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 FirstEnergy (FE) revenue becomes net income?

For TTM through Q1 2026, FirstEnergy turned $15.5B of revenue into $1.07B of net income — a net margin of 6.9%. The waterfall shows where the rest goes: cost of revenue, operating expenses, non-operating items, and taxes.

What are FirstEnergy (FE) gross, operating, and net margins?

For TTM through Q1 2026, FirstEnergy reported a gross margin of 53.8%, an operating margin of 18.7%, and a net margin of 6.9%. Each subtotal in the waterfall corresponds to one of these margins.

Why does FirstEnergy (FE) 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.

FirstEnergy (FE) Income Statement Waterfall

Revenue

$15.5B

Gross Margin

+53.8%

Operating Margin

+18.7%

Net Margin

+6.9%

Income statement waterfall for FirstEnergy (FE) — TTM through Q1 2026

Net income: $1.07B

Margin breakdown for FirstEnergy (FE) — TTM through Q1 2026

Line item	Amount	Running total
Revenue	$15.5B	$15.5B
Cost of Revenue	-$7.18B	$8.35B
Gross Profit	$8.35B	$8.35B
Operating Expenses	-$5.44B	$2.91B
Operating Income	$2.91B	$2.91B
Other Income / Expense	-$1.28B	$1.62B
Pre-tax Income	$1.62B	$1.62B
Income Tax	-$300M	$1.32B
Other Items	-$258M	$1.07B
Net Income	$1.07B	$1.07B

Revenue$15.5B
Cost of Revenue-$7.18B
Gross Profit$8.35B
Operating Expenses-$5.44B
Operating Income$2.91B
Other Income / Expense-$1.28B
Pre-tax Income$1.62B
Income Tax-$300M
Other Items-$258M
Net Income$1.07B

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