What Is Gross Margin in SaaS?
Gross margin is revenue minus cost of goods sold (COGS), expressed as a percentage of revenue. SaaS COGS typically includes hosting, support, and third-party software. Healthy SaaS gross margins are 70–85%. High gross margin is what makes SaaS unit economics so attractive to investors.
Why it matters: this metric helps founders separate random variation from real business movement. Decisions improve when the metric is tracked in trend form, not one-off snapshots.
How to use it in practice: pair this metric with at least one upstream and one downstream signal. That way, you can explain why it changed and what action should come next.
In Assist Founder, this term appears in context with related indicators so you can move from definition to decision without switching tools.