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 Reddit (RDDT) revenue becomes net income?

For TTM through Q1 2026, Reddit turned $2.47B of revenue into $708M of net income — a net margin of 28.6%. The waterfall shows where the rest goes: cost of revenue, operating expenses, non-operating items, and taxes.

What are Reddit (RDDT) gross, operating, and net margins?

For TTM through Q1 2026, Reddit reported a gross margin of 91.4%, an operating margin of 25.1%, and a net margin of 28.6%. Each subtotal in the waterfall corresponds to one of these margins.

Why does Reddit (RDDT) 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.

Reddit (RDDT) Income Statement Waterfall

Revenue

$2.47B

Gross Margin

+91.4%

Operating Margin

+25.1%

Net Margin

+28.6%

Income statement waterfall for Reddit (RDDT) — TTM through Q1 2026

Net income: $708M

Margin breakdown for Reddit (RDDT) — TTM through Q1 2026

Line item	Amount	Running total
Revenue	$2.47B	$2.47B
Cost of Revenue	-$213M	$2.26B
Gross Profit	$2.26B	$2.26B
Operating Expenses	-$1.64B	$621M
Operating Income	$621M	$621M
Other Income / Expense	$89M	$710M
Pre-tax Income	$710M	$710M
Income Tax	-$2.44M	$708M
Net Income	$708M	$708M

Revenue$2.47B
Cost of Revenue-$213M
Gross Profit$2.26B
Operating Expenses-$1.64B
Operating Income$621M
Other Income / Expense$89M
Pre-tax Income$710M
Income Tax-$2.44M
Net Income$708M

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