Latest news with #Datacom
RNZ News
5 days ago
- Business
- RNZ News
Datacom posts $37m profit amid tough year - bets big on AI
Photo: RNZ / Calvin Samuel One of the country's biggest local IT companies, Datacom, has posted an improved full-year result in what it calls a challenging market. Its net profit for the year ended March was $37 million compared to $34m the year before, as it increased revenue marginally to $1.48 billion with new business won in the Australian government sector. "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," chief executive Greg Davidson said. He said many organisations had pushed "pause" on key technology projects, and small New Zealand businesses had had a difficult year. Datacom managed operations to match variable demand, such as call centres, and its overall staff numbers had been reduced by about 12 percent to 5,375, while it also moved to significantly reduce debt. Davidson said Datacom was moving to embed artificial intelligence in its operations and use it to help customers, especially those still using old "legacy systems", which he said was the Achilles' Heel of many organisations. "AI is the single biggest and most significant technology shift that we've seen in decades. The opportunities around AI are almost endless." As an example, he said Datacom was using AI to write new code at a cheaper price and in a quicker time, but greater use and industry commitment to high standards for adoption and ethical use were needed. "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." Sign up for Ngā Pitopito Kōrero , a daily newsletter curated by our editors and delivered straight to your inbox every weekday.
Techday NZ
5 days ago
- Business
- Techday NZ
Datacom posts NZD $1.48 billion revenue, eyes AI-led growth
Datacom Group has reported its financial results for the year ending 31 March 2025, showing steady revenue growth and a focus on artificial intelligence (AI) as it marks its sixtieth year of operations. The company recorded group revenue of NZD $1.48 billion for the 2025 financial year, a slight increase from NZD $1.47 billion in the previous year. Net profit after tax rose to NZD $37 million, up from NZD $34 million the year prior, while group EBITDA was NZD $147 million compared to NZD $152 million in FY24. The company's operating cash flow remained strong at NZD $164 million, with notable progress made in reducing net debt. New Zealand and Australian markets Greg Davidson, Chief Executive Officer of Datacom Group, stated that challenging conditions in New Zealand, including reduced customer technology spending, were partially offset by ongoing positive momentum in Australia. The company's operations in Australia secured several significant contracts, particularly in the government sector. "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." Speaking on Australian operations, Davidson said, "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." AI and technology adoption Throughout the year, Datacom advanced its use of AI in both internal operations and customer services, seeking to capitalise on technology opportunities and efficiencies. The company introduced AI solutions across sectors, notably deploying an AI assistant within its own payroll product, Datapay, to analyse legislative changes and respond to complex queries using natural language processing. "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." The business also recently worked with the Melbourne International Comedy Festival to create an AI-powered "Funny Finder" tool that helps audiences select shows from a 680+ programme line-up. Davidson highlighted the work of Datacom's developers, stating, "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." Strategic transformation He also described FY25 as a period of change for the company, pointing to a transformation programme aimed at improving efficiency and supporting growth in key product areas. The restructure introduced dedicated teams focused on four lines of business: Professional Services, Managed Operations, SaaS Products, and Infrastructure Products, with tailored operations for Australia and New Zealand. "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." Industry outlook and investment Datacom plans to continue investing in infrastructure and in-country capability, particularly as demand for AI grows. Davidson expressed the view that industry-wide attention must be paid to the safe and ethical adoption of AI and the development of workforce capabilities. "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." The company has invested in updating its data centres and developing new SaaS products, such as the Water Intelligence Asset (WAI) tool designed for local councils. Davidson affirmed the business's plans for ongoing investment, saying, "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." Datacom holds a staff level of 5,375 full-time employees and operates across 26 locations, including four data centres. Despite some anticipated headwinds in the coming year, the company underlined its intent to pursue growth and support its shareholders and the wider community.
