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 $6.49B of revenue into $628.31M of net income — a net margin of 9.7%. 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 80.6%, an operating margin of 24.6%, and a net margin of 9.7%. 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

$6.49B

Gross Margin

+80.6%

Operating Margin

+24.6%

Net Margin

+9.7%

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

Net income: $628.31M

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

Line item	Amount	Running total
Revenue	$6.49B	$6.49B
Cost of Revenue	−$1.26B	$5.23B
Gross Profit	$5.23B	$5.23B
Operating Expenses	−$3.63B	$1.60B
Operating Income	$1.60B	$1.60B
Other Income / Expense	−$111.67M	$1.48B
Pre-tax Income	$1.48B	$1.48B
Income Tax	−$239.78M	$1.24B
Other Items	−$616.67M	$628.31M
Net Income	$628.31M	$628.31M

Revenue$6.49B
Cost of Revenue−$1.26B
Gross Profit$5.23B
Operating Expenses−$3.63B
Operating Income$1.60B
Other Income / Expense−$111.67M
Pre-tax Income$1.48B
Income Tax−$239.78M
Other Items−$616.67M
Net Income$628.31M

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

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

Frequently asked questions

+What is an income statement waterfall?

+How much of Ares Management (ARES) revenue becomes net income?

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

+Why does Ares Management (ARES) 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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