--- title: "Enterprise Software Industry: Companies" description: "140 SEC filers are classified under the Standard Industrial Classification code that describes the enterprise software industry." canonical: https://www.getswoopr.com/stocks/industries/information-technology/enterprise-software/ source: "Swoopr Investment: https://www.getswoopr.com" --- # Enterprise Software Industry ## Direct Answer 140 SEC filers are classified under the Standard Industrial Classification code that describes the enterprise 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 Enterprise software companies sell business-critical systems for finance, operations, sales and data to large organizations through subscriptions and licenses. Switching costs and multi-year contracts support recurring revenue. The first numbers to compare across companies here are annual recurring revenue, remaining performance obligations and net retention. ## Key Industry Metrics - **Annual recurring revenue**: Annualized value of subscription contracts for large organizations. It shows how much revenue repeats and, with multi-year deals, how stable the base is. - **Remaining performance obligations**: Contracted revenue not yet recognized. It shows contracted future revenue, so it indicates visibility, but terms vary and cancellation rights affect its quality. - **Net retention**: Spending from existing customers versus a year earlier. Above 100% shows expansion through more users and modules, which is common because large firms add functions over time. - **Operating margin**: Profit after all operating costs as a share of revenue. Mature vendors show how much scale yields, while heavy sales spending can hold back margins at younger firms. - **Free cash flow**: Cash from operations after capital spending. Annual or multi-year billing can lift cash above profit, so it shows how much of earnings turn into cash. ## Primary Macro Drivers - **IT budgets and cloud migration**: Large organizations set software budgets annually, and migration to cloud versions drives recurring revenue and remaining performance obligations. - **AI and automation features**: Adding automation and AI features lets vendors upsell premium tiers, supporting net retention and average contract value. - **Industry and compliance demands**: Industry rules and sector-specific needs make software hard to replace, supporting renewals and pricing. - **Vendor consolidation**: Customers reducing the number of vendors give more spend to suites, helping large vendors and squeezing smaller ones. ## Major Risks - **Seat-based pricing disruption**: If AI lets fewer people do the same job, seat-priced contracts can shrink; watch seat counts, net retention and shifts to usage or outcome-based pricing. - **Budget cuts and elongated deals**: When budgets tighten, buyers delay deals and extend approvals, slowing bookings; watch remaining performance obligations and sales-cycle commentary. - **Competition**: Rivals offering cheaper or bundled alternatives pressure pricing and win rates; watch net retention and discounting commentary. - **Migration execution**: Moving large customers from older systems to new ones is complex and can overrun, hurting satisfaction and margin; watch migration commentary and churn. ## Industry Characteristics | Characteristic | Profile | | --- | --- | | Cyclicality | Mixed | | Capital Intensity | Low | | Regulatory Intensity | Low | | Industry Maturity | Mature | | Geographic Importance | U.S. / Global | ## Enterprise 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 Enterprise Software 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/) - [Enterprise Storage](https://www.getswoopr.com/stocks/industries/information-technology/enterprise-storage/) - [Enterprise Servers](https://www.getswoopr.com/stocks/industries/information-technology/enterprise-servers/) - [ERP Software](https://www.getswoopr.com/stocks/industries/information-technology/erp-software/) - [Enterprise Data Services](https://www.getswoopr.com/stocks/industries/information-technology/enterprise-data-services/) - [Etch Equipment](https://www.getswoopr.com/stocks/industries/information-technology/etch-equipment/) - [Endpoint Security](https://www.getswoopr.com/stocks/industries/information-technology/endpoint-security/) - [Fabless Semiconductors](https://www.getswoopr.com/stocks/industries/information-technology/fabless-semiconductors/) - [Electronics Manufacturing Services](https://www.getswoopr.com/stocks/industries/information-technology/electronics-manufacturing-services/) ### 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 Enterprise Software industry? Key performance indicators for the Enterprise Software industry include: Annual recurring revenue, Remaining performance obligations, Net retention, Operating 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 Enterprise Software industry? The Enterprise 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 Enterprise Software industry? The primary risks for Enterprise Software companies include: Seat-based pricing disruption, Budget cuts and elongated deals, Competition, Migration execution. 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/).