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 H2O America (HTO) revenue becomes net income?

For TTM through Q1 2026, H2O America turned $816M of revenue into $105M of net income — a net margin of 12.9%. The waterfall shows where the rest goes: cost of revenue, operating expenses, non-operating items, and taxes.

What are H2O America (HTO) gross, operating, and net margins?

For TTM through Q1 2026, H2O America reported a gross margin of 55.5%, an operating margin of 22%, and a net margin of 12.9%. Each subtotal in the waterfall corresponds to one of these margins.

Why does H2O America (HTO) 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.

H2O America (HTO) Income Statement Waterfall

Revenue

$816M

Gross Margin

+55.5%

Operating Margin

+22.0%

Net Margin

+12.9%

Income statement waterfall for H2O America (HTO) — TTM through Q1 2026

Net income: $105M

Margin breakdown for H2O America (HTO) — TTM through Q1 2026

Line item	Amount	Running total
Revenue	$816M	$816M
Cost of Revenue	-$364M	$453M
Gross Profit	$453M	$453M
Operating Expenses	-$273M	$179M
Operating Income	$179M	$179M
Other Income / Expense	-$62.2M	$117M
Pre-tax Income	$117M	$117M
Income Tax	-$12.3M	$105M
Net Income	$105M	$105M

Revenue$816M
Cost of Revenue-$364M
Gross Profit$453M
Operating Expenses-$273M
Operating Income$179M
Other Income / Expense-$62.2M
Pre-tax Income$117M
Income Tax-$12.3M
Net Income$105M

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