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 TSMC (TSM) revenue becomes net income?

For TTM through Q1 2026, TSMC turned 4.11T TWD of revenue into 1.93T TWD of net income — a net margin of 47%. The waterfall shows where the rest goes: cost of revenue, operating expenses, non-operating items, and taxes.

What are TSMC (TSM) gross, operating, and net margins?

For TTM through Q1 2026, TSMC reported a gross margin of 61.9%, an operating margin of 53.2%, and a net margin of 47%. Each subtotal in the waterfall corresponds to one of these margins.

Why does TSMC (TSM) 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.

TSMC (TSM) Income Statement Waterfall

Revenue

4.11T TWD

Gross Margin

+61.9%

Operating Margin

+53.2%

Net Margin

+47.0%

Income statement waterfall for TSMC (TSM) — TTM through Q1 2026

Net income: 1.93T TWD

Margin breakdown for TSMC (TSM) — TTM through Q1 2026

Line item	Amount	Running total
Revenue	4.11T TWD	4.11T TWD
Cost of Revenue	−1.57T TWD	2.55T TWD
Gross Profit	2.55T TWD	2.55T TWD
Operating Expenses	−354.83B TWD	2.19T TWD
Operating Income	2.19T TWD	2.19T TWD
Other Income / Expense	113.64B TWD	2.30T TWD
Pre-tax Income	2.30T TWD	2.30T TWD
Income Tax	−371.92B TWD	1.93T TWD
Net Income	1.93T TWD	1.93T TWD

Revenue4.11T TWD
Cost of Revenue−1.57T TWD
Gross Profit2.55T TWD
Operating Expenses−354.83B TWD
Operating Income2.19T TWD
Other Income / Expense113.64B TWD
Pre-tax Income2.30T TWD
Income Tax−371.92B TWD
Net Income1.93T TWD

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Income statement waterfall for TSMC (TSM) — TTM through Q1 2026

Margin breakdown for TSMC (TSM) — TTM through Q1 2026

Frequently asked questions

+What is an income statement waterfall?

+How much of TSMC (TSM) revenue becomes net income?

+What are TSMC (TSM) gross, operating, and net margins?

+Why does TSMC (TSM) have such a high (or low) gross margin?

+What is the difference between gross, operating, and net margin?

Data & methodology

+What is this view?

+How to read this waterfall

+How is the data calculated?

+What is the USD toggle?

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