<aside> ❗
Note: if you're new to Betty's financial metrics, you might want to first read Financial metrics at a glance for a quick overview of how the core metrics relate to one another.
</aside>
Gross Profit measures the profit generated by our players after all direct costs have been paid. This is the money available to fund marketing, salaries, product development, and other operating expenses.
Because it reflects the true economics of the business, Gross Profit sits at the center of many important decisions, including ROAS, player valuation, and long-term growth planning.
Let’s look at Gross Profit in relation to Net Revenue.
Gross Profit is Net Revenue minus the Cost of Goods Sold (COGS).
<aside> 💰
Gross Profit = Net Revenue – Cost of Goods Sold (COGS)
</aside>
In other words, Gross Profit shows how much value remains after serving customers, but before paying for the broader operation of the business.
Now let’s look at COGS.
Cost of Goods Sold (COGS) measures the direct costs required to deliver Betty's product.
These are costs that scale with player activity and must be deducted from NR before value becomes available to the business.
Betty’s COGS includes: