NSCA's Financial Analysis of the Industry Updated for 2025

NSCA has released its 2025 Financial Analysis of the Industry, which, the association says, provides valuable, industry-specific information for systems integrators on key business fundamentals, including markets served, systems and technologies offered, sales trends, labor breakdowns, and company financial health.

Drawing on insights from nearly 100 integration firms across 31 states, three Canadian provinces, and Puerto Rico, the 17th edition of the report has numerous key findings.

*Industry shifts in sales strategies, including a continued move away from competitive bidding and toward negotiated/direct sales, which now account for approximately 72% of total industry revenues.

*Improved profitability and cash flow: Despite economic unpredictability, median gross profit margins improved to 34.2%, while cash-on-hand saw a healthy boost, signaling stronger financial resilience overall.

*Diverging employment trends: When it comes to utilization rates, smaller firms especially report operating at or over capacity, while larger firms show more signs of underutilization and workforce reconfiguration as they adjust staffing levels to fluctuating workloads.

*Recurring revenue growth: Recurring revenue now represents the largest share of revenue ever. This reflects a strategic shift toward managed services and more predictable income streams.

NSCA worked with ESG Professional Accountants, an independent research firm, to preserve confidentiality while developing this report. ESG helped collect data from the 99 integration firms that participated in the report's survey.

The information presented in the report provides an in-depth look at integrator operations and dynamics; it also helps NSCA members better understand the financial health and performance of their companies compared to others. For example, this data can be used by integrators to compare their own financial ratios to industry medians and percentiles to identify strengths and weaknesses; refine pricing and project bidding strategies in response to market trends; evaluate and adjust staffing strategies or optimize labor-utilization rates based on comparative data segmented by firm size; spot inefficiencies, refine material purchasing, and improve job costing practices to protect profit; and optimize project-review processes and recognition programs, comparing frequency, method, and outcomes of post-job reviews to high-performing companies.

"The data in this report can't be found anywhere else in our industry," explains NSCA executive director Tom LeBlanc. "Our members use it to see where they excel and where adjustment is needed. Only when you understand where you stand among your peers can you begin to target areas for improvement and prioritize actions that build a healthier, more competitive business."

After downloading the report, NSCA encourages members to join an exclusive webinar on November 18, featuring insights from LeBlanc, Solutions360 president Joel Harris, and AVI Systems CFO Chris Mounts. Register here.

The 2025 Financial Analysis of the Industry is free for NSCA members to download. Non-members can purchase the report.