What Is Net Income?
A company's total profit after all expenses, taxes, and costs are subtracted from revenue.
The Full Definition
Net income — also called the "bottom line" — is what remains of a company's revenue after subtracting every cost of doing business: operating expenses, interest, taxes, and one-time charges. It's the most commonly cited profitability figure, the basis for earnings per share, and the number most headlines mean when they report a company "made" a certain amount. Net income can be manipulated more easily than free cash flow through accounting choices, which is why experienced investors often look at both figures together rather than net income alone.
Real-World Example
A company with $10 billion in revenue and $1.2 billion in net income has a 12% net margin — meaning it keeps 12 cents of profit for every dollar of sales after all costs are paid.