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 Rocket Lab USA (RKLB) revenue becomes net income?

For TTM through Q1 2026, Rocket Lab USA turned $680M of revenue into -$183M of net income — a net margin of -26.9%. The waterfall shows where the rest goes: cost of revenue, operating expenses, non-operating items, and taxes.

What are Rocket Lab USA (RKLB) gross, operating, and net margins?

For TTM through Q1 2026, Rocket Lab USA reported a gross margin of 36.6%, an operating margin of -33.2%, and a net margin of -26.9%. Each subtotal in the waterfall corresponds to one of these margins.

Why does Rocket Lab USA (RKLB) 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.

Rocket Lab USA (RKLB) Income Statement Waterfall

Revenue

$680M

Gross Margin

+36.6%

Operating Margin

-33.2%

Net Margin

-26.9%

Income statement waterfall for Rocket Lab USA (RKLB) — TTM through Q1 2026

Net income: -$183M

Margin breakdown for Rocket Lab USA (RKLB) — TTM through Q1 2026

Line item	Amount	Running total
Revenue	$680M	$680M
Cost of Revenue	-$431M	$248M
Gross Profit	$248M	$248M
Operating Expenses	-$474M	-$226M
Operating Income	-$226M	-$226M
Other Income / Expense	$14.3M	-$211M
Pre-tax Income	-$211M	-$211M
Tax Benefit	$28.7M	-$183M
Net Loss	-$183M	-$183M

Revenue$680M
Cost of Revenue-$431M
Gross Profit$248M
Operating Expenses-$474M
Operating Income-$226M
Other Income / Expense$14.3M
Pre-tax Income-$211M
Tax Benefit$28.7M
Net Loss-$183M

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