Definition
Unit Economics Measure – A non-GAAP measure some marketplace companies use to show gross profit after also subtracting sales and marketing spend, then adding back depreciation, stock-based compensation, and allocated overhead. Meant to isolate whether each order is profitable on a "direct" basis once acquisition/promotion costs are included, before general corporate overhead (R&D, G&A) is layered on top — useful for tracking whether a marketplace's core transaction economics are improving as it scales, but it excludes real costs the company still has to cover. Found In: MD&A (non-GAAP reconciliation) Formula:
Contribution Profit = Gross Profit - Sales & Marketing Expense + D&A (cost of revenue) + Stock-Based Comp (cost of revenue & S&M) + Allocated Overhead (cost of revenue & S&M)