One of the best growth stocks, Data#3 is well placed to continue to deliver sustainable growth in FY25.
Data#3 Limited (ASX: DTL)
Data#3 Limited has reported strong financial performance for the half-year ending 31 December 2024, delivering results in line with market guidance despite ongoing economic challenges. The company recorded gross sales of $1.4 billion, reflecting a 7.4% increase compared to the previous year. While statutory revenue declined 1.9% to $397.9 million due to changes in revenue recognition, gross profit grew by 10% to $143.6 million, indicating improved margins.
Net profit before tax (NPBT) rose 4.1% to $32 million, and excluding one-off redundancy costs of $0.9 million, underlying NPBT increased 7%. Net profit after tax (NPAT) improved 4.3% to $22.4 million, and earnings per share (EPS) grew 4.2% to 14.43 cents. Shareholders will benefit from a fully franked interim dividend of 13.10 cents per share, marking a 4% increase from the previous year.
The company's Services division performed exceptionally well, with gross sales rising by 19.3%, driven by strong demand for Managed and Maintenance Services. The Software Solutions segment achieved record gross sales of $975.6 million, largely due to high demand for security products and cloud subscriptions, which pushed recurring revenue up to 70% from 67% in FY24. However, Infrastructure Solutions sales declined 12.9%, affected by delayed customer decision-making.
Data#3 is one of the high growth stocks, continuing to maintain a strong financial position with no debt. Chief Executive Officer Brad Colledge emphasized the company's focus on aligning with customer priorities, particularly in security, cloud computing, and connectivity, and its ability to adapt quickly to changes in vendor incentive programs, such as Microsoft’s recent modifications.
The company expects sustained growth in FY25, backed by increasing demand for AI, multicloud solutions, and cybersecurity services. While no specific financial guidance was provided, Data#3 remains confident in delivering continued earnings growth, with a seasonal sales peak expected in May and June 2025.
Source: Company’s Report
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