Datatec Group has turned a remarkable corner, posting a 9.3% rise in gross invoiced income to US$8.46 billion for the year ended 28 February 2026 – a clear signal that the JSE‑listed tech distributor is benefitting from robust AI infrastructure spend and an accelerating cybersecurity market. The surge in earnings comes as the company’s preferred measure of channel activity outpaces the broader IT sector, highlighting a shift toward higher‑margin software and services across its global footprint.
The headline figures illustrate the power of operating leverage. Adjusted EBITDA jumped 17.8% to US$290.1 million, while underlying earnings per share leapt 35% to 48.2 cents. Headline EPS surged 56.5% to 39.9 cents, and profit after tax climbed to US$108.7 million, up from US$69.3 million a year earlier. The board, led by long‑standing CEO Jens Montanana, declared a final cash dividend of R2.25 per share, taking total FY2026 distribution to US$0.24 per share, a 54.8% increase in dollar terms.
Westcon International, Datatec’s global distribution arm, delivered the bulk of the upside. Its gross invoiced income grew 9.6% to US$5.74 billion, and adjusted EBITDA rose 15% to US$172.4 million. Cybersecurity now makes up 52% of Westcon’s category sales, edging up from 51% a year ago, while network‑infrastructure refreshes driven by enterprise AI projects added further momentum.
Datatec FY2026 results: Income mix and regional performance
| Segment | Gross invoiced income | Growth YoY | Adjusted EBITDA | Key trend |
|---|---|---|---|---|
| Westcon International | US$5.74 bn | 9.6% | US$172.4 m | Cybersecurity 52% of sales, AI‑driven refresh |
| Logicalis International | US$2.15 bn | 12% | US$114.5 m | Cloud revenue +23%, annuities 35% of mix |
| Latin America Services | – | – | US$24.3 m | Southern LATAM up, Mexico remodel underway |
| Total Group | US$8.46 bn | 9.3% | US$290.1 m | Software & services 71% of mix (up from 69%) |
The table shows that software and services now represent 71% of Datatec’s gross invoiced income, a clear departure from its historic hardware‑centric profile. The shift is especially pronounced in Logicalis, where cloud‑related invoicing surged 23%, and recurring annuity contracts now account for over a third of sales, underscoring the transition to more predictable revenue streams.
Logicalis International, operating across North America, Europe, the Middle East, Africa and APAC, saw adjusted EBITDA rise 22% to US$114.5 million on the back of a 12% lift in invoicing. Cloud services were the primary driver, reflecting enterprise appetite for scalable, AI‑enabled workloads.
In Latin America, the segment rebounded after a turbulent period. Adjusted EBITDA climbed 21% to US$24.3 million as Chile and the wider southern region delivered strong order intake, while the northern market, particularly Mexico, experienced a 39% drop. Datatec’s plan to “re‑model” its Mexican operations signals a strategic reset aimed at restoring growth.
Beyond the core metrics, the group posted a return on invested capital of 21.6%, up from 16.5%, and trimmed net debt to US$46.7 million from US$52.1 million. These improvements point to a healthier balance sheet poised to fund future acquisitions and shareholder returns.
A tax accrual release of US$15.5 million inflated headline gross profit; excluding this one‑off, Westcon’s gross profit grew 9.6%, aligning with the underlying revenue trend.
Datatec also disclosed a favourable court ruling for its Brazilian subsidiary, PromonLogicalis. The judgment makes US$38.4 million recoverable against future tax liabilities, comprising US$21.3 million of historic corporate tax and US$17.1 million in interest. Though the benefit will be recognised in upcoming periods, it reinforces the group’s resilience in navigating complex international tax environments.
Strategic outlook amid global uncertainty
While the numbers are impressive, Datatec remains cautious. The executive team warned that “global geopolitical situation creates uncertainty in trade, energy and inflation” and pledged to stay focused on operating leverage, earnings quality and cash generation. The repeated emphasis on “unlocking shareholder value” hints at further capital‑allocation moves, possibly more bolt‑on deals or portfolio optimisation.
AI infrastructure investment is expected to keep fueling demand for networking and on‑premises compute, the same forces that propelled Westcon’s standout year. This outlook dovetails with the broader industry narrative that AI‑driven workloads will reshape hardware refresh cycles and elevate the importance of secure, high‑performance connectivity.
Recent bolt‑on acquisitions
| Acquisition | Buyer | Sector | Purchase price |
|---|---|---|---|
| Real Security | Westcon (Europe) | Cybersecurity | US$15.1 million |
| Maple Woods (Logicalis NA) | Logicalis North America | ICT services | US$2.9 million |
| NetworkedAssets (Germany) | Datatec (post‑FY) | Services | US$4.8 million |
These modest‑size deals expand Datatec’s cybersecurity footprint in Europe, deepen its service capabilities in North America, and add a specialised German services business, reinforcing the group’s strategic focus on high‑growth, high‑margin segments.
Following the earnings release, Datatec’s share price nudged 0.4% higher in early Johannesburg trading, lifting market capitalisation above R20 billion and delivering a 40% total return over the past twelve months. The steady stock performance reflects investor confidence in the group’s transformation narrative and its ability to capture value from AI‑centric and security‑driven demand.
Overall, Datatec’s FY2026 results paint a picture of a technology distributor successfully recalibrating its portfolio toward software, services and security. With a solid balance sheet, an expanding AI‑related pipeline and a clear acquisition strategy, the group is well‑positioned to navigate the uncertainty ahead while delivering continued upside for shareholders.