Australian business shines as Datacom Group reports positive 2025 numbers

Datacom is weathering a tougher ICT services marketplace, reporting slight increases in both revenue and profit for the year ended 31 March, 2025, courtesy of strong business in Australia.

Group revenue was NZ$1.48 billion (A$1.37 billion), up from $1.47 billion in 2024, while net profit after tax increased to $37 million from $34 million. Group EBITDA was $147 million, down from $152 million.

Operating cash flow remained strong at $164 million while the business made significant progress on reducing net debt.

Datacom CEO Greg Davidson said while challenging market conditions resulted in a reduction in customer spending in New Zealand, continuing momentum in the Australia helped offset this and deliver a positive result overall.

“We knew coming into FY25 that it was going to be a particularly challenging year in New Zealand, not just for Datacom but also for our customers,” Davidson said.

“Despite the fact many organisations had to push the ‘pause’ button on key technology projects our team has played a critical role in supporting customers throughout New Zealand ensuring they have the assistance they need to navigate an increasingly complex technology and business landscape, while also ensuring they have the right foundations in place to support future growth ambitions.”

Notable wins
In Australia, the business secured several notable contract wins, particularly in government.

“Our Australian team continue to be the go-to experts when it comes to delivering large and complex projects and over the past year have secured significant government contracts in the areas of networks and infrastructure, and AI app modernisation projects,” Davidson said.

“We expect this momentum will continue well into FY26, particularly given the return to ‘business as usual’ post-election and the increased focus on building resilience and capability that we’re seeing amongst key customers in the government space.”

Davidson told Reseller News third party product resell and IT outsourcing activity were the fast growing areas for Datacom in Australia. It was also doing a lot more business in the software development platform market and pushing the company’s SaaS platforms in both geographies.

“We do all of the core infrastructure services in both countries,” he said.

The application of automation has also been an area of focus.

“In order to make progress at the moment, we have to be automating more of what we’re doing,” he said. “AI is just unleashing a whole new generation of it.

“Particularly if there’s existing code from an old system, there’s now a generation of business analysis, documentation, automation of all the coding activities and generation of test cases.

“You still need developers involved to design what the new system does and to manage all that process, but it is enabling us to get many times the productivity we would have had.”

Datacom had also made significant progress in embedding AI into both its own operations and across its product and service offerings to customers.

“AI is the single biggest and most significant technology shift that we’ve seen in decades,” Davidson said. “The opportunities around AI are almost endless and over the past year our teams on both sides of the Tasman have done an exceptional job of identifying use cases – both for our business and customers – and building innovative solutions that are delivering tangible results while also ensuring organisations have the right foundations and technology in place to support future ambitions.”

In the customer experience space, Datacom had been able to introduce solutions to help remove pain points and support a smoother experience for end users.

“This includes implementing an AI assistant for our own payroll solution, Datapay, that enables the consultants to analyse legislative changes and answer complex queries using natural language prompts and automated responses,” Davidson said.

The work Datacom’s team of more than 1800 developers was doing around AI-led application modernisation had drawn the attention of key customers and partners in the region.

“Legacy software remains an Achilles heel for many organisations, and this is something AI can solve,” Davidson said.

Datacom’s team was already using AI agents to write up to 70% of code, resulting in cost savings of between 30% and 50% for our customers and a significant reduction in time spent to complete the project.

Focus on the future
2025 was a year of transformation for Datacom, with a strategic programme of work designed to simplify and improve operations and foster growth in priority products and solutions.

Datacom had established dedicated teams in-market, across four defined lines of business: professional services, managed operations, SaaS products, and infrastructure products, streamlining its operations through automation, removing duplication and driving efficiencies.

It also helped speed up projects around AI and cloud optimisation, and what Datacom refers to as the “future of service delivery” for managed operations customers.

“Ensuring we embrace AI at pace is critical to achieving economic growth,” Davidson said. “However, it’s important that we don’t lose sight of the people and communities this technology is meant to serve, or the impact that lack of planning and thought around future demand will place in terms of energy supply and in-country processing capability.”

Equally important was ensuring Datacom’s current and future workforce had the training, tools and support they need to use AI in their everyday work.

“While most Australian and New Zealand employees say they are using generative AI, there is significant opportunity for organisations to boost usage – in a safe and secure way – through the development of secure tools and AI environments.”

Over the past two financial years Datacom had made significant investment in upgrading its data centres and building out its SaaS product capabilities, including the launch of a Water Intelligence Asset tool for local councils.

It also strengthened its partnership with AWS and inked a preferred supplier relationship with NZ telco 2degrees.

“Over the coming year we will be working closely with our hardware and hyperscale partners to ensure we have both the traditional and GPU processing capacity required to ensure our customers are able to meet their cost, resilience, sovereignty, compliance and latency needs,” Davidson said.