What it is
Net income, often referred to as the "bottom line" or profit, is the total amount of money a company has left after subtracting all its expenses from its total revenue. These expenses include the cost of goods sold, operating expenses, interest on debt, and taxes. It represents the ultimate measure of a company's profitability and is reported on the income statement, serving as the basis for earnings per share calculations.
Net income is a highly anticipated figure during earnings season, directly impacting investor sentiment and stock prices. A rising net income is generally positive, signaling financial health and growth, while a decline can lead to investor concern. While crucial, investors often look beyond just net income, also considering non-GAAP adjustments or free cash flow, as net income can be influenced by non-cash accounting entries.
Why it matters
Net income tells you how much profit a company truly made. It's fundamental for evaluating financial success and calculating earnings per share.
Reviewed under editorial standardsUpdated September 26, 2026Not investment advice