Rising cloud success raises Data#3 revenue past $2.5B

Data#3’s revenue for the 2023 financial year passed the $2.5 billion mark, an increase of 16.9 per cent year-on-year, claiming this growth occurred due to rising multi-cloud revenue and cloud storage sales.

During the 12 months to 30 June, Data#3’s net profit before tax was also up 20.7 per cent to $53.2 million, and its net profit after tax also increased 22.4 per cent to $37 million.

While no concrete information was given about its multi-cloud revenue, the company said it fueled its results, with continued customer investment seen in the technology, as well as security and networking. 

“Multi-cloud is inherent in most of our solutions, which means there is little value in reporting on it separately,” the company noted in its financial documents.

Supplier relationships and customer base also boosted results, Data#3 said.

Data#3 CEO and managing director Laurence Baynham said FY23 was “another strong year” for the company, claiming its revenue growth was three times greater than the wider IT sector.

The company also stated its services growth continued to be a high priority, with consulting services revenue up 25 per cent to $33.2 million, project services revenue up 11.9 per cent to $74.5 million and support services — consisting of managed and maintenance services –up 2.6 per cent. 

Managed services was up 31.1 per cent to $39.3 million, while maintenance services declined 3.9 per cent to $125 million.

“We are pleased with the success of our managed services offerings, fueled by our Microsoft Expert Azure Managed Services Provider accreditation. This certification places Data#3 among the elite ranks of Microsoft Azure Managed Services Providers globally,” the company said.

“We have continued to invest in the managed services business and onboarded many new customers in FY23. We expect to realise the benefits of this investment as contracts mature following their initial transition phase and profitability generally increases from year two onwards of typically five-year contracts.”

Baynham pointed out Data#3 was seeing new solutions in artificial intelligence (AI), which is creating “substantial opportunities across our customer solutions”.

“As we enter this new era of generative AI, we are already seeing rapid product development incorporating cloud, hybrid work, security, connectivity and data analytics. Microsoft is the global industry leader and as their leading partner in the region we are at the forefront of this change as our customers’ enabling technology is increasingly AI-driven,” he said.

Data#3 also said it is seeing growing demand for its solutions, especially for large infrastructure and digital transformation projects.

“We continue to experience a steady increase in the pipeline of large integration project opportunities across our corporate and public sector customers and are seeing strong revenue growth in our high margin managed services and consulting businesses, complementing our growing software and infrastructure business units,” Baynham added. 

“With our leading market position, strong supplier relationships, long-term customer base and experienced team we are confident in our outlook as we enter FY24, despite some expected slowdown in general economic activity. The industry is rapidly progressing, and we are well positioned to benefit.”

In the financial year prior, Data#3 reported a revenue increase of12.1 per cent to $2.2 billion, with public cloud revenue playing a significant role