Data#3 (DTL) H1 2026 earnings summary

Executive summary

• Gross sales reached $1.54 billion for 1H FY26, up 9.2% year-over-year, outpacing the Australian IT market and reflecting sustainable profit growth despite challenging conditions in some service lines.

• Statutory revenue rose 8.1% to $423.1 million, driven by strong Infrastructure Solutions performance.

• Net profit before tax increased 4.5% to $33.5 million; net profit after tax rose 3.7% to $23.2 million; basic EPS up 3.6% to 14.95 cents.

• Recurring revenue remained high at 70%, supported by multi-year subscriptions and as-a-service models.

• Multiple industry awards received, including Microsoft Country Partner of the Year and Cisco Partner of the Year.

Financial highlights

• Gross profit was $144.0 million, up 0.3% year-over-year; average gross margin declined to 9.3% from 10.2% due to Microsoft incentive changes.

• EBIT increased 6.2% to $27.6 million; EBITDA rose 5.7% to $30.9 million with a margin of 7.3%.

• Cash balance at period end was $125.4 million, with average daily cash balance up 12% to $347 million.

• Operating expenses fell 5.4% year-over-year, aided by insurance savings and a one-off $0.9M lease adjustment.

• Fully franked interim dividend up 3.1% to 13.50 cents per share, payout ratio 90.3%.

Outlook and guidance

• Software Solutions expected to return to gross profit growth in 2H FY26, with full-year contribution consistent with FY25.

• High single-digit gross profit growth (7%-9%) targeted for FY26, with stronger H2 performance anticipated.

• Infrastructure Solutions expected to benefit from Windows 11 refresh and AI-enabled device adoption; managed services and infrastructure to maintain growth.

• No specific FY26 earnings guidance provided; earnings expected to be skewed to the second half.

• Overall outlook remains positive, with sustainable earnings growth targeted and AI adoption as a key driver.