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Software and services shift benefits Westcon-Comstor
Distributor shares full-year numbers as it continues to look for higher-value business and areas that deliver recurring revenues
The move by Westcon-Comstor to become a software and services-driven business is starting to deliver, with evidence of its ongoing transformation seen in its latest set of full-year numbers.
The distributor shared results for the year ended 28 February, with gross sales increasing 9.6% year-on-year to US $5.74bn compared with $5.24bn, gross profit improved by 13.1% to $499.2m, and gross margin was also up, by 25.8%, indicating the benefits of a portfolio increasingly centred around higher-value technologies.
The firm specialises in networking, cloud, and over the year put increasing weight behind its security push, with gross sales in that area improving by 12.4% to $3.02bn, accounting for 52% of gross sales.
Security demand came across the firm’s three regions of EMEA, APAC and MEA as the call for services to deal with increasingly complex attacks continued to rise.
As well as the increased activity around security, the other theme in the results was the shift to software and services, which could be seen in the increase in non-hardware sales. That segment of the business climbed to account for 71% of gross sales, with recurring business increased by 12.8% to $3.89bn.
The distie is looking to avoid some of the pricing pressures and shortages plaguing the hardware market this year and possibly beyond.
Recurring business now represents 68% of total gross sales, up by a couple of percent from last year, which provides increased levels of predictability for the distributor.
“FY26 was another year of strong execution, with progress across our key financial and strategic priorities,” said David Grant, CEO at Westcon-Comstor. “We have delivered sustained growth in gross sales while significantly increasing profitability and expanding margins. Our continued shift towards lifecycle selling, software and services is strengthening the resilience of our business and aligning us to areas of the market with more predictable demand.”
Hardware landscape
Grant said the firm was also working to alleviate some of the challenges resellers faced in navigating the difficult hardware landscape.
“Distribution can play a central role in helping partners navigate the volatility we’re seeing in hardware pricing, providing the insight, intelligence and agility to manage risk and maintain momentum,” he said. “Looking to the future, we see huge opportunities in AI and automation, along with platform and marketplace-led motions, as we enable partners to turn capability into packaged, scalable offerings that drive repeatable revenue.”
Callum McGregor, chief financial officer and chief operating officer at Westcon-Comstor, said the FY numbers had come against a challenging economic backdrop.
“Our performance in FY26 demonstrates the continued success and resilience of our business, and our ability to sustain growth despite a challenging macroeconomic backdrop,” he said.
McGregor indicated the foundations were there to take the momentum built up in FY26 into its next fiscal year.
“Profitability has grown ahead of gross sales, supported by an improved mix and disciplined execution,” he said. “At the same time, we have further increased the proportion of recurring and non-hardware gross sales, strengthening predictability and positioning us for continued growth. With strong fundamentals, a healthy pipeline and a future-ready business model, we are well placed to build on this momentum in FY27 and beyond.”
