Bitget Stock Earnings Series: How to Read an Income Statement

An income statement (also known as the profit-and-loss statements) is one of the three core financial statements of a company. It reflects how much money a company earned or lost during a specific period (usually a quarter or a year). On the Bitget platform, if you trade U.S. stock perps, tokenized stocks, or related CFD products, you may not directly hold the underlying shares. However, understanding the company's income statement is still very important because it directly affects the long-term direction of the stock price and your trading decisions (such as directional opportunities during earnings season).

This article explains how to read the income statement of U.S. companies and how to identify potential opportunities for directional trading decisions.

1. How to understand the income statement of U.S. companies

A standard U.S. income statement (Consolidated Statement of Income) follows a step-by-step deduction structure from top to bottom. The lower you go, the "cleaner" the profit figure becomes, reflecting profitability at different stages.

Recommended reading order:

1. Revenue/Net sales: How much the company earned from selling products or services (top line, growth is most important).

2. Cost of revenue/Cost of Goods Sold (COGS): The direct costs required to produce or deliver the products or services.

3. Gross profit: Revenue − Cost of revenue.

4. Gross margin: (Gross profit ÷ revenue) × 100%.

5. Operating expenses: R&D (research and development), SG&A (sales, general, and administrative).

6. Operating Income / EBIT (Earnings Before Interest and Taxes): Gross profit − Operating expenses.

7. Other income/Expenses: Interest, investment income, and other items.

8. Income before tax: Operating income + Other income − Interest.

9. Net income: Income before tax − Tax.

Application context for Bitget U.S. stocks:

• During earnings season, you can focus on whether revenue and EPS (earnings per share = net income ÷ weighted average shares outstanding) exceed expectations. This is a key trigger for significant price movements in U.S. stock perps like NVDA and TSLA.

• The Bitget platform does not directly provide a complete income statement, but you can view it on TradingView, Yahoo Finance, or the company's official website (the Bitget market page often features earnings event alerts).

2. How to calculate profit? (Key profit metrics)

Simple example (Hypothetical company):

• Revenue: $10 billion.

• COGS: $4 billion → Gross profit: $6 billion, gross margin: 60%.

• Operating expenses: $3.5 billion → Operating income: $2.5 billion.

• Taxes and fees: $0.5 billion → Net income: $2 billion, net margin: 20%.

In Bitget U.S. stock trading, if you see that a company like Apple (AAPL) has a service segment gross margin consistently above 70% while hardware margin drops to around 35%, you'll understand why the market values the growing share of service revenue.

3. How to identify companies with lasting competitiveness: three key points in the income statement

To find companies with a strong "moat" and long-term profitability, the income statement is often more direct than the balance sheet Focus on three key indicators:

• Sustainable revenue growth (ideally 10%+ APR for 5–10 consecutive years)

• Check for consistent year-over-year (YoY) and quarter-over-quarter (QoQ) positive growth.

• Revenue decline in a declining industry (e.g., traditional retail) is a major warning sign.

• Stable or improving gross profit and gross margin (best indicator of competitiveness and pricing power)

• Software/SaaS/Platform companies: Gross margin typically 70%–90%.

• Consumer goods/Luxury: 50%–70%.

• Hardware/Manufacturing: 20%–40%.

• If the margin is below the industry average and continues to decline, it may indicate stronger competition or loss of cost control. Treat this with caution.

• Gross margin stability over 5+ Years (one of the strongest signs of a moat)

• If a company's gross margin has fluctuated by no more than ±5% over the past 5–10 years, it suggests a strong competitive barriers (brand, technology, network effects, economies of scale, etc.).

• Examples:

• Apple: Over the past 10 years, gross margin has mostly ranged between 37% and 44%, showing strong pricing power.

• NVIDIA: Gross margin was around 50% before the AI boom and rose to over 70% afterward, reflecting the company's strong technology moat.

• Many traditional manufacturing companies show long-term declines in gross margin, which may signal gradual marginalization.

Summary: Sustainable revenue growth + high and stable gross margin for over 5 years ≈ The company likely possesses long-term profitability, making it potentially suitable for long-biased grids or directional positions on Bitget.

4. Practical case study (using NVIDIA as an example, FY2025–2026)

Case: NVIDIA (NVDA)

• Revenue: Grew from $27 billion in FY2023 to $60 billion, with explosive growth to $120 billion+ in FY2025.

• Gross margin: Increased from around 50% to 73%, reaching 75%+ in FY2025 (continuous improvement, extremely strong pricing power in AI chips).

• Net income: Grew from billions to tens of billions, with net margin also significantly increasing.

Conclusion: Fits the "high revenue growth + consistently rising gross margin" profile, indicating extremely strong sustainable competitiveness.

Practical trading guidance on Bitget (For reference only – Trading involves risk):

1. Observation before earnings:

• If the market expects 50%+ revenue growth and gross margin to remain around 75%, you might consider a light long position in the NVDAUSDT perpetual futures (5–10x leverage) in advance.

2. Earnings beat scenario (the most common large moves):

• If actual revenue, gross margin, and EPS significantly exceed expectations, you may consider entering a long position quickly, targeting an 8%–20% daily price move.

• Bitget suggestion: set a trailing stop to lock in profits or gradually reduce positions at higher levels.

3. Grid bot (more stable during consolidation):

• If the price moves into a high-level consolidation after earnings (for example, in the $180–$220 range):

• Open a long grid: Set lower limit at 170, upper limit at 230, with 15–25 grids and 5–10x leverage.

• Use Bitget's grid trading bot to automatically buy low and sell high, accumulating profits from intraday fluctuations.

4. Warning signs for reversal

• If gross margin suddenly drops below 65% in a quarter, or revenue growth slows significantly, consider reducing positions or taking a light short position (be mindful of futures funding rates).

Conclusion

After understanding the income statement of U.S. stock earnings, you will no longer rely only on candlestick charts or news when trading Bitget U.S. stock perps or tokenized stocks. You'll be able to judge directional bias based on the underlying profitability, leading to more informed decisions. We wish you successful trading on Bitget and hope you capture the next NVIDIA-style opportunity!

Disclaimer

Cryptocurrency investments carry significant risk. Please make decisions based on your personal financial situation and risk tolerance, and diversify your asset allocation wisely. This content is for reference only and does not constitute investment advice. Exercise strict risk control, as market volatility can be extremely high.