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 Kraft Heinz (KHC) revenue becomes net income?

For TTM through Q1 2026, Kraft Heinz turned $25B of revenue into -$5.76B of net income — a net margin of -23%. The waterfall shows where the rest goes: cost of revenue, operating expenses, non-operating items, and taxes.

What are Kraft Heinz (KHC) gross, operating, and net margins?

For TTM through Q1 2026, Kraft Heinz reported a gross margin of 33.3%, an operating margin of -19.2%, and a net margin of -23%. Each subtotal in the waterfall corresponds to one of these margins.

Why does Kraft Heinz (KHC) 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.

Kraft Heinz (KHC) Income Statement Waterfall

Revenue

$25B

Gross Margin

+33.3%

Operating Margin

-19.2%

Net Margin

-23.0%

Income statement waterfall for Kraft Heinz (KHC) — TTM through Q1 2026

Net income: -$5.76B

Margin breakdown for Kraft Heinz (KHC) — TTM through Q1 2026

Line item	Amount	Running total
Revenue	$25B	$25B
Cost of Revenue	-$16.7B	$8.33B
Gross Profit	$8.33B	$8.33B
Operating Expenses	-$13.1B	-$4.79B
Operating Income	-$4.79B	-$4.79B
Other Income / Expense	-$664M	-$5.45B
Pre-tax Income	-$5.45B	-$5.45B
Income Tax	-$310M	-$5.76B
Net Loss	-$5.76B	-$5.76B

Revenue$25B
Cost of Revenue-$16.7B
Gross Profit$8.33B
Operating Expenses-$13.1B
Operating Income-$4.79B
Other Income / Expense-$664M
Pre-tax Income-$5.45B
Income Tax-$310M
Net Loss-$5.76B

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