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MarginMeter

COGS (Cost of Goods Sold) for SaaS

COGS definition for SaaS and AI founders: what it means, how to calculate it, and common pitfalls when reading it in dashboards.

For a SaaS company, cost of goods sold is the cost of serving the customers you have: production hosting, AI and third-party APIs used by the product, payment fees, embedded services and customer support for existing customers.

Formula

Gross profit = Revenue − COGS

In practice

Staging environments, internal tools, R&D experiments and sales costs are not COGS. See what counts as COGS for SaaS.

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