What is the difference between single-ended and differential outputs?

Single-ended is the most frequently used encoder output where commonly the output alternates between 0 and 5VDC. For an encoder with a differential output, for each channel that alternates between 0 and 5VDC, there is a complementary channel that at the same time, alternates between 0 and -5VDC. A differential signal allows for longer cable runs and can be used in electrically noisy environments.