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 RLI (RLI) revenue becomes net income?

For TTM through Q1 2026, RLI turned $1.90B of revenue into $395.01M of net income — a net margin of 20.8%. The waterfall shows where the rest goes: cost of revenue, operating expenses, non-operating items, and taxes.

What are RLI (RLI) gross, operating, and net margins?

For TTM through Q1 2026, RLI reported a gross margin of 37.5%, an operating margin of 26.7%, and a net margin of 20.8%. Each subtotal in the waterfall corresponds to one of these margins.

Why does RLI (RLI) 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.

RLI (RLI) Income Statement Waterfall

Revenue

$1.90B

Gross Margin

+37.5%

Operating Margin

+26.7%

Net Margin

+20.8%

Income statement waterfall for RLI (RLI) — TTM through Q1 2026

Net income: $395.01M

Margin breakdown for RLI (RLI) — TTM through Q1 2026

Line item	Amount	Running total
Revenue	$1.90B	$1.90B
Cost of Revenue	−$1.19B	$712.18M
Gross Profit	$712.18M	$712.18M
Operating Expenses	−$205.20M	$506.98M
Operating Income	$506.98M	$506.98M
Other Income / Expense	−$12.29M	$494.69M
Pre-tax Income	$494.69M	$494.69M
Income Tax	−$99.68M	$395.01M
Net Income	$395.01M	$395.01M

Revenue$1.90B
Cost of Revenue−$1.19B
Gross Profit$712.18M
Operating Expenses−$205.20M
Operating Income$506.98M
Other Income / Expense−$12.29M
Pre-tax Income$494.69M
Income Tax−$99.68M
Net Income$395.01M

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Income statement waterfall for RLI (RLI) — TTM through Q1 2026

Margin breakdown for RLI (RLI) — TTM through Q1 2026

Frequently asked questions

+What is an income statement waterfall?

+How much of RLI (RLI) revenue becomes net income?

+What are RLI (RLI) gross, operating, and net margins?

+Why does RLI (RLI) have such a high (or low) gross margin?

+What is the difference between gross, operating, and net margin?

Data & methodology

+What is this view?

+How to read this waterfall

+How is the data calculated?

+What is the USD toggle?

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