← View All Metrics
Read about our privacy policy.
Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.

Operating Margin


What is Operating Margin?

Operating Margin measures the profitability of your core business activities, excluding the effects of interest and taxes.

How is Operating Margin used?

This metric is important for assessing fiscal health and scalability potential. It's an indicator of operational efficiency and highlights how well you manage your costs relative to its revenue. Operating Margin is useful during funding rounds, as a healthy Operating Margin demonstrates you can meet operating costs while scaling up. It can also inform pricing adjustments, cost control measures, and benchmarking against competitors.

How to calculate Operating Margin

Operating Income / Revenue x 100

To calculate Operating Margin, divide your Operating Income by your Revenue, then multiply the result by 100.

Best Practices

Operating Margin can be improved by growing revenue, optimising variable costs, reducing overheads, and focusing on high-margin products. It's also good practice to benchmark against similar industry averages.

Common Misconceptions

A high Operating Margin doesn't always signal healthy finances. If achieved through excessive cost-cutting, it might hinder growth potential and sustainability. Also, Operating Margin should not be confused with a cash metric, as it doesn't account for capital expenditure or working capital.




What are the main drivers of Operating Margin?
  • Revenue
  • Variable costs
  • Overheads
How should I break down Operating Margin?
  • Geography
  • Product

Supported Integrations

Get this metric directly out of one of our supported integrations.
No items found.

Related Metrics

Join other fast growing SaaS startups using Calliper.

Calliper is a modern business intelligence platform designed for SaaS Operators. Get automatic customer insights and alerts, and make data-informed decisions with ease.