Data#3 (ASX: DTL) – Files Chair’s Address to Shareholders

Data#3 has upgraded its first-half FY27 guidance, projecting pre-tax profit of $52 million to $57 million, representing growth of 55% to 70% against the prior comparative period of $33.5 million. The announcement, made at the company’s AGM on 28 October 2026, demonstrates management confidence in near-term trading momentum and provides material context for investors assessing the company’s trajectory following a record FY26 result.

FY26 delivered gross sales of $3.4 billion, up 12.7% year-on-year, with earnings before tax reaching $78.8 million, up 14.0%. Net profit after tax was $54.5 million, up 13.1%, translating to basic earnings per share of 35.16 cents. The company maintained a fully franked dividend of 31.75 cents per share for the year, up 13.0%, at a payout ratio of 90.3%. The balance sheet remained debt-free with $326 million in cash at 30 June 2026.

The Infrastructure Solutions segment drove particularly strong performance, with gross sales growth exceeding 14% and management profit surging more than 78% to $31.2 million. This reflects demand for AI-enabled devices, Windows 11 upgrades and hybrid cloud solutions. Software Solutions gross sales grew 14.1% to $2.3 billion, aided by Azure migrations and a significant government contract win as the sole panel provider of Microsoft products and services to the Australian Government, a five-year arrangement described as the largest in the company’s history.

Services performance proved mixed. Business Aspect consulting achieved record growth of over 22%, while Maintenance Services grew 11.5%. However, Project Services declined 15.3% and People Solutions fell 8.7%, both constrained by extended procurement cycles and reduced customer confidence. Management flagged FY26 as the start of a multi-year transition for Project Services, with leadership changes and new capability development planned.

The company’s recurring revenue base expanded to 70% of gross sales in FY26, reflecting customer migration toward subscription and As-a-Service models. The Internal Cost Ratio improved from 79.7% to 77.5%, demonstrating operating leverage gains through automation and AI adoption. These structural improvements underpin the elevated H1 FY27 guidance.

Management outlined strategic priorities for FY27 focused on Solutions, Customer Experience, Operational Excellence and People. The company is investing in a dedicated AI Practice, establishing a 24×7 Sovereign Security Operations Centre to support data residency requirements, and accelerating Services growth through a more integrated solutions model. These initiatives position Data#3 to capture growing demand in artificial intelligence and security solutions.

The H1 FY27 guidance assumes gross profit growth of around 20% at the mid-point and interest income of $8.8 million. Management notes that profit before tax for the full year FY27 will be skewed to the first half due to large transactions announced earlier in October, with more normalised growth anticipated in the second half. Investors should monitor quarterly updates and the half-year results announcement scheduled for 22 February 2027 for visibility on whether demand sustains, particularly in Services. This announcement is price sensitive and has been flagged as material by the ASX.

View the full ASX announcement (PDF)

About Data#3 Limited (ASX: DTL)

Data#3 Limited is an Australian enterprise IT and ICT solutions provider that specializes in consulting, procurement, project services, managed services, and resourcing. The company delivers technology solutions across hybrid cloud, modern workplace, security, data and AI, and connectivity sectors. Data#3 operates across Australia with headquarters in Queensland and regional presence in multiple states, serving customers in healthcare, government, and education sectors.

If you would like to discuss this announcement, request a callback or call us on 1300 889 603.