Datatec's AI-Fueled Transformation: Riding the Infrastructure Wave from Distribution to Services
FY26 results show a company building a secular AI infrastructure franchise, with cybersecurity and cloud-led recurring revenue driving record EBITDA.
DTC.JO · Earnings Call · 2026-05-26
AI Tailwinds Power a Record Year
Datatec's FY26 results, released on 26 May, delivered a striking confirmation that the company is capturing the enterprise-side of the AI infrastructure buildout. CEO Jens Montanana opened the call with a clear thesis: “another year of excellent performance with AI investment fueled growth in most of the areas we operate.” — Jens Montanana, Chief Executive Officer · 2026-05-26 The numbers back that up. Adjusted EBITDA grew at nearly double the rate of gross invoiced income and gross profit, while underlying EPS doubled again—creating what management described as “almost a 4x leverage between top and bottom line growth.” This earnings power translated into a record ordinary dividend of $0.24 per share. The company's strategic pivot is unmistakable. working capital management improvements and a shift toward Cloud-based, recurring revenue are reshaping the profitability profile. The business mix now sees nearly 70% of Westcon’s sales coming from repeatable software licenses or delivered services, up from a majority one-off CapEx just a few years ago. This is not merely a cyclical uptick; it's a structural evolution toward sticky, high-margin revenue.Westcon and Logicalis: Two Engines of Growth
Westcon International delivered a record year in profitability, its seventh consecutive year of top and bottom line growth. Cybersecurity now accounts for over half of total sales and is growing faster than any other category. Montanana framed the opportunity succinctly: “We are entering a secular trend that will be very positive for networking.” — Jens Montanana, Chief Executive Officer · 2026-05-26 The thesis is simple but powerful: AI automation is generating enormous data volumes that demand faster infrastructure, and this investment cycle will be sustained by the need for on-premises inference and cybersecurity defenses. Logicalis International was even more striking. Gross invoiced income rose 12% to $2.1 billion, with the recurring element up 17% to 63% of total. Cloud-based sales now drive nearly a quarter of top line. Operating profit more than doubled in two years. The company is executing a playbook where services and software dominate, driving gross margins above 30%—best-in-class among peers.The Market's Verdict
The tape is voting on the same themes. Global keyword momentum strongly favors data center AI and AI data centers, with dozens of positive price movers across the space. Peers like Lenovo (0992.HK) reported AI server and AI cloud strength, confirming the breadth of demand. Datatec is riding a wave that is clearly visible across the market—not a company-specific story but a secular tailwind. Yet management remains cautious. Montanana warned of “AI is going to be more impactful for everything that's non-IT” — Jens Montanana, Chief Executive Officer · 2026-05-26—a reminder that adoption will be messy and disruptive. The company is vigilant about currency volatility, inflation, and supply chain disruptions. The Latin America recovery, while improving, is still below target conversion rates.The market has rewarded the name with a strong run, but the real opportunity lies in the durable shift toward AI-driven enterprise infrastructure. Datatec is well positioned to benefit from the AI automation wave, but the risk is whether the current valuation already discounts the multiyear potential. This is a company that has executed well on its transformation and is now reaping the rewards—a compelling story for investors who want exposure to the AI supply chain without the hyperscaler volatility.Our forward view remains very positive for our industry, but cautious with the overall environment. We are vigilant to currency volatility, inflation and supply chain disruption and any dysfunctional international trade arrangements. As our performance continues to improve, so do the possibilities for unlocking shareholder value, which remains a strategic priority.