Data#3 revenue hits $1.17 billion in first half of FY23

ASX-listed managed services provider Data#3 enjoyed what it calls "another record first half result" for the six months to December last year, in its 2023 financial year (1H FY23).

Net profit after tax (NPAT) increased by 38.1 per cent in 1H FY23 to $17.1 million, up from $12.35 million in the 2021 half year to December for the Brisbane-based MSP.

Data#3 revenue increased by 16.7 per cent to $1.17 billion in this period.

The MSP credits this to substantial multi-cloud growth in public and private cloud.

Contracts with government and large corporate customers also delivered recurring revenues of approximately 65 per cent of total revenue, in line with the previous corresponding period.

Last month, Data#3 announced that subject to finalising the interim accounts and audit review, its consolidated net profit before tax (NPBT) for the first half of FY23 was expected to be near the top end of the $21 million to $25 million guidance range.

This profit estimate was accurate, as Data#3 announced today that the NPBT was $24.6 million, with the company stating this highlights its continued improvements in operating leverage.

Gross profit increased 13.8 per cent to $120 million with overall gross margins at 10.3 per cent, due to the company’s larger but lower-margin infrastructure solutions and software solutions businesses growing more than 18 per cent.

“We are very pleased with the strong first half performance, which saw solid contributions across our business units and regions," Data#3 chief executive and managing director Laurence Baynham said.

"This was underpinned by particularly strong growth in our software and infrastructure businesses, reflecting momentum in our large integration projects, as well as good execution of our strategy to grow our services businesses and recurring revenue base,” he added.

Software was the strongest contributor to company revenue, making up $766.5 million, up 18.3 per cent since 1H FY22. Infrastructure contributed $242.3 million is revenue, up 18.4 per cent from the previous FY.  

Internal staff costs increased by 12.3 per cent from $75.5 million to $84.8 million with strong headcount growth in services and general renumeration increases.

Company headcount increased to 1300 people.

“Our strong customer base and close alignment with global vendors puts us in a strong position to further cement our market leadership in a rapidly growing Australian IT market," Baynham said.

“The pipeline of large integration project opportunities continues to build as large corporates and government bodies drive transformation agendas."

"Meanwhile our strategic focus on services growth remains an integral part of our software and infrastructure offering, while further improving our margins," he added.

“In line with previous years, we continue to expect a sales peak in the months of May and June and a profit skew in the second half," Baynham said.

Data#3 has been recognised by several vendors for national and international awards recently.

Earlier this year, Data#3 won the As-a-Service Partner of the Year award at the Aruba APJ awards for the second year in a row.

In November 2022, Data#3 was awarded the 2022 Enlightened Growth Leadership Award by the Frost & Sullivan Institute, due to the company’s balance of financial growth, corporate social responsibility and environmental, social and governance.

The same month Data#3 was also named as the 2022 Cisco Global Security Partner of the Year.

In February 2022, Data#3 was tapped by Adelaide-based Westminster School to deploy Dell EMC VxRail hyperconverged infrastructure to replace its IT systems.

During November 2021, Data#3 teamed up with India-headquartered MSSP SecurityHQ to bolster its managed security services.

April 2021 saw Data#3 score a deal to deliver a networking solution for the redeveloped Sydney Football Stadium, as part of an $828 million project.