Datto Holdings’ Annualized Recurring Revenue (2019–2022)

This statistic highlights Datto Holdings’ Annualized Recurring Revenue (ARR), on an annual basis from 2019 onwards.

Annual Run-Rate Revenue

The annualized worth of all subscription agreements as of the conclusion of a period is what we call annual run-rate revenue, or ARR. ARR is calculated by

• Multiplying the monthly run-rate revenue for the period’s last month by 12.
• Monthly run-rate income is computed by aggregating monthly subscription values from both long-term and month-to-month subscriptions during the last month of the reporting period.

ARR solely accounts for the recurring value of subscription contracts, not one-time income from gadgets or professional services. Seasonality and contract term changes are mitigated by ARR. Because ARR does not have a defined definition, it is unlikely to be compared to other firms’ similarly titled measurements. ARR should be evaluated apart from revenue and deferred revenue, and is not meant to be used in conjunction with or in substitute of either. ARR is not a forecast, and our MSP partners’ ongoing contracts at the time of calculation may or may not be extended or renewed.

Datto Holdings’ Annualized Recurring Revenue (ARR)

Observation

The firm uses a highly effective go-to-market methodology to acquire, retain, and expand MSP partners, using their sales team and the strength of their brand. They have over 17,000 MSP partners as of December 31, 2020, with over 1,100 of them generating annual run-rate revenue (ARR) of $100,000 or more apiece. As of December 31, 2020, MSP partners with over $100,000 in ARR represented for 47% of our total ARR. As of December 31, 2020, our ten largest partners accounted for about 3% of our ARR, with no one partner accounting for more than 0.8 percent.

Since its beginning, the company has enjoyed quick development and earns a substantial volume of recurring income. The ARR was $542.8 million as of December 31, 2020, while revenue for the year ended December 31, 2020 was $518.8 million, with recurring subscription revenue accounting for about 94% of total revenue. ARR was $474.8 million as of December 31, 2019, and revenue was $458.8 million for the year ending December 31, 2019, with nearly 90% of revenue coming from recurring subscriptions. Our net income was $22.5 million for the year ended December 31, 2020, and our adjusted profits before interest, taxes, depreciation, and amortization (“Adjusted EBITDA”) was $150.5 million. Our net loss was $31.2 million, and our Adjusted EBITDA was $84.6 million for the year ended December 31, 2019.

Trends

Between the years 2019 and 2020, ARR has risen. ARR contains run-rate revenue numbers from month-to-month subscription contracts, which explains why. Month-to-month contracts accounted for roughly 39 percent of overall income and 42 percent of subscription revenue for the fiscal year ending December 31, 2020. Month-to-month contracts accounted for roughly 31% of overall revenue and 35% of subscription revenue for the year ending December 31, 2019. The increase in month-to-month contract revenue as a percentage of total revenue and subscription revenue during the COVID-19 pandemic was primarily due to the addition of fewer long-term contracts during the pandemic compared to the prior year period, while other existing contracts completed their initial term and rolled to month-to-month contracts thereafter. The current pattern indicates that growth will continue in the next quarters.

About the business

Datto Holding Corp. delivers cloud-based software and technology solutions to small and medium enterprises in the United States and globally via the managed service provider (MSP) channel. Its Unified Continuity products include Business Continuity and Disaster Recovery, which protects servers and workstations while minimizing downtime; Cloud Continuity, an image-based continuity solution for Windows-based laptops and desktops; SaaS Protection, an automated and secure backup and restoration product; Workplace, a cloud-hosted file sync and share solution that allows end-users to synchronize files across platforms, including mobile devices; and File Protection, which protects files across platforms.

Access points, switches, edge routers, and controlled power devices are among the company’s networking products. Autotask Professional Services Automation, an IT business management software, and remote monitoring and management are among the company’s business management offerings. Merritt Topco, Inc. was the previous name of the firm, which changed to Datto Holding Corp. in January 2020. Datto Holding Corp. is based in Norwalk, Connecticut, and was created in 2007.

Did you like Datto Holdings’ Annualized Recurring Revenue statistic?

Access more such KPI data points and segment financials on thousands of US stocks, with Business Quant.

You can get started here.