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 Affirm Holdings (AFRM) revenue becomes net income?

For TTM through Q1 2026, Affirm Holdings turned $3.97B of revenue into $382M of net income — a net margin of 9.6%. The waterfall shows where the rest goes: cost of revenue, operating expenses, non-operating items, and taxes.

What are Affirm Holdings (AFRM) gross, operating, and net margins?

For TTM through Q1 2026, Affirm Holdings reported a gross margin of 67.7%, an operating margin of 11.1%, and a net margin of 9.6%. Each subtotal in the waterfall corresponds to one of these margins.

Why does Affirm Holdings (AFRM) 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.

Affirm Holdings (AFRM) Income Statement Waterfall

Revenue

$3.97B

Gross Margin

+67.7%

Operating Margin

+11.1%

Net Margin

+9.6%

Income statement waterfall for Affirm Holdings (AFRM) — TTM through Q1 2026

Net income: $382M

Margin breakdown for Affirm Holdings (AFRM) — TTM through Q1 2026

Line item	Amount	Running total
Revenue	$3.97B	$3.97B
Cost of Revenue	-$1.28B	$2.69B
Gross Profit	$2.69B	$2.69B
Operating Expenses	-$2.25B	$442M
Operating Income	$442M	$442M
Other Income / Expense	-$46.3M	$395M
Pre-tax Income	$395M	$395M
Income Tax	-$12.8M	$382M
Net Income	$382M	$382M

Revenue$3.97B
Cost of Revenue-$1.28B
Gross Profit$2.69B
Operating Expenses-$2.25B
Operating Income$442M
Other Income / Expense-$46.3M
Pre-tax Income$395M
Income Tax-$12.8M
Net Income$382M

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