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Margins are one of those key figures that are easily overlooked in everyday life - yet they show more clearly than many valuation ratios how a business model works. They reveal how much value a company generates and how much of it is consumed by its own organization. While the market fluctuates, margins remain a sober view of structure and efficiency.
The gross margin is the starting point. It shows how much of the turnover remains after direct costs: Materials, manufacturing, hosting, logistics. A high gross margin is usually the result of differentiation or low variable costs. A low gross margin, on the other hand, characterizes industries that work with volume or aggressive pricing.
The operating margin considers the entire organization - personnel, development, sales, marketing, administration, depreciation and amortization. It answers the question of how much of the originally created value is actually retained as operating profit. Only the interaction of both margins shows the operational reality of a business model.
The calculation is simple:
Gross margin = (sales - direct costs) / sales
Operating margin = operating profit / sales
Example:
€ 10 billion sales, € 6 billion direct costs → gross margin 40%.
If this leaves an operating profit of € 2 billion, this results in an operating margin of 20%.
The difference shows how resource-intensive the model is on a day-to-day basis.
The patterns are important:
If the gross margin falls, cost pressure or competition often increases.
If the operating margin increases, efficiency, capacity utilization or scaling improve.
If the gap increases, the model becomes more difficult to organize.
If it decreases, it becomes more mature.
Practical examples from various business models:
1. $MSFT (-0,83%) (Microsoft)
Gross margin mostly in the range of ~68-72%, operating margin typically between 35-40%.
A consistent software model with a low cost base and high efficiency.
2. $AAPL (+2,27%) (Apple)
Gross margin in the range of 43-46%, operating margin often around 25-30%.
The gap reflects the capital and marketing intensity of a global hardware model.
3. $AMZN (+2%) (Amazon.)
Retail with gross margins of around 10-20 %; AWS well over 60 %, operating margins there mostly between 25-30 %.
An example of highly segmented margin profiles.
4. $META (+1,83%) (Meta Platforms)
High gross margins; operating margins often in the 25-35% range, depending on the investment phase.
Digital advertising scales with very low marginal costs.
5. $TSLA (+0,22%) (Tesla)
Gross margins used to be over 25%, recently noticeably lower; operating margin moves accordingly.
Pricing strategies, demand and costs have a direct impact.
6. $NFLX (-0,76%) (Netflix)
Gross margin often between ~35-45 %, operating margin usually lower and dependent on content investments.
Only greater scaling creates operating leverage.
7. $ADBE (+4,29%) (Adobe)
Gross margin regularly above 80%, operating margin typically in the 30-40% range.
A mature software model with stable efficiency.
8. $NVDA (+0,31%) (Nvidia)
Gross margins usually well above 65-70%, driven by technological differentiation.
The gap between production costs and prices is structurally high.
9. $SHOP (+2,64%) (Shopify)
Gross margin solid (~50 %), operating margin often low to negative.
Strong platform, but high expenses for sales, infrastructure and growth.
10. $ORCL (-4,41%) (Oracle)
Gross margins around ~70-75% for years, operating margins often between 25-35%.
An established enterprise model with stable, recurring revenues.
Margins show how valuable a product is - and how efficiently a company uses its resources. The gross margin describes the quality of the offering, the operating margin the quality of the organization. Together, they provide a structural picture that goes beyond short-term valuation figures and reveals how sustainable a business model really is.
