Data#3 (DTL) H1 2025 earnings summary

Executive summary

• Gross sales grew 7.4% year-over-year to AUD 1.4 billion, driven by strong growth in Managed and Maintenance Services and Software Solutions, while Consulting and Infrastructure Solutions lagged.

• Gross profit rose 10% to AUD 143.6 million, with average gross margin improving to 10.2% due to higher-margin services.

• Profit before tax increased 4.1% to AUD 32 million; underlying NPBT up 7% excluding AUD 0.9 million in one-off redundancy costs.

• Interim dividend of AUD 0.131 per share, up 4%, with a payout ratio of 90.8%.

• Net profit after tax increased 4.3% to AUD 22.4 million, with basic EPS of 14.43 cents.

Financial highlights

• Recurring business now represents 70% of gross sales, up from 67% year-over-year, reflecting a shift to multi-year and as-a-service models.

• Services gross sales up 19.3% to AUD 205.4 million; product gross sales up 5.6% to AUD 1,207.3 million.

• Software Solutions gross sales rose 11.4%, driven by security, cloud, and public sector demand; Infrastructure Solutions declined 12.9%.

• Statutory revenue declined 1.9% due to Infrastructure Solutions weakness and revenue recognition changes.

• Net assets at 31 December were AUD 78.4 million, up AUD 3.5 million, driven by net profit and offset by dividend payments.

Outlook and guidance

• Positive outlook for H2 FY25, with anticipated rebound in Infrastructure Solutions and pent-up demand for AI-enabled devices and multi-cloud solutions.

• No specific FY25 guidance provided, but continued sales peak expected in May and June; focus on software profitability, CSP, Copilot, Azure, managed services, and security.

• Microsoft channel incentive changes expected to have immaterial impact in FY25, with mitigation strategies in place for FY26.

• Ongoing growth expected in services, especially Managed Services and security solutions.