Westcon-Comstor, a global technology provider and specialist distributor, announces 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 $403bn (FY23: $329bn), 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

Operational highlights

Launch of innovative Amazon Web Services (AWS) Marketplace programme
Acquisition of Rebura as part of wider cloud growth strategy and opportunity
Acceleration of data-driven approach with launch of Partner Insights tool

US$ millions
FY24
FY23
Change

Revenue
3,685
3,421
+7.7%

Recurring revenue(% of total revenue)
1,63144%
1,31738%
+23.8%+6pp

Gross profit
403
329
+22.7%

Adjusted EBITDA*
120
95
26.4%

Adjusted EBIDA Margin*
3.3%
2.8%
+0.5pp

Net debt
(88.9)
(68.4)
+$20.5m

 
CEO at Westcon-Comstor, David Grant.
CEO for Westcon-Comstor, David Grant says, “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.” add Grant
He concludes by saying, “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.”
Strategy in action
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 $403bn (FY23: $329bn), 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.
Strategy in action
Westcon-Comstor, the conduit linking the world’s premier IT vendors with a network of technology resellers, systems integrators, and service providers, celebrates another year of remarkable progress fueled by its distinctive data-driven approach. A surge in sales across all regions propelled total revenues to $3.69 billion (FY23: $3.42 billion), marking a notable 7.7% increase, primarily fueled by robust performances in cybersecurity and networking. Gross profit soared by 22.7% to $403 billion (FY23: $329 billion), showcasing double-digit growth across all regions.
The results for the fiscal year ending February 29, 2024, underscore Westcon-Comstor’s accelerated transition towards a software, services, and subscription-based recurring revenue model. Recurring revenues now constitute 44% of total revenues, up from 38% in FY23.
Adjusted EBITDA surged by 26.4% from $95.1 million to $120.2 million, reflecting sustained revenue growth and a relentless pursuit of efficiency. This effort yielded a further 0.5 percentage point increase in adjusted EBITDA margin, now standing at 3.3% (FY23: 2.8%).
FY24 witnessed a relaxation in the supply chain constraints experienced in the previous year, with a steady improvement in hardware supply chain and product availability. The net revenue backlog decreased from $768 million to $446 million, indicative of an overall improvement in the supply chain landscape.
Data-driven approach
Intelligent Demand, Westcon-Comstor’s exclusive data-driven lead generation program, built on advanced analytics and the company’s proprietary customer insights platform, continues its upward trajectory. The sustained expansion in this domain underscores the company’s adeptness in enabling channel partners to centralize data within their growth strategies.
FY24 witnessed the introduction of Partner Insights, a novel tool integrated into Westcon-Comstor’s PartnerCentral digital marketplace platform. Partner Insights empowers partners to track vital performance metrics and integrate a data-centric approach to performance analysis.
Growth across all regions
The exceptional operational performance of the company has propelled double-digit growth in gross profit across all regions throughout the year, mirroring the revenue expansion in each geographic area.
Key technology domains and software sales drive growth
The growth witnessed during FY24 has been propelled by robust performances in cybersecurity and networking, collectively constituting 89% of the revenue. Continuous innovation in the company’s offerings to vendors and channel partners has yielded several market-leading initiatives.
For instance, in FY24, it was announced that Westcon-Comstor’s 3D Lab, an environment allowing testing of multi-vendor cybersecurity solutions against specific use cases in a dynamic virtual demo setting, had garnered over 1,500 users and generated over US $25 million in new business for partners since its launch the preceding year.
Crafted in response to shifts in end-user needs and purchasing behavior, the 3D Lab empowers Westcon-Comstor’s partners and their clientele to explore diverse solution combinations from vendors before making purchase and implementation decisions.
Milestones during the year
In January 2024, Westcon-Comstor announced the launch of its AWS Marketplace programme. This signified a more streamlined route to transacting on AWS Marketplace for partners and vendors, fostering new growth opportunities and securing the role of the channel in the cloud marketplace economy.
Westcon-Comstor’s acquisition of Rebura in January 2024 represents another significant leap forward in strengthening its cloud capabilities and channel-focused services. This strategic move empowers partners to offer a comprehensive suite of AWS solutions to their customers. Rebura’s expertise, combined with Westcon-Comstor’s cybersecurity specialisation, forms a robust cloud offering for channel partners, further bolstering the company’s offering as part of wider cloud strategy.
Market dynamics
Throughout the year, market dynamics were shaped by various factors, including heightened inflation and interest rates, geopolitical tensions, numerous global elections, repercussions from climate risks, and escalating cyber-attacks. These challenges underscored the pivotal significance of robust cybersecurity measures and solutions, compelling organizations to prioritize investments in technologies that bolster their cyber-defense capabilities. Investment in cyber-resilience remained a paramount concern for organizations, reflecting the elevated threat landscape of cyber-attacks. Despite persistent macroeconomic uncertainties and constrained IT budgets, the global cybersecurity technology market witnessed significant growth, presenting opportunities for Westcon-Comstor and its partners.
Outlook
Looking ahead, despite challenging conditions, the company anticipates sustained robust performance and growth in FY25. Westcon-Comstor’s growth is projected to be bolstered by its ongoing emphasis on cybersecurity and networking in the upcoming year, with the company’s cloud strategy also contributing to momentum.
Westcon-Comstor’s data-driven approach, coupled with its focus on Partner Success and environmental and social responsibility, will persist in driving performance, positioning Westcon-Comstor as a frontrunner in delivering unparalleled value and service excellence.
We remain optimistic that FY25 will mark another year of strong performance and growth as we execute our strategy.The post Westcon-Comstor Unveils Robust Financial Performance first appeared on IT News Africa | Business Technology, Telecoms and Startup News.