As of 3/31/23 MORN has 12,411 employees, a 24% increase in the last 12 months. Over the same period, expenses (defined as revenue less adjusted operating income) increased from $375m to $428m, a 14% increase. Given that approximately two-thirds of the expense is employee compensation and benefits, this would suggest that the compensation and benefit expense per employee has declined. Is that correct? Can you shed some information on why that may be the case? Is this a function of the types of ro

September 8, 2023

Yes, you’re correct that that adjusted operating expense per average employee declined in the first quarter of 2023, relative to the prior-year period, a trend that continued into the second quarter of 2023 relative to the prior-year period. As you note, total compensation and benefits and related costs (including commissions and stock-based compensation) have historically accounted for roughly two-thirds of operating expenses, as they did in 2021 and 2022. Those expenses have declined on a per employee basis, due in part to the increased proportion of our employee base located in India, where our labor costs are lower than in many other markets. The decline also reflects our efforts to control costs in other discretionary categories including professional fees, travel, and marketing.

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