Definition

R&D intensity

Research and development expense as a share of revenue — how much of each sales dollar the company reinvests in building what it will sell next. It is expensed as incurred under GAAP, so a heavy research year depresses today's operating margin to fund products that arrive in later ones.

Formula

R&D intensity = R&D expense ÷ Revenue

Drivers — what actually moves it

Product cycle: spend concentrates ahead of platform transitions and new architectures.
Competitive clock: in winner-take-most markets, underspending rivals is the more expensive mistake.
Revenue scale: the same absolute program shrinks as a ratio when the top line grows — operating leverage inside R&D.

Where to find it in the filing

Income statement (Consolidated Statements of Operations). 10-K Item 8 — the research and development line among operating expenses; MD&A discusses program direction.

XBRL concepts Echelon grounds to: ResearchAndDevelopmentExpense

Sector caveats — where this breaks

GAAP expenses R&D immediately while capitalizing factories — asset-light research businesses look less invested than they are.
A falling ratio can mean discipline or harvest — direction alone does not say which.

Operating leverage Operating margin Gross margin

Educational use only — not investment advice. Figures come from public SEC filings; Echelon teaches you to analyze data, it never recommends buying or selling any security.