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Norwalk , CT - May 12 , 2021 - Datto Holding Corp. ( Datto ) ( NYSE : MSP ) , the leading global provider of cloud - based software and security solutions purpose - built for delivery by managed service providers ( MSPs ) , today announced its financial results for the first quarter ended March 31 , 2021 . First Quarter 2021 Financial Results ( In Millions ) Subscription Revenue ( ¹ ) " Our first quarter results represented a great start to the year , " said Tim Weller , Datto's Chief Executive Officer . " We delivered subscription revenue growth of 17 % year over year , added 300 net new partners during the quarter and drove another sequential increase in ARR growth , so the business continues to accelerate . Looking ahead to the rest of 2021 , we remain focused on our investments in cloud and security as we give our MSP partners the ability to secure SMB digital assets in a hybrid cloud world no matter where the data and applications live . We see good momentum across the product suite and we are well positioned to capitalize on the large and growing market opportunity ahead of us . " Total Revenue ( ¹ ) ARR ( 2 ) Gross Margin Net Income Datto Announces First Quarter 2021 Financial Results First quarter subscription revenue grew 17 percent year - over - year to $ 135.6 million ARR grew 15 percent year - over - year to $ 572.5 million Adjusted EBITDA ( 3 ) Net Cash Provided by Operating Activities Free Cash Flow ( 3 ) datto 2 3 Recent Highlights 1 Subscription Revenue and Total Revenue include benefits from favorable foreign exchange rates of approximately 3 % . Q1 2021 $ 135.6 $ 144.9 $ 572.5 73 % $ 15.3 $ 46.9 $ 35.2 $ 24.5 Q1 2020 $ 116.0 $ 124.7 $ 498.4 70 % $ 1.4 $ 25.0 $ ( 1.3 ) $ ( 15.2 ) Annual run - rate revenue ( ARR ) is the annualized value of all subscription agreements as of the end of a period . We calculate ARR by multiplying the monthly run - rate revenue for the last month of a period by 12 . EXHIBIT 99.1 Y / Y Change 17 % 16 % 15 % +341 bps 1030 % 88 % NM NM A reconciliation of GAAP to non - GAAP financial measures is provided in the financial statement tables included in this press release . An explanation of these measures is also included under the heading " Non GAAP Financial Measures . " Ended the quarter with more than 17,300 MSP partners , a net increase of 300 in the quarter . Expanded MSPs contributing over $ 100,000 ARR to 1,150 up from 1,000 at March 31 , 2020 . Second Quarter and Full Year 2021 Financial Outlook Datto is providing the following guidance for the first quarter and full - year 2021 : Launched Datto Commerce in North America . By simplifying how MSPs quote , sell and procure , Datto Commerce improves operational efficiency and productivity for MSPs . Hosted our fourth MSP Tech Day , with a focus on cyber resilience . The event delivered a deep dive into cybersecurity , business continuity , and incident response to help MSPs and their small and medium business ( SMB ) clients protect against growing cyber threats . Announced the findings of a commissioned study by Forrester highlighting that Datto's integrated solutions yielded an average return on investment ( ROI ) of 256 % within a three year period for MSPs , with the platform paying for itself in less than six months . Recognized as a Strategic , high - performance RMM / PSA vendor by Canalys in their recent RMM / PSA vendor Point of View report . Closed the acquisition of BitDam , an Israel - based cyber security company that protects SMBs against ransomware , malware , and phishing threats . BitDam's elite team and leading cyber threat detection technology significantly enhance Datto's cyber resilience solutions .