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 Ares Management (ARES) revenue becomes net income?

For TTM through Q1 2026, Ares Management turned $6.31B of revenue into $623M of net income — a net margin of 9.9%. The waterfall shows where the rest goes: cost of revenue, operating expenses, non-operating items, and taxes.

What are Ares Management (ARES) gross, operating, and net margins?

For TTM through Q1 2026, Ares Management reported a gross margin of 70.7%, an operating margin of 22.9%, and a net margin of 9.9%. Each subtotal in the waterfall corresponds to one of these margins.

Why does Ares Management (ARES) 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.

Ares Management (ARES) Income Statement Waterfall

Revenue

$6.31B

Gross Margin

+70.7%

Operating Margin

+22.9%

Net Margin

+9.9%

Income statement waterfall for Ares Management (ARES) — TTM through Q1 2026

Net income: $623M

Margin breakdown for Ares Management (ARES) — TTM through Q1 2026

Line item	Amount	Running total
Revenue	$6.31B	$6.31B
Cost of Revenue	-$1.85B	$4.46B
Gross Profit	$4.46B	$4.46B
Operating Expenses	-$3.02B	$1.44B
Operating Income	$1.44B	$1.44B
Other Income / Expense	$14.7M	$1.46B
Pre-tax Income	$1.46B	$1.46B
Income Tax	-$241M	$1.22B
Other Items	-$595M	$623M
Net Income	$623M	$623M

Revenue$6.31B
Cost of Revenue-$1.85B
Gross Profit$4.46B
Operating Expenses-$3.02B
Operating Income$1.44B
Other Income / Expense$14.7M
Pre-tax Income$1.46B
Income Tax-$241M
Other Items-$595M
Net Income$623M

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