Private Software Firms See Strongest Revenue Growth Since Recession Began, Expect Big Job Gains

The Software & Information Industry Association (SIIA) announced the results of the 2012 SoftwareBenchmarking Industry Report, which finds that private software companies are experiencing the largest revenue growth since 2008 and expect strong job growth. The report – which was developed by SIIA partner OPEXEngine, an aggregator of financial and operating benchmarks for small and mid-sized software companies – surveyed private and public U.S. firms with up to $350 million in revenues.

The 2012 Report identifies significant revenue growth rates, strong job creation and high expectations. According to the report, participating private software firms achieved an average revenue growth rate of 37 percent in 2011 – 10 percent beyond the growth rate achieved in 2010 – and they anticipate further gains in 2012. Importantly, companies say they plan to increase employee headcount in 2012 by an average of 27 percent – the highest hiring expectation since the recession. 

Key findings from the 2012 Software Benchmarking Industry Report include:

-- Private firms expect to increase headcount by an average of 27 percent. Firms with revenue under  $10 million and between $10 and $20 million anticipate the biggest hiring gains at 38 percent and 36.5 percent, respectively.

-- Private software firms achieved an average revenue growth rate of 37 percent in 2011, compared to 28 percent in 2010.

-- Private companies in the $20-$40 million range had the highest revenue growth rate (46 percent).

-- 80 percent of private software companies surveyed expect 20 percent or greater revenue growth in 2012, while 30 percent expect higher than 50 percent.

-- Revenue growth rates were higher for the West Coast companies – almost 50 percent versus 36 percent for the East Coast companies. 

-- In terms of operating expenses, East Coast companies spent 66 percent of what West Coast companies spent.

-- Employee productivity on the East Coast was 5 percent higher than on the West Coast.

-- East Coast companies anticipate a 35 percent growth in headcount during 2012, compared to 26 percent for West Coast companies.

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