How do I calculate Contribution margin?

Use the formula(s) on this page. Keep inputs consistent by period and basis.

What are good benchmarks?

Benchmarks vary by model and stage. See Benchmarks on this page for ranges.

Inconsistent definitions/time windows; wrong basis (revenue vs gross profit).

Pitchkit

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GLOSSARY

Contribution margin

Revenue minus variable costs, before fixed costs.

Interpretation

Shows cash generated by each unit/customer to cover fixed costs and growth.

Worked example

Revenue $100; Variable costs $30 → Contribution margin = (100−30)/100 = 70%.

Common pitfalls

Treating fixed headcount as variable; excluding third‑party API costs; ignoring payment fees.

How to show in your deck

Financials slide: show gross vs contribution margin; tie to payback math.

Deck snippet

Back to Glossary

GLOSSARY

Contribution margin

Revenue minus variable costs, before fixed costs.

Interpretation

Shows cash generated by each unit/customer to cover fixed costs and growth.

Worked example

Revenue $100; Variable costs $30 → Contribution margin = (100−30)/100 = 70%.

Common pitfalls

Treating fixed headcount as variable; excluding third‑party API costs; ignoring payment fees.

How to show in your deck

Financials slide: show gross vs contribution margin; tie to payback math.

Contribution margin

Interpretation

Worked example

Common pitfalls

How to show in your deck

Deck snippet

Contribution margin

Interpretation

Worked example

Common pitfalls

How to show in your deck

Deck snippet

Formulas

FAQs

Related terms

Interpretation

Worked example

Common pitfalls

How to show in your deck

Deck snippet

Interpretation

Worked example

Common pitfalls

How to show in your deck

Deck snippet

Formulas

FAQs

How do I calculate Contribution?

What are good benchmarks?

Common pitfalls?

Related terms