Direct Answer
140 SEC filers are classified under the Standard Industrial Classification code that describes the cloud security industry, and their latest annual reports show $630.2 billion of combined revenue and a median operating margin of -5.5%. Investors should still evaluate its revenue model, industry-specific KPIs, valuation framework and the risks that can change the group's economics.
Industry Overview
Cloud security companies sell software that protects cloud workloads, identities and data, usually by subscription. Growth follows cloud adoption and the number of workloads and users protected. The first numbers to compare across companies here are annual recurring revenue, net retention and customers over a spend threshold.
Key Industry Metrics
- Annual recurring revenue: Annualized subscription value for cloud protection tools. It follows workloads and users protected, and growth shows how quickly customers adopt cloud-based security.
- Net retention: Spending from existing customers versus a year earlier. Above 100% means customers add workloads and modules, while weakness can reflect consolidation onto other platforms.
- Customers over a spend threshold: Accounts paying above a stated annual amount. It shows larger deployments, but each company picks its own cutoff, so compare one company over time.
- Gross margin: Revenue left after hosting and support. Cloud-delivered security processes large volumes of data, so margin shows how efficiently the vendor handles that load.
- Free cash flow: Cash from operations after capital spending. Subscription billing often precedes revenue, so free cash flow can exceed profit and shows how much growth turns into cash.
Primary Macro Drivers
- Cloud migration: Moving more systems to the cloud creates more settings, identities and data to protect, supporting annual recurring revenue and customers over a spend threshold.
- Regulation and breach costs: High-profile breaches and mandated disclosure raise board attention and spending on cloud controls, supporting bookings and renewals.
- AI workload security: Running models and data pipelines in the cloud adds new assets and risks that need monitoring, expanding revenue per customer.
- Vendor consolidation: Customers choosing fewer vendors buy more modules from broad platforms, raising spend per customer and net retention for them.
Major Risks
- Platform competition: Large cloud and security vendors bundle similar features, pressuring pricing and win rates; watch net retention and discounting commentary.
- Pricing pressure: Rivals and procurement push prices down at renewal, narrowing gross margin; watch revenue per customer and renewal commentary.
- Budget cuts: Customers trim tools or delay new modules when budgets tighten; watch billings, net retention and remaining performance obligations.
- Breach incidents damaging trust: A security failure at the vendor can cost customers and invite legal claims, damaging sales; watch disclosed incidents, churn and liability language.
Industry Characteristics
| Characteristic | Profile |
|---|---|
| Cyclicality | Mixed |
| Capital Intensity | Low |
| Regulatory Intensity | Low |
| Industry Maturity | Growth |
| Geographic Importance | U.S. / Global |
Cloud Security Filers in the SEC Record
140 companies with annual reports in the dataset are classified by the SEC in the Standard Industrial Classification code 7372. Their latest fiscal years end between 2024 and 2026, and together they reported $630.2 billion of revenue. Median revenue growth over the prior year was 13.5%. Median operating margin was -5.5% and median net margin -2.3%. Median total liabilities were 44% of total assets, and 65 of 140 reported a profit in their latest year.
| Company | Revenue | Growth | Operating margin | Net margin | Year |
|---|---|---|---|---|---|
| Microsoft Corp | $281.7 billion | 14.9% | 45.6% | 36.1% | FY 2025 |
| Oracle Corp | $67.4 billion | 17.3% | 30.6% | 25.2% | FY 2026 |
| Salesforce, Inc. | $41.5 billion | 9.6% | 20.1% | 18.0% | FY 2026 |
| Block, Inc. | $24.2 billion | 0.3% | 7.1% | 5.4% | FY 2025 |
| Adobe Inc. | $23.8 billion | 10.5% | 36.6% | 30.0% | FY 2025 |
| Intuit Inc. | $18.8 billion | 15.6% | 26.1% | 20.5% | FY 2025 |
| Servicenow, Inc. | $13.3 billion | 20.9% | 13.7% | 13.2% | FY 2025 |
| Shopify Inc. | $11.6 billion | 30.1% | 12.7% | 10.7% | FY 2025 |
The 8 largest of 140 by revenue. Source: each company's own annual report as filed with the SEC (XBRL data), figures in U.S. dollars. A company's SIC code reflects its main business as the SEC records it, so it can differ from how an index provider or analyst classifies the company, and a diversified group appears under only one code.
Where to Go Next
The Cloud Security guide describes how the industry earns money, what to measure and what can go wrong. To see how it compares, read the neighbouring industries in the same sector, then apply the same checks to a specific company.
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Frequently Asked Questions
What are the main KPIs for the Cloud Security industry?
Key performance indicators for the Cloud Security industry include: Annual recurring revenue, Net retention, Customers over a spend threshold, Gross margin, Free cash flow. Which matter most depends on the company's model, so compare them across several companies rather than relying on one.
How cyclical is the Cloud Security industry?
The Cloud Security industry exhibits mixed cyclicality characteristics. Some segments move with the broader economy while others maintain more stable demand, making stock selection within the group particularly important.
What are the biggest risks in the Cloud Security industry?
The primary risks for Cloud Security companies include: Platform competition, Pricing pressure, Budget cuts, Breach incidents damaging trust. Investors should assess each company's exposure to these factors and its track record of navigating them.