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
Recent Developments
Jul 12, 2024 - Industry Growth to Improve, Then Flatten
- 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.
- The Monitoring Association (TMA) recently released its new AVS-01 Alarm Validation Scoring Standard online training course. TMA developed the AVS-01 to standardize methods for estimating the potential threat level of a burglar alarm activation using real-time and historical data. The new TMS training modules offer an introduction to the AVS-01 standard and demonstrate the system’s alarm level classifications and call-handling process. More monitoring centers are expected to adopt AVS-01 into their standard operating procedures.
- Demand for building design services slipped in May from the prior month, as architectural billings remain soft, according to a June report by the American Institute of Architects (AIA). The AIA’s Architecture Billing Index (ABI) fell to 42.4 in May from April’s reading of 48.3. Any reading of 50 or more indicates growth in architectural billings. The score for new project inquiries fell to 52.1 in May compared to 54.8 in April, and the index for the value of new design contracts decreased from 49.2 to 45.6. The AIA’s Chief Economist, Kermit Baker said, "The decline in the May ABI score continues a year and a half of weakness in design billings at US architecture firms. However, firms only reported modest declines over the first half of this period. Over the past nine months, volatility has increased, and scores have softened more significantly, with the May score the weakest reported since the end of the pandemic recession." Architectural billings are an indicator of future alarm system demand for nonresidential and residential buildings.
- 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%.
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