Security System Services

Industry Profile Report

Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters

Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.

Call Preparation Call Prep Questions, Industry Terms, and Weblinks.

Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.

Industry Profile Excerpts

Industry Overview

The 5,800 security systems service providers in the US design, sell, install, service, and monitor security alarm systems. Companies may install stand-alone systems or offer monitoring services. Customers include residential, commercial, educational, governmental, and industrial accounts.

Customer Attrition

Failure to retain customers is costly, as companies typically incur acquisition expenses and depend on payments over the term of a contract to recoup costs.

Technology Integration

Advances in technology help drive popularity for integrated security systems that combine multiple features, such as video surveillance, intruder detection, alarm systems, and home control.

Industry size & Structure

The average security systems services provider operates out of a single location, employs 21-22 workers, and generates $4-5 million annually.

    • The security systems services industry consists of about 5,800 firms that employ about 125,000 workers and generate about $28 billion annually.
    • The industry is concentrated at the top and fragmented at the bottom. The top four firms account for 34% of industry revenue. The top 50 firms account for 58% of industry revenue.
    • Large companies include Apollo Global (ADT) and Monitronics (Brinks Home Security). Large companies may be vertically-integrated and have international operations.
    • Estimated US household penetration of alarm systems is 50%.
    • The industry includes national and regional chains, franchises, and independent operators.
                                    Industry Forecast
                                    Security System Services Industry Growth
                                    Source: Vertical IQ and Inforum

                                    Recent Developments

                                    May 13, 2024 - Industry to Post Steady but Flat Growth
                                    • The security systems services industry is expected to experience stronger growth in 2025 after a slowdown in 2024. The industry’s year-over-year sales growth is projected to decline to 2.7% in 2024 after rising 6.3% in 2023, according to Inforum and the Interindustry Economic Research Fund, Inc. The security systems services industry is forecast to notch sales growth of 4.7% in 2025, then see flat but steady average annual sales growth of 5.9% through 2028, according to Inforum and the Interindustry Economic Research Fund, Inc.
                                    • According to the recently released 2024 version of the What Home Buyers Really Want study by the National Association of Home Builders (NAHB), US home buyers’ emphasis on security features has increased significantly. The study found that between 2012 and 2023, the percentage of buyers who view security cameras as desirable or essential grew from 40% to 76%. Over the same period, the share of buyers who considered wired home security systems as desirable or essential increased from 26% to 61%. Between 2018 and 2023, the percentage of home buyers who think video doorbells are desirable or essential rose from 45% to 74%.
                                    • The rate of US business applications, a key demand indicator for security systems services, decreased by 0.5% in April 2024 compared to the prior month, according to the US Census Bureau. The Northeast posted the largest decline in business applications with a drop of 5.2%, followed by the Midwest (-1.7%) and West (-0.7%). The South saw an increase of 1.4%. Of the 20 major industry sectors tracked by the Census Bureau, only four posted growth in April, led by retail trade (+10.2%), manufacturing (+2.2%), transportation and warehousing (+0.4%), and finance and insurance (+0.2%). Industries that notched the largest drops in April business applications included agriculture (-25.8%), utilities (-16.7%), management of companies (-10.2%), mining (-9.9%), and educational services (-5.7%).
                                    • With the supply chain disruptions and most other pandemic-era headwinds behind them, security dealers and integrators are looking forward to more typical business challenges this year, according to the 2024 SDM Industry Forecast Study. When asked about their outlook for 2024 revenue, 58% of security dealer and integrator respondents said they thought revenue would increase, while 35% believe sales will stay the same and 7% think revenue will decline. Among specific areas of the security industry, respondents were most confident about video surveillance, monitoring, access control, fire alarm/emergency communications, and intruder alarms. When asked about their top business challenges for 2024, the top reply was increasing sales (ranked the highest by 41% of respondents), followed by finding/retaining employees (35%), controlling costs (30%), generating recurring revenue (30%), and protecting profit margins (28%).
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