Data # 3 Posts 11.3% Profit Rise and Boosts Dividend to 28.1 Cents
Data # 3 Limited has delivered a robust FY25 performance with revenues rising 5.8% to $863 million and net profit up 11.3%, supported by strong growth across its core business segments and a 10.2% dividend increase.
- FY25 revenues increased 5.8% to $863.2 million
- Net profit rose 11.3% to $48.2 million
- Gross sales grew 9.1% to $3.0 billion
- Dividend per share increased 10.2% to 28.1 cents fully franked
- Board refreshed with new non-executive appointments
Strong Financial Performance in a Challenging Market
Data # 3 Limited has announced record financial results for the fiscal year ended 30 June 2025, demonstrating resilience and growth despite a competitive technology landscape and subdued economic conditions. The company reported revenues from ordinary activities of $863.2 million, up 5.8% from the previous year, while net profit after tax attributable to members increased by 11.3% to $48.2 million.
Gross sales, a non-IFRS measure reflecting total proceeds from sales whether acting as principal or agent, rose 9.1% to $3.0 billion, underscoring the company’s expanding footprint across its Software Solutions, Infrastructure Solutions, and Services segments.
Segment Highlights and Operational Insights
The Software Solutions division surpassed $2 billion in gross sales, buoyed by strong demand in the Public Sector and Education verticals and a strategic shift towards cloud-based licensing models. Despite headwinds from Microsoft’s channel incentive program changes effective January 2025, the segment maintained growth momentum, supported by early transitions from traditional enterprise agreements to cloud solution provider arrangements.
Infrastructure Solutions experienced a mixed year, with a slow first half impacted by election cycles and delayed customer decisions, but rebounded strongly in the second half. Growth was driven by network and security product sales and device upgrades aligned with Windows 11 and AI-ready PCs. The segment also improved gross margins and operational efficiencies through restructuring and automation initiatives.
Services delivered solid growth, particularly in Managed and Maintenance Services, which grew 25% and 9% respectively. The company expanded its managed services offerings, notably in the mining sector, and launched new security solutions including a Managed Extended Detection and Response (MXDR) service, reflecting rising cybersecurity demand.
Financial Strength and Shareholder Returns
Data # 3’s balance sheet remains robust and debt-free, with net assets increasing to $84.2 million and cash holdings rising to $356.7 million. The company’s internal cost ratio improved to 79.7%, reflecting disciplined cost management and operational leverage. Earnings per share rose 11.1% to 31.12 cents, while fully franked dividends increased by 10.2% to 28.1 cents per share, maintaining a payout ratio of approximately 90%.
Governance and Strategic Outlook
The company undertook board renewal during the year, with the retirement of long-serving directors and the appointment of experienced non-executive directors Bronwyn Morris, Diana Eilert, and Laurence Baynham, bringing fresh perspectives and governance expertise. CEO Brad Colledge highlighted the company’s strategic focus on lifecycle services, customer experience, and leveraging AI technologies to drive future growth.
Looking ahead, Data # 3 anticipates continued growth in Infrastructure Solutions and Services, while managing short-term pressures in Software Solutions due to vendor program transitions. The company is well positioned to capitalize on expanding opportunities in cloud computing, cybersecurity, and AI, supported by strong vendor partnerships and a commitment to sustainability and ESG initiatives.
Bottom Line?
Data # 3’s FY25 results set a strong foundation, but investors will watch closely how the company navigates vendor transitions and capitalizes on AI-driven growth in FY26.
Questions in the middle?
- How will Microsoft’s channel incentive changes impact Software Solutions growth in FY26?
- What is the potential for further margin improvement in Infrastructure Solutions through automation?
- How effectively will new board members influence strategic execution and risk management?
