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 Qnity Electronics (Q) revenue becomes net income?

For TTM through Q1 2026, Qnity Electronics turned $4.95B of revenue into $650M of net income — a net margin of 13.1%. The waterfall shows where the rest goes: cost of revenue, operating expenses, non-operating items, and taxes.

What are Qnity Electronics (Q) gross, operating, and net margins?

For TTM through Q1 2026, Qnity Electronics reported a gross margin of 42%, an operating margin of 21.4%, and a net margin of 13.1%. Each subtotal in the waterfall corresponds to one of these margins.

Why does Qnity Electronics (Q) 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.

Qnity Electronics (Q) Income Statement Waterfall

Revenue

$4.95B

Gross Margin

+42.0%

Operating Margin

+21.4%

Net Margin

+13.1%

Income statement waterfall for Qnity Electronics (Q) — TTM through Q1 2026

Net income: $650M

Margin breakdown for Qnity Electronics (Q) — TTM through Q1 2026

Line item	Amount	Running total
Revenue	$4.95B	$4.95B
Cost of Revenue	-$2.87B	$2.08B
Gross Profit	$2.08B	$2.08B
Operating Expenses	-$1.02B	$1.06B
Operating Income	$1.06B	$1.06B
Other Income / Expense	-$127M	$934M
Pre-tax Income	$934M	$934M
Income Tax	-$242M	$692M
Other Items	-$42M	$650M
Net Income	$650M	$650M

Revenue$4.95B
Cost of Revenue-$2.87B
Gross Profit$2.08B
Operating Expenses-$1.02B
Operating Income$1.06B
Other Income / Expense-$127M
Pre-tax Income$934M
Income Tax-$242M
Other Items-$42M
Net Income$650M

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