AI SaaS margin glossary

• Gross margin per customerWhat a single customer pays you, minus what that customer costs you to serve.
• LLM cost per customerThe model/token spend attributable to one customer over a period.
• Break-even usageThe usage level at which a customer's LLM cost equals what they pay.
• Token costThe price of the input and output tokens a request consumes.
• Cost per million tokens (per Mtok)The standard unit LLM providers price in: USD per 1,000,000 tokens.
• Blended marginYour overall gross margin across all customers combined.
• Unprofitable customerA customer whose LLM cost exceeds the revenue they pay you.
• Input vs output tokensThe two halves of an LLM bill, usually priced very differently.