What is Revenue?

Revenue is the total income a company generates from its primary business activities, typically the sale of goods and services. It is the "top line" figure on an income statement from which all costs and expenses are subtracted to arrive at net income.

For Startups: Revenue is a primary indicator of traction and product-market fit. Investors will look at both the absolute amount of revenue and, more importantly, its growth rate. For subscription businesses, this is measured as Monthly Recurring Revenue (MRR) or Annual Recurring Revenue (ARR).

Important Distinction: It's crucial to distinguish Revenue from Bookings (the value of contracts signed) and Cash Collections. Under accrual accounting, revenue is recognized only when it is earned, not when the cash is received.

Example: A SaaS company sells a one-year subscription for ₹12,000. While the cash collected is ₹12,000, the revenue recognized each month is only ₹1,000.