--- title: "Data Center Networking Industry" description: "7 SEC filers are classified under the Standard Industrial Classification code that describes the data center networking industry." canonical: https://www.getswoopr.com/stocks/industries/information-technology/data-center-networking/ source: "Swoopr Investment: https://www.getswoopr.com" --- # Data Center Networking Industry ## Direct Answer 7 SEC filers are classified under the Standard Industrial Classification code that describes the data center networking industry, and their latest annual reports show $69.6 billion of combined revenue and a median operating margin of -4.9%. 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 networking companies make the switches, optics and interconnect that link servers and storage inside and between data centers. AI clusters need very high-speed networks, which is driving rapid growth. The first numbers to compare across companies here are revenue and backlog, port speed mix such as 400G and 800G and gross margin. ## Key Industry Metrics - **Revenue and backlog**: Sales and orders awaiting delivery. Large cloud customers order in waves, so backlog shows near-term visibility while swings reveal how lumpy their spending is. - **Port speed mix such as 400G and 800G**: Sales divided among link speeds such as 400G and 800G. A shift to faster ports raises content per switch and shows how far customers have moved to AI-ready networks. - **Gross margin**: Revenue left after chips, optics and manufacturing. Fast product transitions can lift it, while price competition from large buyers and custom designs reduces it. - **Customer concentration**: The share of revenue from a few cloud and AI buyers. Because they build in large steps, their spending pauses or design changes can move results sharply. - **Product transition timing**: When customers move to the next speed generation. Timing shapes revenue because buyers delay older purchases before a transition, and early readiness can win share. ## Primary Macro Drivers - **Hyperscaler and AI capital spending**: Large cloud and AI buyers set the networking budget, so their capital plans appear in revenue and backlog for switches and optics. - **Network speed upgrades**: Moving from slower to faster ports raises content per rack and price per port, lifting revenue and affecting port speed mix. - **Cluster size growth**: Bigger training clusters need more links between processors, multiplying switches and optics per cluster and boosting revenue per deployment. - **Open and custom designs**: Choices between open and custom designs decide which vendors win each build, affecting share, gross margin and design-win counts. ## Major Risks - **Customer concentration**: A few cloud buyers account for most orders, so a deployment pause or vendor change can move revenue; watch top-customer share and backlog. - **Pricing competition**: Large buyers negotiate hard and can source from several suppliers, compressing gross margin; watch gross margin and discounting remarks. - **Technology transitions**: A faster standard can leave older products behind or favor new entrants; watch the port speed mix, product transition timing and inventory write-downs. - **Capex cuts**: Buyers can pause spending to digest earlier purchases, so orders may fall sharply; watch backlog, book-to-bill and customers' capital spending guidance. ## Industry Characteristics | Characteristic | Profile | | --- | --- | | Cyclicality | Cyclical | | Capital Intensity | Medium | | Regulatory Intensity | Low | | Industry Maturity | Growth | | Geographic Importance | Global | ## Data Center Networking Filers in the SEC Record 7 companies with annual reports in the dataset are classified by the SEC in the Standard Industrial Classification code 3576. Their latest fiscal years end in 2025, and together they reported $69.6 billion of revenue. Median revenue growth over the prior year was 9.7%. Median operating margin was -4.9% and median net margin -0.1%. Median total liabilities were 40% of total assets, and 3 of 7 reported a profit in their latest year. | Company | Revenue | Growth | Operating margin | Net margin | Year | | --- | --- | --- | --- | --- | --- | | [Cisco Systems, Inc.](https://www.getswoopr.com/stocks/companies/cisco/) | $56.7 billion | 5.3% | 20.8% | 18.0% | FY 2025 | | [Arista Networks, Inc.](https://www.getswoopr.com/stocks/companies/arista-networks/) | $9.0 billion | 28.6% | 42.8% | 0.0% | FY 2025 | | [F5, Inc.](https://www.getswoopr.com/stocks/companies/f5-inc/) | $3.1 billion | 9.7% | 24.8% | 22.4% | FY 2025 | | [Netgear, Inc.](https://www.getswoopr.com/stocks/companies/netgear-inc/) | $700 million | 3.8% | -4.9% | -2.6% | FY 2025 | | [Lantronix Inc](https://www.getswoopr.com/stocks/companies/lantronix-inc/) | $123 million | -23.3% | -8.9% | -9.3% | FY 2025 | | [Foxx Development Holdings Inc.](https://www.getswoopr.com/stocks/companies/foxx-development-holdings-inc/) | $66 million | 1941.8% | -14.7% | -13.7% | FY 2025 | | [Intrusion Inc](https://www.getswoopr.com/stocks/companies/intrusion-inc/) | $7 million | 21.6% | -130.6% | -0.1% | FY 2025 | 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 Networking 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. ### More in Information Technology - [Information Technology sector overview](https://www.getswoopr.com/stocks/industries/information-technology/) - [Data Center Semiconductors](https://www.getswoopr.com/stocks/industries/information-technology/data-center-semiconductors/) - [Data Center IT Services](https://www.getswoopr.com/stocks/industries/information-technology/data-center-it-services/) - [Data Security](https://www.getswoopr.com/stocks/industries/information-technology/data-security/) - [Cybersecurity](https://www.getswoopr.com/stocks/industries/information-technology/cybersecurity/) - [Data Storage Hardware](https://www.getswoopr.com/stocks/industries/information-technology/data-storage-hardware/) - [CRM Software](https://www.getswoopr.com/stocks/industries/information-technology/crm-software/) - [Database Software](https://www.getswoopr.com/stocks/industries/information-technology/database-software/) - [CPU & Processor Semiconductors](https://www.getswoopr.com/stocks/industries/information-technology/cpu-and-processor-semiconductors/) ### Put it to work - [How to analyze a stock](https://www.getswoopr.com/stocks/how-to-analyze-a-stock/) - [Fundamental analysis guides](https://www.getswoopr.com/learn/fundamental-analysis/) - [Company research](https://www.getswoopr.com/stocks/companies/) - [All industries](https://www.getswoopr.com/stocks/industries/) ## Frequently Asked Questions What are the main KPIs for the Data Center Networking industry? Key performance indicators for the Data Center Networking industry include: Revenue and backlog, Port speed mix such as 400G and 800G, Gross margin, Customer concentration, Product transition timing. 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 Networking industry? The Data Center Networking 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 Networking industry? The primary risks for Data Center Networking companies include: Customer concentration, Pricing competition, Technology transitions, Capex cuts. 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/).