# 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.

<table><thead><tr><th width="198.33333333333331">Item</th><th width="322">Explanation</th><th>Source of Data</th></tr></thead><tbody><tr><td>Gross Margin</td><td>Total Revenue - Total Cost. Reflects the net profit SaaS business retains.</td><td>Various Payment Channels, Cloud Billing Data</td></tr><tr><td>Contribution Margin</td><td>Total Revenue - Variable Cost. Reflects marginal profit.</td><td>Paigo Calculated Costs, Various Payment Channels, Cloud Billing Data</td></tr><tr><td>Contribution Margin by Customer</td><td>Revenue from a customer - Variable Cost attributed to a customer. Reflects the profitability on particular customers or contracts.</td><td>Paigo Calculated Costs, Various Payment Channels, Cloud Billing Data</td></tr><tr><td>Contribution Margin by Offering<br>(Coming Soon)</td><td>Revenue from a product offering - Variable Cost attributed to a product offering. Reflects the profitability of product lines or packages.</td><td>Paigo Calculated Costs, Various Payment Channels, Cloud Billing Data</td></tr></tbody></table>

The costs used in profit margin analytics are those defined in [#understand-usage-based-cost](#understand-usage-based-cost "mention").


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