Unit economics
Per-User Gross Margin Calculator
Per-user gross margin is revenue per user minus the AI and infrastructure cost to serve that user, divided by revenue. A profitable AI app needs the average user and the heavy user to clear this cost floor. The calculator combines model token spend, usage per user, revenue per user, and other per-user COGS to show gross profit, margin percentage, and the minimum sustainable ARPU.
Open the live Per-User Margin calculator - AI COGS / user →
Example scenario
Suppose a user pays 20 dollars a month and costs about 6 dollars in AI and infrastructure to serve. Gross profit is 14 dollars, a 70 percent margin. If a power user instead costs 25 dollars to serve, that seat is underwater at the same price. Enter your own usage and costs to see the margin and the minimum sustainable price.
What the inputs mean
- Revenue per user: what each user pays per month (ARPU).
- Usage per user: the tokens or requests that drive the variable AI cost.
- Model: sets the per-token input and output rates from the index.
- Other per-user cost: infrastructure and any tools you pay for on the user's behalf.
What the result means
You get the cost to serve one user, the gross profit and gross margin at your price, and the minimum sustainable price (ARPU) that keeps the user profitable. A healthy average can still hide users you serve below cost, so check your heaviest usage too.
Assumptions
- Model rates are list per-token rates from the source-backed index, not negotiated discounts.
- Cost to serve is AI plus the other per-user cost you enter; it excludes payment fees, support, and salaries unless you add them.
- Margin is assessed per user; a product can be profitable on average and still lose money on power users.
- Example numbers are illustrative, not benchmarks for any specific product.
Where the prices come from
Token rates come from the source-backed pricing index, where every figure links to the provider's own page and carries a last-checked date. This tool reads those committed numbers; it never calls a provider or fetches live prices.
Formula and methodology
Gross profit per user is revenue per user minus the cost to serve that user, where cost to serve is AI spend (your usage times the model rates) plus the other per-user cost you enter. Gross margin is gross profit divided by revenue. The minimum sustainable price is the cost to serve, the point where margin reaches zero. Standard arithmetic; no model internals.
Interpretation guide
- Compare alternatives with the same workload assumptions.
- Stress-test output-heavy, retry-heavy, cache-miss, and power-user cases before committing budget.
- Verify source links and production logs before using the estimate for billing decisions.
Limitations before production billing decisions
Treat ByteCosts calculations as planning estimates, not final billing totals. Real invoices can differ because token mix, retry rate, cache hit rate, rate limits, taxes, gateway fees, regional pricing, and negotiated discounts change the effective cost.
Verify the provider source before production billing decisions, then compare the estimate with your own logs or invoice once production traffic is live.
Frequently asked questions
What is a healthy gross margin for an AI app?
It depends on your usage and price, but the lever is the same: revenue per user must clear the cost to serve, with room for the heaviest users. The calculator shows your margin and the minimum sustainable price for your numbers.
How do power users affect my margin?
A few heavy users can cost many times the median, so a healthy average margin can still hide users you serve at a loss. Model your heaviest usage, not just the average.
What should I charge for my AI feature?
At least the cost to serve your target user, plus the margin you need. Enter usage and costs and the tool shows the minimum sustainable price (ARPU) and the margin at any price you pick.
Does this include infrastructure and tools?
Yes, if you enter them as the other per-user cost. It excludes payment fees, support, and salaries unless you add them.
Per-User Gross Margin Calculator. ByteCosts. https://bytecosts.com/tools/per-user-margin/