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 Tempus AI (TEM) revenue becomes net income?

For TTM through Q1 2026, Tempus AI turned $1.36B of revenue into -$303M of net income — a net margin of -22.2%. The waterfall shows where the rest goes: cost of revenue, operating expenses, non-operating items, and taxes.

What are Tempus AI (TEM) gross, operating, and net margins?

For TTM through Q1 2026, Tempus AI reported a gross margin of 69.6%, an operating margin of -18.1%, and a net margin of -22.2%. Each subtotal in the waterfall corresponds to one of these margins.

Why does Tempus AI (TEM) 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.

Tempus AI (TEM) Income Statement Waterfall

Revenue

$1.36B

Gross Margin

+69.6%

Operating Margin

-18.1%

Net Margin

-22.2%

Income statement waterfall for Tempus AI (TEM) — TTM through Q1 2026

Net income: -$303M

Margin breakdown for Tempus AI (TEM) — TTM through Q1 2026

Line item	Amount	Running total
Revenue	$1.36B	$1.36B
Cost of Revenue	-$415M	$949M
Gross Profit	$949M	$949M
Operating Expenses	-$1.2B	-$247M
Operating Income	-$247M	-$247M
Other Income / Expense	-$61.2M	-$308M
Pre-tax Income	-$308M	-$308M
Tax Benefit	$5.57M	-$303M
Net Loss	-$303M	-$303M

Revenue$1.36B
Cost of Revenue-$415M
Gross Profit$949M
Operating Expenses-$1.2B
Operating Income-$247M
Other Income / Expense-$61.2M
Pre-tax Income-$308M
Tax Benefit$5.57M
Net Loss-$303M

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