How do I calculate Gross 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).

GLOSSARY

Revenue minus direct costs to deliver the product, as a share of revenue.

COGS typically includes hosting, third-party APIs, support tied to delivery, and payment fees. Excludes sales and marketing.

Gross margin (%)

((Revenue - COGS) / Revenue) x 100%

GLOSSARY

Revenue minus direct costs to deliver the product, as a share of revenue.

COGS typically includes hosting, third-party APIs, support tied to delivery, and payment fees. Excludes sales and marketing.

Gross margin (%)

((Revenue - COGS) / Revenue) x 100%