Gross margin
Last verified
Gross margin is revenue minus COGS, as a percentage of revenue.
Traditional SaaS runs 75–85%. AI products carrying real inference costs frequently run lower, and the gap is inference. That is not necessarily a problem — but it needs to be known, because it changes what pricing has to do.
Margin improves through model choice, prompt caching, the Batch API, shorter prompts, and pricing that reflects usage. All of those require knowing what you spend today.