SaaS Gross Margin

SaaS Gross Margin is a financial metric that measures the difference between revenue and the cost of goods sold (COGS), expressed as a percentage of revenue. In SaaS, COGS typically includes hosting fees, customer support, and third-party licensing costs.

A high gross margin indicates efficient operations and the potential for profitability after accounting for operating expenses. Monitoring this metric helps businesses assess financial health, price products appropriately, and make strategic decisions about scaling and investment.