Business Pitch Dictionary by pitch.dog
Margins, break-even & unit economics · Core

Contribution margin

Also called: CM

ELI5

Revenue minus specified variable or directly attributable costs, expressed in amount or percentage.

Used in conversation

“How are we defining contribution margin in this deck?”

Pitch context

You will see “Contribution margin” in financial models, budgets, board packs and investor materials when the discussion reaches margins, break-even & unit economics.

Why it matters: In margins, break-even & unit economics, different calculation boundaries, periods or accounting treatments can change the number and the decision.

Caution

Calculation, recognition and disclosure can vary by accounting framework, company policy and reporting context.

Connected terms

  • Gross marginGross margin subtracts defined cost of revenue; contribution margin subtracts the variable costs defined for a decision or unit.
  • Configuration managementThe search label “CM” can route to both entries.
  • Contract manufacturerThe search label “CM” can route to both entries.
Sources & evidence · 4

Direct term-level sources and supporting source families.