Cloud credits are hiding your real gross margin
Startup cloud credits make infrastructure look free until they expire. Why to exclude credits from COGS and plan for the margin you'll have without them.
September 30, 2026 · 1 min read
Startup programs hand out generous cloud credits. They're a gift — and a trap for anyone reading gross margin from the bill.
The cliff
While credits last, your infrastructure line is close to zero and margin looks spectacular. When they expire, cost jumps overnight. If pricing was set with credits in mind, the business model breaks on a date you could have predicted.
Exclude credits from COGS
Report margin as if you were paying full price. In MarginMeter, AWS credits are excluded from COGS by default and shown separately, so the margin you see is the margin you'll keep.
Plan for the cliff
- Know your gross cloud cost per $1 of revenue, before credits.
- Check that your prices still work at that cost — the AI pricing calculator helps.
- Optimize before the credits run out, not after.
Related
- Your AI feature is a cost line, not a feature flagEvery AI request has a price. How AI features quietly change SaaS gross margin, why the monthly invoice is too late, and what to measure daily instead.
- MRR is not revenue — and why that matters for your marginMRR and revenue answer different questions. Why mixing them inflates gross margin, and how to use each one correctly in a SaaS dashboard.
- Stripe fees are part of your cost of goods soldPayment fees are often a SaaS company's third-largest cost after hosting and AI. How to account for Stripe fees in gross margin and estimate them per plan.
See your real margin in five minutes.
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