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 Principal Financial Group (PFG) revenue becomes net income?

For TTM through Q1 2026, Principal Financial Group turned $15.5B of revenue into $1.55B of net income — a net margin of 10%. The waterfall shows where the rest goes: cost of revenue, operating expenses, non-operating items, and taxes.

What are Principal Financial Group (PFG) gross, operating, and net margins?

For TTM through Q1 2026, Principal Financial Group reported a gross margin of 48.7%, an operating margin of 12.4%, and a net margin of 10%. Each subtotal in the waterfall corresponds to one of these margins.

Why does Principal Financial Group (PFG) 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.

Principal Financial Group (PFG) Income Statement Waterfall

Revenue

$15.5B

Gross Margin

+48.7%

Operating Margin

+12.4%

Net Margin

+10.0%

Income statement waterfall for Principal Financial Group (PFG) — TTM through Q1 2026

Net income: $1.55B

Margin breakdown for Principal Financial Group (PFG) — TTM through Q1 2026

Line item	Amount	Running total
Revenue	$15.5B	$15.5B
Cost of Revenue	-$7.93B	$7.52B
Gross Profit	$7.52B	$7.52B
Operating Expenses	-$5.61B	$1.91B
Operating Income	$1.91B	$1.91B
Other Income / Expense	-$41.1M	$1.87B
Pre-tax Income	$1.87B	$1.87B
Income Tax	-$263M	$1.61B
Other Items	-$55.6M	$1.55B
Net Income	$1.55B	$1.55B

Revenue$15.5B
Cost of Revenue-$7.93B
Gross Profit$7.52B
Operating Expenses-$5.61B
Operating Income$1.91B
Other Income / Expense-$41.1M
Pre-tax Income$1.87B
Income Tax-$263M
Other Items-$55.6M
Net Income$1.55B

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