Profitability
Gross margin
Revenue minus the direct cost of making what was sold, as a share of revenue.
Gross margin looks only at the direct costs of the products or services sold: raw materials, manufacturing, royalties paid per unit. Overheads such as marketing, research and administration come later.
A high gross margin means each sale is very profitable on its own; whether the company as a whole is profitable then depends on how much it spends on everything else.
General explanation for education only, not investment advice. Company-specific definitions can differ; each breakdown uses the company’s own.