The Data#3 Limited (ASX: DTL) share price has lifted 3% higher today after the technology company reported a record result. The software provider increased revenues by 14.9% and upped earnings per share by 30.5% despite the challenges of the COVID-19 pandemic.
What does Data#3 do?
Data#3 is the largest enterprise software supplier in the Asia Pacific. Targeting enterprise and government customers, the company delivers technology solutions in cloud, mobility, security, data and analytics, and IT lifecycle management.
Data#3 provides services across consulting, procurement, projects, resourcing, and managed services sectors. The software provider is headquartered in Brisbane, with facilities across 12 locations in Australia and Fiji.
What did the company report?
Data#3 reported a revenue of $1.6 billion, up 14.9% on the previous year. This was driven by growth in public cloud revenue which lifted 60.4% to $581 million. The cloud revenue stream is accelerating and now accounts for around a third of total revenue.
Earnings before interest and taxes (EBIT) went up by 32.3% to $34.1 million and EBIT margin increased 0.3pp to 2.1%. This contributed to a net profit after taxes of $23.6 million, up 30.5%. Earnings per share were also up 30.5%.
Data#3 declared total dividends of 13.9 cents a share, a 29.9% increase on FY19.
Chairman Richard Anderson said:
Data#3's performance both in increased profit and solid underlying cash flow has delivered a significant increase in dividend. Combined with a very strong share price performance, this provides shareholders with an outstanding return for the year.
The Data#3 share price has gained 133% over the past year and is up 98% since March.
Data#3 responded to the pandemic by mitigating supply chain risk and responding to shifts in customer projects and investment priorities. The company offered pre-packaged pandemic technology solutions and received excellent customer satisfaction feedback.
CEO Laurence Baynham said:
We are delighted with the performance of the consolidated Data#3 business, which delivered another record result in what has been an extraordinary year. The result demonstrates the inherent strength and relevance of our solution offerings in an evolving market.
What's the outlook for Data#3?
Data#3 remains confident in its longer-term strategy. It has a robust business with no material debt and solid long-term customer relationships. The company expects that technology will play a major role in Australia's economic recovery from the pandemic and says it is well-positioned to capitalise on opportunities.
Nonetheless, given the timing of recovery is uncertain, Data#3 has declined to provide commentary on its FY21 outlook, saying only that the long-term financial goal is to deliver sustainable earnings growth.
The Data#3 share price was trading 3.1% higher at $5.32 at the time of writing.