Westcon-Comstor reports 8% revenue rise to USD $3.69 billion

Westcon-Comstor, a global technology provider and specialist distributor, has reported strong financial results for the fiscal year ending 29 February 2024 (FY24). This performance has been bolstered by a strategic shift towards recurring revenues and a data-driven approach, with notable growth in the cybersecurity and networking sectors.

Overall revenue increased by 8% to USD $3.69 billion, up from USD $3.42 billion in FY23. This growth has been attributed largely to robust software performance. Strategic vendor gross sales saw a 10% increase, maintaining a compound annual growth rate (CAGR) of 10% over the past five years. Gross profit also saw a significant rise, climbing by 23% to USD $403 million, compared to USD $329 million in the previous fiscal year.

Recurring revenues grew by 24%, reaching USD $1.63 billion and representing 44% of total revenue, up from 38% in FY23. Adjusted EBITDA saw a substantial increase of 26%, rising from USD $95.1 million to USD $120.2 million, with a 0.5 percentage point improvement in margin to 3.3%. Despite strong growth and product lead-time challenges, net debt remained stable.

David Grant, CEO of Westcon-Comstor, commented on the company's performance, highlighting the resilience and efficiency exhibited in dynamic market conditions. "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," said Grant. Looking ahead, he expressed optimism for the coming year, emphasising continued innovation and strategic acquisitions, including the acquisition of Rebura and the launch of the AWS Marketplace programme.

Westcon-Comstor has emphasised a data-driven strategy, which has been pivotal in driving sales growth across all regions. The company's Intelligent Demand program, based on advanced analytics and its customer insights platform, continues to thrive. Additionally, the launch of the Partner Insights tool within the PartnerCentral digital marketplace has enabled partners to monitor key performance metrics more effectively.

The company's geographical performance was equally impressive, with double-digit growth in gross profit across all regions. Revenue grew by 6.7% in Europe, 12.9% in the Asia-Pacific region, and 3.4% in the Middle East and Africa.

Key technology domains and software sales have significantly contributed to Westcon-Comstor's growth. Cybersecurity and networking now account for 89% of revenue. The 3D Lab initiative, which allows multi-vendor cybersecurity solutions to be tested in a virtual demo environment, has attracted over 1,500 users and generated more than USD $25 million in new business since its launch.

In January 2024, the company announced the launch of its AWS Marketplace programme, which aims to streamline transactions for partners and vendors and foster new growth opportunities. The acquisition of Rebura further strengthens Westcon-Comstor’s cloud capabilities, enabling comprehensive AWS solutions for its partners.

Throughout the year, various factors influenced market dynamics, such as high inflation, geopolitical tensions, and increased cyber-attacks. These challenges highlighted the critical need for robust cybersecurity measures, which in turn drove organisations to invest in technologies that bolster their cyber-defence capabilities.

Looking forward, Westcon-Comstor expects continued robust performance and growth in FY25, focusing on cybersecurity and networking. The company's data-driven approach and commitment to Partner Success and environmental and social responsibility are expected to drive further growth and solidify its market position.