Operating revenue examples by industry
Although operating revenue is present in all industries, there are slight variations. Here's how it presents itself for different types of businesses.
For SaaS companies, operating revenue is driven by the number of subscriptions. A SaaS company typically calculates operating revenue by multiplying its average subscription price per customer by its total subscriber count.
If you have a lot of new subscribers in one quarter—even if this creates growth—and then lose them all at once, it won't reflect on operating revenue. This is because it only shows the numbers from your core operations.
In retail and consumer goods
For retailers and small businesses, operating revenue is far simpler to calculate. It's simply the gross sales minus returns.
For CPG (consumer package goods) companies, operating revenue represents new product sales plus add-on sales (like accessories or higher-margin products).
They can also derive an operating revenue figure from service revenues (through a multiple of service fees earned).
Though there are variations across non-profit industries, operating revenue is generally made up of contributions and grants received. For non-profits that generate income through selling products or services, operating revenues will also include those same elements.
In the service industry
The service industry is incredibly varied. Companies in this sector will generate millions of dollars in revenue each year, working on a number of different projects.
This makes it incredibly difficult to calculate an operating revenue figure given the vast array of services—ranging from very high-value workloads to smaller jobs that may be spread over a longer period of time.
If you're in the service industry, there is a way to measure your operating revenue, but it requires a bit more work. First, calculate your total revenue for the year—typically using your income statement or balance sheet (which will help you to understand how much revenue has been generated from each job).
Now that you've got the total revenue figure, subtract your cost of services to arrive at the actual operating revenue.