What is Profit Margin?

Profit margin is profit as a share of revenue—or revenue minus total cost in percent or currency. It shows funnel sustainability after ad spend, payout fees, and operating costs.

Formulas

• Gross margin = (Revenue − COGS) ÷ Revenue.
• Net margin = (Revenue − All costs) ÷ Revenue.
• Absolute profit = Revenue − Cost (links to ROI).

In arbitrage

Revenue = approved payout; cost = ad spend + infra. 10% margin at high volume can beat 50% on small caps. Rebills and LTV raise margin over a month vs day-0.

Margin vs ROI

ROI = profit ÷ cost; margin = profit ÷ revenue. ROI 50% on $1,500 revenue and $1,000 cost ≈ 33% margin. Use ROI to run/stop, margin for cash planning.

See also: ROI, break-even ROI, EPC, traffic arbitrage.