Revenue inflection has driven operating margin from a 30.3% trough in Q3 2025 to 39.1% in Q3 2026, though reported pricing power warrants verification given prior year-over-year revenue declines of up to -7.0%.
CSX Corporation (CSX) annual income statement — 30-year revenue, gross profit & net income history
| Metric | TTM | Dec'25 | Dec'24 | Dec'23 | Dec'22 | Dec'21 | Dec'20 | Dec'19 | Dec'18 | Dec'17 | Dec'16 | Dec'15 | Dec'14 | Dec'13 | Dec'12 | Dec'11 | Dec'10 | Dec'09 | Dec'08 | Dec'07 | Dec'06 | Dec'05 | Dec'04 | Dec'03 | Dec'02 | Dec'01 | Dec'00 | Dec'99 | Dec'98 | Dec'97 | Dec'96 |
|---|
| Sales/Revenue | 14.94B | 14.09B | 14.54B | 14.66B | 14.85B | 12.52B | 10.58B | 11.94B | 12.25B | 11.41B | 11.07B | 11.81B | 12.67B | 12.03B | 11.76B | 11.74B | 10.64B | 9.04B | 11.26B | 10.03B | 9.57B | 8.62B | 8.02B | 7.79B | 8.15B | 8.11B | 8.19B | 10.81B | 9.9B | 10.62B | 10.54B |
| Revenue Growth % | 5.8% | -3.08% | -0.8% | -1.32% | 18.62% | 18.32% | -11.34% | -2.56% | 7.38% | 3.06% | -6.28% | -6.77% | 5.35% | 2.3% | 0.11% | 10.41% | 17.64% | -19.67% | 12.21% | 4.85% | 11% | 7.46% | 2.91% | -4.4% | 0.52% | -0.99% | -24.23% | 9.22% | -6.81% | 0.81% | 0.3% |
| Cost of Goods Sold | 9.5B | 9.41B | 9.03B | 9.05B | 9.14B | 7.23B | 6.14B | 7.08B | 7.51B | 7.55B | 7.7B | 8.09B | 8.88B | 8.46B | 8.39B | 8.2B | 7.43B | 6.72B | 7.61B | 7.02B | 6.95B | 6.53B | 6.47B | 3.47B | 4.09B | 4.16B | 4.68B | 4.16B | 6.12B | 6.3B | 6.38B |
| COGS % of Revenue | - | 66.75% | 62.13% | 61.77% | 61.52% | 57.76% | 58.03% | 59.35% | 61.3% | 66.15% | 69.52% | 68.45% | 70.09% | 70.31% | 71.39% | 69.85% | 69.87% | 74.33% | 67.63% | 69.98% | 72.68% | 75.81% | 80.69% | 44.49% | 50.18% | 51.34% | 57.15% | 38.52% | 61.84% | 59.34% | 60.6% |
| Gross Profit | 5.44B | 4.68B | 5.51B | 5.6B | 5.72B | 5.29B | 4.44B | 4.85B | 4.74B | 3.86B | 3.37B | 3.73B | 3.79B | 3.57B | 3.36B | 3.54B | 3.21B | 2.32B | 3.64B | 3.01B | 2.61B | 2.08B | 1.57B | 4.33B | 4.06B | 3.95B | 3.51B | 6.65B | 3.78B | 4.32B | 4.15B |
| Gross Margin % | 36.4% | 33.25% | 37.87% | 38.23% | 38.48% | 42.24% | 41.97% | 40.65% | 38.7% | 33.85% | 30.48% | 31.55% | 29.91% | 29.69% | 28.61% | 30.15% | 30.13% | 25.67% | 32.37% | 30.02% | 27.32% | 24.19% | 19.56% | 55.51% | 49.82% | 48.66% | 42.85% | 61.48% | 38.16% | 40.66% | 39.4% |
| Gross Profit Growth % | - | -14.91% | -1.73% | -1.98% | 8.07% | 19.07% | -8.45% | 2.34% | 22.76% | 14.46% | -9.45% | -1.66% | 6.13% | 6.16% | -5.03% | 10.48% | 38.09% | -36.29% | 20.99% | 15.23% | 25.32% | 32.89% | -63.73% | 6.53% | 2.91% | 12.42% | -47.19% | 75.99% | -12.53% | 4.02% | 0.63% |
| Operating Expenses | 0 | 164M | 140M | 136M | -238M | 130M | 107M | 107M | 98M | 114M | 100M | 142M | 176M | 140M | 991M | 137M | 134M | 36M | 880M | 782M | 698M | 746M | 557M | 3.7B | 7.63B | 2.84B | -191M | 9.75B | 10.02B | 10.15B | 10.16B |
| OpEx % of Revenue | - | 1.16% | 0.96% | 0.93% | -1.6% | 1.04% | 1.01% | 0.9% | 0.8% | 1% | 0.9% | 1.2% | 1.39% | 1.16% | 8.43% | 1.17% | 1.26% | 0.4% | 7.82% | 7.8% | 7.3% | 8.66% | 6.95% | 47.48% | 93.55% | 35.01% | -2.33% | 90.16% | 101.27% | 95.56% | 96.4% |
| Selling, General & Admin | 0 | 0 | -50M | -29M | -79M | -64M | -42M | -43M | -38M | -32M | 24M | 0 | 0 | 0 | 0 | 3.07B | 2.96B | 2.63B | 2.96B | 2.99B | 2.93B | 3.44B | 557M | 993M | 3.5B | 3.57B | 3.56B | 1.49B | 4.24B | 4.34B | 4.3B |
| SG&A % of Revenue | - | - | -0.34% | -0.2% | -0.53% | -0.51% | -0.4% | -0.36% | -0.31% | -0.28% | 0.22% | - | - | - | - | 26.17% | 27.8% | 29.08% | 26.25% | 29.77% | 30.63% | 39.9% | 6.95% | 12.74% | 42.91% | 44% | 43.5% | 13.79% | 42.86% | 40.83% | 40.85% |
| Research & Development | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| R&D % of Revenue | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - |
| Other Operating Expenses | 0 | 164M | 190M | 165M | -159M | 194M | 149M | 150M | 136M | 146M | 76M | 142M | 176M | 140M | 991M | -2.94B | -2.82B | -2.59B | -2.08B | -2.2B | -2.23B | -2.69B | 0 | 2.71B | 4.13B | -729M | -3.75B | 8.26B | 5.78B | 5.81B | 5.85B |
| Operating Income | 5.44B | 4.52B | 5.37B | 5.47B | 5.95B | 5.16B | 4.33B | 4.75B | 4.64B | 3.75B | 3.27B | 3.58B | 3.61B | 3.43B | 3.36B | 3.4B | 3.07B | 2.29B | 2.76B | 2.23B | 1.92B | 1.34B | 1.01B | 626M | 1.13B | 957M | 805M | 608M | 1.16B | 1.58B | 1.52B |
| Operating Margin % | 36.4% | 32.08% | 36.91% | 37.3% | 40.09% | 41.2% | 40.96% | 39.75% | 37.9% | 32.85% | 29.58% | 30.34% | 28.52% | 28.52% | 28.61% | 28.99% | 28.87% | 25.27% | 24.55% | 22.22% | 20.02% | 15.54% | 12.62% | 8.03% | 13.82% | 11.8% | 9.83% | 5.62% | 11.72% | 14.9% | 14.45% |
| Operating Income Growth % | - | -15.75% | -1.85% | -8.18% | 15.41% | 19.01% | -8.64% | 2.2% | 23.88% | 14.48% | -8.65% | -0.8% | 5.34% | 1.99% | -1.2% | 10.84% | 34.4% | -17.3% | 23.96% | 16.4% | 43.02% | 32.31% | 61.66% | -44.45% | 17.76% | 18.88% | 32.4% | -47.59% | -26.72% | 4.01% | 29.86% |
| EBITDA | 7.08B | 6.2B | 7.02B | 7.07B | 7.46B | 6.58B | 5.72B | 6.09B | 5.97B | 5.06B | 4.58B | 4.79B | 4.76B | 4.53B | 4.42B | 4.38B | 4.02B | 3.19B | 3.68B | 3.12B | 2.78B | 2.17B | 1.74B | 1.27B | 1.78B | 1.58B | 1.41B | 1.23B | 1.79B | 2.27B | 2.14B |
| EBITDA Margin % | 47.4% | 44% | 48.31% | 48.26% | 50.2% | 52.54% | 54.03% | 51.05% | 48.77% | 44.38% | 41.33% | 40.57% | 37.6% | 37.7% | 37.61% | 37.3% | 37.78% | 35.32% | 32.71% | 31.1% | 29.08% | 25.2% | 21.72% | 16.28% | 21.79% | 19.47% | 17.15% | 11.37% | 18.08% | 21.38% | 20.33% |
| EBITDA Growth % | 12.06% | -11.72% | -0.71% | -5.12% | 13.33% | 15.06% | -6.17% | 2.01% | 17.99% | 10.67% | -4.53% | 0.59% | 5.07% | 2.53% | 0.96% | 9.01% | 25.84% | -13.26% | 18.02% | 12.11% | 28.08% | 24.68% | 37.27% | -28.55% | 12.48% | 12.38% | 14.32% | -31.34% | -21.18% | 6.02% | 20.88% |
| D&A (Non-Cash Add-back) | 1.64B | 1.68B | 1.66B | 1.61B | 1.5B | 1.42B | 1.38B | 1.35B | 1.33B | 1.31B | 1.3B | 1.21B | 1.15B | 1.1B | 1.06B | 976M | 947M | 908M | 918M | 890M | 867M | 833M | 730M | 643M | 649M | 622M | 600M | 621M | 630M | 688M | 620M |
| EBIT | 5.53B | 4.59B | 5.39B | 5.64B | 6.09B | 5.67B | 4.38B | 5.05B | 4.94B | 3.69B | 3.32B | 3.68B | 3.59B | 3.48B | 3.53B | 3.44B | 3.1B | 2.32B | 2.67B | 2.35B | 2.26B | 1.49B | 1.09B | -3.16B | -4.25B | -3.88B | -6.69B | -9.23B | -7.23B | -6.81B | -6.87B |
| Net Interest Income | -844M | -844M | -747M | -730M | -700M | -715M | -737M | -689M | -607M | -533M | -569M | -538M | -540M | -554M | -561M | -547M | -551M | -547M | -482M | -362M | -353M | -397M | -414M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Interest Income | 0 | 0 | 85M | 79M | 42M | 7M | 17M | 48M | 32M | 13M | 10M | 6M | 5M | 8M | 5M | 5M | 6M | 11M | 37M | 55M | 41M | 38M | 21M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Interest Expense | 844M | 844M | 832M | 809M | 742M | 722M | 754M | 737M | 639M | 546M | 579M | 544M | 545M | 562M | 566M | 552M | 557M | 558M | 519M | 417M | 394M | 435M | 435M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Other Income/Expense | -752M | -752M | -811M | -638M | -609M | -208M | -708M | -429M | -339M | -606M | -533M | -446M | -569M | -508M | -399M | -516M | -525M | -524M | -617M | -297M | -53M | -284M | -359M | -361M | -296M | -452M | -472M | -434M | -387M | -400M | -206M |
| Pretax Income | 4.69B | 3.77B | 4.55B | 4.83B | 5.34B | 4.95B | 3.63B | 4.32B | 4.3B | 3.14B | 2.74B | 3.14B | 3.04B | 2.92B | 2.96B | 2.89B | 2.55B | 1.76B | 2.15B | 1.93B | 1.86B | 1.05B | 653M | 265M | 723M | 448M | 277M | 139M | 773M | 1.18B | 1.32B |
| Pretax Margin % | 31.37% | 26.75% | 31.33% | 32.95% | 35.99% | 39.54% | 34.27% | 36.16% | 35.13% | 27.54% | 24.76% | 26.57% | 24.03% | 24.3% | 25.21% | 24.59% | 23.94% | 19.48% | 19.07% | 19.26% | 19.46% | 12.24% | 8.14% | 3.4% | 8.87% | 5.52% | 3.38% | 1.29% | 7.81% | 11.14% | 12.49% |
| Income Tax | 1.11B | 880M | 1.08B | 1.16B | 1.23B | 1.17B | 862M | 985M | 995M | -2.33B | 1.03B | 1.17B | 1.12B | 1.06B | 1.1B | 1.07B | 983M | 624M | 781M | 706M | 531M | 316M | 219M | 76M | 256M | 155M | 91M | 88M | 236M | 384M | 461M |
| Effective Tax Rate % | 23.6% | 23.35% | 23.82% | 24.04% | 23.03% | 23.63% | 23.77% | 22.82% | 23.12% | -74.12% | 37.47% | 37.28% | 36.7% | 36.21% | 37.28% | 36.91% | 38.61% | 35.43% | 36.39% | 36.54% | 28.52% | 29.95% | 33.54% | 28.68% | 35.41% | 34.6% | 32.85% | 63.31% | 30.53% | 32.46% | 35.03% |
| Net Income | 3.58B | 2.89B | 3.47B | 3.67B | 4.11B | 3.78B | 2.77B | 3.33B | 3.31B | 5.47B | 1.71B | 1.97B | 1.93B | 1.86B | 1.86B | 1.82B | 1.56B | 1.13B | 1.36B | 1.34B | 1.31B | 717M | 339M | 246M | 424M | 293M | 565M | 2M | 537M | 799M | 855M |
| Net Margin % | 23.97% | 20.5% | 23.87% | 25.03% | 27.7% | 30.19% | 26.13% | 27.9% | 27% | 47.95% | 15.48% | 16.65% | 15.2% | 15.51% | 15.82% | 15.52% | 14.7% | 12.47% | 12.13% | 13.32% | 13.69% | 8.32% | 4.23% | 3.16% | 5.2% | 3.61% | 6.9% | 0.02% | 5.43% | 7.52% | 8.12% |
| Net Income Growth % | 23.4% | -16.74% | -5.4% | -10.84% | 8.81% | 36.74% | -16.99% | 0.7% | -39.52% | 219.32% | -12.91% | 2.13% | 3.27% | 0.27% | 2.03% | 16.63% | 38.69% | -17.44% | 2.17% | 1.98% | 82.71% | 111.5% | 37.8% | -41.98% | 44.71% | -48.14% | 28150% | -99.63% | -32.79% | -6.55% | 38.35% |
| Net Income (Continuing) | 3.58B | 2.89B | 3.47B | 3.67B | 4.11B | 3.78B | 2.77B | 3.33B | 3.31B | 5.47B | 1.71B | 1.97B | 1.93B | 1.86B | 1.86B | 1.82B | 1.56B | 1.14B | 1.36B | 1.23B | 1.33B | 739M | 434M | 189M | 410M | 243M | 129M | 32M | 520M | 799M | 855M |
| Discontinued Operations | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 110M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Minority Interest | 6M | 5M | 5M | 5M | 10M | 10M | 9M | 15M | 17M | 16M | 15M | 16M | 24M | 21M | 14M | 13M | 14M | 14M | 0 | 0 | 89M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| EPS (Diluted) | 1.93 | 1.54 | 1.79 | 1.82 | 1.95 | 1.68 | 1.20 | 1.39 | 1.28 | 2.00 | 0.60 | 0.67 | 0.64 | 0.61 | 0.60 | 0.57 | 0.45 | 0.32 | 0.37 | 0.33 | 0.31 | 0.28 | 0.08 | 0.06 | 0.11 | 0.06 | 0.03 | 0.00 | 0.14 | 0.21 | 0.22 |
| EPS Growth % | 26.14% | -13.97% | -1.65% | -6.67% | 16.07% | 40% | -13.67% | 8.59% | -36% | 233.33% | -10.45% | 4.69% | 4.92% | 1.67% | 5.26% | 26.67% | 40.63% | -13.51% | 12.12% | 6.45% | 10.71% | 231.75% | 33.33% | -42.45% | 75.16% | 85.25% | - | -99.64% | -33.33% | -4.55% | 37.5% |
| EPS (Basic) | - | 1.54 | 1.79 | 1.83 | 1.95 | 1.68 | 1.20 | 1.39 | 1.29 | 2.00 | 0.60 | 0.67 | 0.64 | 0.61 | 0.60 | 0.57 | 0.46 | 0.32 | 0.38 | 0.35 | 0.33 | 0.29 | 0.09 | 0.06 | 0.11 | 0.06 | 0.03 | 0.00 | 0.14 | 0.21 | 0.22 |
| Diluted Shares Outstanding | 1.85B | 1.86B | 1.94B | 2.01B | 2.14B | 2.25B | 2.3B | 2.39B | 2.58B | 2.74B | 2.84B | 2.95B | 3.01B | 3.06B | 3.12B | 3.27B | 3.46B | 3.56B | 3.68B | 4.03B | 4.19B | 4.1B | 4.05B | 3.86B | 4.02B | 4.67B | 3.81B | 3.83B | 3.86B | 3.87B | 3.89B |
| Basic Shares Outstanding | 1.85B | 1.86B | 1.94B | 2.01B | 2.14B | 2.25B | 2.3B | 2.39B | 2.57B | 2.73B | 2.84B | 2.95B | 3B | 3.06B | 3.11B | 3.25B | 3.43B | 3.53B | 3.61B | 3.87B | 3.96B | 3.9B | 3.87B | 3.85B | 3.83B | 4.59B | 3.8B | 3.79B | 3.8B | 3.78B | 3.85B |
| Dividend Payout Ratio | - | 33.64% | 26.8% | 24.05% | 20.71% | 22.19% | 28.82% | 22.91% | 22.7% | 12.94% | 39.7% | 34.88% | 32.66% | 32.17% | 30% | 26.33% | 23.8% | 30.61% | 22.56% | 17.29% | 11.07% | 12.97% | 25.37% | 34.96% | 20.28% | 58.36% | 46.37% | 13100% | 48.79% | 29.41% | 26.08% |
Quick answers to the most common questions about buying CSX stock.
For fiscal year 2025, CSX Corporation (CSX) reported total revenue of $14.09B. This represents a 33.8% increase compared to $10.54B in 1996.
CSX Corporation (CSX) is profitable, generating $2.89B in net income for the fiscal year ending 2025 with a net profit margin of 20.5%.
CSX Corporation (CSX) reported an operating income of $4.52B, resulting in an operating profit margin of 32.1%. This margin reflects the operational efficiency of the business before interest and taxes.
CSX Corporation (CSX) generated $4.68B in gross profit for the year, representing a gross profit margin of 33.2%. This demonstrates the company's core pricing power and production efficiency.
Key Metrics
Top Statement Risk
Revenue growth masking pricing pressure
Metrics are mathematically derived from official filings.
Revenue Inflection Gains Momentum
CSX's revenue trajectory has swung decisively from contraction to double-digit expansion, with Q3 2026 posting 12.0% YoY growth on $4.0B in revenue — a dramatic reversal from the -7.0% trough seen in Q1 2025, suggesting a cyclical recovery in Eastern industrial freight demand is taking hold.
The sequential acceleration from 1.7% growth in Q1 2026 to 10.1% in Q2 and 12.0% in Q3 2026 marks the strongest sustained expansion in the observed ten-quarter window. This inflection appears driven by a recovery in industrial production across the 23 states east of the Mississippi, where CSX's Merchandise and Intermodal segments are most sensitive to manufacturing output. However, the recent intelligence flag of a volume-revenue disconnect suggests part of the headline growth may be attributable to fuel surcharge mechanics or favorable mix rather than pure pricing power, and investors should monitor whether organic growth durability holds if energy prices normalize.
Operating Margins Approach Western Peer Levels
CSX's operating margin expanded to 39.1% in Q3 2026, up from the 30.3-31.6% range seen throughout 2025, approaching peer Union Pacific's 40.1% and significantly exceeding Norfolk Southern's 32.9% — suggesting the company's Precision Scheduled Railroading discipline is compounding revenue gains into outsized profitability.
The margin expansion appears structural rather than cyclical: even during the 2025 revenue contraction, CSX maintained operating margins above 30%, indicating effective cost discipline even in a downturn. The gap between CSX's 39.1% and NSC's 32.9% is particularly telling given both companies operate the Eastern duopoly and share similar geographic constraints, implying CSX is extracting more operating leverage from its network. That said, the 100% gross margin reading in Q2 2026 and missing COGS data across several quarters introduce uncertainty into the trend, and the sustainability of this margin profile will depend on whether train velocity and terminal dwell improvements — the KPIs underpinning PSR efficiency — remain intact as volumes scale.
Fixed-Cost Model Amplifies Recovery Upside
Operating income surged to $1.6B on $4.0B of revenue in Q3 2026, a $500M increase from the $1.1B recorded in Q4 2025 on comparable revenue, demonstrating that CSX's high fixed-cost railroad infrastructure is now converting incremental volume into disproportionate profit as network utilization improves.
The operating leverage is stark: revenue grew roughly 12% year-over-year in Q3 2026, yet operating income grew approximately 45% from the $1.1B level a year prior, indicating that variable cost management — crew starts, fuel consumption, and terminal labor — is scaling well below the rate of top-line expansion. Net income margin of 26.2% also stands above the 20.5% Q4 2025 level, suggesting the leverage flows cleanly through the P&L rather than being absorbed by non-operating items. However, the debt-to-equity ratio of 1.47 flagged in the intelligence layer is notably elevated for the sector and may constrain the company's ability to sustain capital returns to shareholders if a renewed industrial slowdown compresses cash generation.
Q1 2026 Marks Operational Turning Point
The 2026Q1 period appears to be the critical inflection point where CSX broke out of a four-quarter revenue contraction streak, posting 1.7% growth alongside EPS of $0.43 — a 26.5% increase year-over-year — signaling that cost restructuring and volume normalization converged to reset the earnings trajectory.
Prior to Q1 2026, CSX experienced four consecutive quarters of negative revenue growth ranging from -0.9% to -7.0%, with EPS growth turning sharply negative (-24.4% in Q1 2025, -19.6% in Q3 2025). The pivot in Q1 2026 set the stage for the subsequent acceleration, with EPS reaching $0.57 in Q3 2026 — a 54.1% year-over-year increase — suggesting the company emerged from the trough with significantly improved operating efficiency. The lasting impact of this inflection appears to be a higher-margin revenue mix, as the company now operates with structurally lower costs from its prior restructuring efforts while benefiting from recovering demand, though the durability of this shift remains dependent on macroeconomic conditions in the Eastern industrial corridor.
Pricing Narrative Warrants Skepticism
Despite reported volume growth in recent quarters, CSX's revenue declined 3.1% year-over-year at certain points in 2025, suggesting pricing power may be weaker than headline operating margins imply, and the anomalous gross margin readings — including an apparent 100% margin in Q2 2026 — raise questions about data completeness and reported earnings quality.
The divergence between volume growth and revenue contraction flagged in recent intelligence could indicate that fuel surcharge revenue, which behaves as a cost-recovery mechanism, is masking underlying pricing erosion in the Merchandise segment — the segment investors rely on for margin durability. Additionally, the accounting nuance of gains on real estate sales frequently inflating CSX's operating income means the 39.1% margin in Q3 2026 may overstate core rail profitability; normalizing for these non-recurring items could reveal a more modest margin profile closer to the mid-30s range observed during the 2024-2025 period. Finally, the structural decline in domestic coal-fired power generation represents a slow-burning headwind that export coal volumes may not fully offset, potentially capping long-term revenue growth well below the 12% rate currently observed.
EPS Growth Outpaces Revenue on Low SBC
CSX reported zero stock-based compensation across all ten quarters and diluted EPS of $0.57 in Q3 2026 — a 54.1% increase year-over-year on only 12.0% revenue growth — suggesting earnings expansion is driven by genuine operating improvement rather than financial engineering or dilution effects.
The absence of SBC is consistent with CSX's identity as a mature industrial railroad where compensation is predominantly cash-based, meaning the reported net income of $1.1B is not being inflated by non-cash charges that typically erode earnings quality in technology or consumer sectors. The net margin expansion from 19.3% in Q3 2025 to 26.2% in Q3 2026 appears to reflect a combination of operating leverage and potentially lower non-operating costs, though the data does not disclose interest expense or tax rate trends to fully confirm this. Investors should note that the quarterly tax rate implications embedded in the net margin trajectory are not visible in the provided data, and the significant swings in quarterly net income ($646M to $1.1B range) warrant closer examination of any one-time items that may be distorting the underlying earnings trend.