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 International Paper (IP) revenue becomes net income?

For TTM through Q1 2026, International Paper turned $25B of revenue into -$3.35B of net income — a net margin of -13.4%. The waterfall shows where the rest goes: cost of revenue, operating expenses, non-operating items, and taxes.

What are International Paper (IP) gross, operating, and net margins?

For TTM through Q1 2026, International Paper reported a gross margin of 27.8%, an operating margin of -10.5%, and a net margin of -13.4%. Each subtotal in the waterfall corresponds to one of these margins.

Why does International Paper (IP) 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.

International Paper (IP) Income Statement Waterfall

Revenue

$25B

Gross Margin

+27.8%

Operating Margin

-10.5%

Net Margin

-13.4%

Income statement waterfall for International Paper (IP) — TTM through Q1 2026

Net income: -$3.35B

Margin breakdown for International Paper (IP) — TTM through Q1 2026

Line item	Amount	Running total
Revenue	$25B	$25B
Cost of Revenue	-$18B	$6.95B
Gross Profit	$6.95B	$6.95B
Operating Expenses	-$9.56B	-$2.61B
Operating Income	-$2.61B	-$2.61B
Other Income / Expense	-$511M	-$3.12B
Pre-tax Income	-$3.12B	-$3.12B
Tax Benefit	$484M	-$2.64B
Other Items	-$713M	-$3.35B
Net Loss	-$3.35B	-$3.35B

Revenue$25B
Cost of Revenue-$18B
Gross Profit$6.95B
Operating Expenses-$9.56B
Operating Income-$2.61B
Other Income / Expense-$511M
Pre-tax Income-$3.12B
Tax Benefit$484M
Other Items-$713M
Net Loss-$3.35B

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