Half of MSPs use profits and Monthly Recurring Revenue (MRR) to track their financial health. A large portion (35-40%) also use Return On Investment (ROI) metrics—like Customer Acquisition Cost, Return on Capital Investment, and Cost of Goods Sold—to understand what their most capital-efficient services and channels are.
However, barely a third track Customer Lifetime Value (CLTV) or Customer Churn rates. If MSPs care about retaining and increasing their MRR—which is the third most popular financial metric being tracked—then understanding the long-term value of ongoing client relationships and when they stop doing business with you can offer extremely valuable insights.
Only a quarter track their Service Multiple of Wages. Ignoring this metric can cause MSPs to underprice services because they don’t have a clear picture of the staffing costs. Since many MSPs plan to hire new staff in 2025, this metric should be focused on.
"EBITDA is relevant to any MSP that wants to either buy or sell. Most MSP owners are so deep into building the business, they’re really not thinking about EBITDA. But they should, because you don’t know when someone is going to be interested in buying you."
Darrin Leblanc
Vice President Biz Development & Operations
EPK Solutions
“ EBITDA is important for mature MSPs to measure, who are either on the precipice of selling or want to go down that path in the future. Having these numbers and knowing your value arguably makes you even more valuable to private equity firms, because keeping your books clean shows maturity.”
Matthew Bookspan
CEO
Blacktip
Over half of respondents (57%) fell somewhere between $500,000 and $5 million annually. 38% make between $1–$5 million, while about a third (34%) make between $3–$10 million. Nearly a third (29%) of respondents make $5+ million. The bottom line? Most MSPs, regardless of size, can generate a few million in revenue each year.
When we look at the data based on company size, revenue generally shifts upward with employee count:
Nearly 50% of MSPs have an Average Revenue Per User (ARPU) rate between $101+–$250. The largest single group are those in the $151–$200 range, at 19% of respondents. Nearly a quarter (24%) have an impressive ARPU rate over $251—making them high performers in the category.
ARPU generally skews higher as company size grows, although some small and medium businesses have achieved a rate of $251+, which is more common for large MSPs.
“ You could be charging $300 a user a month—but if you get a million tickets per person, your costs will go up and you won’t do very well. If you’re going to track ARPU, you have to correlate it with ticket data to see what you charge vs. what you spend.”
Matthew Bookspan
CEO, Blacktip
Nearly half of respondents (46%) have a recurring revenue rate of 25% or less. The other half (52%) have 26%+ or more in recurring revenue. Since about half (49%) of respondents track this financial metric—it’s the third most popular choice—it’s clearly a focus area for MSPs. Despite a large portion of respondents having rates below 25%, 81% of MSPs said their percentage of recurring revenue increased in the past year.
Those with higher customer retention rates and staff utilization rates were more likely to have recurring revenue rates in the 51–80% range. (Baseline respondents are more likely to have 25% or less in recurring revenue.) Customer satisfaction leaders are slightly more likely to have higher recurring revenue rates and say their recurring revenue rates have increased over the past year. These both indicate that a strong client experience and productive staff can positively influence recurring revenue.
Small MSPs are slightly more likely to have recurring revenue rates of 10% or less, and they’re slightly less likely to have rates in the 11–25% range than average—meaning smaller businesses may struggle to land recurring work. They’re also more likely to say they didn’t grow recurring revenue in the past year. However, small MSPs perform about as well as others in the 26–50% ranges—and even slightly better than bigger MSPs in the 51+ ranges. This suggests some tinier MSPs can enjoy high rates of recurring revenue—and perhaps shows a niche market preference for small, dedicated teams over larger MSPs.
“A healthy MSP can be one that’s covering all of their costs with monthly recurring revenue. If you’re at the stage where you’re covering staff salaries, healthcare, etc., and the lights are on, you’re probably in a healthy place. Whatever you do on top of that—project work, hardware sales, software sales, additional service work—is mainly pure profit.”
Darrin Leblanc
Vice President Biz Development & Operations
EPK Solutions
“ To be a mature MSP, you need to be in the 70-80% range of recurring revenue. Our recurring revenue is over 80%. The only other revenue that's separate from that is product sales and professional services (but that's just for our existing client base).”
Matthew Bookspan
CEO
Blacktip
The majority of MSPs project their revenue will grow between 1–25% in 2025. About a quarter (26%) are more bullish and see their growth rate above 26%+. These rates are fairly consistent across MSPs of different sizes.
For those projecting growth in the year ahead, nearly half (47%) attribute this to acquiring new clients. That could be why over a third (36%) plan to start, increase, or improve their marketing efforts. Another third also plan to offer new services and explore partnership opportunities to drive growth. This shows that high-growth MSPs are taking a more holistic approach to growing their business—with areas like marketing and partnerships becoming just as important as the technical services provided.
Less than a third plan to impact growth by driving efficiency through service delivery or by reducing costs. However, since many MSPs see increasing costs as an impediment to their growth (more on this later), looking inward to increase efficiency should perhaps be higher on their list of priorities. Large and small MSPs with high annual revenue were more likely to see service delivery efficiency as a major growth driver in the year ahead.
MSPs with the highest reported annual revenue are more likely to have:
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