Arc CRO on what drove major 2024 growth, M&A and shift in revenue mix

Geoff Wing tells CRN how the MSP went from £10.5m of revenue to £23m last year and how it plans to replicate its success

Arc is on a mission to repeat its dazzling 2024 revenue performance with a goal of double-digit growth.

Last year the MSP grew its headcount from 58 to 140 people and managed to hike its revenues from £10.5m to £23m.

Of that growth, 23 per cent was organic while the rest is made up of its acquisition spree.

Arc chief revenue officer Geoff Wing speaks to CRN about the services outfit’s 2025 goal, including growth target, how Arc will shift its revenue mix, and M&A.

“What's really important is that we move the organisation from a position of providing desktop to datacentre services and helpdesk, to desktop to datacentre, helpdesk and hybrid cloud through the acquisition of NITC,” he says.

“Moving on from that, and this is the real pivotal move that has put us ahead of the pace of the rest of the competitors in the market is the acquisition of Perspicuity, which gave us capability across SharePoint, but more importantly, power apps, biz apps, and really critically Copilot.”

Wing reveals the major drivers behind Arc’s revenue jump was new logo acquisition, which contributed 20 per cent to organic growth.

“But also, we were able to expand off the back of helping a number of customers in some new areas that we hadn't previously helped them with,” he adds.

“The rest of it was acquisitions. We bought Clear Thinking IT in January 2024. NITC, then being the next acquisition that drove up additional revenues. And then finally, Perspicuity in January this year.”

2025 goal

Wing wants to keep Arc’s momentum going and reveals his aim to duplicate last year’s organic growth performance.

“We're looking to go again at what we did previously. So, we're looking at around 22 per cent to 25 per cent organic growth, with a minimum of that being 20 per cent new logo.”

He also teases an upcoming “shift” in Arc’s revenue mix.

“Close of last year before Perspicuity landed, we were an 80 per cent recurring revenue business and 20 per cent non-recurring.

“That non-recurring is made up of hardware resale, but also quite a lot of professional services and consultancy work.

“Over the next 12 months, we expect that to shift to more of a 70/30 mix that's driven particularly by the Perspicuity acquisition because that is predominantly a professional services business.”

More M&A?

While Arc very much has organic growth top of mind, M&A is still on its radar.

“We do have more acquisitions within our sites over the next 12 months,” says Wing.

However, after its last three M&A deals, Wing feels Arc is flying high from a capability standpoint.

“We have enough/everything we need now to execute on what we want to have as a vision for our customers in the market, which is an end-to-end MSP for the small to medium market.

“We can deliver across desktops, datacentre, everything you need, and we can secure it.

“Most of last year was looking for the right capability acquisitions. Where is that hybrid cloud capability coming from? Where is the Microsoft application and power platform capability as well as AI coming from?

“This year it’s more of a where can we draw more scale and more resource capability?”

That said, however, Wing reveals what might tempt Arc to take out its wallet.

“If the right security capability came up we may, we may consider it.

“We do have quite a strong cyber offering now, but it's always a bit of an interesting space.

“Everyone feels like it should be the easiest sell in the world, but a lot of boards, sadly, still take it as an insurance and a cost benefit kind of decision.

“There is a limited number of organisations out there that have really made the transition to delivering not just professional services around cyber but actively a good recurring revenue model that customers are deriving consistent benefit that they can see and feel.”