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 CVS Health (CVS) revenue becomes net income?

For TTM through Q1 2026, CVS Health turned $408B of revenue into $2.93B of net income — a net margin of 0.7%. The waterfall shows where the rest goes: cost of revenue, operating expenses, non-operating items, and taxes.

What are CVS Health (CVS) gross, operating, and net margins?

For TTM through Q1 2026, CVS Health reported a gross margin of 13.9%, an operating margin of 1.5%, and a net margin of 0.7%. Each subtotal in the waterfall corresponds to one of these margins.

Why does CVS Health (CVS) 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.

CVS Health (CVS) Income Statement Waterfall

Revenue

$408B

Gross Margin

+13.9%

Operating Margin

+1.5%

Net Margin

+0.7%

Income statement waterfall for CVS Health (CVS) — TTM through Q1 2026

Net income: $2.93B

Margin breakdown for CVS Health (CVS) — TTM through Q1 2026

Line item	Amount	Running total
Revenue	$408B	$408B
Cost of Revenue	-$351B	$56.6B
Gross Profit	$56.6B	$56.6B
Operating Expenses	-$50.6B	$5.97B
Operating Income	$5.97B	$5.97B
Other Income / Expense	-$2.51B	$3.46B
Pre-tax Income	$3.46B	$3.46B
Income Tax	-$568M	$2.89B
Other Items	$43M	$2.93B
Net Income	$2.93B	$2.93B

Revenue$408B
Cost of Revenue-$351B
Gross Profit$56.6B
Operating Expenses-$50.6B
Operating Income$5.97B
Other Income / Expense-$2.51B
Pre-tax Income$3.46B
Income Tax-$568M
Other Items$43M
Net Income$2.93B

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