Dicker Data Surpasses FY25 Targets with AI-Driven Revenue Boost

FY25 Results Surpass Expectations Driven by AI and Infrastructure

Dicker Data (ASX:DDR) has reported FY25 gross revenue of $3.876 billion, beating its guidance range by a comfortable margin with a 14.9% increase year-on-year. This growth was underpinned by strong demand across software, endpoint solutions, and infrastructure refreshes, with AI-specific deals contributing over $45 million to the top line. The company’s net operating profit before tax rose 10.1% to $124.7 million, reflecting improved operating efficiencies despite a slight dip in gross profit margin to 9.0% from 9.6% the previous year.

The company’s Australian segment led the charge with a 17.2% uplift in gross revenue, driven by software growth and endpoint device sales, including the materialisation of the Windows 10 refresh opportunity. New Zealand operations also posted a solid 3.6% revenue increase and a notable 54% jump in net profit after tax, benefiting from reduced operating costs.

Strategic AI Investments and Vendor Partnerships Bolster Growth

Dicker Data’s FY25 momentum was boosted by strategic initiatives in artificial intelligence and cybersecurity. The company established an AI proof-of-concept facility in partnership with Dell Technologies and Equinix in Sydney, alongside securing the first Cisco AI Pod in the region, expected to be operational in the first half of FY26. Additionally, Dicker Data was appointed as a distributor for cybersecurity leader CrowdStrike and AI data management vendor VAST, expanding its footprint in high-growth technology segments.

These developments build on the company’s earlier momentum reported in H1 FY25, where AI deployments and PC refresh cycles drove a 15.7% revenue increase, as detailed in the company’s AI and PC refresh growth and AI and PC refresh surge announcements. The AI Accelerate series launched by Dicker Data has attracted strong partner engagement, signalling growing ecosystem appetite for AI solutions in the ANZ region.

Balance Sheet Strength and Dividend Policy Update

Despite increased sales volumes, Dicker Data managed to reduce net working capital by $12.2 million and decrease net debt by $12.8 million to $293 million, reflecting disciplined capital management. The company announced a shift to a revised dividend policy targeting 80-100% payout of net profit after tax, maintaining its quarterly dividend schedule and introducing a 1% discount for shareholders participating in the dividend reinvestment plan (DRP). The final dividend for FY25 was 11.5 cents per share, fully franked, bringing the total dividends for the year to 44.5 cents per share.

FY26 Outlook Underpinned by Strong YTD Performance and Market Tailwinds

In the first four months of FY26, unaudited gross revenue climbed 13.4% to $1.267 billion, with net operating profit before tax surging 45.5% to $47.3 million. This was driven by elevated demand in endpoint devices, software, and data centre refresh projects, alongside margin improvements from inventory sales. AI-related revenues have already exceeded $20 million and are expected to accelerate through the year.

Dicker Data’s FY26 strategy focuses on scaling AI-enabled infrastructure, capturing the datacentre refresh cycle, and expanding cybersecurity and software offerings. The company also aims to strengthen its SMB partner base with low-touch engagement models and broaden its portfolio with new vendors. Market forecasts from Gartner predict IT spending growth of 8.9% in Australia and 10.4% in New Zealand for 2026, with datacentre systems expected to grow 22.5%, providing a supportive backdrop for Dicker Data’s growth ambitions.

While pricing pressures from vendor strategy changes may impact unit demand in the second half, the company anticipates overall revenue growth to remain robust. This disciplined approach to enterprise segment engagement and operational improvements positions Dicker Data well to capitalise on evolving technology trends.