Data # 3 Faces FY26 Profit Dip Amid Microsoft Changes but Eyes Growth
Data # 3 Limited showcased strong FY25 financial results with record $3 billion gross sales and announced key board changes at its 2025 AGM. The company projects steady growth for FY26 despite some short-term challenges.
- Record FY25 gross sales of $3.0 billion, up 9%
- Profit before tax increased 11.4% to $69.1 million
- Three new directors standing for election to strengthen board
- FY26 outlook anticipates slight first half profit dip offset by infrastructure growth
- Focus on AI, cloud, security, and infrastructure for future growth
Strong Financial Performance Amid Board Renewal
Data # 3 Limited delivered a robust financial performance in FY25, highlighted by record gross sales of $3.0 billion, marking a 9% increase over the previous year. Profit before tax rose by 11.4% to $69.1 million, supported by operational efficiencies and a strategic restructure within its Infrastructure Solutions segment. The company’s balance sheet remains strong and debt-free, with net assets of $84 million and excellent cash conversion, underscoring its financial resilience.
Alongside these results, the 2025 Annual General Meeting marked a significant phase of board renewal. Three new non-executive directors, Bronwyn Morris AM, Diana Eilert, and Laurence Baynham, are standing for election. Their combined expertise spans finance, technology, and corporate leadership, promising to enhance governance and strategic oversight as Data # 3 navigates its next growth chapter.
Operational Highlights and Strategic Progress
The company’s Software Solutions division surpassed $2 billion in gross sales for the first time, despite challenges from changes to Microsoft’s partner incentive programs. Growth was driven by strong demand in public sector and education verticals, as well as a successful transition to cloud-based subscription models. Infrastructure Solutions rebounded strongly in the second half of FY25, with a 10% increase in gross profit and a notable 27.4% rise in management profit, reflecting improved deal margins and operational discipline.
Services also contributed solidly, with growth in Managed and Maintenance Services offsetting softer demand in recruitment and consulting during election periods. Data # 3 continued to embed AI capabilities across its offerings, particularly through Microsoft CoPilot workshops and advisory services, positioning itself at the forefront of digital transformation trends.
Outlook and Future Opportunities
Looking ahead to FY26, Data # 3 anticipates a slight dip in first half gross profit for Software Solutions due to ongoing Microsoft incentive adjustments, balanced by stronger Infrastructure Solutions performance. The company projects pre-tax profit between $32 million and $34 million for the first half, with full-year gross profit growth expected in the high single digits. The upcoming Brisbane 2032 Olympics presents a unique opportunity for large-scale infrastructure projects, aligning well with Data # 3’s capabilities.
Employee engagement remains a cornerstone of the company’s success, with high satisfaction ratings and recognition as an Employer of Choice for ten consecutive years. The retirement of long-serving Executive General Manager Michael Bowser after 38 years marks the end of an era, but the company’s leadership and culture appear well-positioned for continued innovation and growth.
Bottom Line?
Data # 3’s blend of strong financials, strategic board renewal, and focus on emerging technologies sets the stage for sustained growth amid evolving market dynamics.
Questions in the middle?
- How will the new board members influence Data # 3’s strategic direction and governance?
- What impact will Microsoft’s incentive program changes have on long-term software sales?
- Can Data # 3 capitalize fully on opportunities presented by the 2032 Brisbane Olympics infrastructure projects?
