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 Hershey (HSY) revenue becomes net income?

For TTM through Q1 2026, Hershey turned $12B of revenue into $1.09B of net income — a net margin of 9.1%. The waterfall shows where the rest goes: cost of revenue, operating expenses, non-operating items, and taxes.

What are Hershey (HSY) gross, operating, and net margins?

For TTM through Q1 2026, Hershey reported a gross margin of 34.8%, an operating margin of 14.1%, and a net margin of 9.1%. Each subtotal in the waterfall corresponds to one of these margins.

Why does Hershey (HSY) 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.

Hershey (HSY) Income Statement Waterfall

Revenue

$12B

Gross Margin

+34.8%

Operating Margin

+14.1%

Net Margin

+9.1%

Income statement waterfall for Hershey (HSY) — TTM through Q1 2026

Net income: $1.09B

Margin breakdown for Hershey (HSY) — TTM through Q1 2026

Line item	Amount	Running total
Revenue	$12B	$12B
Cost of Revenue	-$7.82B	$4.17B
Gross Profit	$4.17B	$4.17B
Operating Expenses	-$2.48B	$1.69B
Operating Income	$1.69B	$1.69B
Other Income / Expense	-$205M	$1.48B
Pre-tax Income	$1.48B	$1.48B
Income Tax	-$389M	$1.09B
Net Income	$1.09B	$1.09B

Revenue$12B
Cost of Revenue-$7.82B
Gross Profit$4.17B
Operating Expenses-$2.48B
Operating Income$1.69B
Other Income / Expense-$205M
Pre-tax Income$1.48B
Income Tax-$389M
Net Income$1.09B

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