> For the complete documentation index, see [llms.txt](https://docs.drivepoint.io/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.drivepoint.io/using-the-web-app/reports/cohort-analysis/cohorted-financials.md).

# Cohorted Financials

This report is derived by combining the financial information from the Drivepoint Smartmodel™ and your Sales data (e.g. DTC Sales from Shopify or Amazon Sales from Amazon).

## Determining Contribution Profit <a href="#determining-contribution-profit" id="determining-contribution-profit"></a>

Sales tax is a passthrough, so it is not in net revenue. Contribution profit per customer applies the model's contribution margin to **net revenue** on every order in the same month. Net revenue is gross sales − discounts − returns + shipping income. Discounts and returns are already out. Sales tax is not in it.

Since the contribution margin is not calculated per product, keep that in mind when using the `First Segment` filter that the average contribution margin from a month has been applied across **all products**.

See the [Changelog](/changelog/updates/sales-tax-margin-calculations.md) for Shopify's names versus Drivepoint's columns on the combined ecommerce tables.

## Determining Total Cost and Customer Acquisition Cost (CAC) <a href="#determining-customer-acquisition-cost-cac" id="determining-customer-acquisition-cost-cac"></a>

The report provides insights into key cost metrics, including **Direct Ad Spend** and **Total Marketing Spend**, which represent the investment required to acquire new customers.

**Total View**

When selecting the **Total** metric type, the report displays the absolute amount of **Direct Ad Spend** and **Total Marketing Spend** for each month. This allows for an analysis of overall spending trends without adjusting for customer count.

**Per Customer View**

When selecting **Per Customer**, the report divides these costs by the number of customers acquired in each month, providing an average cost per customer.

For instance, the direct ad spend for Jan. 2024 was $10,000 and the number of customers acquired in Jan. 2024 was 200; thus, the Blended Spend CAC (Customer Acquisition Cost) for the month was $50 (`$10,000 spend / 200 customers`). As a result, this calculation generalizes that 100% of the spend is towards customer acquisition, which Drivepoint has found to be close to true across a portfolio of companies.

Similar to the determination of contribution profit mentioned above, there is no attribution of the CACs to a specific segment. The marketing spend that acquires a customer is not determinant of the product the customer chooses to buy.

***Amazon can often experience a 14 day lag. Click below to learn more.***

{% content-ref url="/pages/N9BKbfVSxVucmF4yc5IK" %}
[Amazon Reports](/using-the-web-app/reports/amazon-reports.md)
{% endcontent-ref %}

## Definitions <a href="#definitions" id="definitions"></a>

**Metric Type:** This report allows you to analyze customer financial metrics in two different ways:

* **Per Customer (Selected by Default):** When the **Per Customer** option is selected, all financial metrics are divided by the **Cohort Size**, providing insights at an individual customer level. Example: **Net Sales** is calculated as **Cumulative Net Sales / Cohort Size**.
* **Total:** When the **Total** option is selected, financial metrics are displayed in absolute values without dividing by cohort size. This allows for an overall view of revenue and profitability trends across all cohorts. Example: **Net Sales** in **Total** mode reflects the **total cumulative net sales** without normalization per customer.

***

* **Months Since First Purchase:** Calculated as calendar months from the date of the first purchase. Month 0 represents the partial calendar month in which the first purchase occurred. Month 1 and onward represent the full calendar months that follow.

*For instance, a customer was acquired in Jan. 2020. The Month 0 is representative of that first purchase and any purchases that followed within Jan. 2020. Month 1 would represent any purchases that took place in Feb. 2020, Month 2 would be Mar. 2020, Month 3 as Apr. 2020, and so on.*

* **Gross Sales:** Cumulative Gross Sales / Cohort Size
* **Net Sales:** Cumulative Net Sales / Cohort Size. `Net Sales = Gross Sales − Discounts − Returns`. Shipping and sales tax are not included. This matches Shopify's Net sales.
* **Net Revenue:** Cumulative Net Revenue / Cohort Size. `Net Revenue = Gross Sales − Discounts − Returns + Shipping`. Discounts and returns are already out. Sales tax is not in net revenue. Shopify Total sales is net revenue plus sales tax, and Drivepoint keeps that only as a check.

*The following metrics rely on financials being saved from the model to the data warehouse during a Save Plan action. If you see, for instance, a Blended Spend (CAC) at $0 for a Cohort Month, you may need to save a plan.*

* **Contribution Profit:** Cumulative Contribution Profit / Cohort Size. `Contribution Profit = Contribution Margin × Net Revenue`. Sales tax is not in net revenue.
* **Blended Spend:** Direct Ad Spend / Cohort Size
* **Fully Loaded Spend:** Total Marketing Spend / Cohort Size
* **Contribution Profit Less Blended Spend:** Contribution Profit − Blended Spend
* **Contribution Profit Less Fully Loaded Spend:** Contribution Profit − Fully Loaded Spend

*💡Example: After 4 months, the Contribution Profit Less Fully Loaded Spend (aka without any direct costs related to acquiring a customer) of customers who bought a subscription in Feb-23 is $14. After 10 months their Contribution Profit without fully loaded Spend is $20.*


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