It's probably a result of rapid expansion. eg, they did $3M revenue over the last financial year, but only started that year with 20 or whatever employees. So you should probably be dividing by something like an average of 26 employees and not 34, which gives $115K per person and seems more in line with reality.

Usually a revenue run rate means "we extrapolated our previous short term over the next year." It's useful for rapidly-growing companies where your next three quarters are much more likely to look like your current one than the previous three.

So that would mean they're still being very economical with per-employee expenses. My guess is that a lot of those employees aren't developers, they're in other roles where the average pay is lower (support, film and video editing, administration, even some sales roles).

This

^#theman

My understanding from reading his blog is that everyone works from home. Which means that he doesn't have to pay for office space, and he can hire people who live where engineer salaries aren't as high as they are in the major tech hubs.

We have two offices (PDX and ORL) but roughly 50% of Treehouse works from home so that definitely helps keep overheads low.

Do you have many employees outside of the US?

Just two (UK and CAN)

Actually, it's most likely that software development is capitalized and amortized over the life of the product (GAAP standard is typically 3 years). Basically, accounting rules allow you to spread the cost of software developers over a few years, so the impact of 34 employees (assuming they are all developers) may only be in the $25-35k/each range

You are also in Silicon Valley, from what I remember Treehouse was in Orlando and Portland, I imagine Orlando especially is way cheaper on both a salary and overhead cost

We're spread out across the USA (and one person in CAN and one in UK) therefore our salaries are more in keeping with national averages instead of SV.

Do you mind expanding how that >$30k splits between office and medical? Seems insanely high to me, but of course in the UK we don't have to cover medical insurance.

Not the parent, but we pay between $1,000-$1,500 per month per employee (annually $12,000 - $18,000) for medical. We do pay 100% for great coverage for their whole families, so I'm sure many companies are paying less, but it adds up fast. That's not including other loaded headcount numbers like 401k matching, FSA pre-loading, training budget, travel, cell phone + plan, and so on.

Our office costs are generally pretty low, although if you factor in desks, chairs, monitors, laptops, iPads, kitchen stuff, etc... it does add up fast.