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Trace3 announced in October 2023 that it aimed to increase revenue from approximately $2.5 billion to $4 billion by 2026. As of August 18, 2026, publicly available company materials and relevant coverage document continued expansion, acquisitions, new technology initiatives and an ownership change—but do not confirm that Trace3 reached $4 billion in revenue.
What Trace3 announced
CRN reported on October 9, 2023, that Trace3 planned to reach $4 billion in revenue by 2026. The company described its current revenue as approximately $2.5 billion and presented the $4 billion figure as a strategic objective.
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The announcement was a management ambition, not audited financial guidance from a public company. The available coverage also does not define whether the figure represented consolidated revenue, gross sales, bookings or another financial measure. It should therefore be treated as a company-stated target rather than a verified result. CRN’s original report attributed the target and related operating figures to Trace3 leadership.
The growth math behind the target
Using the disclosed $2.5 billion starting point, Trace3 would have needed to add approximately $1.5 billion in annual revenue—about a 60% cumulative increase—to reach $4 billion.
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Over three years, that works out to roughly 17% annualized growth:
- Starting revenue: approximately $2.5 billion
- Target revenue: $4 billion
- Required cumulative increase: approximately 60%
- Implied annualized growth rate: approximately 17%
There is an important timing distinction. In a related CRN interview, then-CEO Rich Fennessy described a five-year plan that began when Trace3 was approaching approximately $1.5 billion to $1.7 billion and aimed to make the company a $3.5 billion-to-$4 billion business. The later $2.5 billion figure suggests the company had grown substantially during the plan period. It does not prove that Trace3 had doubled revenue or that it ultimately met the $4 billion objective.
Trace3’s four-part growth strategy
Trace3 said its roadmap, launched in 2021, centered on four areas:
- Client engagement: deepen relationships and add customers.
- Services maturity: build more repeatable consulting, integration and managed-services capabilities.
- Talent and expertise: hire specialists and expand technical capabilities.
- Geographic reach: use mergers and acquisitions to enter markets and add capabilities.
The company also discussed improving its internal operations, strengthening vendor relationships and sharpening its emerging-technology offering.
Why Trace3 emphasized services
Trace3’s “services-first” positioning reflected an effort to move beyond one-time product transactions and project work. The company said it wanted to help customers plan technology strategies, integrate converged environments, and operate and manage technology after implementation.
That model can potentially create deeper customer relationships and more repeatable revenue than hardware or software resale alone. However, the public information available does not show how Trace3’s revenue mix changed. It does not disclose services revenue, recurring-revenue percentages, gross margins, retention rates or profitability.
That distinction matters: describing services as a growth priority is not the same as demonstrating that services had become a specific percentage of sales or had delivered a known financial return.
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Trace3 identified several connected areas of enterprise technology:
- Data and analytics
- Artificial intelligence and generative AI
- Cybersecurity
- Cloud and hybrid-cloud modernization
- Consulting, integration and managed services
The company’s basic thesis was that customers increasingly needed integrated solutions spanning data, cloud and security rather than isolated technology projects.
Trace3 reported more than 30% growth in the year before the 2023 announcement, approximately 300 new clients, roughly 150 new employees and more than 3,750 clients across all 50 U.S. states. Fennessy also told CRN that cybersecurity had grown by more than 70% over the preceding year and that Trace3 planned to hire another 100 employees in 2024.
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Those figures were company-reported statements covered by CRN, not independently audited metrics. They show the scale of the ambition and the areas management viewed as attractive, but they do not establish a complete year-by-year path to $4 billion.
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How acquisitions supported the plan
Acquisitions were intended to add specialized skills, customers and geographic coverage more quickly than organic hiring alone could provide.
- Set Solutions: acquired in 2023 to strengthen Trace3’s cybersecurity capabilities.
- Tail Wind Informatics: acquired to expand data-strategy consulting and analytics expertise. CRN reported that approximately 50 Tail Wind employees joined Trace3; the deal terms were not disclosed. See CRN’s coverage.
- Zivaro: acquired in December 2024, creating Trace3 Government and expanding public-sector capabilities, according to Trace3’s announcement archive.
- IVOXY: acquired in June 2025, expanding Trace3’s presence in the Pacific Northwest, according to Trace3.
This acquisition trail supports the conclusion that M&A remained an important growth mechanism. It does not reveal how much revenue any transaction contributed, whether acquired revenue was consolidated immediately, or how much of the company’s growth was organic.
Ownership and leadership changed in 2025
In November 2025, Apollo-managed funds completed the acquisition of Trace3 from American Securities. American Securities retained a significant minority interest. Joe Quaglia became CEO, succeeding Rich Fennessy.
The transaction created a new ownership phase for the company. Private-equity ownership can provide capital for acquisitions and operational investment, but the available announcement does not disclose valuation, debt, leverage, profitability targets or a future exit plan. Those details should not be inferred from the transaction alone. The change was reported in Business Wire and Trace3’s announcements.
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What Trace3 was doing in 2026
Trace3’s 2026 public positioning continued to emphasize artificial intelligence, cloud, data, cybersecurity, government technology, consulting and managed services.
Its public announcements included new executive appointments in May 2026, a Cisco-and-NVIDIA AI Factory initiative announced in May, Cisco Preferred recognition across six portfolios in February, and Cisco Powered Services designations for several managed-services offerings. Trace3 also made public claims about strong growth in agentic AI in July.
These developments indicate continued investment and expansion. They are not a substitute for a financial statement. Partner certifications and technology initiatives demonstrate ecosystem activity, but they do not prove a particular revenue level.
Trace3’s later messaging also highlighted the difficulty of moving AI from experimentation into production. Its discussion of the AI production gap reinforces an important business point: demand for AI services may create opportunities in data modernization, infrastructure, governance and security, but AI interest does not automatically translate into fast or profitable revenue.
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The available public record does not confirm that Trace3 reached $4 billion in revenue by 2026. Trace3’s current announcements and news materials document acquisitions, technology initiatives, partner achievements, leadership changes and continued expansion, but they do not publish a confirmed 2026 revenue total.
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It would be inaccurate to state either that Trace3 achieved the target or that it missed it without a verified financial disclosure. The most defensible conclusion is that $4 billion remains the original 2023 management target unless Trace3 provides additional financial information.
Trace3 is privately held, which limits the amount of independently verifiable financial data available. The public materials reviewed also do not provide revenue by business unit, services mix, profitability, cash flow, acquisition-adjusted organic growth or a year-by-year bridge from $2.5 billion to $4 billion.
How to judge the plan’s credibility
For investors, competitors, vendors and enterprise buyers assessing the company, the most useful questions are not limited to the headline revenue number:
- Organic versus acquired growth: How much expansion came from new customer demand, and how much came from acquired businesses?
- Services mix: Did consulting and managed services become a larger share of revenue?
- Talent scalability: Could Trace3 hire and retain enough specialists to support growth without weakening delivery quality?
- Cross-selling: Could the company sell cloud, data, AI and cybersecurity services to its existing customer base?
- Integration execution: Were acquired teams and customer relationships combined without disruption?
- Financial transparency: Are revenue, margins, cash flow and recurring-revenue measures available from a reliable source?
Acquisitions can accelerate scale, but they can also add integration costs, overlapping operations and cultural friction. A services-led model can improve strategic value and customer stickiness, but it requires skilled employees and repeatable delivery systems. AI can expand demand, but production deployments depend on data quality, infrastructure, security and measurable business outcomes.
What to watch next
A meaningful post-2026 scorecard would ideally include:
- A company-confirmed revenue figure and a clear definition of what it measures
- Organic growth excluding acquisitions
- The proportion of revenue from consulting and managed services
- AI-related bookings, production deployments and revenue
- Customer additions, retention and expansion
- Employee growth, utilization and delivery capacity
- New acquisitions and their strategic or financial contribution
- How Apollo’s ownership affects investment and operating priorities
Until those details are disclosed, Trace3’s $4 billion figure should be understood as an ambitious strategic plan—not a verified financial outcome.
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