Data#3 delivered record financial results for FY26, with gross sales reaching $3.4 billion, up 12.7% from the prior year, and net profit before tax climbing 14.0% to $78.8 million. The performance is particularly noteworthy because it substantially outpaced the broader Australian IT market, which Gartner forecasts will grow just 8.9% in calendar year 2026. This outperformance reflects Data#3’s ability to capture market share and execute effectively across its diversified business model while competitors face margin pressures in a competitive landscape.
The earnings expansion tells a compelling story for shareholders. Net profit after tax increased 13.1% to $54.5 million while basic earnings per share grew 13.0% to 35.16 cents, driven by a combination of strong gross sales growth, disciplined cost management, and improved operating leverage across the business. Gross profit margin remained stable at 9.0%, suggesting the company maintained pricing discipline despite competitive conditions. The company’s operating leverage is evident in how earnings growth is outpacing sales growth, indicating that incremental revenue is flowing through at higher margins as the business scales.
Segment performance reinforces the company’s balanced exposure to resilient technology spending trends. Infrastructure Solutions gross sales increased by more than 14%, supported by ongoing demand for end-user devices, enterprise networking, and data centre solutions. Software Solutions achieved record gross sales of $2.3 billion, up more than 14%, driven by security products, cloud services, and Microsoft Azure subscriptions. Services grew more modestly at 3.6%, though the company notes solid growth in Managed Services and Maintenance Services underpinned by contract renewals and new wins. This diversification across infrastructure, software, and recurring services revenue streams provides resilience through different market cycles.
Data#3’s financial position strengthens the case for sustained capital allocation. The company maintains a strong balance sheet with no borrowings, providing flexibility to invest in growth while simultaneously returning cash to shareholders. The fully franked full year dividend increased 13.0% to 31.75 cents per share, with the payout ratio holding steady at 90.3%. This dividend growth is meaningful for Australian investors given the franking credits, particularly in a lower-rate environment where those credits retain value.
Looking ahead, the critical variables for investors centre on whether Data#3 can sustain market share gains in its key segments, particularly in software where the 14% growth rate requires ongoing strength in cloud and security demand. The company’s commentary emphasises customer focus on digital transformation, artificial intelligence, cyber security, and cloud technologies with clear business outcomes. Execution against these secular trends, combined with the company’s ability to translate sales growth into profit growth, will determine whether the momentum continues. This announcement is price sensitive and flagged as material by the ASX.
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About DTL (ASX: DTL)
DTL is listed on the Australian Securities Exchange (ASX: DTL).
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