Profitability

Gross Profit

Revenue minus the cost of goods sold (COGS), showing how much a company earns from its core production activities.

What does Gross Profit mean?

Gross profit measures how efficiently a company produces and delivers its products or services. A high gross margin indicates strong pricing power or low production costs. Gross profit does not account for operating expenses, interest, or taxes. For SaaS companies, gross margins of 70-80% are typical, while manufacturing businesses often see 30-50%. Tracking gross profit trends helps identify whether your unit economics are improving or deteriorating.