Gross Profit Margin

Definition

The proportion of revenue remaining after deducting the direct costs of producing goods or services, expressed as a percentage of revenue. Gross profit margin is a primary indicator of the intrinsic economic profitability of a product or service, and reflects pricing power, cost structure, and competitive intensity. In SaaS and software businesses, gross margins above 70% signal high scalability and strong unit economics that underpin premium revenue multiples.