AI Gross Margin Calculator

Model costs sit in cost of goods sold, so they set your gross margin. See where you stand and what a lower LLM bill is worth.

Monthly revenue ($)

Monthly LLM API spend ($)

Other COGS: hosting, data, support ($)

LLM cost reduction (%)

Gross margin today–

LLM spend as a share of revenue

Gross margin after the reduction–

Extra gross profit per year–

Example values. apicuts guarantees at least 20% lower LLM cost after our fee.

How it's calculated

Gross margin = (revenue − COGS) ÷ revenue, where COGS includes LLM API spend and other costs that scale with usage.

Investors compare AI companies on gross margin. Read AI gross margin explained and how investors diligence AI COGS.

How do I calculate gross margin for an AI startup?

Subtract COGS, including LLM API spend, from revenue and divide by revenue.

How much does a 20% lower LLM bill improve margin?

It depends on how much of revenue goes to models. Enter your numbers above to see it.

Book a free 15-minute API cost teardown. Bring last month's provider usage and we'll show you your biggest waste and the first fix we'd ship.