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 Texas Pacific Land (TPL) revenue becomes net income?

For TTM through Q1 2026, Texas Pacific Land turned $839M of revenue into $504M of net income — a net margin of 60%. The waterfall shows where the rest goes: cost of revenue, operating expenses, non-operating items, and taxes.

What are Texas Pacific Land (TPL) gross, operating, and net margins?

For TTM through Q1 2026, Texas Pacific Land reported a gross margin of 97.7%, an operating margin of 74.4%, and a net margin of 60%. Each subtotal in the waterfall corresponds to one of these margins.

Why does Texas Pacific Land (TPL) 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.

Texas Pacific Land (TPL) Income Statement Waterfall

Revenue

$839M

Gross Margin

+97.7%

Operating Margin

+74.4%

Net Margin

+60.0%

Income statement waterfall for Texas Pacific Land (TPL) — TTM through Q1 2026

Net income: $504M

Margin breakdown for Texas Pacific Land (TPL) — TTM through Q1 2026

Line item	Amount	Running total
Revenue	$839M	$839M
Cost of Revenue	-$19.3M	$820M
Gross Profit	$820M	$820M
Operating Expenses	-$195M	$624M
Operating Income	$624M	$624M
Other Income / Expense	$15.1M	$639M
Pre-tax Income	$639M	$639M
Income Tax	-$136M	$504M
Net Income	$504M	$504M

Revenue$839M
Cost of Revenue-$19.3M
Gross Profit$820M
Operating Expenses-$195M
Operating Income$624M
Other Income / Expense$15.1M
Pre-tax Income$639M
Income Tax-$136M
Net Income$504M

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