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 Sempra (SRE) revenue becomes net income?

For TTM through Q1 2026, Sempra turned $13.6B of revenue into $2.07B of net income — a net margin of 15.2%. The waterfall shows where the rest goes: cost of revenue, operating expenses, non-operating items, and taxes.

What are Sempra (SRE) gross, operating, and net margins?

For TTM through Q1 2026, Sempra reported a gross margin of 30.6%, an operating margin of 25%, and a net margin of 15.2%. Each subtotal in the waterfall corresponds to one of these margins.

Why does Sempra (SRE) 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.

Sempra (SRE) Income Statement Waterfall

Revenue

$13.6B

Gross Margin

+30.6%

Operating Margin

+25.0%

Net Margin

+15.2%

Income statement waterfall for Sempra (SRE) — TTM through Q1 2026

Net income: $2.07B

Margin breakdown for Sempra (SRE) — TTM through Q1 2026

Line item	Amount	Running total
Revenue	$13.6B	$13.6B
Cost of Revenue	-$9.44B	$4.16B
Gross Profit	$4.16B	$4.16B
Operating Expenses	-$758M	$3.41B
Operating Income	$3.41B	$3.41B
Other Income / Expense	-$394M	$3.01B
Pre-tax Income	$3.01B	$3.01B
Income Tax	-$709M	$2.3B
Other Items	-$233M	$2.07B
Net Income	$2.07B	$2.07B

Revenue$13.6B
Cost of Revenue-$9.44B
Gross Profit$4.16B
Operating Expenses-$758M
Operating Income$3.41B
Other Income / Expense-$394M
Pre-tax Income$3.01B
Income Tax-$709M
Other Items-$233M
Net Income$2.07B

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