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 Alibaba (BABA) revenue becomes net income?

For TTM through Q1 2026, Alibaba turned 1.02T CNY of revenue into 104B CNY of net income — a net margin of 10.1%. The waterfall shows where the rest goes: cost of revenue, operating expenses, non-operating items, and taxes.

What are Alibaba (BABA) gross, operating, and net margins?

For TTM through Q1 2026, Alibaba reported a gross margin of 39.8%, an operating margin of 5.8%, and a net margin of 10.1%. Each subtotal in the waterfall corresponds to one of these margins.

Why does Alibaba (BABA) 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.

Alibaba (BABA) Income Statement Waterfall

Revenue

1.02T CNY

Gross Margin

+39.8%

Operating Margin

+5.8%

Net Margin

+10.1%

Income statement waterfall for Alibaba (BABA) — TTM through Q1 2026

Net income: 104B CNY

Margin breakdown for Alibaba (BABA) — TTM through Q1 2026

Line item	Amount	Running total
Revenue	1.02T CNY	1.02T CNY
Cost of Revenue	-616B CNY	408B CNY
Gross Profit	408B CNY	408B CNY
Operating Expenses	-348B CNY	59.7B CNY
Operating Income	59.7B CNY	59.7B CNY
Other Income / Expense	72.5B CNY	132B CNY
Pre-tax Income	132B CNY	132B CNY
Income Tax	-30B CNY	102B CNY
Other Items	1.47B CNY	104B CNY
Net Income	104B CNY	104B CNY

Revenue1.02T CNY
Cost of Revenue-616B CNY
Gross Profit408B CNY
Operating Expenses-348B CNY
Operating Income59.7B CNY
Other Income / Expense72.5B CNY
Pre-tax Income132B CNY
Income Tax-30B CNY
Other Items1.47B CNY
Net Income104B CNY

Want to see what changed vs last year?Profit Bridge

Frequently asked questions

Data & methodology

Alibaba (BABA) Key Financials

Charts, filings, and peer comparison for every metric

Explore more

Deep-dives across the income statement, cash flow, capital return, and valuation

Overview

BABA Overview

Counters

Income Statement

Cash Flow

Capital Return

How this company returns cash to shareholders — buybacks, dividends, and stock splits.

Forecast & Valuation