Revenue is the total income earned by a company for selling its goods and services. Revenue is called the top line because it sits at the top of the income statement, which also refers to a company's gross sales. Revenue is the income generated before expenses are deducted. Revenue is also called net sales for some companies since net sales include any returns of merchandise by customers.
Earnings, by contrast, reflect the bottom line on the income statement and is the profit a company has earned for a period. The earnings figure is listed as net income on the income statement. When investors and analysts speak of a company's earnings, they're talking about the company's net income or the profit.
Net income or earnings is calculated by subtracting the costs of doing business such as depreciation, interest charges paid on loans, general and administrative costs, income taxes, and operating expenses such as rent, utilities, and payroll. A company's bottom line is also called net profit.
Apple Inc. Example
Below is the income statement for Apple Inc. as of the end of their fiscal year in 2017 from their 10K statement.
Apple Inc. (AAPL) posted a net sales number of $229 billion for the period. The company's revenue number represented a 6.7% top-line growth rate from the same period a year earlier.
Apple posted $48.35 billion in net income or earnings which was a 5.8% increase from the same period in 2016.
Remember, net income is a smaller number than revenue because net income is the result of total revenue minus all of the costs or expenses for the period.
The Bottom Line
The difference between revenue and earnings is that while revenue tracks the total amount of money made in sales, earnings reflect the portion of the revenue the company keeps in profit after every expense is paid.