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 GameStop (GME) revenue becomes net income?

For TTM through Q2 2026, GameStop turned $3.73B of revenue into $763M of net income — a net margin of 20.4%. The waterfall shows where the rest goes: cost of revenue, operating expenses, non-operating items, and taxes.

What are GameStop (GME) gross, operating, and net margins?

For TTM through Q2 2026, GameStop reported a gross margin of 34.4%, an operating margin of 10.6%, and a net margin of 20.4%. Each subtotal in the waterfall corresponds to one of these margins.

Why does GameStop (GME) 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.

GameStop (GME) Income Statement Waterfall

Revenue

$3.73B

Gross Margin

+34.4%

Operating Margin

+10.6%

Net Margin

+20.4%

Income statement waterfall for GameStop (GME) — TTM through Q2 2026

Net income: $763M

Margin breakdown for GameStop (GME) — TTM through Q2 2026

Line item	Amount	Running total
Revenue	$3.73B	$3.73B
Cost of Revenue	-$2.45B	$1.28B
Gross Profit	$1.28B	$1.28B
Operating Expenses	-$888M	$396M
Operating Income	$396M	$396M
Other Income / Expense	$446M	$842M
Pre-tax Income	$842M	$842M
Income Tax	-$78.9M	$763M
Net Income	$763M	$763M

Revenue$3.73B
Cost of Revenue-$2.45B
Gross Profit$1.28B
Operating Expenses-$888M
Operating Income$396M
Other Income / Expense$446M
Pre-tax Income$842M
Income Tax-$78.9M
Net Income$763M

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