The Level Index, 2026 Annual Report
The State of Contractor Finance 2026
The founding team's analysis of 2,200+ contractors representing $13.25B in job revenue, across operating, private-equity, and CFO roles. The seven numbers that separate the top quartile from everyone else, and where the money quietly leaks.
Executive summary
The median recorded job gross margin is 44.3% across 1,747,089 completed jobs from 1,791 companies. Separately, the median company cash-to-billings ratio is 85.1% (n=464), and median billing speed is 1 day (n=733, including progress billing). Each metric uses its own eligible sample within the 2,200+ contractor research universe. Compare margin, collection and labor economics separately, then use complete job costs and invoice records to identify the first operating decision. A high revenue total alone does not establish healthy profit or cash.
2,200+
contractors analyzed
$13.25B
job revenue in the dataset
44.3%
median recorded job gross margin (1.75M jobs, 1,791 companies)
85.1%
median cash-to-billings ratio (n=464)
The seven numbers that separate top performers
1. Job-level gross margin
44.3%A job margin is only trustworthy when labor, materials, and subcontractor costs are attached to the same work as revenue.
What to do
Cost every job in real time, not after closeout. The number you can see is the only one you can protect.
2. Collection rate
85.1%Recorded collections compared with billings over the retained window (n=464). Top decile is 96.0%; bottom decile near 39%. The difference is not a measured A/R balance, bad debt or recoverable cash. Rabbet is a separate slow-payment reference, not validation of this ratio.
What to do
Reconcile invoice aging, cutoff, credits, retainage and disputes before estimating recovery. Assign ownership for supported overdue balances.
3. Billing speed
1 dayMedian is 1 day when progress billing is included (about a quarter of contractors). Among post-completion invoicers the median is 7 days and the slowest decile waits 30+ days.
What to do
Progress-bill wherever the contract allows. Days-to-invoice is the cheapest cash-flow lever you have.
4. Service-agreement gross margin
37.9%Top quartile clears 53%. Company-level SA gross margin has a negative bottom decile (n=259). Outdated pricing, scope creep or allocation may explain your own result; test agreement costs before repricing.
What to do
Reprice the agreement book on cost, not on last year's rate. Recurring revenue is not recurring margin.
5. Quote conversion (decided quotes)
73.9%Measured on decided quotes (customer said yes or no), top quartile 83.2%. On an all-quotes basis (including undecided) the median is 38.1%.
What to do
All-quote and decided-quote medians use different bases. Check your own undecided value and test whether structured follow-up converts it; the separate medians do not measure your undecided share.
6. Labor share of quoted revenue (sample unverified)
29.1%The retained labor-share reference is 29.1% of quoted revenue (eligible sample unverified), and 40% of jobs run over their labor-hour budget. The 40% over-budget figure concerns 315,393 jobs with estimated and actual hours from 1,391 companies; it does not measure overtime or prove demand is unconstrained. Test qualified-hour capacity against your own demand.
What to do
Manage gross profit per labor hour, not headcount. The scarce input is skilled time, so measure the return on it.
7. Customer concentration (top account)
31%The median largest-customer share is 31% (n=959 eligible companies with at least $100K annual revenue). Use roughly 25-30% as a planning trigger for downside review, then test contract durability, replacement demand and cash reserves. A share alone does not establish lender refusal or a fixed valuation discount.
What to do
A large account is a downside-review trigger. Test contract durability, replacement demand and reserves before assuming a valuation adjustment.
Methodology
Figures are compiled from the Level founding team's analysis of 2,200+ contractors representing $13.25 billion in job revenue, built across operating, private-equity, and CFO roles (financial reviews, operator interviews, and due diligence), and layered with named public sources including BLS wage data, SEC filings from public specialty contractors, and industry surveys. All figures are aggregated and anonymized; no individual company is identified or identifiable. Distributions are reported as medians and percentiles with metric-specific eligible samples or an explicit unverified-sample label. Specific figures are rounded and should be treated as directional benchmarks, not precise measurements. Where our data and industry surveys conflict, we cite both.
Frequently asked questions
What is the median gross margin for a contractor job?
The median job-level gross margin is 44.3%, measured across 1,747,089 completed jobs from 1,791 companies. Apply that comparison only after labor, materials, and subcontractor costs are attached to the same work as revenue.
What is a good collection rate for a contractor?
The median cash-to-billings ratio is 85.1% (n=464 eligible companies). It compares recorded collections with billings over the retained measurement window; it is not a point-in-time A/R balance, bad-debt rate or recoverable-cash estimate. The top decile is 96.0% and the bottom decile near 39%. Reconcile invoice aging, cutoff, credits, retainage and disputes before estimating potential recovery. Rabbet's slow-payment-cost estimate is a separate industry reference and does not validate this ratio.
Where does the data in this report come from?
The State of Contractor Finance is built on the Level founding team's analysis of 2,200+ contractors representing $13.25 billion in job revenue, across operating, private-equity, and CFO roles, layered with named public sources (BLS, SEC filings, CFMA and industry surveys). All figures are aggregated and anonymized; no individual company is identified.
Is the report free?
Yes. The full report is free to read and the published aggregate benchmark data is downloadable as machine-readable JSON, free to cite with attribution to the Level Index.
Full report
Get the complete PDF report
Get the executive summary, all seven findings, charts, definitions, and sources in one shareable PDF. The web report and underlying data remain open to read and cite.
Raw data, free to cite
The Level Index dataset
The download contains published aggregate benchmarks with definitions, sources and metric-specific samples or explicit unverified-sample labels. It does not expose private observations for recomputing distributions. Free to cite with attribution to the Level Index.
See where your numbers land against the report
Start with a free call. After agreed data access, compare job margin, collections and labor economics with each published eligible sample or labeled reference where its sample is unverified, within the 2,200+ contractor research universe.
No commitment. Real numbers, not generic advice.