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 Lamb Weston (LW) revenue becomes net income?

For TTM through Q1 2026, Lamb Weston turned $6.52B of revenue into $300M of net income — a net margin of 4.6%. The waterfall shows where the rest goes: cost of revenue, operating expenses, non-operating items, and taxes.

What are Lamb Weston (LW) gross, operating, and net margins?

For TTM through Q1 2026, Lamb Weston reported a gross margin of 20.6%, an operating margin of 9.3%, and a net margin of 4.6%. Each subtotal in the waterfall corresponds to one of these margins.

Why does Lamb Weston (LW) 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.

Lamb Weston (LW) Income Statement Waterfall

Revenue

$6.52B

Gross Margin

+20.6%

Operating Margin

+9.3%

Net Margin

+4.6%

Income statement waterfall for Lamb Weston (LW) — TTM through Q1 2026

Net income: $300M

Margin breakdown for Lamb Weston (LW) — TTM through Q1 2026

Line item	Amount	Running total
Revenue	$6.52B	$6.52B
Cost of Revenue	-$5.18B	$1.34B
Gross Profit	$1.34B	$1.34B
Operating Expenses	-$733M	$608M
Operating Income	$608M	$608M
Other Income / Expense	-$175M	$433M
Pre-tax Income	$433M	$433M
Income Tax	-$136M	$298M
Net Income	$300M	$300M

Revenue$6.52B
Cost of Revenue-$5.18B
Gross Profit$1.34B
Operating Expenses-$733M
Operating Income$608M
Other Income / Expense-$175M
Pre-tax Income$433M
Income Tax-$136M
Net Income$300M

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