Presidio's Q3 2017 financial results, released today, revealed how the IT solutions provider increasingly leans of cloud, software subscriptions and security services to drive overall revenue growth.
Total revenue for the three months ended March 31, 2017 was $628.8 million, up 7.2 percent from $586.4 million in the prior year quarter.
Cloud revenue increased 52.4% to $119.0 million in the three months ended March 31, 2017 compared to $78.1 million for the three months ended March 31, 2016, a result of strong demand in client engagements around cloud and IT transformation, converged and hyper-converged infrastructure and data center modernization to support new private cloud infrastructure in all market sectors, the company said.
Presidio Revenue Mix
Some of that cloud revenue likely involves IT project work rather than recurring revenues. Still, Presidio was quick to point out that its software subscription business is growing rapidly.
According to a Presidio statement:
"The growth in our third quarter was impacted by an increase in the proportion of our solutions being delivered in the form of software subscriptions where we are an agent and accordingly the revenue associated with these solutions is recognized net of the related cost of sales in total revenue."
Also, security Revenue increased 84.7%, to $89.2 million in the three months ended March 31, 2017 compared to $48.3 million in the three months ended March 31, 2016.
Presidio & Wall Street Expectations
Presidio's overall results fell somewhat short of Wall Street's expectations. Earnings missed by roughly 1 penny per share and revenue was roughly $60 million short of Wall Street's expectations, according to SeekingAlpha. Shares were down about 8 percent in after-hours trading.
Presidio, led by CEO Bob Cagnazzi, launched its IPO in March 2017. The company is a bellwether stock for established and aspiring MSPs that are pushing hard into cloud services, security and hybrid IT services.