Earnings

Earnings is a term used in accounting, finance, and labor markets to describe the income that entities or individuals generate over a period. In corporate finance, earnings most commonly refers to net earnings, i.e., net income after all expenses, taxes, and interest. Companies report earnings quarterly and annually; analysts track earnings growth, earnings per share (EPS), and margins to assess profitability and value creation. In many markets, GAAP-based earnings are contrasted with non-GAAP or “adjusted” earnings that exclude items such as one-time charges or stock-based compensation.

Earnings can also refer more broadly to the income that individuals receive from employment or self-employment—wages, salaries, bonuses, and other compensation. Personal earnings depend on labor market conditions, education, experience, hours worked, and contracts.

Key relationships: Revenue is the gross inflow from selling goods or services; earnings (profit) are what remains after costs, taxes, and financing charges. EBITDA is a common proxy that excludes depreciation, amortization, interest, and taxes. EPS, a widely used performance metric, divides net earnings by the number of outstanding shares.

Earnings announcements can influence stock prices and investment decisions. In economics, earnings may also refer to factor incomes in broader measures of national income.