A few years ago, I sat in a board meeting where the founder proudly announced that revenue had doubled. The room was buzzing. Then the VP of Finance put up the next slide: operating expenses had tripled. Revenue doubled, but the company was burning cash faster than ever. The problem wasn't the product or the market share strategy. It was that nobody had been watching the operating expense line while they scaled.
Operating expenses (OpEx) are the costs of running a business day to day, excluding the direct cost of making or delivering your product. They include everything from office rent to your marketing budget, from engineering salaries to the software subscriptions piling up on your company credit card. And for marketers, they matter enormously, because your entire department lives inside this line item on the income statement.
Operating expenses are the ongoing costs a company incurs through its normal business operations. They are distinct from COGS (cost of goods sold), which captures the direct costs of producing goods or delivering services.
The formula that connects them is:
Operating Income = Gross Profit − Operating Expenses
Or equivalently:
Operating Income = Revenue − COGS − Operating Expenses
Operating expenses typically fall into the category accountants call SG&A (Selling, General & Administrative), plus Research & Development. According to Square's business glossary, operating expenses cover "expenses that a business owner incurs in order to operate that business," excluding direct production costs.
Understanding what falls under OpEx helps marketers locate their own spending within the broader financial picture.
| Category | Examples | Marketing Relevance |
|---|---|---|
| Sales & Marketing | Ad spend, agency fees, events, content production, marketing tools | This is your department's direct budget line |
| General & Administrative | Office rent, utilities, insurance, legal fees, accounting | Shared overhead that gets allocated across departments |
| Research & Development | Product development, engineering salaries, testing infrastructure | Determines product quality and feature velocity, which affects positioning |
| Human Resources | Payroll, benefits, recruiting, training | Marketing team headcount is often the largest component of marketing OpEx |
| IT & Technology | Software licenses, cloud infrastructure, cybersecurity | MarTech stack costs increasingly dominate marketing budgets |
| Depreciation & Amortization | Equipment depreciation, software amortization | Non-cash charges that still affect reported operating income |
Sources: NetSuite — Marketing Expenses Defined, DealHub — What Are Operating Expenses?
One detail that trips people up: marketing expenses are sometimes split between COGS and OpEx. For example, at a SaaS company, the customer success team might be classified as COGS (because they directly support service delivery), while the demand generation team is OpEx. How your company classifies marketing costs affects gross margin and operating margin calculations.
The question every marketing leader should be able to answer: what percentage of revenue does our company spend on operations, and how does our marketing allocation compare to peers?
| Business Type | Total OpEx as % of Revenue | Marketing as % of Revenue |
|---|---|---|
| Early-Stage SaaS | 95–120% | 20–30% |
| Growth-Stage SaaS | 75–95% | 15–25% |
| Mature SaaS | 60–80% | 10–15% |
| B2B Companies (avg.) | 70–85% | 9.4% |
| eCommerce / DTC | 65–80% | 12–20% |
| Manufacturing | 55–70% | 3–5% |
| Professional Services | 80–90% | 5–8% |
Sources: SaaS Capital — 2025 Spending Benchmarks, Data-Mania — B2B Marketing Budget Benchmarks 2026, Rampiq — B2B SaaS Marketing Budget Guide 2025
I find the SaaS numbers particularly revealing. Early-stage SaaS companies routinely spend more than they earn (OpEx exceeding 100% of revenue) because they're investing in growth. According to SaaS Capital's 2025 benchmarks, equity-backed SaaS companies spend 107% of ARR on operations, compared to 95% for bootstrapped companies. The gap is almost entirely in sales and marketing: equity-backed companies spend 89% more on sales and 100% more on marketing.
For B2B companies broadly, marketing budgets in 2025 averaged 9.4% of revenue, up from 7.7% in 2024 according to Gartner's CMO Spend Survey. Looking ahead, 69% of marketers expect budget increases in 2026.