The 1-Year R&D Payback Audit: 88% of Public Software Companies Fail to Return $1 of Gross Profit per $1 of R&D
Across 175 SEC-audited public software companies, median 1-year lagged R&D payback is $0.46 per dollar spent, and 88% fail to clear $1.00. Separating Compounders (41) and Harvesters (47) from Burners (47) and Faders (40) exposes where engineering budgets actually buy durable gross profit.
ResearchPublished Nov 13, 2026 · Data as of Nov 13, 2026· 1 min read · 2 exhibits
Why R&D Spend Alone Is Not a Software Moat
Scored Software Universe
175 SEC-Audited Issuers
234 Total Tracked
Failing $1.00 Payback
88% 154 of 175 Issuers
17 Negative or Zero
Median 1-Yr R&D Payback
$0.46 vs 20.1% R&D Int.
GP Delta / Prior R&D
Clearing $1.00+ Payback
21 12% of Universe
Top Capital Allocators
Software investors routinely treat high R&D intensity as proof of product velocity. In practice, R&D expense is an input, not an output.
To measure whether engineering payroll actually translates into pricing power and unit-economic scale, Golden Door tracks 1-Year Lagged R&D Payback: (Gross Profit_FY - Gross Profit_PriorFY) / R&D_PriorFY
. Lagging R&D by one fiscal year aligns last year's product investment with this year's realized gross profit dollars, stripped of stock-price inputs and Non-GAAP adjustments
Universe split at 20.1% median R&D intensity and $0.46 median 1-year payback: 41 Compounders, 47 Harvesters, 47 Burners, and 40 Faders.
Harvesters
34
Lean Spend · High Payback
Compounders
31
High Spend · High Payback
Faders
31
Low Spend · Weak Payback
Burners
34
High Spend · Weak Payback
Med Intensity
20.75%
Med Payback
$0.48
Med Mult.
0.92x
Source: SEC Form 10-K and 10-Q XBRL filings and Golden Door Software R&D Return Benchmark.
Exhibit 2Financial Schedule
The Four Software R&D Regimes: Universe Medians Across 175 Companies
Quadrant counts, median R&D intensity, and median 1-year lagged gross profit payback per $1.00 of prior-year R&D.
Quadrant
Issuers
Share
Median R&D Int.
Median 1-Yr Payback
Capital Regime
CompoundersAbove-median R&D intensity (>20.1%) paired with above-median gross-profit payback (>$0.46).
41
23.4%
26%
$0.63
High Reinvestment + High Return
HarvestersHighest median payback ($0.79) on lean R&D budgets; includes mature platforms and cash cows.
47
26.9%
12.5%
$0.79
Low Reinvestment + High Return
BurnersSpend more on R&D (26.6% median) than Compounders, yet earn less than half the payback.
47
26.9%
26.6%
$0.27
High Reinvestment + Low Return
FadersModest R&D intensity paired with weak or contracting gross profit.
40
22.9%
14%
$0.21
Low Reinvestment + Low Return
Source: Golden Door Software R&D Return Benchmark (SEC Form 10-K/Q XBRL).
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