MSP, Small business

AVG Technologies: SMB Software Sales Dip Again

Gary Kovacs
Gary Kovacs

Even as AVG Technologies cuts financial losses in its SMB software business, the company's overall SMB sales continue to dip a bit -- proving that life in the cloud and managed services software market isn't always easy.

As you'll likely recall, Avast Software is in the process of acquiring AVG for $1.3 billion. Avast CEO Vince Steckler has previously told ChannelE2E that he's committed to AVG's SMB platforms -- which include CloudCare for security and Managed Workplace for MSPs, among other offerings.

Still, AVG's SMB offerings have faced business challenges in recent quarters -- which triggered a reorganization in 2015. At the time, AVG CEO Gary Kovacs predicted the company's SMB business would return to break-even results in 2016. So far, the company is falling a bit short of that goal even as it makes progress on some fronts.

Indeed, AVG's Q2 revenue for SMB software were $15.594 million -- down from $16.868 million in Q2 2015, the company disclosed today. The SMB segment's quarterly loss ($2.3 million) was smaller than last year's Q2 quarterly loss in the business segment ($2.6 million), which shows some progress in terms of business efficiency.

But is the progress arriving quickly enough? The answer to that question is somewhat mixed. AVG's overall revenues for the quarter missed Wall Street's expectations by about $1.55 million, according to SeekingAlpha, and profits were a penny-per-share below expectations.

Those aren't huge misses, but they're still concerning at a time when so many other cloud- and MSP-focused software companies are growing in the SMB sector.

Avast's buyout of AVG is expected to close sometime between September 15, and October 15, 2016, depending on the timing of regulatory review, the two companies have previously said.

Joe Panettieri

Joe Panettieri is co-founder & editorial director of MSSP Alert and ChannelE2E, the two leading news & analysis sites for managed service providers in the cybersecurity market.