividend of 18.25 cents.

The gap between gross sales and revenue is central to understanding Data#3.

Business model and what drives earnings

Recurring gross sales, mainly from Software Solutions and Managed Services, made up 70% of total gross sales in FY26. That proportion matters because recurring sales are typically more predictable than one-off hardware or project work, and tend to renew with customer contracts.

The company's earnings are sensitive to customers' technology budgets and to the policies of the large software vendors it resells. The coverage reviewed noted that some customers delayed technology spending, although public sector and infrastructure Demand held up. That commentary points to a mixed demand environment in which the company still delivered growth.

FY27 strategy

Management said it plans to accelerate growth in AI, cyber security, cloud, data and managed services. Planned moves include expanding the AI practice, modernising infrastructure offerings and launching a Sovereign Security Operations Centre. The company also intends to focus on advisory and managed services and on operational efficiency, and expressed confidence in sustainable earnings growth.

The strategic logic is clear. Advisory and managed services generally carry higher margins and longer relationships than pure product resale, so shifting the mix in that direction can lift profit even if gross sales growth moderates. The risk is execution: building specialist capability in AI and security requires skilled staff, who are in demand across the sector, and customers may evaluate such offerings more critically than traditional licences.

Financial strength and cash flow

The coverage reviewed mentioned encouraging Cash Flow and an improved financial position, but gave no cash balance, Operating Cash Flow or working-capital figures. For a reseller, working Capital is particularly important because the company often collects from customers and pays vendors on different timetables, which can cause large swings in reported cash around year end. Investors should check the Annual Report for the cash balance, the timing effects and any borrowings before drawing takeaways.

Sector and competitive position

Data#3 competes with other Australian IT service providers and resellers, global systems integrators, and the software and cloud vendors' own sales teams. Its position is shaped by vendor partnerships and its skills in complex environments, particularly for large public sector customers.

A structural consideration is vendor concentration. Resellers depend on the commercial terms offered by large software vendors, and a change in those terms could affect margin.

Risks to monitor

- Customer budget timing, particularly government procurement cycles and delayed technology spending.

- Vendor terms: changes in licensing models or partner incentives can affect margins.

- Talent and execution as the company expands AI and security capabilities.

- Competition from global integrators and vendor-direct channels.

- Technology adoption risk: AI investments may take longer to translate into revenue than management expects.

- Dividend sustainability if earnings growth slows, given the high payout implied by FY26 figures.

What to watch next

Several dates and signals will matter. The half-year result for the six months to 31 December 2026 is the next scheduled earnings milestone, and investors should look for growth in recurring sales, the progress of the AI and security offerings, the status of the Sovereign Security Operations Centre and any commentary on customer spending.