Datacom Group has announced its financial results for the year ended 31 March 2025 (FY25). Group revenue was $1.48 billion, a slight increase on $1.47 billion the prior year (FY24), while net profit after tax increased to $37 million, up from $34 million in FY24. Group EBITDA was $147 million, compared to $152 million the year prior.
Full-year operating cash flow remains strong at $164m and the business made significant progress on reducing its net debt levels.
Commenting on the results, Datacom Group CEO Greg Davidson said that while challenging market conditions resulted in a notable reduction in customer spend in the New Zealand market, continued momentum in the Australian market helped offset this resulting in an overall positive result for the Group.
“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. 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.”
In Australia, the business secured several notable contract wins, particularly in the government space.
“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. 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.”
Throughout FY25, Datacom made significant progress in embedding AI into both its own operations, resulting in efficiencies and across its products and service offering to customers.
“AI is the single biggest and most significant technology shift that we’ve seen in decades. 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 (or CX) space, we’ve been able to introduce some innovative 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.”
Recently, Datacom has teamed up with the Melbourne International Comedy Festival to create an AI-powered “Funny Finder” tool to help audiences pick their perfect show from the festival’s 680+ show programme.
Davidson notes the pioneering work that Datacom’s team of 1800+ developers is doing around AI-led application modernisation in particular has 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. Using our AI-led approach to application modernisation, our team is already using AI agents to write up to 70% of code, resulting in cost savings of between 30%-50% for our customers and a significant reduction in time spent to complete the project.”
Davidson adds that FY25 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.
As part of this programme of work, which is now entering the final stages, Datacom has established dedicated teams in-market, underpinned by four defined lines of business (Professional Services, Managed Operations, SaaS Products, and Infrastructure Products) and Market-led operations in Australia and New Zealand to enable improved collaboration and better support customers.
“This year, Datacom marks the significant milestone of 60 years of operations, so completing this key piece of work – which is ultimately designed to future-proof our business and ensure we are in the best possible position to support the changing needs of our customers – is perfect timing.
“Not only has the transformation seen us streamline our own operations by automating processes, removing duplication and driving efficiencies, it has also helped us speed up key projects we’re doing around AI and cloud optimisation, and what we refer to as the ‘Future of Service Delivery’ for our customers in the managed operations space.
With AI adoption moving at speed, Davidson notes there is an immediate need for the industry as whole to play an active role in ensuring safe adoption of AI but also ensure meaningful and robust discussion is taking place around the areas of ethical use, resilience and in-country capability.
“Ensuring we embrace AI at pace is critical to achieving economic growth. 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 is making sure that our current and future workforce has 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.”
Davidson said the Group is committed to investing in the areas of infrastructure and in-country capability.
“Over the past two financial years we have made significant investment around upgrading our data centres and building out our SaaS product capabilities, including the launch of our Water Intelligence Asset (WAI) tool for local councils. 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.”
While FY26 will see us continue to navigate some economic challenges, we remain committed to innovation, growth and ensuring we are delivering a good outcome to both our shareholders and the wider community.
All financial figures are in New Zealand dollars.
