Operating Expenses (Opex)

Operating Expenses (Opex)

Operating expenses are the costs associated with running a business on a day-to-day basis. They include things like rent, utilities, payroll, and general administrative costs.

Opex can be contrasted with capital expenditures (CAPEX), which are one-time costs associated with acquiring or improving property, plant, and equipment.

While CAPEX is typically incurred to generate future revenue, opex is incurred to maintain current operations. As such, it is often considered a non-revenue generating expense.

However, opex can also include marketing and other sales-related expenses that are necessary to maintain current revenue levels. So while it may not directly generate new revenue, it is still essential to the operation of the business.