💼 OpEx

OpEx#

Operating expenses — the ongoing cost of running operations.

Important

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What it is#

OpEx — operating expenses — are the ongoing, day-to-day costs of running a business or system. They contrast with CapEx (capital expenditures), the one-time, long-term investments like buying servers or buildings; OpEx is the recurring spend — salaries, rent, cloud usage.

What counts as OpEx#

In a business: salaries, rent, utilities, marketing, maintenance. In a tech/ML setting: cloud compute (AWS, GCP, Azure), data storage (S3, BigQuery, Snowflake), inference costs (GPU time per prediction), third-party API fees, and monitoring/logging subscriptions.

CapEx vs OpEx#

The split is timing and accounting. CapEx is a one-time investment in a long-lived asset, capitalised and depreciated over years. OpEx is a recurring operating cost, expensed immediately on the income statement. Buying $500k of servers is CapEx; paying $50k a month for cloud, salaries and electricity is OpEx.

Why it matters#

OpEx is subtracted from revenue to get operating profit, so businesses track it closely to control recurring costs. In ML specifically, reducing OpEx — more efficient models that burn fewer GPU hours — is what makes a deployment sustainable at scale, tying it directly to FLOPs and inference cost.

Theme: Business & Growth Analytics · All terminology

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Mind map — connected ideas

FLOPs · Gross Margin · Cloud Inference · SaaS (Software as a Service) · LLMs (Large Language Models) · Blended CAC (Customer Acquisition Cost)

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More in Business & Growth Analytics

Blended CAC (Customer Acquisition Cost) · CAC (Customer Acquisition Cost) · Cannibalization · Channel-Specific CAC (Customer Acquisition Cost) · Churn · Cohort · Cohort-Based LTV (Simple Version) · Conversion Rate (CR) · Cost-Per-Click (CPC) Models · Cross-Selling · CTR (Click-Through Rate) · Customer Lifetime · Customer Segmentation · D2C (Direct-to-Consumer)