---
title: "Definition of SBC/Revenue"
url: https://signalscreener.fr/definition/sbc-to-revenue/
markdown_url: https://signalscreener.fr/definition/sbc-to-revenue.md
description: "SBC-to-Revenue measures what percentage of revenue is spent on employee stock compensation."
type: glossary-definition
site: Signal Screener
language: en
keywords:
  - "SBC/Revenue"
  - "Stock-Based Compensation-to-Revenue"
translations:
  es: https://signalscreener.fr/es/definition/sbc-to-revenue.md
  fr: https://signalscreener.fr/fr/definition/sbc-to-revenue.md
  zh: https://signalscreener.fr/zh/definition/sbc-to-revenue.md
---

# Stock-Based Compensation-to-Revenue

## What is SBC/Revenue?

SBC-to-Revenue measures what percentage of revenue is spent on employee stock compensation. It shows the real cost of compensating employees with equity, which dilutes existing shareholders.

## Think of it like this

Imagine you own a pizzeria making $100k in sales. If you give employees stock worth $10k annually instead of cash, that's 10% SBC-to-Revenue. It's like giving away 10% of your business each year to employees - real dilution for owners!

## Formula

```
SBC/Revenue = (Stock-Based Compensation / Total Revenue) × 100%
```

- **Stock-Based Compensation**: Total value of stock/options granted to employees annually
- **Revenue**: Total sales for the period

## Why it matters

- Shows real cost of employee compensation
- High SBC dilutes shareholders
- Critical for evaluating tech companies
- Often overlooked in reported earnings

## What's a good value?

| Range | Rating | What it means |
|---|---|---|
| < 5% | Low | Minimal dilution, mature company |
| 5-10% | Moderate | Typical for profitable tech companies |
| 10-20% | High | Significant dilution, growth stage |
| > 20% | Very High | Excessive dilution, red flag |

## Real-world example

Uber 2019: 35% SBC/Revenue - extremely high, burning shareholders. Netflix: 5-8% - reasonable for profitable streaming. Amazon AWS: 3-5% - mature business unit. Unprofitable startups: 20%+ common.

---

This is educational content, not financial advice.

Source: [Definition of SBC/Revenue](https://signalscreener.fr/definition/sbc-to-revenue/) on Signal Screener. Free to quote and cite with attribution and a link to that URL, which is the canonical one.

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