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 PDD Holdings (PDD) revenue becomes net income?

For TTM through Q1 2026, PDD Holdings turned 442B CNY of revenue into 95.6B CNY of net income — a net margin of 21.6%. The waterfall shows where the rest goes: cost of revenue, operating expenses, non-operating items, and taxes.

What are PDD Holdings (PDD) gross, operating, and net margins?

For TTM through Q1 2026, PDD Holdings reported a gross margin of 56%, an operating margin of 22.2%, and a net margin of 21.6%. Each subtotal in the waterfall corresponds to one of these margins.

Why does PDD Holdings (PDD) 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.

PDD Holdings (PDD) Income Statement Waterfall

Revenue

442B CNY

Gross Margin

+56.0%

Operating Margin

+22.2%

Net Margin

+21.6%

Income statement waterfall for PDD Holdings (PDD) — TTM through Q1 2026

Net income: 95.6B CNY

Margin breakdown for PDD Holdings (PDD) — TTM through Q1 2026

Line item	Amount	Running total
Revenue	442B CNY	442B CNY
Cost of Revenue	-194B CNY	247B CNY
Gross Profit	247B CNY	247B CNY
Operating Expenses	-149B CNY	98B CNY
Operating Income	98B CNY	98B CNY
Other Income / Expense	18.8B CNY	117B CNY
Pre-tax Income	117B CNY	117B CNY
Income Tax	-21.3B CNY	95.6B CNY
Net Income	95.6B CNY	95.6B CNY

Revenue442B CNY
Cost of Revenue-194B CNY
Gross Profit247B CNY
Operating Expenses-149B CNY
Operating Income98B CNY
Other Income / Expense18.8B CNY
Pre-tax Income117B CNY
Income Tax-21.3B CNY
Net Income95.6B CNY

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