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 Telephone and Data Systems (TDS) revenue becomes net income?

For TTM through Q1 2026, Telephone and Data Systems turned $2.13B of revenue into $132M of net income — a net margin of 6.2%. The waterfall shows where the rest goes: cost of revenue, operating expenses, non-operating items, and taxes.

What are Telephone and Data Systems (TDS) gross, operating, and net margins?

For TTM through Q1 2026, Telephone and Data Systems reported a gross margin of 41%, an operating margin of -1.1%, and a net margin of 6.2%. Each subtotal in the waterfall corresponds to one of these margins.

Why does Telephone and Data Systems (TDS) 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.

Telephone and Data Systems (TDS) Income Statement Waterfall

Revenue

$2.13B

Gross Margin

+41.0%

Operating Margin

-1.1%

Net Margin

+6.2%

Income statement waterfall for Telephone and Data Systems (TDS) — TTM through Q1 2026

Net income: $132M

Margin breakdown for Telephone and Data Systems (TDS) — TTM through Q1 2026

Line item	Amount	Running total
Revenue	$2.13B	$2.13B
Cost of Revenue	-$1.26B	$875M
Gross Profit	$875M	$875M
Operating Expenses	-$898M	-$23.5M
Operating Income	-$23.5M	-$23.5M
Other Income / Expense	$370M	$346M
Pre-tax Income	$346M	$346M
Income Tax	-$7.57M	$339M
Other Items	-$206M	$132M
Net Income	$132M	$132M

Revenue$2.13B
Cost of Revenue-$1.26B
Gross Profit$875M
Operating Expenses-$898M
Operating Income-$23.5M
Other Income / Expense$370M
Pre-tax Income$346M
Income Tax-$7.57M
Other Items-$206M
Net Income$132M

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