Net profit margin
also known as net margin · profit margin
The share of revenue left as profit after all costs - delivery and overheads - are subtracted. The bottom-line measure of agency profitability.
For example, an agency bills $1,000,000, spends $550,000 on delivery and $350,000 on overheads, leaving $100,000 profit - a 10% net margin. It shows what the whole operation, not just project delivery, actually keeps.
Why it matters to agencies: net margin is the number that says whether the agency is truly profitable once rent, software and admin are paid. Many agencies look busy and even show healthy gross margins yet run a thin net margin, which is why owners watch it closely.
A healthy agency net margin is around 15-25%; consistent single digits usually points to overhead bloat or under-pricing.
Net profit margin = net profit ÷ revenue × 100
Net profit is revenue minus delivery costs and all overheads.
Net profit margin calculator
Plug in your numbers - it updates as you type.
Prefer its own page? Open the net profit margin calculator
What is net profit margin?
The share of revenue left as profit after all costs - delivery and overheads - are subtracted. The bottom-line measure of agency profitability.
How do you calculate net profit margin?
Subtract all costs - delivery plus overheads - from revenue to get net profit, divide by revenue, and multiply by 100.
What is a good net profit margin for an agency?
Many agencies target around 15-25%; consistently in single digits usually points to overhead bloat or under-pricing.
What is the difference between gross and net margin?
Gross margin counts only delivery costs; net margin also subtracts overheads, so it is always the lower, fuller picture.