The output of CAGE is a set of short nucleotide sequences (often called tags in analogy to expressed sequence tags) with their observed counts.  Copy numbers of CAGE tags provide a digital quantification of the RNA transcript abundances in biological samples.  Using a reference genome, a researcher can usually determine, with some confidence, the original mRNA (and therefore which gene) the tag was extracted from.
Unlike a similar technique serial analysis of gene expression (SAGE) in which tags come from other parts of transcripts, CAGE is primarily used to locate exact transcription start sites in the genome. This knowledge in turn allows a researcher to investigate promoter structure necessary for gene expression.
CAGE tags tend to start with an extra guanine (G) that is not encoded in the genome, which is attributed to the template-free 5′-extension during the first-strand cDNA synthesis or reverse-transcription of the cap itself.  When not corrected, this can induce erroneous mapping of CAGE tags, for instance to nontranscribed pseudogenes. On the other hand, this addition of Gs was also utilised as a signal to filter more reliable TSS peaks.