When it comes to some of the most valuable companies in the world, there are often several factors that set them apart from the rest. Among the most important is high workforce productivity. An interesting metric that shows employee productivity is revenue per employee. High revenue per employee indicates two key attributes of a large business that lead to strong employee productivity: scalability and strong management.
Scalability means that a business can increase the revenue and profits it generates in proportion to the increase in headcount and other costs. This is how companies run high margins. Effective use of technology and products that are stronger than competitors can help drive scale. High revenue per employee indicates that managers are utilizing their staff well. They are placing them in roles that maximize their skills and productivity. As employees maximize their productivity, they also generate more revenue.
Below, I will detail the three firms. They generated more than $1 million in revenue per employee over the past 12 months, demonstrating impressive workforce productivity.
Visa: Leveraging scale to keep marketing costs low
visa today
- 52-week range
- $252.70
▼
$328.51
- Dividend yield
- 0.72%
- P/E ratio
- 33.73
- Price target
- $332.81
visa NYSE: V There were about 31,600 employees in fiscal year 2024. Over the past 12 months, Visa has generated nearly $36 billion in revenue. This results in $1.1 million in revenue per employee. Visa’s business scalability is seen in its growth. Its adjusted earnings per share (EPS) grew faster than its employee count. In 2015, the company had 11,300 employees and generated adjusted EPS of $2.62. In fiscal 2024, the firm had adjusted EPS of $10.05. Adjusted EPS growth is 262%, while headcount growth is only 180%. The company has grown its profits far more than its headcount over the past 10 years.
With bilateral visa status MasterCard NYSE: MA Contributes to the ability to scale in US payment processing. New businesses likely already know that Visa and MasterCard are their only options. Therefore, Visa doesn’t need to hire many salespeople to convince customers to choose them over many other options. Advertising costs also become less necessary as its paid network grows, as more people will naturally come into contact with your brand over time. This bears out in reality, as Visa’s marketing spend has grown 79% since 2015, versus a 158% increase in total revenue.
Broadcom: Management effectively integrates VMWare
Broadcom today
01/23/2025 to 04:00 PM Eastern
- 52-week range
- $117.43
▼
$251.88
- Dividend yield
- 0.98%
- P/E ratio
- 195.99
- Price target
- $225.83
Chip awesome Broadcom NASDAQ: AVGO is also generating a large amount of sales relative to its number of employees. Broadcom’s 37,000 employees helped the company generate nearly $52 billion in revenue over the past 12 months. This equates to about 1.4 million in revenue per employee. Before the company’s massive acquisition of VMware, the per-employee figure was even higher. It was previously sitting at around $1.8 million Including 17,000 VMware employees.
Still, the VMware merger shows how Broadcom is driving efficiency. Prior to the merger, VMware had about 38,000 employees. Still, Broadcom expects VMware-related revenue to continue growing, despite retaining less than half of VMware’s workforce. It has been doing just that. VMware’s annualized booking value increased 8% from Q3 2024 to Q4. Management expects this figure to increase to 10% in Q1 2025. Revenue growth while headcount declines are driving margins at VMware. Broadcom doubled VMware’s operating margins from 30% to 70% after the acquisition. This is a testament to management’s ability to integrate the business at Broadcom.
Apple: Earnings have grown 10 times faster than headcount since 2019
Apple today
01/23/2025 to 04:00 PM Eastern
- 52-week range
- $164.07
▼
$260.10
- Dividend yield
- 0.45%
- P/E ratio
- 36.79
- Price target
- $238.14
Apple’s NASDAQ: AAPL Revenue per employee far eclipses that of the other two firms, coming in at $2.4 million. Apple generated revenue of $391 billion in the last 12 months with 164,000 employees. Apple has demonstrated its ability to scale by growing its revenue and adjusted EPS at a much faster rate than its headcount. Apple had 137,000 employees in 2019, an increase of 20%. However, during that time, revenue has grown by 50%. Annual adjusted EPS increased from $2.97 to $6.75, an increase of more than 127%.
Particularly strong drivers of the company’s revenue and earnings growth came from its services segment and geographies outside the US. Year-on-year services revenue has grown by 108% since 2019. Gross margin in the services segment also increased dramatically, from 64% to 74% in 2019. Non-US revenue grew 56% during the period, significantly outpacing the 43% increase. In US revenue.
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