Technology reseller and services provider Data#3 has reported a decline in revenue for the first half of the 2013 fiscal year, which was in line with its guidance, following a change in the software licensing billing schedule with Micrososft.
Revenue for the half decreased 7 per cent to $406.2 million compared to the previous corresponding period, with hardware product revenue down 9.7 per cent to $338.6 million.
Services revenue increased 12.7 per cent to $66.6 million and total gross profit increased 3.9 per cent to $61.6 million, while gross margins increased to 15.2 per cent from 13.7 per cent.
Data#3 managing director, John Grant, flagged changes to the payment schedule with Microsoft as a “major contributor” to revenue declines while a broader market shift away from hardware procurement also had an impact.
“The shifting in billing in [Microsoft’s] major licensing from annual to advanced and arrears pushed revenue out,” Mr Grant told The Australian Financial Review.
But, software licensing was strong, he added.
Further, declines were offset by the company’s largest ever infrastructure contract for Perth’s Fiona Stanley hospital supplying Cisco networking equipment.
“Gross revenue was down due the billing changes, and product revenue hardware and software was down in the market place particularly,” Mr Grant said.
Demand for cloud computing services - where companies can outsource IT management and hosting for a monthly bill, was flat.
“We’ve got good cloud and customers are not going there,” he said.
“They’re buying licensing software from us...the current market is in a state of getting more out of their current investment,” he said.
Data#3’ directors declared an interim fully franked divident of 3.45 cents per share.
It would not provide full-year guidance citing market conditions in both the private and public sectors were uncertain.
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