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 Best Buy Co. (BBY) revenue becomes net income?

For TTM through Q2 2026, Best Buy Co. turned $41.9B of revenue into $1.14B of net income — a net margin of 2.7%. The waterfall shows where the rest goes: cost of revenue, operating expenses, non-operating items, and taxes.

What are Best Buy Co. (BBY) gross, operating, and net margins?

For TTM through Q2 2026, Best Buy Co. reported a gross margin of 22.5%, an operating margin of 4.3%, and a net margin of 2.7%. Each subtotal in the waterfall corresponds to one of these margins.

Why does Best Buy Co. (BBY) 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.

Best Buy Co. (BBY) Income Statement Waterfall

Revenue

$41.9B

Gross Margin

+22.5%

Operating Margin

+4.3%

Net Margin

+2.7%

Income statement waterfall for Best Buy Co. (BBY) — TTM through Q2 2026

Net income: $1.14B

Margin breakdown for Best Buy Co. (BBY) — TTM through Q2 2026

Line item	Amount	Running total
Revenue	$41.9B	$41.9B
Cost of Revenue	-$32.4B	$9.43B
Gross Profit	$9.43B	$9.43B
Operating Expenses	-$7.64B	$1.78B
Operating Income	$1.78B	$1.78B
Other Income / Expense	-$220M	$1.56B
Pre-tax Income	$1.56B	$1.56B
Income Tax	-$420M	$1.14B
Net Income	$1.14B	$1.14B

Revenue$41.9B
Cost of Revenue-$32.4B
Gross Profit$9.43B
Operating Expenses-$7.64B
Operating Income$1.78B
Other Income / Expense-$220M
Pre-tax Income$1.56B
Income Tax-$420M
Net Income$1.14B

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