Data#3 sees cloud surge in yet another record result

Data#3 sees cloud surge in yet another record result

62 per cent of Data#3's revenue was recurring

Data#3 CEO Laurence Baynham

Data#3 CEO Laurence Baynham

Credit: Data#3

Despite the challenging market conditions in the six months to December 2020, Data#3 has continued producing record results with revenue up 19.2 per cent to $856.7 million and net profit rising 7.9 per cent to $9.4 million.  

About $346.1 million of Data#3’s revenue derived from the public cloud arena (up 37.4 per cent), during the first half of FY21.

In a statement to shareholders, Data#3 CEO and managing director Laurence Baynham pointed out about 62 per cent of its total revenue was recurring, deriving from government and large corporate contracts. 

“We continue to see growth in the Australian IT market and believe we are well positioned to capitalise on that opportunity as we continue to develop and offer solutions for our customers changing requirements,” Baynham said.

“The solid first half performance and pipeline of opportunities for the second half, give us the confidence that we will achieve our full year financial objective, being to deliver sustainable earnings growth.”

During the first half gross profit increased 1.2 per cent to $89.7 million with total gross margin decreasing from 12.3 per cent to 10.5 per cent, reflecting the shift in Data#3’s sales mix along with strong growth in software licensing and public cloud revenues. 

Net profit before tax increased 10.2 per cent to $13.9 million. 

Staff costs also increased 2.5 per cent to $66.7 million, reflecting headcount growth predominantly in the services area, which Baynham said continues to grow. 

Operating expenses fell 18.4 per cent to $9.7 million due to a large reduction in travel costs, rent saving from decommissioning its cloud platform and a concerted effort to contain costs. 

Baynham indicated his FY21 priorities were to continue to adapt to changing market conditions and increase the full lifecycle of services.

Some of Data#3's key customer deals in the past six months include Victoria University, Department of Defence and Edith Cowan University

In November, Data#3 earned certification in Dell Technologies’ Cloud Platform (DTCP), making it the vendor’s first partner in the Australian and New Zealand region to do so. 

The certification, which is available for Dell Technologies’ Titanium partners, means the vendor has recognised Data#3's service capabilities with VMware and Dell Technologies.

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