What is the difference?

Revenue vs Net Profit


Net Profit

What is it?

Revenue is defined as the income generated through a business’ primary operations. It is often referred to as “top line” and is shown at the top of an income statement.

Net profit is the value that remains after all expenses are subtracted from the company’s total income. It is one of the best ways to determine a business' profitability and is often referred to as the bottom line.


ƒ Sum(Revenue)
ƒ Sum(Revenue) - Sum(Operating Expenses) - Sum(COGS) + Sum(Other Revenue) - Sum(Other Expenses)


If a customer signs an annual contract for $12,000 consisting of monthly payments, then the revenue for each month of that year is $1,000, and the revenue for that year is $12,000.

A software company sells software and ongoing product maintenance. They earned $3M of Revenue in the fiscal year. In the same year, the company sold a pile of office furniture which netted a gain on disposal of assets in the amount of $0.5M. All other annual costs, such as salaries, wages for seasonal contractors, commissions for agents, office rent, utilities, software subscriptions, office supplies, income tax, and interest costs totaled $1.5M. The Net income for this company for the current fiscal year is $2M: $3M Revenue - $1.5M OPEX + $0.5M Gain on assets.

Published and updated dates

Date created: Oct 12, 2022

Latest update: Oct 12, 2022

Date created: Oct 12, 2022

Latest update: Mar 18, 2024