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 Norwegian Cruise Line (NCLH) revenue becomes net income?

For TTM through Q1 2026, Norwegian Cruise Line turned $10B of revenue into $568M of net income — a net margin of 5.7%. The waterfall shows where the rest goes: cost of revenue, operating expenses, non-operating items, and taxes.

What are Norwegian Cruise Line (NCLH) gross, operating, and net margins?

For TTM through Q1 2026, Norwegian Cruise Line reported a gross margin of 43%, an operating margin of 15.9%, and a net margin of 5.7%. Each subtotal in the waterfall corresponds to one of these margins.

Why does Norwegian Cruise Line (NCLH) 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.

Norwegian Cruise Line (NCLH) Income Statement Waterfall

Revenue

$10B

Gross Margin

+43.0%

Operating Margin

+15.9%

Net Margin

+5.7%

Income statement waterfall for Norwegian Cruise Line (NCLH) — TTM through Q1 2026

Net income: $568M

Margin breakdown for Norwegian Cruise Line (NCLH) — TTM through Q1 2026

Line item	Amount	Running total
Revenue	$10B	$10B
Cost of Revenue	-$5.71B	$4.32B
Gross Profit	$4.32B	$4.32B
Operating Expenses	-$2.73B	$1.59B
Operating Income	$1.59B	$1.59B
Other Income / Expense	-$1.02B	$578M
Pre-tax Income	$578M	$578M
Income Tax	-$9.61M	$568M
Net Income	$568M	$568M

Revenue$10B
Cost of Revenue-$5.71B
Gross Profit$4.32B
Operating Expenses-$2.73B
Operating Income$1.59B
Other Income / Expense-$1.02B
Pre-tax Income$578M
Income Tax-$9.61M
Net Income$568M

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