What Is Net Income?

By Timothy Green – Updated Apr 17, 2025 at 12:28 AM

Key Points

Net income is calculated by subtracting all expenses from total revenue.
Net income offers insight into profitability but may not fully represent cash generated.
Fluctuations in net income can significantly impact a company's perceived profitability.

On a company’s income statement, also called its profit and loss statement, you’ll find net income near the bottom. Net income is a critically important metric that investors must understand to have a good idea of a company’s profitability.

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A person marking a profit and loss statement with a pen. — Image source: Getty Images

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Amazon net income chart — Source: Ycharts

About the Author

Tim Green is a contributing Motley Fool technology and consumer goods analyst covering companies in AI, cloud computing, retail, and other market sectors. Before The Motley Fool, Tim was in a doctoral program for computational physics. He holds a bachelor’s degree in physics from Rochester Institute of Technology.

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John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Timothy Green has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon. The Motley Fool has a disclosure policy.