--- title: "Collaboration Software Industry" description: "140 SEC filers are classified under the Standard Industrial Classification code that describes the collaboration software industry." canonical: https://www.getswoopr.com/stocks/industries/information-technology/collaboration-software/ source: "Swoopr Investment: https://www.getswoopr.com" --- # Collaboration Software Industry ## Direct Answer 140 SEC filers are classified under the Standard Industrial Classification code that describes the collaboration software 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 Collaboration software companies sell messaging, video, document and workflow tools for teams, charged per user or by usage. Network effects and integration with other tools drive adoption, while bundling by large suites is a constant pressure. The first numbers to compare across companies here are paid seats and annual recurring revenue, net retention and customers over a spend threshold. ## Key Industry Metrics - **Paid seats and annual recurring revenue**: The number of paid users and annualized subscription value. Because pricing is per user, seat counts follow customers' headcount, so layoffs and consolidation can flatten growth. - **Net retention**: Spending from existing customers versus a year earlier. Above 100% shows teams adding users or upgrading plans, and below 100% reveals seat reductions or moves to bundled suites. - **Customers over a spend threshold**: Accounts paying above a stated annual amount. It shows adoption growing across large organizations, though companies set their own cutoffs, so compare within one firm. - **Gross margin**: Revenue left after hosting, video and storage costs. Video and file sharing consume bandwidth and storage, so margin shows how much of subscription revenue remains. - **Free cash flow**: Cash from operations after capital spending. It shows how much revenue turns into cash, which matters for companies facing price pressure from larger bundled rivals. ## Primary Macro Drivers - **Hybrid work**: Teams split between home and offices rely on shared messaging, meetings and documents, supporting paid seats and annual recurring revenue. - **Enterprise software budgets**: Companies set spending for tools shared across the workforce, so overall software budgets drive seat growth and net retention. - **AI assistant features**: Assistants that summarize and draft raise per-seat value, supporting premium tiers and net retention. - **Integrations**: Connections to other business tools make a collaboration tool harder to leave and raise usage, supporting retention and expansion. ## Major Risks - **Bundling by large suites**: Large suites include messaging and meetings at low incremental price, pressuring standalone pricing and growth; watch net retention and customer growth. - **Seat counts under pressure**: When companies cut staff or consolidate tools, paid seats fall even if usage is steady; watch paid seats and net retention. - **Pricing competition**: Rivals offer similar features at lower prices, pressuring list prices and discounting; watch revenue per seat and discounting commentary. - **Product commoditization**: As features spread across suppliers, buyers see little difference and can switch; watch customers over a spend threshold, churn and mix. ## Industry Characteristics | Characteristic | Profile | | --- | --- | | Cyclicality | Mixed | | Capital Intensity | Low | | Regulatory Intensity | Low | | Industry Maturity | Mature | | Geographic Importance | U.S. / Global | ## Collaboration Software 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](https://www.getswoopr.com/stocks/companies/microsoft/) | $281.7 billion | 14.9% | 45.6% | 36.1% | FY 2025 | | [Oracle Corp](https://www.getswoopr.com/stocks/companies/oracle-corporation/) | $67.4 billion | 17.3% | 30.6% | 25.2% | FY 2026 | | [Salesforce, Inc.](https://www.getswoopr.com/stocks/companies/salesforce/) | $41.5 billion | 9.6% | 20.1% | 18.0% | FY 2026 | | [Block, Inc.](https://www.getswoopr.com/stocks/companies/block-inc/) | $24.2 billion | 0.3% | 7.1% | 5.4% | FY 2025 | | [Adobe Inc.](https://www.getswoopr.com/stocks/companies/adobe/) | $23.8 billion | 10.5% | 36.6% | 30.0% | FY 2025 | | [Intuit Inc.](https://www.getswoopr.com/stocks/companies/intuit/) | $18.8 billion | 15.6% | 26.1% | 20.5% | FY 2025 | | [Servicenow, Inc.](https://www.getswoopr.com/stocks/companies/servicenow/) | $13.3 billion | 20.9% | 13.7% | 13.2% | FY 2025 | | [Shopify Inc.](https://www.getswoopr.com/stocks/companies/shopify/) | $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 Collaboration Software guide describes how the industry earns money, what to measure and what can go wrong. 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Key performance indicators for the Collaboration Software industry include: Paid seats and 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 Collaboration Software industry? The Collaboration Software 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 Collaboration Software industry? The primary risks for Collaboration Software companies include: Bundling by large suites, Seat counts under pressure, Pricing competition, Product commoditization. Investors should assess each company's exposure to these factors and its track record of navigating them. **[Swoopr Editorial Team](https://www.getswoopr.com/authors/swoopr-editorial-team/)** Swoopr's editorial team produces independent investment education content reviewed for accuracy and clarity. We do not provide personalized financial advice. See our [editorial policy](https://www.getswoopr.com/legal/editorial-policy/) and [corrections policy](https://www.getswoopr.com/legal/corrections-policy/).