2011 SDM 100: Facts and Figures

There's much to smile about in 2011, as more than eight in 10 of SDM 100 companies (82 percent) thinks 2011 will bestow increased revenues compared with last year. Compare this to 56 percent in 2010 and 39 percent in 2009 who expected increases.

Recurring monthly revenue (RMR)--a prime revenue stream for SDM 100 companies — improved 10 percent in 2010, compared with 6 percent in 2009. Partly responsible for the increase is the addition of several systems integrator companies that bring significant amounts of RMR to the SDM 100. In addition, traditional security dealers performed well in 2010, with only 14 of the 100 ranked companies reporting a decline in RMR year-over-year.

These 10 security companies are on the rise. All had the same or greater RMR in 2010 compared with 2009, but did not make the cut-off for the SDM 100 this year. Some are new to the report, while others have been ranked in prior years.

Total annual revenue among the SDM 100 was $9.2 billion, or 12 percent stronger in 2010 compared with the prior year. Partly responsible for the increase is the ranking of several newly ranked companies that significantly added to the total, including Niscayah and Ingersoll Rand, as well as a substantial increase for ADT.

This table presents aggregate figures for the SDM 100 group of companies, which are ranked by their recurring monthly revenue — an industry standard of valuation of a security monitoring business. Most of the SDM 100 firms are privately held. Submitting recurring monthly revenue is required for ranking; other figures are not required but mostly provided. Most firms — but not all — also reported their total annual revenue, number of subscribers, and installation revenues. Therefore, one should exercise caution in using this information to extrapolate industry totals or to benchmark. Note: A major change in 2011 is the incorporation of "systems integrator" firms that collect RMR in the SDM 100, which, due to the inclusion of several large integrators, contributed to year-over-year increases in both RMR and total annual revenue.

Security alarm companies derive their revenue from a wide variety of product categories, including the most sizeable — burglar alarm systems, which comprised 42 percent of dealers’ revenue in 2009 but just 34 percent in 2010. Taking up the slack is the category of integrated commercial systems at 17 percent of the total.

Security alarm companies derive their revenue from a wide variety of service categories, including the most sizeable — monitoring, which comprises nearly half of all revenue. The SDM 100 is now tracking, for the first time, the average percentage of revenue from “managed services” — 2 percent in 2010.

Installation and technical service make up the lion’s share of positions within an SDM 100 company, together accounting for four of every 10 employees on a dealer’s or integrator’s workforce.