Service Leadership Announces Findings of its Annual IT Solution Provider Industry Profitability Report
Report finds TSPs continue to experience unprecedented growth rates for fifth consecutive year – the longest run in industry history
TAMPA, Fla., May 08, 2025 (GLOBE NEWSWIRE) -- Service Leadership, Inc.®, a ConnectWise company, released the findings of its Service Leadership Index® 2025 Annual IT Solution Provider Industry Profitability Report™. The report features extensive data analysis that provides invaluable insights for IT solution providers (TSPs) to understand “what good looks like” for the industry.
The Service Leadership Index is the leading source of empirical data on TSP performance worldwide. 2025 marks the 20th year of benchmarking to objectively identify best practices for TSP owners and executives in 104 countries.
The report evaluated TSP performance trends, revealing another monumental year for the industry, and includes key findings such as:
- 2024 marked a record fifth consecutive year—the longest run in industry history—of 19%+ adjusted EBITDA profitability for the best-in-class TSPs. This unprecedented milestone demonstrates the sustained success of the TSP industry.
- Valuation multiples for best-in-class TSPs reached near-record highs in 2024 due to continued revenue growth and even stronger profitability growth. This yielded an approximate 22% increase in valuations from 2023 across all Predominant Business Models™. This continued growth of TSPs is expected to further influence private equity investments and positively impact future valuations and multiples.
- For managed service providers (MSPs), while total revenue growth was slower than in previous years at 7.1%, it was outpaced by stronger growth in adjusted EBITDA at 13.0%.
- While value-added resellers (VARs) experienced a significant drop in revenue growth from 14.1% in 2023 to 1.8% in 2024, they were able to maintain an adjusted EBITDA dollar growth of 3.4%.
"Despite revenue growth slowing last year, continued strong profitability in 2024 demonstrated the maturation of TSPs and the continued health of the TSP industry," stated Peter Kujawa, EVP and GM of Service Leadership and IT Nation. "TSPs benefited in 2024 from continued lower wage inflation, and the focus on efficiency improvements is leading to higher service gross margin output for the top performers."
The report also includes special sections focused on:
- Macroeconomic impacts on TSP performance
- 2021-24 budget attainment and 2025 budgets
- Financial performance by geographic regions (Australia/New Zealand, Europe, and North America)
- MSP sales and marketing costs vs. productivity
- Impact of vendor programs and of product and cloud resale margins on TSP profitability
These special sections, and the report overall, will help TSPs worldwide understand how to drive better financial performance.
To receive a complimentary executive summary and learn how to purchase a full copy of the 300+ page report, click here.
About Service Leadership, Inc.
Service Leadership, Inc.®, a ConnectWise company, 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, business coaches, and consultants. The company also publishes SLIQ™, the exclusive web application for TSP 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:
Keith Giannini
connectwise@inkhouse.com
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