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 Erie Indemnity (ERIE) revenue becomes net income?

For TTM through Q1 2026, Erie Indemnity turned $4.09B of revenue into $571M of net income — a net margin of 14%. The waterfall shows where the rest goes: cost of revenue, operating expenses, non-operating items, and taxes.

What are Erie Indemnity (ERIE) gross, operating, and net margins?

For TTM through Q1 2026, Erie Indemnity reported a gross margin of 16.1%, an operating margin of 17.9%, and a net margin of 14%. Each subtotal in the waterfall corresponds to one of these margins.

Why does Erie Indemnity (ERIE) 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.

Erie Indemnity (ERIE) Income Statement Waterfall

Revenue

$4.09B

Gross Margin

+16.1%

Operating Margin

+17.9%

Net Margin

+14.0%

Income statement waterfall for Erie Indemnity (ERIE) — TTM through Q1 2026

Net income: $571M

Margin breakdown for Erie Indemnity (ERIE) — TTM through Q1 2026

Line item	Amount	Running total
Revenue	$4.09B	$4.09B
Cost of Revenue	-$3.43B	$659M
Gross Profit	$659M	$659M
Operating Expenses	$74.2M	$734M
Operating Income	$734M	$734M
Other Income / Expense	-$7.48M	$726M
Pre-tax Income	$726M	$726M
Income Tax	-$155M	$571M
Net Income	$571M	$571M

Revenue$4.09B
Cost of Revenue-$3.43B
Gross Profit$659M
Operating Expenses$74.2M
Operating Income$734M
Other Income / Expense-$7.48M
Pre-tax Income$726M
Income Tax-$155M
Net Income$571M

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