What is Revenue?

Revenue is the total income a business generates from selling goods or services before any costs or expenses are deducted, also called the top line.

Revenue sits at the top of the income statement and is the starting point for every profitability calculation. It is recognised when goods are delivered or services performed, not necessarily when cash arrives — under IFRS 15 and ASC 606 the contract performance obligation drives timing.

Analysts distinguish gross revenue (total billings) from net revenue (after returns, refunds and discounts). Growth rate, mix between recurring and one-off sales, and the gap between booked and recognised revenue all signal business quality.

Formula

Net Revenue = Gross Sales − Returns − Discounts

Example

A SaaS startup signs a CHF 120,000 annual contract in January; under IFRS 15 it recognises CHF 10,000 in revenue each month rather than the full amount upfront.

Related terms

Gross Profit

Gross profit is revenue minus the direct cost of producing the goods or services sold, showing how much money a business keeps from each sale before operating expenses.

Profit Margin

Profit margin is a profitability ratio that expresses a company's profit as a percentage of its revenue, showing how many cents of profit are produced by each franc, euro or dollar of sales.

Income Statement

The income statement (or profit and loss statement, P&L) reports a company's revenues, expenses and profits over a specific period, showing whether the business made money and how.

Operating Profit

Operating profit (or operating income, EBIT) is what a business earns from its core operations after deducting both the direct cost of sales and all operating expenses, but before interest and tax.

Frequently asked questions

Is revenue the same as profit?+

No. Revenue is income before costs; profit is what remains after every expense, interest and tax.

What is recurring revenue?+

Predictable income from subscriptions or contracts that renew, used to value SaaS and service businesses.

When is revenue recognised?+

When control of the good or service passes to the customer, not when the invoice is paid.