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 TKO Group Holdings (TKO) revenue becomes net income?

For TTM through Q1 2026, TKO Group Holdings turned $5.06B of revenue into $226M of net income — a net margin of 4.5%. The waterfall shows where the rest goes: cost of revenue, operating expenses, non-operating items, and taxes.

What are TKO Group Holdings (TKO) gross, operating, and net margins?

For TTM through Q1 2026, TKO Group Holdings reported a gross margin of 51.5%, an operating margin of 20%, and a net margin of 4.5%. Each subtotal in the waterfall corresponds to one of these margins.

Why does TKO Group Holdings (TKO) 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.

TKO Group Holdings (TKO) Income Statement Waterfall

Revenue

$5.06B

Gross Margin

+51.5%

Operating Margin

+20.0%

Net Margin

+4.5%

Income statement waterfall for TKO Group Holdings (TKO) — TTM through Q1 2026

Net income: $226M

Margin breakdown for TKO Group Holdings (TKO) — TTM through Q1 2026

Line item	Amount	Running total
Revenue	$5.06B	$5.06B
Cost of Revenue	-$2.45B	$2.61B
Gross Profit	$2.61B	$2.61B
Operating Expenses	-$1.59B	$1.01B
Operating Income	$1.01B	$1.01B
Other Income / Expense	-$298M	$717M
Pre-tax Income	$717M	$717M
Income Tax	-$86.6M	$631M
Other Items	-$404M	$226M
Net Income	$226M	$226M

Revenue$5.06B
Cost of Revenue-$2.45B
Gross Profit$2.61B
Operating Expenses-$1.59B
Operating Income$1.01B
Other Income / Expense-$298M
Pre-tax Income$717M
Income Tax-$86.6M
Other Items-$404M
Net Income$226M

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