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 Home Depot (HD) revenue becomes net income?

For TTM through Q2 2026, Home Depot turned $166.59B of revenue into $14.01B of net income — a net margin of 8.4%. The waterfall shows where the rest goes: cost of revenue, operating expenses, non-operating items, and taxes.

What are Home Depot (HD) gross, operating, and net margins?

For TTM through Q2 2026, Home Depot reported a gross margin of 33.1%, an operating margin of 12.4%, and a net margin of 8.4%. Each subtotal in the waterfall corresponds to one of these margins.

Why does Home Depot (HD) 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.

Home Depot (HD) Income Statement Waterfall

Revenue

$166.59B

Gross Margin

+33.1%

Operating Margin

+12.4%

Net Margin

+8.4%

Income statement waterfall for Home Depot (HD) — TTM through Q2 2026

Net income: $14.01B

Margin breakdown for Home Depot (HD) — TTM through Q2 2026

Line item	Amount	Running total
Revenue	$166.59B	$166.59B
Cost of Revenue	−$111.41B	$55.19B
Gross Profit	$55.19B	$55.19B
Operating Expenses	−$34.45B	$20.74B
Operating Income	$20.74B	$20.74B
Other Income / Expense	−$2.30B	$18.44B
Pre-tax Income	$18.44B	$18.44B
Income Tax	−$4.42B	$14.01B
Net Income	$14.01B	$14.01B

Revenue$166.59B
Cost of Revenue−$111.41B
Gross Profit$55.19B
Operating Expenses−$34.45B
Operating Income$20.74B
Other Income / Expense−$2.30B
Pre-tax Income$18.44B
Income Tax−$4.42B
Net Income$14.01B

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Income statement waterfall for Home Depot (HD) — TTM through Q2 2026

Margin breakdown for Home Depot (HD) — TTM through Q2 2026

Frequently asked questions

+What is an income statement waterfall?

+How much of Home Depot (HD) revenue becomes net income?

+What are Home Depot (HD) gross, operating, and net margins?

+Why does Home Depot (HD) have such a high (or low) gross margin?

+What is the difference between gross, operating, and net margin?

Data & methodology

+What is this view?

+How to read this waterfall

+How is the data calculated?

+What is the USD toggle?

Home Depot (HD) Key Financials

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