What is an income statement waterfall?

An income statement waterfall is a bar chart that walks from total revenue down to net income, with each step showing how much a cost or tax line removes (or adds). Subtotals — gross profit, operating income, pre-tax income — are anchored to zero so the cascade reconciles exactly to the bottom line.

How much of American Financial Group (AFG) revenue becomes net income?

For TTM through Q1 2026, American Financial Group turned $8.11B of revenue into $879M of net income — a net margin of 10.8%. The waterfall shows where the rest goes: cost of revenue, operating expenses, non-operating items, and taxes.

What are American Financial Group (AFG) gross, operating, and net margins?

For TTM through Q1 2026, American Financial Group reported a gross margin of 18.1%, an operating margin of 13.7%, and a net margin of 10.8%. Each subtotal in the waterfall corresponds to one of these margins.

Why does American Financial Group (AFG) have such a high (or low) gross margin?

Gross margin (gross profit ÷ revenue) reflects how much of each revenue dollar remains after direct production costs. Capital-light software and platform businesses often show gross margins above 60–80% because their cost of revenue is mainly hosting and support. Hardware, retail, and commodity businesses show lower gross margins because raw materials and manufacturing costs are significant. The waterfall makes this visible at a glance — the size of the "Cost of Revenue" bar relative to Revenue is the gross margin complement.

What is the difference between gross, operating, and net margin?

Gross margin = (Revenue − Cost of Revenue) ÷ Revenue. It measures production efficiency. Operating margin = Operating Income ÷ Revenue. It adds operating expenses (R&D, S&M, G&A) and measures the profitability of core operations. Net margin = Net Income ÷ Revenue. It also includes interest, other income/expense, and taxes, and represents the shareholder take after everything.

American Financial Group (AFG) Income Statement Waterfall

Revenue

$8.11B

Gross Margin

+18.1%

Operating Margin

+13.7%

Net Margin

+10.8%

Income statement waterfall for American Financial Group (AFG) — TTM through Q1 2026

Net income: $879M

Margin breakdown for American Financial Group (AFG) — TTM through Q1 2026

Line item	Amount	Running total
Revenue	$8.11B	$8.11B
Cost of Revenue	-$6.65B	$1.47B
Gross Profit	$1.47B	$1.47B
Operating Expenses	-$351M	$1.12B
Operating Income	$1.12B	$1.12B
Pre-tax Income	$1.12B	$1.12B
Income Tax	-$236M	$879M
Net Income	$879M	$879M

Revenue$8.11B
Cost of Revenue-$6.65B
Gross Profit$1.47B
Operating Expenses-$351M
Operating Income$1.12B
Pre-tax Income$1.12B
Income Tax-$236M
Net Income$879M

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