Net income, often called the bottom line, is the amount of profit a company reports after subtracting all expenses from revenue for a reporting period. It appears on the income statement and reflects profitability after operating costs, interest, taxes, and non-cash charges such as depreciation and amortization have been accounted for.
Investors and analysts use net income to assess profitability and to compare performance across periods and peers. It feeds into metrics such as earnings per share (EPS), which is net income divided by the weighted average shares outstanding, and net income margin, which expresses net income as a percentage of revenue.
Net income can be influenced by non-operating items, one-time gains or losses, and accounting methods. Because it includes non-cash charges and financing costs, net income may differ from cash flow from operations. For this reason, analyses often consider net income alongside revenue, cash flow, and other profitability measures.
Net income is reported for quarterly and annual periods and is a foundational figure used in many fundamental analysis frameworks.
Example: A company reports revenue of $500 million and total expenses of $420 million for the period, resulting in net income of $80 million.
Revenue · Operating income · Earnings per share (EPS) · Net income margin · Cash flow from operations