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 Air Products and Chemicals (APD) revenue becomes net income?

For TTM through Q1 2026, Air Products and Chemicals turned $12.5B of revenue into $2.11B of net income — a net margin of 16.9%. The waterfall shows where the rest goes: cost of revenue, operating expenses, non-operating items, and taxes.

What are Air Products and Chemicals (APD) gross, operating, and net margins?

For TTM through Q1 2026, Air Products and Chemicals reported a gross margin of 32%, an operating margin of 18.4%, and a net margin of 16.9%. Each subtotal in the waterfall corresponds to one of these margins.

Why does Air Products and Chemicals (APD) 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.

Air Products and Chemicals (APD) Income Statement Waterfall

Revenue

$12.5B

Gross Margin

+32.0%

Operating Margin

+18.4%

Net Margin

+16.9%

Income statement waterfall for Air Products and Chemicals (APD) — TTM through Q1 2026

Net income: $2.11B

Margin breakdown for Air Products and Chemicals (APD) — TTM through Q1 2026

Line item	Amount	Running total
Revenue	$12.5B	$12.5B
Cost of Revenue	-$8.48B	$3.99B
Gross Profit	$3.99B	$3.99B
Operating Expenses	-$1.69B	$2.29B
Operating Income	$2.29B	$2.29B
Other Income / Expense	$452M	$2.75B
Pre-tax Income	$2.75B	$2.75B
Income Tax	-$589M	$2.16B
Other Items	-$50.2M	$2.11B
Net Income	$2.11B	$2.11B

Revenue$12.5B
Cost of Revenue-$8.48B
Gross Profit$3.99B
Operating Expenses-$1.69B
Operating Income$2.29B
Other Income / Expense$452M
Pre-tax Income$2.75B
Income Tax-$589M
Other Items-$50.2M
Net Income$2.11B

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