Does mid-cap Software company KnowBe4 have a sustainably profitable business model? By studying its gross margins and comparing them to its operating margins, we can gain insight into quality of its business. With gross margins at 85.7%, you might be telling yourself the KnowBe4 is profitable -- but there is more to the story.
Gross margins take into account only the cost of revenue, meaning the expenses directly related to each sale. So it's important to also look at operating margins, which take into account overhead costs. One way to look at it is that gross profit gives insight into KnowBe4's market and the viability of its business model. Operating margins, on the other hand, show you how efficiently the company is implementing this business model.
| Date Reported | Revenue ($) | Cost of Revenue ($) | Gross Margins (%) | YoY Growth (%) |
|---|---|---|---|---|
| 2021-12-31 | 246,298,000.0 | 35,115,000.0 | 85.74 | 1.2 |
| 2020-12-31 | 174,886,000.0 | 26,730,000.0 | 84.72 | 2.16 |
| 2019-12-31 | 120,575,000.0 | 20,579,000.0 | 82.93 | -0.18 |
| 2018-12-31 | 71,287,000.0 | 12,062,000.0 | 83.08 | n/a |
Despite these healthy gross profits, the company's operating margins have not broken above zero over the last four years. The company is not profitable.
| Date Reported | Total Revenue ($) | Operating Expenses ($) | Operating Margins (%) | YoY Growth (%) |
|---|---|---|---|---|
| 2021-12-31 | 246,298,000.0 | 252,886,000.0 | -2.67 | -203.41 |
| 2020-12-31 | 174,886,000.0 | 176,428,000.0 | -0.88 | 99.15 |
| 2019-12-31 | 120,575,000.0 | 246,107,000.0 | -104.11 | -664.95 |
| 2018-12-31 | 71,287,000.0 | 80,987,000.0 | -13.61 | n/a |
