Dictionary / How companies make money
What Is Revenue?
Revenue is all the money a company takes in from selling its products and services, before any costs are taken out. It is often called sales or the "top line".
What revenue means
A lemonade stand sells 100 cups at $2 each. Its revenue is $200. It does not matter yet what the lemons and cups cost. Revenue only counts the money coming in.
Does revenue mean sales or profit?
Revenue means sales. Profit is what is left after you pay all the costs. A company can have huge revenue and still lose money if its costs are even bigger. Read more in revenue vs profit.
Why investors watch revenue
Growing revenue shows that more people want what the company sells. Young companies are often judged on revenue growth because they have no profit yet. That is why the price-to-sales ratio exists.
Where revenue comes from
Most companies have several sources of revenue. Apple sells iPhones, Macs and services like the App Store. Knowing which part brings in the most money tells you what really drives the business. Every Stooocks company page shows this as a revenue chart.
See it in real companies
Open a company to see what it sells and how it makes money.