Direct Answer
61 SEC filers are classified under the Standard Industrial Classification codes that describe the it consulting industry, and their latest annual reports show $117.6 billion of combined revenue and a median operating margin of -2.9%. Investors should still evaluate its revenue model, industry-specific KPIs, valuation framework and the risks that can change the group's economics.
Industry Overview
IT consulting firms advise on and implement technology strategy, software, cloud and data projects for corporations and governments, charging for time and projects. Revenue follows technology budgets and consultant utilization. The first numbers to compare across companies here are revenue growth and bookings, utilization and billing rates.
Key Industry Metrics
- Revenue growth and bookings: Sales growth and new contracts signed. Bookings lead revenue and show demand for projects, which are more discretionary than long-term outsourcing and shrink quickly in downturns.
- Utilization: The share of consultants' time billed to clients. Higher use lifts margin, but if it is too high there is no time for training or sales, so a balanced level matters.
- Billing rates: The prices charged per hour or per day of consultant time. Rising rates show pricing power or senior mix, while falling rates reveal competitive pressure.
- Operating margin: Profit after salaries and overhead as a share of revenue. People are the main cost, so margin reflects pricing, use of staff and how much work is delivered by lower-cost teams.
- Attrition: The rate at which consultants leave. High turnover raises hiring cost and can hurt delivery, and it often climbs when rival firms are competing for scarce skills.
Primary Macro Drivers
- Digital and cloud spending: Clients budget for cloud and modernization projects, so those budgets drive bookings and billing volume.
- AI projects: Companies bringing in advisers to plan and build AI systems create new project work, lifting revenue growth and bookings.
- Talent supply: Scarce skills set how much work can be staffed, affecting utilization, billing rates and attrition.
- Pricing: Rates charged and fees for fixed projects set revenue per consultant, with competition and demand pushing them up or down.
Major Risks
- Discretionary cuts: Advisory work is often paused when budgets tighten, so revenue can fall quickly; watch bookings, utilization and organic growth.
- Pricing pressure: Competition and client procurement push rates down, squeezing operating margin; watch billing rates and bookings mix.
- AI automation: Tools that automate analysis and coding could cut billable hours per project; watch utilization, headcount and the shift toward fixed-price work.
- Attrition and talent cost: Departing staff require replacement at higher pay and slow projects, lowering margin; watch attrition, utilization and operating margin.
Industry Characteristics
| Characteristic | Profile |
|---|---|
| Cyclicality | Cyclical |
| Capital Intensity | Low |
| Regulatory Intensity | Low |
| Industry Maturity | Mature |
| Geographic Importance | U.S. / Global |
IT Consulting Filers in the SEC Record
61 companies with annual reports in the dataset are classified by the SEC in the Standard Industrial Classification codes 7371, 7373, 8742. Their latest fiscal years end between 2023 and 2026, and together they reported $117.6 billion of revenue. Median revenue growth over the prior year was 3.6%. Median operating margin was -2.9% and median net margin -0.6%. Median total liabilities were 52% of total assets, and 28 of 61 reported a profit in their latest year.
| Company | Revenue | Growth | Operating margin | Net margin | Year |
|---|---|---|---|---|---|
| Cognizant Technology Solutions Corp | $21.1 billion | 7.0% | 16.1% | 10.6% | 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 |
| Booz Allen Hamilton Holding Corp | $11.2 billion | -6.4% | 9.2% | 7.6% | 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 |
| Godaddy Inc. | $5.0 billion | 8.3% | 22.8% | 17.7% | FY 2025 |
The 8 largest of 61 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 IT Consulting 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 IT Consulting industry?
Key performance indicators for the IT Consulting industry include: Revenue growth and bookings, Utilization, Billing rates, Operating margin, Attrition. Which matter most depends on the company's model, so compare them across several companies rather than relying on one.
How cyclical is the IT Consulting industry?
The IT Consulting 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 IT Consulting industry?
The primary risks for IT Consulting companies include: Discretionary cuts, Pricing pressure, AI automation, Attrition and talent cost. Investors should assess each company's exposure to these factors and its track record of navigating them.