Gross Margin

“For example, one of the things that's going to happen is that like right now, Anthropic has like disgustingly high growth, gross margins in their inference.”

“This era of high gross margins being the norm is just going to go away. And what's going to make up for it, I think is lower gross margins, much thinner net margins and just much more scale.”

“Gross margin, gross margins expanded from 38% to 70%, and they're going to have a five hundred and fifty nine million operating profit in QT, QT projected.”

“Micron is producing numbers where they have 80, 85% gross margins. I mean, they're getting software gross margins on making memory.”

“How much I discuss, how often I discuss gross margins with our, with my early stage companies? Never.”

“If you look at the numbers of these companies, if you look at like the amount they're making and how much they spent training the last model, their gross margin positive, you're like, oh, that's really working. But if you look at like the current training that…”

“Anthropic is frontier at coding, and so you're going to pay a premium on that, and they probably have fine gross margins on, on doing that.”

“Our cogs has gone up, or rather cogs has gone down, right? Our gross margin has gone up. Last six or seven quarters.”

“Gross margins are a little bit worse for AI companies.”

“The way you see that in the business is a 20 percentage point expansion of gross margins over the last three years.”

“So the fact that we had great human support is something like no VC wants you to have that because that's expensive and it comes out of your gross margin. Maybe it means you're not, you're quote unquote, not a software company because your gross margin is less…”

“We're available in probably at the time, 20,000 plus retail, retail doors, right? We were losing money... And we had gross margins in the teens.”

“Now it's like a badge of honor to have low gross margins because we're like, oh, at least people are using your AI products. You know, if we see, like we get these pitches and they're like, I have an AI thing and I got 75% gross margins. I'm like, well, no one…”

“This year, they're gonna do a hundred and sixteen million in revenue. Last year, they did a hundred million in revenue. And their gross margins, he said, I could say all this, are 30%.”

“I think that product market fit is the antidote to stupidity provided that is product market fit with high gross margins. And I think like product market fit with low gross margins is, is a tough business.”

“We always look at the gross margins, and it's become like a badge of honor for them to actually have low gross margins, because we're like, oh my god, people are actually using your AI stuff. But if you show up, and you're like, I'm an AI company, and it's lik…”

“Figma, for example, like, when they went out, they are extremely high gross margin, and they're like, hey, we're gonna, you know, pretty aggressively distribute our AI tools, and our gross margins are gonna go down, and You know, investors asked a few clarifyi…”

“There are cases where these kind of vertical products are making margin, gross margins of like 30%, and sometimes they get worse with scale.”

“And there's this fallacy in that, you know, economies of scale will lead to an improved gross margin and it just doesn't happen.”

“No one in AI really has 80%, 90% gross margins because the way we sell software changed.”

“Because in the short term, your gross margins are going to be worse than comparative companies, because obviously you've got to pay the Snowflake bill. But if you're committed, you'll figure out a way how to exploit the unique features of the platform. You'll …”

“And look, as we said today, amount of gross margins were, you know, tens of millions of revenue, and the gross margins are already up around 60%.”

“At least today, you know, there's certainly AI businesses that yes, they're growing really fast, but the margins are quite negative. And so therefore like you have to bet on them raising more venture money until they can like figure that out, whether that's fr…”

“Your largest problem won't be your gross margin, AKA what percentage you make on each item you buy and sell. It'll be your net profit. And getting enough volume to handle your fixed costs.”

“We are currently at about 70% gross margins, and by starting to automate more problems, we expect this to get up to about 85% by the end of next year.”

“A managed service company better be more than 40% gross margin, right?”

“Traditionally, your gross margins were a measure of your technical differentiation, right? And I think if you're running a negative gross margin business, I think you're It speaks for itself. You're selling commodity. You're not, ah, your value creation isn't …”

“It's very hard to invest in a company that can't show a big gross margin, because it's very hard to ever get to a net margin.”

“The average gross margin of a Taiwanese company at this point in time in the mid-eighties is four to five percent. Zero four to zero five percent gross margin.”

“It took forever, but as a result, you've got, you have, like, 80% gross margins. Shopify is like 50, toast is 30.”

“Gross margins is very hard to control. It is what it is. You know, maybe you can get a hundred basis .200 basis point improvement in a cost, but the people cost is very easy to manage.”

“We worked hard and probably within five years, we had gross margins that were probably north of 50%, right? And so now our gross margins are close to 75 to 80, somewhere in that range.”

“And then there are metrics to track efficiency, right? Things like burn multiple, gross margin, NRR, all of these things. They're all of them are just like not applicable at this stage. It's too early and you shouldn't be worrying about that stuff.”

“So like, you know, we're talking about our gross margin needs to be above 60%, hopefully above 70%. Our burn multiple is now below three, right? Like ideally we're in like the, ideally we're like close to one, right? Burn multiple, like in the one to three zon…”

“Your gross margin will ultimately determine your operating margin. There's almost no way that, that you can kind of make those two you know, kind of get out of sync. And so if you're subsidizing something or, you know, or in just such a commodity business and …”

“What's important though, is that you have to productize your service offering. So it's scalable. You can't be an agency. And the real litmus test is your gross margins.”

“Our gross margins are 75%. Blend it, including the services which really shows you that we really are running a SaaS business and not a tech-enabled service business, which traditionally runs in the mid to low sixties.”

“The accuracy rates are better. Our cost to compute has gone down and like, it is the data scientist. We don't need a team to do annotations anymore for the models. And it's just like, it's like our gross margins. It's done like two step functions over the cour…”

“I think there's basically like a law of economic nature that if your gross margins exceed, call it, 75, 80%, and you are of a certain revenue scale threshold... You're, you know, in the billions of dollars of revenue scale, you must have scale economy power.”

“And so, okay, what is your gross margin, which comes after the bomb and the cogs, right? And what is included? And after that, that needs to be Really be above 50%. Yeah. And probably the best is 55, 60.”

“Public companies that have less than 60% gross margins find it structurally basically impossible to drive more than 20% free cash flow margins.”

“So I would say our gross margin is 60% plus.”

“I see a lot of companies where they will, you know, maybe have subscription revenue and professional service revenue broken out, but they don't necessarily break out the cogs, and as a result, it makes it really difficult to understand your gross margin by rev…”

“Particularly, I think that the big moment is that kind of handover from sales to customer success. That's where we found a lot of bottlenecks that we've been solving that has made an impact on our Gross margin as well.”

“Putting goals on an annual basis, and we're tracking on a monthly, so you can see our actuals were above where we wanted to be and we're on track to that golden 80%.”

“Payback period should always be a gross margin adjusted calculation.”

“Indian product is actually very fairly profitable. We make around 8085% gross margin on that.”

“So at a high level, I would say it's kind of in summary, whoever owns demand creation owns the gross margin.”

“AWS makes 90 plus percent gross margins on their bandwidth charges.”

“You can never scale into profitability or a healthy company with a negative gross margin. Unless it eventually writes itself.”

“By design, gross margins exist when you allow human beings to jump their social status. And gross margins disappear when you do not help them increase their social status.”

“However, on a gross margin perspective, it's a fifty-fifty split.”

“I think it's in the 80% right now.”

“Most SaaS companies will have roughly, like, assuming there's nothing weird, right? Like, you don't have a big component of, like, you know professional services, et cetera. Like, assuming all that, you're, you know, a good, healthy SaaS company should be runn…”

“For indirect, what typically happens if you do it well is your CAC will go down, but you're shifting that CAC to success driven revenue share. So it's a more efficient use of a cost of capital. So your CAC goes down, your gross margins go down too, because you…”

“One of which is, if you really think about it, it's a business, it's a 95% gross margin business at the end of the day.”

“It is tough to go from a, you know, being a 20% margin business to a 60% margin business and still being the same business. You can go from 20% to 60%, but chances are you are now in a different business.”

“You could actually think of what we do as value investing in a way, because what we do is we price the risk that a company can actually generate this really valuable prediction. And when we meet a company, they're probably at 30 to 50% accuracy on a model, whi…”

“Most SaaS companies will have roughly, like, assuming there's nothing weird, right? Like, you don't have a big component of, like, professional services, et cetera. Like, assuming all that, your good, healthy SaaS company should be running margins in the, and …”

“And then gross margins as a cloud company, a lot of people don't talk enough in our opinion about gross margins. Obviously gross margins are really, really important for internal employees to understand.”