Looking beyond revenue growth, gross margin provides insight into how profitable a company is and the amount a company can invest back into itself.
(Revenue - COGS) ÷ Revenue
Why It Matters
Gross margin is crucial because it directly impacts how much a startup can invest in its growth and can indicate profitability once at scale. As SaaS businesses reach scale, they can increase gross margin by realizing efficiency of scale via server fees, customer success team productivity, increasing average deal size, and expanding market share or brand presence. 
Despite these efficiencies, customer acquisition cost may increase as a company scales and saturates the market, driving the need for a continued stream of inbound marketing qualified leads and up-sell and add-on sales from its existing customer base to maintain gross margin.
When To Measure It
In the early stages, when establishing initial product-market fit, gross margin is less important. However, as the company begins to scale the metric becomes increasingly important, especially when reporting back to venture capitalists or looking for further funding.
According to the 2013 Pacific Crest Survey, the median gross margin for its private company sample was 79 percent on subscription revenue alone.  The median gross margin for publicly traded SaaS companies expands from 50 percent in year four to just less than 75 percent in year five. 
 Why Revenue Isn't The Most Important Financial Metric For Startups
-  2013 Pacific Crest Survey
-  Why Revenue Isn't The Most Important Financial Metric For Startups
One Measure of Operational Capabilities: Gross Margin