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 Avery Dennison (AVY) revenue becomes net income?

For TTM through Q1 2026, Avery Dennison turned $9.01B of revenue into $690M of net income — a net margin of 7.7%. The waterfall shows where the rest goes: cost of revenue, operating expenses, non-operating items, and taxes.

What are Avery Dennison (AVY) gross, operating, and net margins?

For TTM through Q1 2026, Avery Dennison reported a gross margin of 28.8%, an operating margin of 12.4%, and a net margin of 7.7%. Each subtotal in the waterfall corresponds to one of these margins.

Why does Avery Dennison (AVY) 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.

Avery Dennison (AVY) Income Statement Waterfall

Revenue

$9.01B

Gross Margin

+28.8%

Operating Margin

+12.4%

Net Margin

+7.7%

Income statement waterfall for Avery Dennison (AVY) — TTM through Q1 2026

Net income: $690M

Margin breakdown for Avery Dennison (AVY) — TTM through Q1 2026

Line item	Amount	Running total
Revenue	$9.01B	$9.01B
Cost of Revenue	-$6.42B	$2.59B
Gross Profit	$2.59B	$2.59B
Operating Expenses	-$1.47B	$1.12B
Operating Income	$1.12B	$1.12B
Other Income / Expense	-$183M	$939M
Pre-tax Income	$939M	$939M
Income Tax	-$249M	$690M
Net Income	$690M	$690M

Revenue$9.01B
Cost of Revenue-$6.42B
Gross Profit$2.59B
Operating Expenses-$1.47B
Operating Income$1.12B
Other Income / Expense-$183M
Pre-tax Income$939M
Income Tax-$249M
Net Income$690M

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