Westcon-Comstor announces strong financial results, propelled by data-driven strategy and shift to recurring revenues

Robust performance sees double-digit increase in both gross profit and adjusted EBITDA in FY24, with strong growth in cybersecurity and networking

LONDON, UNITED KINGDOM, May 27, 2024 /EINPresswire.com/ -- Westcon-Comstor, a global technology provider and specialist distributor, today announced its results for the year ended 29 February 2024 (FY24).

Financial highlights
• Total revenue up 8% to $3.69bn (FY23: $3.42bn), driven by strong software results
• Gross sales across strategic vendors increases by 10%, with a CAGR of 10% over the last five years
• Gross profit up 23% to $403m (FY23: $329m), with double-digit growth across all regions
• Focus on recurring revenues with growth of 24% to $1.63bn, representing 44% (FY23: 38%) of total revenue
• Adjusted EBITDA increases by 26% to $120.2m (FY23: $95.1m), with further 0.5pp improvement in margin to 3.3%
• Revenue CAGR of 8% over five years demonstrates the success of the change in strategic focus introduced in FY18
• Net debt remained stable despite strong growth and product lead-time challenges

David Grant, CEO at Westcon-Comstor, said: “It has been another year of excellent growth and operational success for Westcon-Comstor. These results demonstrate our resilience and efficiency when operating in dynamic market conditions, whilst continuing to advance our vision of being the leading data-driven technology provider and specialist distributor of cybersecurity and networking solutions and services globally.

“Looking ahead, we are optimistic for the coming year as we continue to innovate to deliver an exceptional experience for our partners. As we look to maintain our growth, we are focused on identifying opportunities to further expand our capabilities through strategic acquisitions and other forward-thinking initiatives such as our Rebura acquisition and AWS Marketplace programme, cementing our successful position in the market.

“With our data-driven approach at the fore, coupled with our commitment to Partner Success and environmental and social responsibility, our robust performance throughout the year highlights our ability to deliver value and service excellence. We are optimistic that the coming year will be another year of growth for the company.”

Westcon-Comstor, which connects the world’s leading IT vendors with a channel of technology resellers, systems integrators and service providers, has a unique data-driven approach which has driven a growth in sales in all geographies, resulting in another year of exceptional progress. Total revenues increased 7.7% to $3.69bn (FY23: $3.42bn) driven by a strong performance in cybersecurity and networking. Gross profit increased 22.7% to $403m (FY23: $329m), with double-digit growth across all regions.

Results for the year ending 29 February 2024 reflect an acceleration in Westcon-Comstor’s shift to a software, services and subscription-based recurring revenue model, with recurring revenues now representing 44% of total revenues, up from 38% in FY23.

Adjusted EBITDA increased by 26.4% from $95.1m to $120.2m, reflecting the continued growth in revenue and drive for efficiency, which has resulted in a further 0.5 percentage point increase in adjusted EBITDA margin to 3.3% (FY23: 2.8%).

FY24 has seen an easing in the supply chain constraints experienced in the previous year, as there has been a steady improvement in hardware supply chain and product availability. The overall backlog on a net revenue basis has declined from $768m to $446m.

The company’s excellent operating performance has driven double-digit growth in gross profit across all regions during the year, reflecting the growth in revenue across each region.

Growth during FY24 has been driven by strong performance in cybersecurity and networking, which together now account for 89% of revenue. Ongoing innovation in the company’s offering to vendors and channel partners has resulted in several market-leading initiatives.

Combined, across all technology domains, software and services now account for 46% of revenue (FY23: 40%), illustrating the company’s shift to recurring revenues.

Looking forward, although there are challenging conditions, the company is expecting continued robust performance and growth in FY25. Westcon-Comstor’s growth is expected to benefit from its continued focus on cybersecurity and networking during the coming year, with the company’s cloud strategy also fuelling momentum.

Westcon-Comstor’s data-driven approach, alongside its focus on Partner Success and environmental and social responsibility, will continue to drive performance, positioning Westcon-Comstor as a leader in delivering unmatched value and service excellence.

Read the full earnings announcement

Michael Youds
Westcon-Comstor
investors@westcon.com
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