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OPEX
(Operating Expenses)
OPEX (Operating Expenses) are the ongoing costs for running a business, distinct from CAPEX (long-term investments). Includes rent, salaries, utilities, and R&D.
Key in income statements, OPEX affects EBITDA and profit margins. Tech firms often highlight "OPEX efficiency" (e.g., Meta's 2023 layoffs to cut $5B OPEX). GAAP requires separating OPEX from COGS (cost of goods sold). SaaS companies aim for OPEX/revenue ratios below 40%. Unlike CAPEX, OPEX offers immediate tax deductions. The SEC monitors OPEX classification (e.g., WorldCom's fraud involved capitalizing $3.8B in OPEX). Investors track OPEX growth versus revenue to assess scalability.
Key in income statements, OPEX affects EBITDA and profit margins. Tech firms often highlight "OPEX efficiency" (e.g., Meta's 2023 layoffs to cut $5B OPEX). GAAP requires separating OPEX from COGS (cost of goods sold). SaaS companies aim for OPEX/revenue ratios below 40%. Unlike CAPEX, OPEX offers immediate tax deductions. The SEC monitors OPEX classification (e.g., WorldCom's fraud involved capitalizing $3.8B in OPEX). Investors track OPEX growth versus revenue to assess scalability.