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 Illumina (ILMN) revenue becomes net income?

For TTM through Q1 2026, Illumina turned $4.39B of revenue into $853M of net income — a net margin of 19.4%. The waterfall shows where the rest goes: cost of revenue, operating expenses, non-operating items, and taxes.

What are Illumina (ILMN) gross, operating, and net margins?

For TTM through Q1 2026, Illumina reported a gross margin of 67.1%, an operating margin of 20.9%, and a net margin of 19.4%. Each subtotal in the waterfall corresponds to one of these margins.

Why does Illumina (ILMN) 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.

Illumina (ILMN) Income Statement Waterfall

Revenue

$4.39B

Gross Margin

+67.1%

Operating Margin

+20.9%

Net Margin

+19.4%

Income statement waterfall for Illumina (ILMN) — TTM through Q1 2026

Net income: $853M

Margin breakdown for Illumina (ILMN) — TTM through Q1 2026

Line item	Amount	Running total
Revenue	$4.39B	$4.39B
Cost of Revenue	-$1.44B	$2.95B
Gross Profit	$2.95B	$2.95B
Operating Expenses	-$2.03B	$919M
Operating Income	$919M	$919M
Other Income / Expense	$142M	$1.06B
Pre-tax Income	$1.06B	$1.06B
Income Tax	-$208M	$853M
Net Income	$853M	$853M

Revenue$4.39B
Cost of Revenue-$1.44B
Gross Profit$2.95B
Operating Expenses-$2.03B
Operating Income$919M
Other Income / Expense$142M
Pre-tax Income$1.06B
Income Tax-$208M
Net Income$853M

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