NSCA report shows rise in recurring sales for integrators

CEDAR RAPIDS, Iowa—The National Systems Contractors Association (NSCA), a not-for-profit association representing the commercial integration industry, released research revealing that integrators are beginning to embrace more of a recurring sales model.  

NSCA’s Financial Analysis of the Industry report, which looks at details of the industry’s performance based on data collected from 109 integration firms, shows that recurring sales rose from 10.83 percent in 2018 to 17.32 in 2020, a 26 percent growth rate over that two-year period.

“One of the more interesting metrics we revealed is the relationship between recurring and non-recurring sales,” NSCA Executive Director Chuck Wilson said in the announcement. “While the large majority of sales has always been derived from non-recurring sources, the average percentage of revenue derived from recurring sales made a healthy upswing from 10.83 percent in 2018 to 17.32 percent.”

Integration firms participated in the 2021 Financial Analysis of the Industry survey in October and November 2020 (formerly known as the Cost of Doing Business survey), and the report provides information that systems integrators can use to benchmark and compare expenses, profits, sales and other data against industry peers of similar size and business focus.

As NSCA worked with FMI to develop this report, “we took into account the fact that 2020 was the most difficult year many integrators have faced,” NSCA noted. “For this reason, survey participants were asked to use the most recent financial report completed prior to March 2020; therefore, findings will not reflect the impact of the pandemic or PPP funding; however, modifications were made to ensure that the survey reflected evolving industry conditions, including remote workforces and the pandemic’s impact on backlog.”

The information in the Financial Analysis of the Industry provides an in-depth look at integrator operations and dynamics; it also helps NSCA members better understand the financial health of their companies (and their firm’s performance compared to others). In addition, the report includes verbatim responses about the biggest challenges integrators anticipate in future years.

To help integrators further break down the results of the 43-page report and leverage the research to improve business, NSCA is hosting a webinar on March 16. Attendees will learn how to use the Financial Analysis of the Industry to:

• Benchmark profitability of their company vs. the rest of the industry.
• Benchmark their backlog in comparison to other companies.
• Analyze financial trends among small, medium, and large integrators.

The Financial Analysis of the Industry is free for NSCA members to download. The report can also be purchased by non-members for $600; non-members can become NSCA members and then receive the report as part of their membership. For more information about the Financial Analysis of the Industry, or to join NSCA, visit www.nsca.org or call (800) 446-6722.