Presidio ‘Hitting Its Stride,’ CEO Cagnazzi Tells CRN

Presidio notched another record quarter in its earnings books on the back of strong sales in infrastructure, cloud and security, and there is no slowdown expected as customers continue to demand the company’s services, CEO Bob Cagnazzi said.

“It’s been four solid quarters in a row, and the second quarter in a row of record revenue for us,” Cagnazzi told CRN after the the company’s earnings call Wednesday. “The business is really hitting its stride. We saw growth across every customer segment and every technology segment. The things we’ve been focused on, growing our revenue stream, growing out our multi-cloud platform solutions desk, growing out our software-defined networking solutions, all those grew tremendously and we’re really, really pleased.”

The company’s purchase of cyber security provider RedSky almost a year ago is performing ahead of expectations, Cagnazzi said, with security growing 8 percent this quarter, on top of 19 percent growth in the year-ago quarter.

“They were able to leverage some of our services in some of our other technology areas and accelerate the growth a bit ahead of where we expect it to be,” Cagnazzi said. “They’ve really been doing a great job.”

For the second quarter Presidio recorded quarterly total revenue of $767.8 million, up 18.3 percent over the same quarter last year. The New York-based solution provider also reported net income of $5.9 million for earnings per share of $0.07.

“We have been talking about some of these strategic initiatives, about how we’re investing in becoming not just a project provider to our clients but more of a services provider,” he said. “The growth in these advanced technologies, the growth in recurring revenue streams, the priorities we laid out at investors day around revenue growth and backlog momentum, we’ve met or exceeded all of those metrics. It’s great that clients are starting to see us more as a service provider as opposed to just a project relationship.”

The increase is led by infrastructure sales across all of the company’s market segments, with strong growth in government clients, especially state and local government entities, Cagnazzi said.

Presidio also saw strong growth in its public cloud offering and as a result of what Cagnazzi said is a continued shift to cloud revenue from “a point-in-time model to a recurring model.” He said the company also saw increased sales in its hyper-converged systems, as clients look to move to multi-cloud models and leverage both on-premises and hyper-scale offerings.

Cagnazzi said the company saw 27 percent growth in recurring revenue for the quarter on the back of its public cloud offering as well as a growth in managed services. He said growth in that area will stabilize revenue looking ahead.

“We talked about over time as that recurring revenue grows, that relationship becomes more encompassing, that will smooth out our revenue streams and make the business a lot more predictable and we believe we’ll start to see the scale and the margins over time,” he said. “What you’re seeing is really the manifestation of what we’ve been talking about over the last four quarters.”