Here's why this ASX tech share is storming 6% higher on Wednesday

Dicker Data has released its first quarter update and has reported solid revenue growth.

| More on:
person sitting at outdoor table looking at mobile phone and credit card.

Image Source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The Dicker Data Ltd (ASX: DDR) share price is pushing higher on Wednesday.

In morning trade, the ASX tech share is up 6% to $8.88.

Why is this ASX tech share rising today?

Investors have been bidding Dicker Data's shares higher today after they responded positively to the release of the computer hardware and software distributor's first-quarter update.

According to the release, for the three months ended 31 March, Dicker Data delivered a 14.7% increase in total revenue to $772.3 million and 6.7% lift in net profit before tax to $25.4 million.

In respect to its revenue growth, management advised that this growth was driven partly by a full quarter contribution from Hills acquisition that was not in the comparative period.

The balance is attributable to organic growth from existing and new vendors and increases in other income, representing year on year organic growth of 9.7%.

One of the reasons the company's profits did not grow in line with revenue was its DAS business. It reported quarterly revenue of $33.4 million but has yet to deliver a profit. However, management advised that the first quarter was focused on cost rationalisation and it now expects the unit to be profitable from the second quarter.

Positively, the tech share reported an increase in its gross margin to 9.2%. This was in line with expectations and up from 8.6% a year earlier.

Dicker Data Chairman and CEO, David Dicker, commented:

We delivered a pleasing result in the first quarter of 2023, buoyed by a strong monthly revenue result in March. Revenue was up by 14.7% on the prior corresponding period and profit before tax remained strong increasing 8.8%, excluding one-off costs. We expect to see the upside of operational refinements undertaken during the first quarter within the next three to six months, putting us in a strong position to deliver on shareholder expectations in FY23.

Finally, the ASX tech share expects to continue paying out 100% of after-tax profits in FY 2023. This is expected to see three interim dividends of 10 cents per share before a final dividend in March 2024.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Dicker Data. The Motley Fool Australia has positions in and has recommended Dicker Data. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Earnings Results

A man holds his head in his hands, despairing at the bad result he's reading on his computer.
Earnings Results

NAB shares tumble 3% after FY24 result disappoints investors

The market isn't liking the big four bank's result today.

Read more »

A man looking at his laptop and thinking.
Earnings Results

NAB share price on watch after FY24 profits sink to $7.1b

How did the big four bank perform during the year?

Read more »

A male investor wearing a blue shirt looks off to the side with a miffed look on his face as the share price declines.
Earnings Results

Goodman shares fall on Q1 update

How did the company perform in the first quarter? Let's find out.

Read more »

A man in a suit smiles at the yellow piggy bank he holds in his hand.
Earnings Results

Westpac shares on watch amid $6.99b profit and new buyback

Has the big four bank delivered the goods for investors this year? Let's find out.

Read more »

Woman inspecting packages.
Earnings Results

This top 50 ASX stock is diving 5% despite a strong outlook

Investors were looking for more.

Read more »

Two male ASX 200 analysts stand in an office looking at various computer screens showing share prices
Earnings Results

Macquarie share price sinks despite $1.6b half year profit and new buyback

How did this investment bank perform during the first half? Let's find out.

Read more »

A woman holds her hand out under a graphic hologram image of a human brain with brightly lit segments and section points.
Earnings Results

Why the BrainChip share price is in the spotlight this week

Today's reaction is in stark contrast to the day of the release.

Read more »

Shot of a scientist using a computer while conducting research in a laboratory.
Healthcare Shares

2 All Ords ASX healthcare shares making BIG moves on quarterly updates

These two ASX healthcare companies are seeing heavy trading on Thursday.

Read more »