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 103.59B 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: 103.59B 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	−616.14B CNY	407.53B CNY
Gross Profit	407.53B CNY	407.53B CNY
Operating Expenses	−347.87B CNY	59.66B CNY
Operating Income	59.66B CNY	59.66B CNY
Other Income / Expense	72.51B CNY	132.17B CNY
Pre-tax Income	132.17B CNY	132.17B CNY
Income Tax	−30.05B CNY	102.13B CNY
Other Items	1.47B CNY	103.59B CNY
Net Income	103.59B CNY	103.59B CNY

Revenue1.02T CNY
Cost of Revenue−616.14B CNY
Gross Profit407.53B CNY
Operating Expenses−347.87B CNY
Operating Income59.66B CNY
Other Income / Expense72.51B CNY
Pre-tax Income132.17B CNY
Income Tax−30.05B CNY
Other Items1.47B CNY
Net Income103.59B CNY

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

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

Frequently asked questions

+What is an income statement waterfall?

+How much of Alibaba (BABA) revenue becomes net income?

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

+Why does Alibaba (BABA) 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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