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 Arrow Financial (AROW) revenue becomes net income?

For TTM through Q1 2026, Arrow Financial turned $247M of revenue into $51.1M of net income — a net margin of 20.7%. The waterfall shows where the rest goes: cost of revenue, operating expenses, non-operating items, and taxes.

What are Arrow Financial (AROW) gross, operating, and net margins?

For TTM through Q1 2026, Arrow Financial reported a gross margin of 68.2%, an operating margin of 26.2%, and a net margin of 20.7%. Each subtotal in the waterfall corresponds to one of these margins.

Why does Arrow Financial (AROW) 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.

Arrow Financial (AROW) Income Statement Waterfall

Revenue

$247M

Gross Margin

+68.2%

Operating Margin

+26.2%

Net Margin

+20.7%

Income statement waterfall for Arrow Financial (AROW) — TTM through Q1 2026

Net income: $51.1M

Margin breakdown for Arrow Financial (AROW) — TTM through Q1 2026

Line item	Amount	Running total
Revenue	$247M	$247M
Cost of Revenue	-$78.4M	$168M
Gross Profit	$168M	$168M
Operating Expenses	-$104M	$64.6M
Operating Income	$64.6M	$64.6M
Pre-tax Income	$64.6M	$64.6M
Income Tax	-$13.5M	$51.1M
Net Income	$51.1M	$51.1M

Revenue$247M
Cost of Revenue-$78.4M
Gross Profit$168M
Operating Expenses-$104M
Operating Income$64.6M
Pre-tax Income$64.6M
Income Tax-$13.5M
Net Income$51.1M

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