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 Packaging Corporation of America (PKG) revenue becomes net income?

For TTM through Q1 2026, Packaging Corporation of America turned $9.22B of revenue into $740M of net income — a net margin of 8%. The waterfall shows where the rest goes: cost of revenue, operating expenses, non-operating items, and taxes.

What are Packaging Corporation of America (PKG) gross, operating, and net margins?

For TTM through Q1 2026, Packaging Corporation of America reported a gross margin of 20.5%, an operating margin of 13.2%, and a net margin of 8%. Each subtotal in the waterfall corresponds to one of these margins.

Why does Packaging Corporation of America (PKG) 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.

Packaging Corporation of America (PKG) Income Statement Waterfall

Revenue

$9.22B

Gross Margin

+20.5%

Operating Margin

+13.2%

Net Margin

+8.0%

Income statement waterfall for Packaging Corporation of America (PKG) — TTM through Q1 2026

Net income: $740M

Margin breakdown for Packaging Corporation of America (PKG) — TTM through Q1 2026

Line item	Amount	Running total
Revenue	$9.22B	$9.22B
Cost of Revenue	-$7.33B	$1.89B
Gross Profit	$1.89B	$1.89B
Operating Expenses	-$675M	$1.21B
Operating Income	$1.21B	$1.21B
Other Income / Expense	-$233M	$980M
Pre-tax Income	$980M	$980M
Income Tax	-$239M	$741M
Net Income	$740M	$740M

Revenue$9.22B
Cost of Revenue-$7.33B
Gross Profit$1.89B
Operating Expenses-$675M
Operating Income$1.21B
Other Income / Expense-$233M
Pre-tax Income$980M
Income Tax-$239M
Net Income$740M

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