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Financial Metrics

Gross Margin

Revenue minus cost of goods sold, expressed as a percentage of revenue.

In depth

Software: 70-90% (high). Hardware: 25-45% (medium). Retail: 25-50% (low). Margin expansion or compression often drives stock multiples — investors reward margin gains as evidence of pricing power.

Frequently asked about Gross Margin

What is Gross Margin?

Revenue minus cost of goods sold, expressed as a percentage of revenue. Software: 70-90% (high). Hardware: 25-45% (medium). Retail: 25-50% (low). Margin expansion or compression often drives stock multiples — investors reward margin gains as evidence of pricing power.

Why does Gross Margin matter for investors?

In financial metrics, Gross Margin is one of the building blocks investors use to compare opportunities and assess risk. Understanding it helps you read research notes, earnings reports, and market commentary without getting lost in jargon.

How is Gross Margin used in practice?

Software: 70-90% (high). Hardware: 25-45% (medium).

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