Direct Answer
140 SEC filers are classified under the Standard Industrial Classification code that describes the security operations 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
Security operations software companies sell tools that collect security data, detect threats and automate response for security teams, delivered mostly by subscription. Usage and data volumes drive pricing, and platform consolidation is a trend. The first numbers to compare across companies here are annual recurring revenue, net retention and data ingest growth.
Key Industry Metrics
- Annual recurring revenue: Annualized subscription and committed usage value. It shows how much revenue repeats, and growth follows security data volumes and teams' adoption.
- Net retention: Spending from existing customers versus a year earlier. Above 100% shows teams ingesting more data and adding modules, and declines show cost cutting or platform switching.
- Data ingest growth: The pace of growth in how much security data customers send to the platform. It drives usage-based revenue, but customers can limit ingestion to control cost.
- Gross margin: Revenue left after hosting, storage and support. Collecting and searching large volumes of data is costly, so margin shows how efficiently the vendor handles it.
- Customer count: The number of organizations paying. Growth shows reach, but larger security teams generate most revenue, so read count with spend per customer.
Primary Macro Drivers
- Threat volume: More alerts and incidents require more tooling to collect and analyze data, supporting data ingest growth and annual recurring revenue.
- Security team productivity needs: Short-staffed security teams buy tools that automate triage and response, supporting upsell and customer growth.
- AI-assisted analysis: Assistants that summarize alerts and propose responses raise value per analyst, supporting premium tiers and net retention.
- Platform consolidation: Buyers choosing fewer security vendors favor platforms that handle data collection and response together, shifting spend toward broad vendors.
Major Risks
- Competition from large platforms: Large security and cloud platforms bundle detection and response at low added cost, pressuring win rates and price; watch net retention and customer growth.
- Pricing pressure: Customers negotiate lower rates as data volumes grow, squeezing revenue per unit of data and margin; watch data ingest growth and gross margin.
- Data cost: Storing and processing large data volumes is expensive, so growth can raise cost of revenue faster than price; watch gross margin against ingest growth.
- Budget scrutiny: Customers delay new tools or trim data they send when spending is tight, slowing growth; watch net retention and customer count.
Industry Characteristics
| Characteristic | Profile |
|---|---|
| Cyclicality | Mixed |
| Capital Intensity | Low |
| Regulatory Intensity | Low |
| Industry Maturity | Growth |
| Geographic Importance | U.S. / Global |
Security Operations 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 | $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 Security Operations 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.
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Frequently Asked Questions
What are the main KPIs for the Security Operations Software industry?
Key performance indicators for the Security Operations Software industry include: Annual recurring revenue, Net retention, Data ingest growth, Gross margin, Customer count. Which matter most depends on the company's model, so compare them across several companies rather than relying on one.
How cyclical is the Security Operations Software industry?
The Security Operations 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 Security Operations Software industry?
The primary risks for Security Operations Software companies include: Competition from large platforms, Pricing pressure, Data cost, Budget scrutiny. Investors should assess each company's exposure to these factors and its track record of navigating them.