The Nvidia income statement Sankey, explained (and how to make your own)

When Nvidia reports, the income statement Sankey that circulates on X and LinkedIn looks different from most companies' — and that difference is the whole story. Where a typical hardware business shows a thick cost-of-sales ribbon eating most of revenue, Nvidia's data-center-driven results show the opposite: a comparatively slim cost ribbon and an enormous gross-profit stream flowing almost intact toward net income. Popularized by accounts like App Economy Insights, these charts turn a dense earnings release into one picture. Here's how to read Nvidia's, and how to build one for any company yourself.

A note on the numbers

The figures below are rounded, illustrative examples used to explain the shape of the chart — not official reported results. Nvidia's actual quarterly numbers vary and should be taken from its 10-Q, 10-K or investor relations page. Treat everything here as a teaching example, then plug in the real figures when you build your own.

How to read the Nvidia Sankey

Read it left to right. Revenue enters on the far left — for Nvidia, usually dominated by the Data Center segment (the AI accelerators and networking that drive the business), with Gaming, Professional Visualization and Automotive as thinner trunks. Those merge into Total revenue, and then the flow forks. Here's the striking part: only a modest ribbon peels off to Cost of sales. As a rounded illustration, imagine revenue of about $60B with cost of sales near $16B — that leaves roughly $44B of Gross profit continuing to the right, a gross margin somewhere around 73%. Visually, the surviving ribbon is far thicker than the cost that peeled away, which is the opposite of most manufacturers.

Gross profit then splits again. Operating expenses branch off — research and development, which is sizeable for Nvidia, plus selling, general and administrative — but even together they're small relative to that gross-profit trunk, so a wide Operating income continues. Provision for income taxes peels away in red, and what survives all the way to the right edge is Net income, drawn in green. Because so little was lost along the way, that net-income ribbon stays remarkably fat — in this rounded example, on the order of $30B-plus of the original $60B. In one image you can see why the market treats Nvidia's economics as exceptional: a huge share of every revenue dollar reaches the bottom line.

• Revenue enters left, dominated by Data Center with smaller segment trunks.
• Cost of sales forks off as a relatively thin ribbon — the tell of a high-margin business.
• R&D and SG&A branch from gross profit but leave a wide operating income.
• Taxes peel off in red; an unusually thick net income continues to the right in green.

What the shape tells you

Contrast this with the Apple Sankey, where cost of sales takes a much bigger bite. Nvidia's slim cost ribbon and heavy net-income stream are the visual signature of a company selling scarce, high-value chips with pricing power — little of revenue is consumed by the physical cost of goods. You don't have to compute the margin; the Sankey shows it as the ratio of ribbon widths. That's exactly why the format spread from finance Twitter into mainstream earnings coverage: proportion becomes something you feel rather than calculate.

How to make one for any company

You don't need to be App Economy Insights to build these. Grab any company's income statement from its 10-K or 10-Q — revenue segments, cost of sales, gross profit, R&D, SG&A, operating income, taxes and net income — and turn each line into a flow with a source, a target and an amount. Paste those figures straight in, or drop in a plain income-statement block and let the AI copilot infer the structure. Then apply the conventions that make the Nvidia chart readable: costs and taxes in red, net income in green, the revenue trunk neutral, and revenue split by segment to show the mix.

Export a crisp SVG for a deck or a PNG for a post, watermark-free on paid plans, and save it so next quarter is a two-minute update. Once you can read the ribbons, you can decode any company's earnings in seconds — and once you can build them, you can publish your own version of the Nvidia Sankey the minute the numbers drop, this time with the official figures in place of these rounded examples.