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.

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.

MicroStrategy Incorporated Variable Rate Series A Perpetual Stretch Preferred Stock (STRC) Income Statement Waterfall

Q: How much of MicroStrategy Incorporated Variable Rate Series A Perpetual Stretch Preferred Stock (STRC) revenue becomes net income?

For TTM through Q1 2026, MicroStrategy Incorporated Variable Rate Series A Perpetual Stretch Preferred Stock turned $490.47M of revenue into −$12.36B of net income — a net margin of -2519.4%. The waterfall shows where the rest goes: cost of revenue, operating expenses, non-operating items, and taxes.

Q: What are MicroStrategy Incorporated Variable Rate Series A Perpetual Stretch Preferred Stock (STRC) gross, operating, and net margins?

For TTM through Q1 2026, MicroStrategy Incorporated Variable Rate Series A Perpetual Stretch Preferred Stock reported a gross margin of 68.1%, an operating margin of 94.2%, and a net margin of -2519.4%. Each subtotal in the waterfall corresponds to one of these margins.

Q: Why does MicroStrategy Incorporated Variable Rate Series A Perpetual Stretch Preferred Stock (STRC) 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.

Revenue

$490.47M

Gross Margin

+68.1%

Operating Margin

+94.2%

Net Margin

-2519.4%

Income statement waterfall for MicroStrategy Incorporated Variable Rate Series A Perpetual Stretch Preferred Stock (STRC) — TTM through Q1 2026

Net income: −$12.36B

Margin breakdown for MicroStrategy Incorporated Variable Rate Series A Perpetual Stretch Preferred Stock (STRC) — TTM through Q1 2026

Line item	Amount	Running total
Revenue	$490.47M	$490.47M
Cost of Revenue	−$156.39M	$334.07M
Gross Profit	$334.07M	$334.07M
Operating Expenses	$128.01M	$462.09M
Operating Income	$462.09M	$462.09M
Other Income / Expense	−$14.51B	−$14.05B
Pre-tax Income	−$14.05B	−$14.05B
Tax Benefit	$1.88B	−$12.17B
Other Items	−$183.33M	−$12.36B
Net Loss	−$12.36B	−$12.36B

Revenue$490.47M
Cost of Revenue−$156.39M
Gross Profit$334.07M
Operating Expenses$128.01M
Operating Income$462.09M
Other Income / Expense−$14.51B
Pre-tax Income−$14.05B
Tax Benefit$1.88B
Other Items−$183.33M
Net Loss−$12.36B

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MicroStrategy Incorporated Variable Rate Series A Perpetual Stretch Preferred Stock (STRC) Key Financials

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Income statement waterfall for MicroStrategy Incorporated Variable Rate Series A Perpetual Stretch Preferred Stock (STRC) — TTM through Q1 2026

Margin breakdown for MicroStrategy Incorporated Variable Rate Series A Perpetual Stretch Preferred Stock (STRC) — TTM through Q1 2026

Frequently asked questions

What is an income statement waterfall?

How much of MicroStrategy Incorporated Variable Rate Series A Perpetual Stretch Preferred Stock (STRC) revenue becomes net income?

What are MicroStrategy Incorporated Variable Rate Series A Perpetual Stretch Preferred Stock (STRC) gross, operating, and net margins?

Why does MicroStrategy Incorporated Variable Rate Series A Perpetual Stretch Preferred Stock (STRC) have such a high (or low) gross margin?

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

Data & methodology

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How to read this waterfall

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MicroStrategy Incorporated Variable Rate Series A Perpetual Stretch Preferred Stock (STRC) Key Financials

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