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 Howmet Aerospace (HWM) revenue becomes net income?

For TTM through Q1 2026, Howmet Aerospace turned $8.62B of revenue into $1.74B of net income — a net margin of 20.2%. The waterfall shows where the rest goes: cost of revenue, operating expenses, non-operating items, and taxes.

What are Howmet Aerospace (HWM) gross, operating, and net margins?

For TTM through Q1 2026, Howmet Aerospace reported a gross margin of 32.6%, an operating margin of 27.8%, and a net margin of 20.2%. Each subtotal in the waterfall corresponds to one of these margins.

Why does Howmet Aerospace (HWM) 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.

Howmet Aerospace (HWM) Income Statement Waterfall

Revenue

$8.62B

Gross Margin

+32.6%

Operating Margin

+27.8%

Net Margin

+20.2%

Income statement waterfall for Howmet Aerospace (HWM) — TTM through Q1 2026

Net income: $1.74B

Margin breakdown for Howmet Aerospace (HWM) — TTM through Q1 2026

Line item	Amount	Running total
Revenue	$8.62B	$8.62B
Cost of Revenue	-$5.82B	$2.81B
Gross Profit	$2.81B	$2.81B
Operating Expenses	-$415M	$2.39B
Operating Income	$2.39B	$2.39B
Other Income / Expense	-$291M	$2.1B
Pre-tax Income	$2.1B	$2.1B
Income Tax	-$358M	$1.74B
Net Income	$1.74B	$1.74B

Revenue$8.62B
Cost of Revenue-$5.82B
Gross Profit$2.81B
Operating Expenses-$415M
Operating Income$2.39B
Other Income / Expense-$291M
Pre-tax Income$2.1B
Income Tax-$358M
Net Income$1.74B

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