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 Alaska Air Group (ALK) revenue becomes net income?

For TTM through Q2 2026, Alaska Air Group turned $14.8B of revenue into -$175M of net income — a net margin of -1.2%. The waterfall shows where the rest goes: cost of revenue, operating expenses, non-operating items, and taxes.

What are Alaska Air Group (ALK) gross, operating, and net margins?

For TTM through Q2 2026, Alaska Air Group reported a gross margin of 94.6%, an operating margin of -1.5%, and a net margin of -1.2%. Each subtotal in the waterfall corresponds to one of these margins.

Why does Alaska Air Group (ALK) 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.

Alaska Air Group (ALK) Income Statement Waterfall

Revenue

$14.8B

Gross Margin

+94.6%

Operating Margin

-1.5%

Net Margin

-1.2%

Income statement waterfall for Alaska Air Group (ALK) — TTM through Q2 2026

Net income: -$175M

Margin breakdown for Alaska Air Group (ALK) — TTM through Q2 2026

Line item	Amount	Running total
Revenue	$14.8B	$14.8B
Cost of Revenue	-$793M	$14B
Gross Profit	$14B	$14B
Operating Expenses	-$14.2B	-$224M
Operating Income	-$224M	-$224M
Other Income / Expense	-$166M	-$390M
Pre-tax Income	-$390M	-$390M
Tax Benefit	$215M	-$175M
Net Loss	-$175M	-$175M

Revenue$14.8B
Cost of Revenue-$793M
Gross Profit$14B
Operating Expenses-$14.2B
Operating Income-$224M
Other Income / Expense-$166M
Pre-tax Income-$390M
Tax Benefit$215M
Net Loss-$175M

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