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 Align Technology (ALGN) revenue becomes net income?

For TTM through Q1 2026, Align Technology turned $4.10B of revenue into $429.89M of net income — a net margin of 10.5%. The waterfall shows where the rest goes: cost of revenue, operating expenses, non-operating items, and taxes.

What are Align Technology (ALGN) gross, operating, and net margins?

For TTM through Q1 2026, Align Technology reported a gross margin of 67.7%, an operating margin of 14.4%, and a net margin of 10.5%. Each subtotal in the waterfall corresponds to one of these margins.

Why does Align Technology (ALGN) 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.

Align Technology (ALGN) Income Statement Waterfall

Revenue

$4.10B

Gross Margin

+67.7%

Operating Margin

+14.4%

Net Margin

+10.5%

Income statement waterfall for Align Technology (ALGN) — TTM through Q1 2026

Net income: $429.89M

Margin breakdown for Align Technology (ALGN) — TTM through Q1 2026

Line item	Amount	Running total
Revenue	$4.10B	$4.10B
Cost of Revenue	−$1.32B	$2.77B
Gross Profit	$2.77B	$2.77B
Operating Expenses	−$2.18B	$591.59M
Operating Income	$591.59M	$591.59M
Other Income / Expense	$2.14M	$593.73M
Pre-tax Income	$593.73M	$593.73M
Income Tax	−$163.84M	$429.89M
Net Income	$429.89M	$429.89M

Revenue$4.10B
Cost of Revenue−$1.32B
Gross Profit$2.77B
Operating Expenses−$2.18B
Operating Income$591.59M
Other Income / Expense$2.14M
Pre-tax Income$593.73M
Income Tax−$163.84M
Net Income$429.89M

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Overview

ALGN Overview

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Cash Flow

Capital Return

Buybacks1.80% TTM

No dividends or stock splits on record for this company.

Forecast & Valuation

Income statement waterfall for Align Technology (ALGN) — TTM through Q1 2026

Margin breakdown for Align Technology (ALGN) — TTM through Q1 2026

Frequently asked questions

+What is an income statement waterfall?

+How much of Align Technology (ALGN) revenue becomes net income?

+What are Align Technology (ALGN) gross, operating, and net margins?

+Why does Align Technology (ALGN) have such a high (or low) gross margin?

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

Data & methodology

+What is this view?

+How to read this waterfall

+How is the data calculated?

+What is the USD toggle?

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