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 1st Source (SRCE) revenue becomes net income?

For TTM through Q1 2026, 1st Source turned $603M of revenue into $161M of net income — a net margin of 26.7%. The waterfall shows where the rest goes: cost of revenue, operating expenses, non-operating items, and taxes.

What are 1st Source (SRCE) gross, operating, and net margins?

For TTM through Q1 2026, 1st Source reported a gross margin of 70.8%, an operating margin of 34.6%, and a net margin of 26.7%. Each subtotal in the waterfall corresponds to one of these margins.

Why does 1st Source (SRCE) 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.

1st Source (SRCE) Income Statement Waterfall

Revenue

$603M

Gross Margin

+70.8%

Operating Margin

+34.6%

Net Margin

+26.7%

Income statement waterfall for 1st Source (SRCE) — TTM through Q1 2026

Net income: $161M

Margin breakdown for 1st Source (SRCE) — TTM through Q1 2026

Line item	Amount	Running total
Revenue	$603M	$603M
Cost of Revenue	-$176M	$427M
Gross Profit	$427M	$427M
Operating Expenses	-$218M	$209M
Operating Income	$209M	$209M
Other Income / Expense	-$711K	$208M
Pre-tax Income	$208M	$208M
Income Tax	-$47.3M	$161M
Net Income	$161M	$161M

Revenue$603M
Cost of Revenue-$176M
Gross Profit$427M
Operating Expenses-$218M
Operating Income$209M
Other Income / Expense-$711K
Pre-tax Income$208M
Income Tax-$47.3M
Net Income$161M

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