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Westcon-Comstor, a global technology provider and specialist distributor, has announced an increase in profitability. This is alongside strong growth in cybersecurity and an acceleration in its shift to a software, services and subscription-based recurring revenue model.
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The company posted its first-half results for the six months to 31 August 2024 (H1 FY25). It reported a 16.5% year-on-year increase in EBITDA (earnings before interest, taxes, depreciation, and amortisation) to US $69.5 million, with a 0.6pp rise in adjusted EBITDA margin to 4.0%.
Gross profit climbed 6.1% to $216.1 million on revenue of $1.80 billion, with gross margins reaching 12.0% (H1 FY24: 11.0%).
Surging revenue from cybersecurity
The distributor saw revenue from its cybersecurity portfolio surge 22.2% to $860.0 million. This is as it capitalised on growing demand from channel partners and their customers for multi-vendor solutions amid an increasingly complex threat landscape. Westcon-Comstor connects the world’s leading IT vendors with a channel of technology resellers, systems integrators and service providers.
Cybersecurity accounted for 48% of Westcon-Comstor’s revenue during the half-year period (H1 FY24: 38%), with a strong sales pipeline for the second half of the year.
Revenue from software sales saw similar growth. It rose 17.9% to represent 49% of total revenue (H1 FY24: 40%) as the company transitions away from traditional hardware. Westcon-Comstor is shifting towards recurring revenues based on annual subscriptions and Software as a Service (SaaS) models.
“Against a challenging backdrop of uncertain macroeconomic and market conditions, we are pleased to maintain our profit growth trajectory as we report a strong financial performance for H1 FY25,” saidDavid Grant, CEO at Westcon-Comstor.
“Based on our data-driven approach, expertise in high-growth technology domains and track record for innovation. Evidenced by our 3D Lab, AWS Marketplace and Intelligent Demand programmes. We are uniquely placed to add strategic value to channel partners and vendors. We can therefore look to the future with confidence as we focus on unlocking new growth opportunities for partners and vendors across EMEA (Europe, Middle East and Africa) and APAC (Asia-Pacific).”
