Architectural Record just published their Top 300 Architecture Firms list for 2016. I was curious to dig into the data and see if there was anything interesting to learn. It turns out, once you go past the rankings, you can glean some deep insights into what makes up today’s top earning firms.
To do my analysis, I copied the table of data from Arch. Record’s website and pasted it into Excel. Once in Excel, I did some basic data clean-up, like splitting the “US Headquarters” field into separate city and state columns. Want to see the original data? You can download a copy of the Excel file here.
After I got the data in decent shape, I put it into Power BI, Microsoft’s data visualization software. I used Power BI to analyze the data and create the charts and visualizations.
I organized the visualizations into four themes; firm type, firm location, project location, and company comparison. Below is a summary of my finding as well as the visualizations for each category.
The majority of the firms represented in the top 300 were pure architecture firms (203 total). Predictably, these firms accounted for most of the architectural revenue. However, the firms that earned the most total design revenue were actually the EA (engineer – architect) firms, which had almost double the total revenue of the pure architecture firms. Together, these two firm types accounted for almost half the total design revenue of all the firms in the list.
A total of one hundred and thirty five cities were represented on the list, with New York City firms represented the most (33 times). Likewise, New York State has the most mentions with 48 total. California firms were a close second with 37.
Despite not having the most firms represented, California topped the list with the highest total design revenue and architectural revenue. California’s total design revenue was over four times higher than second place Colorado. Similarly, California’s architectural revenue was twice that of second place New York’s.
The top 300 list categorized architectural revenue down by domestic vs international. Nealy 80% of all the architectural revenue came from domestic projects. This surprised me. I would have assumed the number to be closer to 50/50.
For the pure architecture firms, almost 85% of their revenue was from domestic projects. The majority of the pure architecture firms derived their revenue from domestic projects.
Engineering – contractor firms were almost the opposite, with over 60% of their revenue coming from international projects.
Gensler topped the list this year with the most architectural revenue. When you compare total design revenue, however, Gensler is a distant sixth place. AECOM leads the list with nearly eight times Gensler’s total design revenue. Jacobs, and CH2M each earned more than double Gensler’s total design revenue.
Interestingly enough, firms topping the total design revenue list derived only a small portion of their total revenue from architectural services. Overall, total architectural revenue accounted for 30% of all design revenue accounted for in the list.
One piece of data that is missing from the list is total number of employees. It would be interesting to divide total design revenue by number of employees to get a relative idea of how efficient each firm works.
Revenue Over Time
How does the data look over time? Nuri Miller put together this very cool animation that visualizes the architectural revenue of the top 20 firms from 2012 to 2016. The animation uses a bubble motion chart, which is really effective at illustrating the growth of the firms over time. Click the image below to view the animation.
If I were starting a firm today and wanted to end up the top US firm by revenue in the near future, I would start an EA firm based in California, preferably LA or Pasadena. I would make sure no more than a quarter of my revenue came from architectural projects. Of those architectural projects, 80% or more would need to be domestic projects. At least, that’s what the number say.
Of course, there’s no telling how these trends will translate into next year or the year after. Using a data-driven approach to starting a firm is definitely not a bad idea, however, data alone won’t get you there. It takes a lot more than just numbers to make a successful firm.
This exercise served two purposes. One, I wanted to take a deeper look at the top 300 data and see if there were any interesting trends hidden in the list. Two, I wanted to experiment with data visualization techniques as a tool to understand the data as well as present it in a more visual format.
What do you think? What did you learn from the diagrams? Are there any additional comparisons you’d like to see? Leave a comment below!