ELEXIO.
Back to Resources
Business

Understanding Gross Margins: Why 80% Gross Margin Is the SaaS Benchmark

Marcus VanceAug 18, 20266 min read

Gross margin is the single most important metric for evaluating software capital efficiency.

Software COGS Includes:

  1. 1Hosting & Cloud Infrastructure (AWS, Vercel, Supabase).
  1. 2Third-Party APIs (Stripe, OpenAI, Twilio).
  1. 3Customer Support Labor Costs.

The Formula

Gross Margin % = ((Revenue - COGS) / Revenue) x 100

Audit Your Margins

Use our free Gross Margin Calculator to calculate your software profit margin.

Keywords:#Gross Margin#COGS SaaS#Profit Margin#Financial Benchmarks
Interactive Utilities

Try Client-Side Revenue & AI Calculators Live

Instant offline-first execution with zero server latency or data tracking.

Explore All Tools