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 Carvana (CVNA) revenue becomes net income?

For TTM through Q1 2026, Carvana turned $22.5B of revenue into $1.6B of net income — a net margin of 7.1%. The waterfall shows where the rest goes: cost of revenue, operating expenses, non-operating items, and taxes.

What are Carvana (CVNA) gross, operating, and net margins?

For TTM through Q1 2026, Carvana reported a gross margin of 20%, an operating margin of 9.2%, and a net margin of 7.1%. Each subtotal in the waterfall corresponds to one of these margins.

Why does Carvana (CVNA) 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.

Carvana (CVNA) Income Statement Waterfall

Revenue

$22.5B

Gross Margin

+20.0%

Operating Margin

+9.2%

Net Margin

+7.1%

Income statement waterfall for Carvana (CVNA) — TTM through Q1 2026

Net income: $1.6B

Margin breakdown for Carvana (CVNA) — TTM through Q1 2026

Line item	Amount	Running total
Revenue	$22.5B	$22.5B
Cost of Revenue	-$18B	$4.5B
Gross Profit	$4.5B	$4.5B
Operating Expenses	-$2.43B	$2.07B
Operating Income	$2.07B	$2.07B
Other Income / Expense	-$2.89B	-$824M
Pre-tax Income	-$824M	-$824M
Tax Benefit	$2.75B	$1.93B
Other Items	-$331M	$1.6B
Net Income	$1.6B	$1.6B

Revenue$22.5B
Cost of Revenue-$18B
Gross Profit$4.5B
Operating Expenses-$2.43B
Operating Income$2.07B
Other Income / Expense-$2.89B
Pre-tax Income-$824M
Tax Benefit$2.75B
Other Items-$331M
Net Income$1.6B

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