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 Baxter International (BAX) revenue becomes net income?

For TTM through Q1 2026, Baxter International turned $11.3B of revenue into -$1.1B of net income — a net margin of -9.7%. The waterfall shows where the rest goes: cost of revenue, operating expenses, non-operating items, and taxes.

What are Baxter International (BAX) gross, operating, and net margins?

For TTM through Q1 2026, Baxter International reported a gross margin of 30.1%, an operating margin of -2.7%, and a net margin of -9.7%. Each subtotal in the waterfall corresponds to one of these margins.

Why does Baxter International (BAX) 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.

Baxter International (BAX) Income Statement Waterfall

Revenue

$11.3B

Gross Margin

+30.1%

Operating Margin

-2.7%

Net Margin

-9.7%

Income statement waterfall for Baxter International (BAX) — TTM through Q1 2026

Net income: -$1.1B

Margin breakdown for Baxter International (BAX) — TTM through Q1 2026

Line item	Amount	Running total
Revenue	$11.3B	$11.3B
Cost of Revenue	-$7.91B	$3.41B
Gross Profit	$3.41B	$3.41B
Operating Expenses	-$3.71B	-$300M
Operating Income	-$300M	-$300M
Other Income / Expense	-$208M	-$508M
Pre-tax Income	-$508M	-$508M
Income Tax	-$473M	-$981M
Other Items	-$117M	-$1.1B
Net Loss	-$1.1B	-$1.1B

Revenue$11.3B
Cost of Revenue-$7.91B
Gross Profit$3.41B
Operating Expenses-$3.71B
Operating Income-$300M
Other Income / Expense-$208M
Pre-tax Income-$508M
Income Tax-$473M
Other Items-$117M
Net Loss-$1.1B

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