Data#3 raises FY27 first-half profit forecast after record year

First-Half Profit Forecast Raised

Data#3 Limited (ASX:DTL) has lifted its FY27 first-half profit before tax projection to between $52 million and $57 million, equivalent to growth of 55% to 70% on the $33.5 million prior corresponding-period result. The upgraded forecast includes gross profit growth of about 20% at the midpoint and approximately $8.8 million of interest income.

The new range marks a sharper outlook than the October first-half profit update, which had pointed to first-half profit growth of more than 40% and gross profit growth above 15%. Data#3 said visibility had improved as the new financial year began, but cautioned that supply-chain conditions, vendor-program changes, customer purchasing decisions, product deliveries and services milestones could still affect the forecast.

Record FY26 Result Sets the Base

The upgrade follows another record year for the Brisbane-based technology solutions provider. Gross sales climbed 12.7% to $3.4 billion, statutory revenue rose 6.4% to $907.3 million and profit before tax increased 14.0% to $78.8 million. Net profit after tax reached $54.5 million, up 13.1%, while fully franked dividends rose 13.0% to 31.75 cents per share, representing a 90.3% payout ratio.

Recurring gross sales increased to 70% of the total, while the company remained debt-free with $326.0 million in cash at 30 June 2026. The FY26 results and dividend had highlighted the same combination of stronger earnings and dividends alongside a weaker Services performance, which remains an important execution issue for the year ahead.

Software and Infrastructure Carry the Growth

Software Solutions gross sales rose 14.1% to $2.3 billion, with gross profit up 7.6% to $78.1 million despite the full-year impact of changes to Microsoft’s partner incentive programs. Growth came from Azure migrations and consumption, cloud agreements, Copilot, security, software advisory work and a stronger contribution from Adobe, VMware and Veeam.

Infrastructure Solutions produced an even sharper improvement in profitability. Gross profit increased 18.6% to $84.5 million, average gross margin improved to 13.0% from 12.5%, and management profit rose more than 78% to $31.2 million. Demand was supported by Windows 11 upgrades, device refreshes, AI-enabled hardware, hybrid cloud and infrastructure for modern data and AI workloads.

Services Turnaround and AI Investment

Services was more uneven. Gross sales rose 3.6% to $412.3 million, led by a 22% increase in Business Aspect consulting, 11.5% growth in Maintenance Services and 9.4% growth in Managed Services. Project Services fell 15.3% and People Solutions declined 8.7% amid delayed procurement, weaker business confidence, fewer large infrastructure projects in some states and a difficult labour market.

Data#3 is responding with a more integrated services model, clearer ownership of offerings and greater sales discipline. It also plans to establish a dedicated AI Practice and customer-facing AI delivery squads, while expanding its existing security capability with a 24x7 Sovereign Security Operations Centre designed to support local data residency, governance and regulatory requirements.

Full-Year Growth Will Be Less Even

Management expects FY27 profit before tax to be heavily weighted to the first half, partly because of large one-off transactions announced earlier in October. It still expects growth in the second half and across the full year, but at a more normalised rate than the first-half increase. That distinction matters: the upgraded range is a strong near-term signal, but it is not being presented as a straight-line guide to the full year.

Data#3 is scheduled to report its half-year results on 22 February 2027. By then, the key test will be whether the Services reset is translating into better project execution and whether the AI, security and public-sector opportunities are building durable recurring earnings rather than simply amplifying a transaction-heavy first half.