Profitability
Gross profit
What it is
What's left of revenue once the direct cost of production is removed (materials, manufacturing, server hosting). It's the money available to pay for everything else: salaries, research, marketing, taxes.
How to read it
Gross profit growing faster than revenue means the company is producing more cheaply, or selling at higher prices. It's the first floor of profitability: if nothing is left here, nothing will be left further down.
What it does not tell you
What counts as a "direct cost" varies between companies — some include expenses others classify elsewhere, which makes comparison risky outside a single sector.
Other measures — Profitability
Educational content. Polaris is not a registered investment adviser and makes no recommendation.