Gross Margin
What is Gross Margin?
Gross Margin is the percentage of total revenue that remains after subtracting the cost of goods sold (COGS). In the SaaS industry, gross margins are typically high, often ranging between 70% and 90%, due to the low incremental cost of serving new users.
Why It Matters
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It indicates how much capital is available to reinvest in research, development, and marketing.
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High gross margins are a hallmark of a scalable business model that can grow efficiently.
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Investors look for stable or improving gross margins as a sign of operational maturity.
