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 KB Home (KBH) revenue becomes net income?

For TTM through Q1 2026, KB Home turned $5.92B of revenue into $352.66M of net income — a net margin of 6%. The waterfall shows where the rest goes: cost of revenue, operating expenses, non-operating items, and taxes.

What are KB Home (KBH) gross, operating, and net margins?

For TTM through Q1 2026, KB Home reported a gross margin of 17.8%, an operating margin of 7.3%, and a net margin of 6%. Each subtotal in the waterfall corresponds to one of these margins.

Why does KB Home (KBH) 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.

KB Home (KBH) Income Statement Waterfall

Revenue

$5.92B

Gross Margin

+17.8%

Operating Margin

+7.3%

Net Margin

+6.0%

Income statement waterfall for KB Home (KBH) — TTM through Q1 2026

Net income: $352.66M

Margin breakdown for KB Home (KBH) — TTM through Q1 2026

Line item	Amount	Running total
Revenue	$5.92B	$5.92B
Cost of Revenue	−$4.87B	$1.06B
Gross Profit	$1.06B	$1.06B
Operating Expenses	−$624.94M	$431.10M
Operating Income	$431.10M	$431.10M
Other Income / Expense	$24.05M	$455.16M
Pre-tax Income	$455.16M	$455.16M
Income Tax	−$102.50M	$352.66M
Net Income	$352.66M	$352.66M

Revenue$5.92B
Cost of Revenue−$4.87B
Gross Profit$1.06B
Operating Expenses−$624.94M
Operating Income$431.10M
Other Income / Expense$24.05M
Pre-tax Income$455.16M
Income Tax−$102.50M
Net Income$352.66M

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