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 Upwork (UPWK) revenue becomes net income?

For TTM through Q1 2026, Upwork turned $791M of revenue into $109M of net income — a net margin of 13.8%. The waterfall shows where the rest goes: cost of revenue, operating expenses, non-operating items, and taxes.

What are Upwork (UPWK) gross, operating, and net margins?

For TTM through Q1 2026, Upwork reported a gross margin of 77.5%, an operating margin of 15.6%, and a net margin of 13.8%. Each subtotal in the waterfall corresponds to one of these margins.

Why does Upwork (UPWK) 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.

Upwork (UPWK) Income Statement Waterfall

Revenue

$791M

Gross Margin

+77.5%

Operating Margin

+15.6%

Net Margin

+13.8%

Income statement waterfall for Upwork (UPWK) — TTM through Q1 2026

Net income: $109M

Margin breakdown for Upwork (UPWK) — TTM through Q1 2026

Line item	Amount	Running total
Revenue	$791M	$791M
Cost of Revenue	-$178M	$613M
Gross Profit	$613M	$613M
Operating Expenses	-$490M	$123M
Operating Income	$123M	$123M
Other Income / Expense	$22.5M	$146M
Pre-tax Income	$146M	$146M
Income Tax	-$36.7M	$109M
Net Income	$109M	$109M

Revenue$791M
Cost of Revenue-$178M
Gross Profit$613M
Operating Expenses-$490M
Operating Income$123M
Other Income / Expense$22.5M
Pre-tax Income$146M
Income Tax-$36.7M
Net Income$109M

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