Cost of revenue and cost of goods sold (COGS) are related but not identical. Both represent the direct costs of producing or delivering products or services. COGS specifically refers to the direct costs incurred in producing or acquiring goods, including the cost of raw materials, cost of labor, and manufacturing. In contrast, cost of revenue is broader, encompassing all direct costs related to generating revenue, such as COGS and distribution costs. In an industry like SaaS where procurement of physical goods isn’t part of development, COGS and cost of revenue are often used interchangeably.