Profit Margin Analytics

Understand Profit Margin Analytics

Paigo calculates profit margin metrics based on revenue and costs. The explanation of each profit margin item is listed below.

Item	Explanation	Source of Data
Gross Margin	Total Revenue - Total Cost. Reflects the net profit SaaS business retains.	Various Payment Channels, Cloud Billing Data
Contribution Margin	Total Revenue - Variable Cost. Reflects marginal profit.	Paigo Calculated Costs, Various Payment Channels, Cloud Billing Data
Contribution Margin by Customer	Revenue from a customer - Variable Cost attributed to a customer. Reflects the profitability on particular customers or contracts.	Paigo Calculated Costs, Various Payment Channels, Cloud Billing Data
Contribution Margin by Offering (Coming Soon)	Revenue from a product offering - Variable Cost attributed to a product offering. Reflects the profitability of product lines or packages.	Paigo Calculated Costs, Various Payment Channels, Cloud Billing Data

The costs used in profit margin analytics are those defined in #understand-usage-based-cost.