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 T. Rowe Price (TROW) revenue becomes net income?

For TTM through Q1 2026, T. Rowe Price turned $7.41B of revenue into $2.09B of net income — a net margin of 28.3%. The waterfall shows where the rest goes: cost of revenue, operating expenses, non-operating items, and taxes.

What are T. Rowe Price (TROW) gross, operating, and net margins?

For TTM through Q1 2026, T. Rowe Price reported a gross margin of 69.1%, an operating margin of 30.2%, and a net margin of 28.3%. Each subtotal in the waterfall corresponds to one of these margins.

Why does T. Rowe Price (TROW) 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.

T. Rowe Price (TROW) Income Statement Waterfall

Revenue

$7.41B

Gross Margin

+69.1%

Operating Margin

+30.2%

Net Margin

+28.3%

Income statement waterfall for T. Rowe Price (TROW) — TTM through Q1 2026

Net income: $2.09B

Margin breakdown for T. Rowe Price (TROW) — TTM through Q1 2026

Line item	Amount	Running total
Revenue	$7.41B	$7.41B
Cost of Revenue	-$2.29B	$5.12B
Gross Profit	$5.12B	$5.12B
Operating Expenses	-$2.88B	$2.24B
Operating Income	$2.24B	$2.24B
Other Income / Expense	$605M	$2.84B
Pre-tax Income	$2.84B	$2.84B
Income Tax	-$653M	$2.19B
Other Items	-$92.5M	$2.09B
Net Income	$2.09B	$2.09B

Revenue$7.41B
Cost of Revenue-$2.29B
Gross Profit$5.12B
Operating Expenses-$2.88B
Operating Income$2.24B
Other Income / Expense$605M
Pre-tax Income$2.84B
Income Tax-$653M
Other Items-$92.5M
Net Income$2.09B

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