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.
