Security growth buoys Westcon-Comstor

A strong performance on the security front, along with growth in software and services, helped drive decent numbers for Westcon-Comstor’s latest financial year.

Sharing financial results for the 12 months to 28 February 2025, the distributor reported record annual gross sales of US$5.24bn, which is a 3.3% year-on-year increase. Gross margin rose to 22.4% on revenue of $1.97bn.

Gross profit improved by 9.4% to $441m, up from $403m last year, with the channel player indicating there had been growth across its three main regions of Europe, the Middle East and Africa, and Asia-Pacific.

Security accounted for more than half of the firm’s gross sales, improving by 19.3%, with Westcon-Comstor driving wide relationships with vendors operating on that side of the market throughout the fiscal period.

Hardware now only accounts for a third of gross sales as the distributor looks to derive more business from software and services, which are often on a recurring basis and delivered as software as a service (SaaS). Gross sales from software increased by 22.2% to $2.33bn.

As a result of the shift from hardware, the business is now generating 66% of gross sales from software and sales, and looking to increase the volume of activity that is based on recurring business.

Relationships remain key to the distributor’s success, and the past fiscal year has been one characterised by efforts to deepen existing vendor ties and extend the products and services the channel player can support.

Relationships with a core of nine vendors across networking, cloud and security accounted for 80% of gross sales during the year at $4.2bn, with year-on-year growth of 4.9%. 

David Grant, CEO of Westcon-Comstor, said the business had been able to deliver a solid year of growth as it continued to follow its strategic objectives.

“Distribution is evolving and we’re proud to be at the forefront of this change, enabling partners and vendors to grow through our suite of value-added services and market-leading programmes. In a changing world, we are proud to be a future-ready business that combines best-in-class data and digital platforms with deep relationships, leading market shifts and anticipating change to empower our partners and vendors to stay ahead of the curve,” he said.

Looking ahead, Callum McGregor, chief financial officer and chief operating officer at Westcon-Comstor, said the firm was operating in a strong market and the fundamentals were in place to support future growth.

“Despite the challenging backdrop of geopolitical and macroeconomic uncertainty, FY26 offers opportunities for further growth thanks to our healthy sales pipeline, track record of innovation, and strong relationships with partners and vendors,” he said.

Just after the fiscal year closed, the distributor decided to unify its European activities to unlock more efficiencies and make life easier for staff, vendors and partners.

Rene Klein was given the task as executive vice-president for Europe to spearhead those efforts at Westcon-Comstor.

He said that the full-year numbers underlined the strength in the region, even before the changes were introduced.

“We saw a solid, robust performance in Europe during FY25, including an increase in profitability and other key metrics,” said Klein.

“With our new, unified structure in the region, I am confident of leading us to even stronger growth in FY26 and beyond, as we utilise our expertise in high-growth technology domains and our unique offering to drive success for partners and vendors,” he added.