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 Intuitive Surgical (ISRG) revenue becomes net income?

For TTM through Q2 2026, Intuitive Surgical turned $11B of revenue into $3.14B of net income — a net margin of 28.4%. The waterfall shows where the rest goes: cost of revenue, operating expenses, non-operating items, and taxes.

What are Intuitive Surgical (ISRG) gross, operating, and net margins?

For TTM through Q2 2026, Intuitive Surgical reported a gross margin of 66.7%, an operating margin of 31.3%, and a net margin of 28.4%. Each subtotal in the waterfall corresponds to one of these margins.

Why does Intuitive Surgical (ISRG) 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.

Intuitive Surgical (ISRG) Income Statement Waterfall

Revenue

$11B

Gross Margin

+66.7%

Operating Margin

+31.3%

Net Margin

+28.4%

Income statement waterfall for Intuitive Surgical (ISRG) — TTM through Q2 2026

Net income: $3.14B

Margin breakdown for Intuitive Surgical (ISRG) — TTM through Q2 2026

Line item	Amount	Running total
Revenue	$11B	$11B
Cost of Revenue	-$3.68B	$7.36B
Gross Profit	$7.36B	$7.36B
Operating Expenses	-$3.91B	$3.45B
Operating Income	$3.45B	$3.45B
Other Income / Expense	$355M	$3.81B
Pre-tax Income	$3.81B	$3.81B
Income Tax	-$648M	$3.16B
Net Income	$3.14B	$3.14B

Revenue$11B
Cost of Revenue-$3.68B
Gross Profit$7.36B
Operating Expenses-$3.91B
Operating Income$3.45B
Other Income / Expense$355M
Pre-tax Income$3.81B
Income Tax-$648M
Net Income$3.14B

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