AVG Technologies Q2: Clues about the Managed Workplace Business Market Performance

Written by Jessica Davis 1
August 19, 2015

AVG Technologies recently reported its Q2 financial results. And MSPmentor took a deeper dive into the company's earnings call with analysts to find out how the Managed Workplace RMM business and channel business is performing. Here's what we found.

The consolidation in the managed services platform space over the last few years has certainly led to a new era as the industry matures. A side benefit of consolidation has been a new view inside the market performance of some of these remote monitoring and management platforms/tools.

That’s because two RMM companies were acquired by publicly held companies that report quarterly financial results – Solarwinds (N-able and N-central) and AVG (Level Platforms and Managed Workplace).

Both AVG and Solarwinds have provided a little more insight than we are used to into the financial performance of these RMM tools. We took a look at Solarwinds’ most recent results a few weeks back. And AVG reported results earlier this month. So here’s what we know about how the platform formerly known as Level Platforms is doing these days.

In a call with analysts following the company’s quarterly results announcement, CEO Gary Kovacs and CFO John Little provided the following information about the company’s small and medium business (SMB) segment, which is the channel portion of the company’s business.

$16.9 million in revenue (compared to $14.4 million in the same period last year) for Q2 in the SMB segment
Executives attributed much of the revenue increase to AVG’s acquisition of Norman Safeground, a Norway-based international IT security company in November 2014.
The revenue growth year over year represents a 17 percent growth rate
SMB annualized monthly recurring revenue at $23 million compared to $17 million for the same period last year.
The SMB segment was not profitable during Q2, but executives expect profitability for the segment in Q4
Overall AVG profit margin was down slightly due to the impact of new acquisitions and higher investment in the SMB business (the channel business).

“During the quarter we also released new versions of our Managed Workplace product, which was well received by the market,” Kovacs told analysts.

Keep in mind that AVG has recently embarked on a new strategy in the channel space, too, with AVG Business. The new name is designed to showcase what AVG does for the SMB and channel segments.

And AVG is banking on the fact that no other RMM provider offers an integrated, well-known security solution in its platform. By leveraging the security brand, the company expects to be able to reach new segments of channel partners and SMBs. Which is perhaps why the company’s executives are bullish on the SMB segment’s Q4 outlook.

We’ll keep an eye on these financials going forward and bring you the news as it happens.