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by JCW2001
4 days ago
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"Cost of revenue" isn't the entire cost of running the company, (ie R&D, operations, sales, marketing, etc). It's just a cost they've associated with revenue IN ADDITION to the other costs I mentioned. HSBC say they need to turn a 13b revenue to 200b by 2030 AND also find another 204b, in order to become profitable. |
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Its a little less arbitrary than that. Cost of Revenue/Cost of Sales/Cost of Goods Sold are clear, if you're following GAAP. To label these expenses as cost of revenue, they must meet the matching principle in that the expenses must be directly tied to the generation of specific revenue. If you didn't make that "sale" then that specific cost would not exist.
Other operating expenses come later on the income statement.
Total Revenue - Cost of Revenue = Gross Profit first, then you subtract OpEx from there for EBIT.
For OpenAI, I'd assume cost of revenue is almost directly inference costs + customer support & app dev.