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 Li Auto (LI) revenue becomes net income?

For TTM through Q1 2026, Li Auto turned 109B CNY of revenue into -1.8B CNY of net income — a net margin of -1.7%. The waterfall shows where the rest goes: cost of revenue, operating expenses, non-operating items, and taxes.

What are Li Auto (LI) gross, operating, and net margins?

For TTM through Q1 2026, Li Auto reported a gross margin of 16%, an operating margin of -3.9%, and a net margin of -1.7%. Each subtotal in the waterfall corresponds to one of these margins.

Why does Li Auto (LI) 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.

Li Auto (LI) Income Statement Waterfall

Revenue

109B CNY

Gross Margin

+16.0%

Operating Margin

-3.9%

Net Margin

-1.7%

Income statement waterfall for Li Auto (LI) — TTM through Q1 2026

Net income: -1.8B CNY

Margin breakdown for Li Auto (LI) — TTM through Q1 2026

Line item	Amount	Running total
Revenue	109B CNY	109B CNY
Cost of Revenue	-91.6B CNY	17.4B CNY
Gross Profit	17.4B CNY	17.4B CNY
Operating Expenses	-21.6B CNY	-4.21B CNY
Operating Income	-4.21B CNY	-4.21B CNY
Other Income / Expense	2.15B CNY	-2.06B CNY
Pre-tax Income	-2.06B CNY	-2.06B CNY
Tax Benefit	292M CNY	-1.77B CNY
Other Items	-31.9M CNY	-1.8B CNY
Net Loss	-1.8B CNY	-1.8B CNY

Revenue109B CNY
Cost of Revenue-91.6B CNY
Gross Profit17.4B CNY
Operating Expenses-21.6B CNY
Operating Income-4.21B CNY
Other Income / Expense2.15B CNY
Pre-tax Income-2.06B CNY
Tax Benefit292M CNY
Other Items-31.9M CNY
Net Loss-1.8B CNY

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