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 Keysight Technologies (KEYS) revenue becomes net income?

For TTM through Q2 2026, Keysight Technologies turned $6.09B of revenue into $1.05B of net income — a net margin of 17.2%. The waterfall shows where the rest goes: cost of revenue, operating expenses, non-operating items, and taxes.

What are Keysight Technologies (KEYS) gross, operating, and net margins?

For TTM through Q2 2026, Keysight Technologies reported a gross margin of 63.7%, an operating margin of 18.2%, and a net margin of 17.2%. Each subtotal in the waterfall corresponds to one of these margins.

Why does Keysight Technologies (KEYS) 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.

Keysight Technologies (KEYS) Income Statement Waterfall

Revenue

$6.09B

Gross Margin

+63.7%

Operating Margin

+18.2%

Net Margin

+17.2%

Income statement waterfall for Keysight Technologies (KEYS) — TTM through Q2 2026

Net income: $1.05B

Margin breakdown for Keysight Technologies (KEYS) — TTM through Q2 2026

Line item	Amount	Running total
Revenue	$6.09B	$6.09B
Cost of Revenue	-$2.21B	$3.88B
Gross Profit	$3.88B	$3.88B
Operating Expenses	-$2.77B	$1.11B
Operating Income	$1.11B	$1.11B
Other Income / Expense	$73M	$1.18B
Pre-tax Income	$1.18B	$1.18B
Income Tax	-$106M	$1.07B
Other Items	-$23M	$1.05B
Net Income	$1.05B	$1.05B

Revenue$6.09B
Cost of Revenue-$2.21B
Gross Profit$3.88B
Operating Expenses-$2.77B
Operating Income$1.11B
Other Income / Expense$73M
Pre-tax Income$1.18B
Income Tax-$106M
Other Items-$23M
Net Income$1.05B

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