Can Dicker Data Sustain Growth Amid Margin Pressure and ASEAN Expansion?

Strong Financial Performance Amid Market Shifts

Dicker Data Ltd has delivered a solid first half for fiscal year 2025, reporting gross revenue of $1.84 billion, a 15.7% increase compared to the prior corresponding period. This growth was largely fueled by accelerated PC refresh cycles and a surge in AI-driven deals, reflecting the company’s ability to capitalize on evolving technology trends.

EBITDA rose 9.4% to $75.4 million, while net profit before tax climbed 13.3% to $57.6 million. Despite a slight compression in gross profit margin to 9.1%, attributed to a shift towards larger enterprise customers with lower margins, operational efficiencies helped reduce expenses as a percentage of gross revenue from 6.9% to 6.1%.

Strategic Focus on AI, Cybersecurity, and Windows 10 Refresh

Dicker Data’s strategic initiatives are clearly aligned with major industry themes. The company is deepening its AI ecosystem through partnerships, including a sovereign AI factory in Melbourne and an AI proof-of-concept facility in Sydney with Dell Technologies and Equinix. These moves aim to accelerate AI adoption across Australia and New Zealand, positioning Dicker Data as a key enabler in the region’s AI transformation.

Additionally, the company is leveraging the Windows 10 end-of-support cycle, which is driving significant refresh demand, particularly in the SMB and mid-market segments. This opportunity is complemented by a growing cybersecurity market, where Dicker Data has expanded its distribution portfolio to include leaders like CrowdStrike and VAST, responding to increasing cyber threat awareness and complexity.

Geographic and Product Expansion

Regionally, Australia remains the largest contributor with 18% gross revenue growth, including over $30 million from AI deployments. New Zealand also showed steady growth with a 5.2% increase in gross revenue and a notable 24.1% rise in net profit after tax. Looking ahead, Dicker Data is targeting organic expansion into the ASEAN markets, leveraging its marketplace platform and vendor partnerships to enter these new territories with scalable technical and sales capabilities.

Outlook and Guidance

For the full fiscal year 2025, Dicker Data projects gross revenue between $3.7 billion and $3.8 billion, representing 10% to 13% growth over FY24. Net operating profit before tax is expected to range from $120 million to $124 million, with a margin of approximately 3.2% to 3.4%. The company anticipates revenue growth to moderate in the second half due to tougher year-on-year comparisons but expects profitability to strengthen as it rebalances towards higher-margin SMB and mid-market segments.

Dividend payments continue with fully franked dividends at 22 cents per share for H1 FY25, paid quarterly, supporting shareholder returns amid ongoing investment in growth initiatives.