Definition
Revenue minus the direct cost of delivering a product or service, expressed as a percentage of revenue.
Why it matters for growth
Gross margin shows how much revenue is left to cover sales, marketing, and overhead after the direct cost of serving each customer.
Example
A SaaS company with $100,000 in revenue and $20,000 in hosting and support costs reports an 80% gross margin.
FAQ
- What is Gross Margin?
- Revenue minus the direct cost of delivering a product or service, expressed as a percentage of revenue.
- Why does Gross Margin matter for growth?
- Gross margin shows how much revenue is left to cover sales, marketing, and overhead after the direct cost of serving each customer.
- What is an example of Gross Margin?
- A SaaS company with $100,000 in revenue and $20,000 in hosting and support costs reports an 80% gross margin.