What is Revenue from Operations?
Nexa Consultancy | Startup & Finance Glossary
Revenue from Operations is a specific line item on the income statement that represents the revenue a company generates from its principal business activities. It excludes any income from non-operating activities, such as interest income from investments or gains from the sale of assets.
For Startups: Focusing on revenue from operations gives a clear picture of the health of the core business model, stripping away any peripheral financial noise. For a SaaS startup, this would be its subscription revenue. For a D2C brand, it would be the revenue from selling its products.
Example: A company has total revenues of ₹1.1 Crore. Of this, ₹1 Crore is from the sale of its software, and ₹10 Lakhs is from interest earned on its bank deposits. Its Revenue from Operations is ₹1 Crore.