Direct Answer
57 SEC filers are classified under the Standard Industrial Classification codes that describe the data center it services industry, and their latest annual reports show $118.9 billion of combined revenue and a median operating margin of -5.3%. Investors should still evaluate its revenue model, industry-specific KPIs, valuation framework and the risks that can change the group's economics.
Industry Overview
Data center IT service companies design, build and manage the servers, networks and storage inside data centers for enterprises and carriers, under project and managed contracts. Demand follows cloud and AI infrastructure spending. The first numbers to compare across companies here are backlog and bookings, revenue by service line and gross margin.
Key Industry Metrics
- Backlog and bookings: Contracted work and new orders signed. Backlog shows work in the pipeline, though project timing varies, and a pause in customer buildouts can delay revenue.
- Revenue by service line: Sales split between design, build, managed operations and maintenance. Managed services tend to be steadier, while build projects follow construction cycles.
- Gross margin: Revenue left after labor, materials and subcontractors. Project work is competitive, so margins reflect bid discipline, mix and how well costs are controlled during delivery.
- Utilization: The share of technical staff time that is billed. Higher use lifts margin, while low use shows idle staff, which matters when projects slip.
- Customer concentration: The share of revenue from a few large operators and carriers. Large customers can dominate backlog, so a delayed buildout by one has outsized effect.
Primary Macro Drivers
- Data center buildouts: New and expanded facilities require design, build and fit-out work, so the construction pipeline drives backlog and bookings.
- Enterprise infrastructure refresh: Companies replacing aging servers and storage buy integration and installation work, adding project revenue by service line.
- AI capacity demand: Large AI clusters need specialized power, cooling and network design, raising project size and bookings tied to infrastructure services.
- Outsourcing: Enterprises outsourcing day-to-day operations sign managed contracts, giving more recurring revenue and steadier utilization.
Major Risks
- Project timing: Large builds are won and delayed on customer schedules, so quarterly revenue can swing; watch backlog conversion and bookings relative to revenue.
- Customer concentration: A few hyperscalers or carriers account for a large part of sales, so one project shift matters; watch top-customer share and backlog.
- Competition from cloud providers: Cloud providers increasingly sell managed infrastructure themselves, reducing work for outside providers; watch bookings and renewal commentary.
- Talent costs: Skilled technicians and engineers are scarce, so wage pressure and attrition squeeze margin and delivery; watch utilization, headcount and gross margin.
Industry Characteristics
| Characteristic | Profile |
|---|---|
| Cyclicality | Cyclical |
| Capital Intensity | Medium |
| Regulatory Intensity | Low |
| Industry Maturity | Growth |
| Geographic Importance | U.S. / Global |
Data Center IT Services Filers in the SEC Record
57 companies with annual reports in the dataset are classified by the SEC in the Standard Industrial Classification codes 7374, 7373. Their latest fiscal years end between 2023 and 2026, and together they reported $118.9 billion of revenue. Median revenue growth over the prior year was 11.5%. Median operating margin was -5.3% and median net margin -0.6%. Median total liabilities were 57% of total assets, and 27 of 57 reported a profit in their latest year.
| Company | Revenue | Growth | Operating margin | Net margin | Year |
|---|---|---|---|---|---|
| Automatic Data Processing Inc | $20.6 billion | 7.1% | n/a | 19.8% | FY 2025 |
| Leidos Holdings, Inc. | $17.2 billion | 3.1% | 12.3% | 8.4% | FY 2026 |
| Kyndryl Holdings, Inc. | $15.1 billion | 0.2% | n/a | 1.2% | FY 2026 |
| Workday, Inc. | $9.6 billion | 13.1% | 7.5% | 7.3% | FY 2026 |
| Caci International Inc | $8.6 billion | 12.6% | 8.9% | 5.8% | FY 2025 |
| Science Applications International Corp | $7.3 billion | -2.9% | 7.2% | 4.9% | FY 2026 |
| Parsons Corp | $6.4 billion | -5.7% | 6.6% | 3.8% | FY 2025 |
| Toast, Inc. | $6.2 billion | 24.1% | 4.7% | 5.6% | FY 2025 |
The 8 largest of 57 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 Data Center IT Services 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 Data Center IT Services industry?
Key performance indicators for the Data Center IT Services industry include: Backlog and bookings, Revenue by service line, Gross margin, Utilization, Customer concentration. Which matter most depends on the company's model, so compare them across several companies rather than relying on one.
How cyclical is the Data Center IT Services industry?
The Data Center IT Services industry is cyclical, meaning its revenues and earnings tend to expand during economic expansions and contract during downturns. Investors should monitor leading economic indicators and interest rate trends when evaluating timing.
What are the biggest risks in the Data Center IT Services industry?
The primary risks for Data Center IT Services companies include: Project timing, Customer concentration, Competition from cloud providers, Talent costs. Investors should assess each company's exposure to these factors and its track record of navigating them.