Report finds TSPs continue to experience unprecedented growth rates for fourth consecutive year
TAMPA, Fla., June 05, 2024 (GLOBE NEWSWIRE) — Service Leadership, Inc.®, a ConnectWise solution and the leading source of empirical data on IT solution provider (TSP) performance worldwide, today released the findings of its Service Leadership Index® 2024 Annual IT Solution Provider Industry Profitability Report™. The report features widespread data collection and analysis that provides invaluable insights for TSPs as they navigate the year ahead.
The Service Leadership Index® is the leading source of empirical data on TSP performance worldwide. 2024 marks the 19th year of benchmarking to objectively identify best practices for TSP owners and executives in 103 countries.
The report evaluated TSP performance trends, revealing another monumental year for the industry, and includes key findings such as:
- 2023 marked a record fourth consecutive year of 20%+ adjusted EBITDA profitability for the best-in-class TSPs, an unprecedented occurrence that demonstrates the sustained success of the TSP industry.
- Highest approximate company valuations since Service Leadership began measuring in 1999, yielding an approximate 22% increase from 2022 across all Predominant Business Models™ (PBMs™) despite macroeconomic recessionary fears and moderate M&A volume due to the increased cost of capital, primarily due to rising interest rates.
- Continued strong MSP total revenue growth of 13.3% with a 27.8% adjusted EBITDA growth, demonstrating that high growth does not reduce profitability.
- While VARs experienced a slight drop in revenue growth from 16.6% in 2022 to 14.1% in 2023, they had a very strong adjusted EBITDA dollar growth of 31.8%.
“Despite facing heightened recessionary pressures last year, 2023 demonstrated the maturation of TSPs in their business processes, leading to improvements in operations and service delivery,” stated Peter Kujawa, VP & GM of Service Leadership. “Through the adoption of innovative technologies that enhance operational efficiency, TSPs globally are expected to sustain impressive growth rates and profitability into the foreseeable future.”
The report also includes two new special sections:
- Impact of hyperautomation/AI on the TSP industry: The section unpacks the opportunity provided by hyperautomation and includes the seven success factors for successfully implementing hyperautomation in a TSP.
- Customer Experience and Profitability: The section explores the impact of customer satisfaction on business profitability and attrition, including the clear correlation between Net Promoter Score™ (NPS®) and profitability.
“These two special sections in the report – impact of hyperautomation and AI on the TSP industry and correlation between NPS and profitability will be exceptionally valuable to all TSPs,” said Peter Kujawa. “With hyperautomation, there’s a right way to do it and a wrong way. The report provides best practices for doing it right.”
These special sections, and the report overall, empower TSPs worldwide with crucial insights that will drive better financial performance and maximize future growth, profitability, and stock value.
To receive a complimentary executive summary and learn how to purchase a full copy of the report, click here.
About Service Leadership, Inc.
Service Leadership, Inc.®, a ConnectWise solution, is dedicated to providing total profit solutions for IT solution providers (TSPs), directly and through industry consultants and global technology vendors. The company publishes the leading vendor-neutral, TSP financial and operational benchmark: Service Leadership Index®. This includes private diagnostic benchmarks for individual TSPs and their business coaches and consultants. The company also publishes SLIQ™, the exclusive web application for partner owners and executives to drive financial improvements by confidentially assessing and driving their Operational Maturity Level™. For more information, visit service-leadership.com.
Media Contact:
Kaileigh Higgins
Email: ConnectWise@Inkhouse.com
