Net Income
Net income is the profit remaining after a company subtracts its expenses from revenue for a period. It is often called the “bottom line” because it appears near the bottom of the income statement.
Reviewed September 2026
Basic formula
A simplified formula is: Net income = revenue − expenses. In practice, expenses can include cost of goods sold, operating expenses, interest, taxes and other gains or losses.
Simple example
A company earns $1,000,000 in revenue and has $850,000 in total expenses. Its net income is $150,000.
Net income vs. revenue
Revenue measures sales or other top-line income before most expenses. Net income is what remains after expenses. A company can have rising revenue while net income falls if costs rise faster.
Net income vs. cash flow
Net income is an accounting measure, not the same as cash generated. Non-cash expenses, working-capital changes and capital spending can make cash flow differ significantly from reported profit.