Direct Answer
140 SEC filers are classified under the Standard Industrial Classification code that describes the endpoint 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
Endpoint security companies protect laptops, servers and mobile devices with software that detects and stops attacks, usually with cloud-delivered subscriptions. Detection quality and platform breadth drive share. The first numbers to compare across companies here are annual recurring revenue, net retention and module adoption per customer.
Key Industry Metrics
- Annual recurring revenue: Annualized subscription value for protecting devices. It shows how much revenue repeats, and growth reflects the replacement of older antivirus and expansion across more endpoints.
- Net retention: Spending from existing customers versus a year earlier. Above 100% shows customers adding devices and modules, and declines show downgrades or consolidation onto another platform.
- Module adoption per customer: The number of add-on products each customer uses. Rising adoption shows platform expansion, which lifts revenue per customer and makes switching harder.
- Gross margin: Revenue left after cloud hosting, data processing and support. Endpoint products stream data from many devices, so margin shows how efficiently the vendor handles that load.
- Free cash flow: Cash from operations after capital spending. Annual prepayments lift cash, so it shows how much of revenue growth converts into cash after costs.
Primary Macro Drivers
- Threat environment: New attack methods drive buyers to upgrade detection tools, supporting annual recurring revenue and module adoption per customer.
- Replacement of legacy antivirus: Companies moving off older signature-based tools to cloud-delivered detection create new subscription revenue.
- Platform consolidation: Buyers wanting fewer vendors adopt more modules from one platform, lifting module adoption per customer and net retention.
- Regulation: Rules requiring defenses and breach disclosure add mandatory spending, supporting renewals and new deals.
Major Risks
- Competition and bundling by large vendors: Large vendors bundle similar protection into broader subscriptions, pressuring pricing and win rates; watch net retention and discounting commentary.
- Outage or update failure risk: A faulty update or missed attack can disrupt customers and cost trust and legal liability; watch disclosed incidents, churn and litigation notes.
- Pricing pressure: Competitive offers and customer negotiations push down prices at renewal, narrowing gross margin; watch revenue per customer and renewal commentary.
- Budget scrutiny: Customers cutting security spending delay new modules and renewals; watch billings, net retention and remaining performance obligations.
Industry Characteristics
| Characteristic | Profile |
|---|---|
| Cyclicality | Mixed |
| Capital Intensity | Low |
| Regulatory Intensity | Low |
| Industry Maturity | Growth |
| Geographic Importance | U.S. / Global |
Endpoint 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 Endpoint 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 Endpoint Security industry?
Key performance indicators for the Endpoint Security industry include: Annual recurring revenue, Net retention, Module adoption per customer, 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 Endpoint Security industry?
The Endpoint 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 Endpoint Security industry?
The primary risks for Endpoint Security companies include: Competition and bundling by large vendors, Outage or update failure risk, Pricing pressure, Budget scrutiny. Investors should assess each company's exposure to these factors and its track record of navigating them.