Data#3's first-half results show its total revenue rose by 19.2% to $856.7 million. $346.1 million of that was public cloud revenue.
Gross profit growth was weaker, however, increasing just 1.2% to $89.7 million. Total gross margin decreased from 12.3% to 10.5%, which Data#3 ascribes to a shift in its sales mix towards software licensing and public cloud.
An increased headcount meant staff costs increased by 2.5%, but operating expenses decreased by 18.4% due to a large reduction in travel costs as a result of the pandemic, rent savings following the decommissioning of the Data#3 Cloud platform, and a "concerted effort" to contain costs.
So net profit before tax increased by 10.2% to $13.9 million, earnings per share was up 7.9% to 6.09 cents, and the company declared an interim fully franked dividend of 5.5 cents per share, up 7.8%.
Data#3 CEO and managing director Laurence Baynham said "We are pleased with the first half performance, delivering another record result despite the challenging environment and changing market conditions. Once again, this result clearly demonstrates the inherent strength and relevance of our solution offerings in an evolving market.
"It is also reassuring that approximately 62% of our total revenue is recurring, derived from contracts with government and large corporate customers, fulfilling their essential IT requirements."
He added "We continue to see growth in the Australian IT market, and believe we are well positioned to capitalise on that opportunity as we continue to develop and offer solutions for our customers' changing requirements.
"The solid first half performance and pipeline of opportunities for the second half give us confidence that we will achieve our full year financial objective, being to deliver sustainable earnings growth."
Data#3 chairman Richard Anderson said "The results reflect the ongoing successful implementation of the company's strategies over a number of years, and the company's resilience to the challenges of the current environment."