Revenue

Concept

Revenue is the total value of goods sold or services rendered to customers during a period. It's the top line—the first number on an income statement before any costs are deducted. Revenue represents economic activity, not profit. A company can have massive revenue and still lose money.

Intuition

Revenue is the starting point because it measures scale—how much economic activity the business generates. But revenue alone tells you nothing about profitability or sustainability. A company burning $2 for every $1 of revenue is still dying. Revenue matters because it's the input to every margin calculation. Without revenue, there's nothing to analyze. It's also the hardest line to fake sustainably—eventually, you need real customers paying real money.

Components

Interview Script

Revenue is the total value of goods sold or services provided to customers during a period—it's the top line of the income statement before any costs are deducted. It measures scale and economic activity, not profitability, which is why a company can have massive revenue and still lose money. It's the starting point for every margin calculation and the hardest line to fake because it ultimately requires real customers paying real money.