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Zix CEO, CFO: Security MSPs Regained Momentum in July

Security-focused MSPs regained momentum in the July 2020 timeframe after navigating coronavirus-related economic slowdowns earlier in the quarter, Zix Corp. ($ZIXI) executives told Wall Street analysts during an August 5, 2020, earnings call.

Zix specializes in cloud email security, productivity and compliance solutions. The company works with more than 4,450 MSP (managed IT services provider) partners. Many of those MSPs originally were AppRiver partners. Zix acquired AppRiver in February 2019.

David Rockvam, CFO, Zix

David Wagner, CEO, Zix

During the company’s Q2 2020 earnings call, Zix CEO David Wagner and CFO David Rockvam shared these anecdotes:

  • The company added 60 net new transacting MSP partners in Q2, up from the 55 MSPs added in Q1.
  • Late in Q2, Zix began seeing increasing sales momentum — both on the direct and indirect side of the business and across the company’s full suite of products.
  • In June 2020, Zix achieved a monthly record of 4,300 trials, exceeding the prior record of just under 4,200 trials established in February 2020.
  • The record trials were driven primarily by continuing increases in encryption, archive and advanced threat protection by MSP partners.
  • On the MSP side, sales to existing customers accounted for only 22% of the MRR increase in the quarter. But for the month of July, that figure surged to 48%. The reason: A flexible, consumption-based, month-to-month billing model allowed Zix partners and customers to recover quickly — particularly during July.
  • 93% of all new customers in Q2 2020 were brought onto the new Zix Secure Cloud platform.
  • Zix added 56,386 cloud mailboxes in Q2 2020, bringing the total number of productivity mailboxes to nearly 1.1 million.
  • AppRiver direct customers and MSPs started 1,212 trials of SecureTide, ZixEncrypt and ZixArchive in Q2 2020.

Overall for the quarter, Zix revenue was $53.3 million — up 16% from Q2 in 2019. The various Zix financial figures generally beat Wall Street’s expectations.

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