What is "Net Revenue" meaning?

Net revenue is the amount of money a business retains from its sales after subtracting items like product returns, sales discounts, and allowances. Unlike gross revenue, which includes all sales without deductions, net revenue provides a more accurate picture of a company’s true income. It’s a key metric for assessing performance, especially in digital and e-commerce businesses.

Example

“While the campaign drove high gross sales, the team focused on net revenue to gauge the real impact after returns and discount codes.”

How is "Net Revenue" used in business?

In business, net revenue is used to measure financial health, assess sales effectiveness, and forecast future growth. It helps investors and stakeholders understand how much money the company is actually making, beyond surface-level sales figures. It’s especially relevant in online retail, SaaS, and digital services where discounts and refund rates can vary widely.

Pro Tip

Track net revenue alongside gross revenue to uncover hidden issues like excessive refunds or overly generous discounts that might be affecting profits.

Related Terms

Gross Revenue, Profit Margin, Refund Rate, Revenue Recognition