Westcon-Comstor seeks new growth opportunities as it boosts profitability

Weston-Comstor’s first-half results show strong performance in cybersecurity and software sales as EBITDA rises 16.5% to US$69.5 million.

Global technology provider, Westcon-Comstor has announced an increase in profitability in its first-half results for the first six months to 31st August 2024 (H1 FY25). To be precise, the company reported a 16.5% year-on-year increase in EBITDA (earnings before interest, taxes, depreciation, and amortization) to US$69.5 million, with a 0.6pp rise in adjusted EBITDA margin to 4.0%.

A global specialist distributor, Weston-Comstor connects the world’s leading IT vendors with a channel of technology resellers, systems integrators and service providers. Weston-Comstor also recorded a gross profit that climbed 6.1% to US$216.1 million on revenue of US$1.80 billion, with gross margins reaching 12.0% (H1 FY24: 11.0%).

Contributing to the increased profitability is the strong growth in cybersecurity and an acceleration in the company’s shift to a software, services and subscription-based recurring revenue model. Specifically, the strong growth in cybersecurity saw revenue from its cybersecurity portfolio surge 22.2% to US$860.0 million.

The specialist distributor capitalized on growing demand from channel partners and their customers for multi-vendor solutions amid an increasingly complex threat landscape. This resulted in cybersecurity accounting 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.

At the same time, revenue from software sales saw similar growth, rising 17.9% to represent 49% of total revenue (H1 FY24: 40%). Weston-Comstor has been transitioning away from traditional hardware towards recurring revenues based on annual subscriptions and Software as a Service (SaaS) models.

According to David Grant, CEO at Westcon-Comstor, despite the challenging backdrop of uncertain macroeconomic and market conditions, they are pleased to maintain profit growth trajectory as the company reports a strong financial performance for H1 FY25.

“Through our data-driven approach, expertise in high-growth technology domains and track record for innovation – as evidenced by our 3D Lab, AWS Marketplace and Intelligent Demand programs – we are uniquely placed to add strategic value to channel partners and vendors,” said Grant.

Grant also mentioned that the success for H1FY25 signals the opportunity for the company to look to the future with confidence. This includes Weston-Comstor focusing on unlocking new growth opportunities for partners and vendors across EMEA (Europe, Middle East and Africa) and Asia Pacific.