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 Strategy (MSTR) revenue becomes net income?

For TTM through Q1 2026, Strategy turned $490M of revenue into -$12.4B of net income — a net margin of -2519.4%. The waterfall shows where the rest goes: cost of revenue, operating expenses, non-operating items, and taxes.

What are Strategy (MSTR) gross, operating, and net margins?

For TTM through Q1 2026, Strategy reported a gross margin of 68.1%, an operating margin of 94.2%, and a net margin of -2519.4%. Each subtotal in the waterfall corresponds to one of these margins.

Why does Strategy (MSTR) 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.

Strategy (MSTR) Income Statement Waterfall

Revenue

$490M

Gross Margin

+68.1%

Operating Margin

+94.2%

Net Margin

-2,519.4%

Income statement waterfall for Strategy (MSTR) — TTM through Q1 2026

Net income: -$12.4B

Margin breakdown for Strategy (MSTR) — TTM through Q1 2026

Line item	Amount	Running total
Revenue	$490M	$490M
Cost of Revenue	-$156M	$334M
Gross Profit	$334M	$334M
Operating Expenses	$128M	$462M
Operating Income	$462M	$462M
Other Income / Expense	-$14.5B	-$14B
Pre-tax Income	-$14B	-$14B
Tax Benefit	$1.88B	-$12.2B
Other Items	-$183M	-$12.4B
Net Loss	-$12.4B	-$12.4B

Revenue$490M
Cost of Revenue-$156M
Gross Profit$334M
Operating Expenses$128M
Operating Income$462M
Other Income / Expense-$14.5B
Pre-tax Income-$14B
Tax Benefit$1.88B
Other Items-$183M
Net Loss-$12.4B

Want to see what changed vs last year?Profit Bridge

Frequently asked questions

Data & methodology

Strategy (MSTR) Key Financials

Charts, filings, and peer comparison for every metric

Explore more

Deep-dives across the income statement, cash flow, capital return, and valuation

Overview

MSTR Overview

Counters

Income Statement

Cash Flow

Capital Return

How this company returns cash to shareholders — buybacks, dividends, and stock splits.

Forecast & Valuation