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 Teradyne (TER) revenue becomes net income?

For TTM through Q1 2026, Teradyne turned $3.79B of revenue into $854M of net income — a net margin of 22.6%. The waterfall shows where the rest goes: cost of revenue, operating expenses, non-operating items, and taxes.

What are Teradyne (TER) gross, operating, and net margins?

For TTM through Q1 2026, Teradyne reported a gross margin of 58.8%, an operating margin of 26.9%, and a net margin of 22.6%. Each subtotal in the waterfall corresponds to one of these margins.

Why does Teradyne (TER) 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.

Teradyne (TER) Income Statement Waterfall

Revenue

$3.79B

Gross Margin

+58.8%

Operating Margin

+26.9%

Net Margin

+22.6%

Income statement waterfall for Teradyne (TER) — TTM through Q1 2026

Net income: $854M

Margin breakdown for Teradyne (TER) — TTM through Q1 2026

Line item	Amount	Running total
Revenue	$3.79B	$3.79B
Cost of Revenue	-$1.56B	$2.23B
Gross Profit	$2.23B	$2.23B
Operating Expenses	-$1.21B	$1.02B
Operating Income	$1.02B	$1.02B
Other Income / Expense	-$27.7M	$992M
Pre-tax Income	$992M	$992M
Income Tax	-$133M	$859M
Net Income	$854M	$854M

Revenue$3.79B
Cost of Revenue-$1.56B
Gross Profit$2.23B
Operating Expenses-$1.21B
Operating Income$1.02B
Other Income / Expense-$27.7M
Pre-tax Income$992M
Income Tax-$133M
Net Income$854M

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