Data#3 falls just below $1 billion in half-year revenue – Finance – Cloud – Services

Brisbane-based solutions provider Data#3 reported nearly $1 billion in revenue for the first half of the fiscal year, boosted by nearly 35% growth in cloud revenue public.

The company’s overall revenue increased 16.6% to $999.3 million and said its public cloud business grew 34.8% to $466.7 million. Gross profit rose 17.5% to $105.4 million, driven by growth in services, the company told shareholders.

Data #3 boss Laurence Baynham said the company was pleased with the performance and it reflected the strong contributions from each of the business units and regions.

“This was underpinned by diligent execution of our strategy as we grew our software and services business and our recurring revenue base,” he said.

“We have maintained strong service levels with our large, long-standing customer base while strengthening our relationships with our key suppliers through our highly experienced and committed team. »

Public cloud growth has been attributed to cloud migrations by enterprise and government customers and the company said that while margins were lower in the public cloud, data obtained from customers provided a competitive advantage.

Recurring revenue now represents around 65% of total revenue, compared to 62% in the previous corresponding half-year.

The company said that while the backlog caused by the global shortage of computer chips and integrated circuits helped get FY22 off to a quick start, it experienced a similar backlog in late December. He described the impact on the first half result as “not significant”.

He said he had adapted to continued supply chain shortages and delays, with early ordering and contingency planning, resulting in a return to more predictable business operations, he said. .

Additionally, Data#3 disclosed that it increased its direct headcount by 10% over the prior corresponding period, primarily in service teams.

Data#3 said it was well positioned to capitalize on a growing market and a continuing trend for large-scale digital transformation projects, particularly in software and services.

“The Australian IT market is expected to grow at a record pace this calendar year, which will allow us to further consolidate our market leadership and expand our services business,” Baynham added.

“The pipeline of large integration project opportunities continues to expand and growing services is integral to our software and infrastructure offering while further improving our margins.

“Ongoing supply constraints caused by the global shortage of computer chips and integrated circuits are expected to continue in FY23, but the industry has adapted to these longer lead times, minimizing their impact. Conversely, we are well placed to capitalize on the opportunities this presents by working closely with customers and suppliers and leveraging the strength of our supplier relationships.

“While our strong business performance continued into the second half of the year, given that pandemic-related uncertainties remain, at this stage it would not be prudent to provide specific guidance for FY22. from previous years, we continue to expect sales to peak in May and June and earnings to pick up in the second half, and sustainable earnings growth.”