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 Etsy (ETSY) revenue becomes net income?

For TTM through Q1 2026, Etsy turned $2.86B of revenue into $285M of net income — a net margin of 9.9%. The waterfall shows where the rest goes: cost of revenue, operating expenses, non-operating items, and taxes.

What are Etsy (ETSY) gross, operating, and net margins?

For TTM through Q1 2026, Etsy reported a gross margin of 72%, an operating margin of 14.3%, and a net margin of 9.9%. Each subtotal in the waterfall corresponds to one of these margins.

Why does Etsy (ETSY) 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.

Etsy (ETSY) Income Statement Waterfall

Revenue

$2.86B

Gross Margin

+72.0%

Operating Margin

+14.3%

Net Margin

+9.9%

Income statement waterfall for Etsy (ETSY) — TTM through Q1 2026

Net income: $285M

Margin breakdown for Etsy (ETSY) — TTM through Q1 2026

Line item	Amount	Running total
Revenue	$2.86B	$2.86B
Cost of Revenue	-$801M	$2.06B
Gross Profit	$2.06B	$2.06B
Operating Expenses	-$1.65B	$408M
Operating Income	$408M	$408M
Other Income / Expense	$861K	$409M
Pre-tax Income	$409M	$409M
Income Tax	-$89.5M	$320M
Other Items	-$35M	$285M
Net Income	$285M	$285M

Revenue$2.86B
Cost of Revenue-$801M
Gross Profit$2.06B
Operating Expenses-$1.65B
Operating Income$408M
Other Income / Expense$861K
Pre-tax Income$409M
Income Tax-$89.5M
Other Items-$35M
Net Income$285M

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