Service Leadership, a ConnectWise solution, has released its 18th Annual IT Solution Provider Industry Profitability Report, which shows that managed service providers (MSPs) have had over 20% adjusted EBITDA for the third consecutive year. At the same time, value-added resellers (VARs) have improved their profit performance for six straight years. The report also includes special sections on financial performance in different regions, profitability correlation of key traits, and declining services gross margin trends with recommendations for improvement.
Some stats:
- 81% of providers are less than 10M in revenue.68% are under $5M.
- There’s been a resurgence in the creation of new providers since 2016 – and still increasing.
- And still, about 1 in 4 providers are losing money at any given time.Yet, both VARs and MSPs have outpaced all the public indices, including the NASDAQ.
This is like Christmas for analysts like me. I was provided a copy of the report, and I’ve been still going over it. At 302 pages, you can understand why it’s taking a bit. More to come here.