I’m also curious about your last question. Cost of goods sold would not fall into R&D or sales as far as I know.
So curious, in fact, that I asked Gemini to reconstruct their income statement from the info in this article :)
There seems to be an assumption that the 20% payment to MS is the cost of compute for inference. I would bet that’s at a significant discount - but who knows how much…
Line Item | Amount (USD) | Calculation / Note
Revenue
$4.3 Billion
Given.
Cost of Revenue (COGS)
($0.86 Billion)
Assumed to be the 20% of revenue paid to Microsoft ($4.3B * 0.20) for compute/cloud services to run inference.
Gross Profit
$3.44 Billion
Revenue - Cost of Revenue. This 80% gross margin is strong, typical of a software-like business.
Operating Expenses
Research & Development
($6.7 Billion)
Given. This is the largest expense, focused on training new models.
Sales & Ads
($2.0 Billion)
Given. Reflects an aggressive push for customer acquisition.
Stock-Based Compensation
($2.5 Billion)
Given. A non-cash expense for employee equity.
General & Administrative
($0.04 Billion)
Implied figure to balance the reported operating loss.
Total Operating Expenses
($11.24 Billion)
Sum of all operating expenses.
Operating Loss
($7.8 Billion)
Confirmed. Gross Profit - Total Operating Expenses.
Other (Non-Operating) Income / Expenses
($5.7 Billion)
Calculated as Net Loss - Operating Loss. This is primarily the non-cash loss from the "remeasurement of convertible interest rights."
Net Loss
($13.5 Billion)
Given. The final "bottom line" loss.