Profit has two commonly used meanings. One is basically revenues minus expenses, and is essentially a measure of how successfully the company is operating. But

Profit has two commonly used meanings. One is basically revenues minus expenses, and is essentially a measure of how successfully the company is operating. But another is what the owners take from the company, after paying all operating expenses. In this sense, profit is basically a form of parasitism on the company: if it weren't for the need to pay its owners, the company could better achieve its goals by re-investing that same money into operating better (buying new equipment, paying its employees more/hiring more/better employees, reducing unpopular monetization to ensure client goodwill, etc). The more money that goes out of the company to shareholders, the worse the company is at operating. Today, at least in tech, few if any l companies post a profit in the second sense (they don't pay dividends), so we often tend to think of profit in the first sense, usually for tax reasons (taxes on cash dividends are usually payable immediately). But still, a similar phenomenon as the "parasitic" profit happnes: stock buybakcs. The company "invests" its profits into buying back its own stock, as a form of paying out shareholders through increased stock price. And, similarly to paying dividends, this takes away money that the company could have used on operating more efficiently in its core industry.