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 AT&T (T) revenue becomes net income?

For TTM through Q2 2026, AT&T turned $127B of revenue into $21.5B of net income — a net margin of 16.9%. The waterfall shows where the rest goes: cost of revenue, operating expenses, non-operating items, and taxes.

What are AT&T (T) gross, operating, and net margins?

For TTM through Q2 2026, AT&T reported a gross margin of 88.5%, an operating margin of 19.6%, and a net margin of 16.9%. Each subtotal in the waterfall corresponds to one of these margins.

Why does AT&T (T) 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.

AT&T (T) Income Statement Waterfall

Revenue

$127B

Gross Margin

+88.5%

Operating Margin

+19.6%

Net Margin

+16.9%

Income statement waterfall for AT&T (T) — TTM through Q2 2026

Net income: $21.5B

Margin breakdown for AT&T (T) — TTM through Q2 2026

Line item	Amount	Running total
Revenue	$127B	$127B
Cost of Revenue	-$14.6B	$113B
Gross Profit	$113B	$113B
Operating Expenses	-$87.6B	$25B
Operating Income	$25B	$25B
Other Income / Expense	$1.16B	$26.1B
Pre-tax Income	$26.1B	$26.1B
Income Tax	-$3.05B	$23.1B
Other Items	-$1.63B	$21.5B
Net Income	$21.5B	$21.5B

Revenue$127B
Cost of Revenue-$14.6B
Gross Profit$113B
Operating Expenses-$87.6B
Operating Income$25B
Other Income / Expense$1.16B
Pre-tax Income$26.1B
Income Tax-$3.05B
Other Items-$1.63B
Net Income$21.5B

Want to see what changed vs last year?Profit Bridge

Frequently asked questions

Data & methodology

AT&T (T) Key Financials

Charts, filings, and peer comparison for every metric

Explore more

Deep-dives across the income statement, cash flow, capital return, and valuation

Overview

T Overview

Counters

Income Statement

Cash Flow

Capital Return

How this company returns cash to shareholders — buybacks, dividends, and stock splits.

Forecast & Valuation