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 Valero Energy (VLO) revenue becomes net income?

For TTM through Q1 2026, Valero Energy turned $126B of revenue into $4.21B of net income — a net margin of 3.3%. The waterfall shows where the rest goes: cost of revenue, operating expenses, non-operating items, and taxes.

What are Valero Energy (VLO) gross, operating, and net margins?

For TTM through Q1 2026, Valero Energy reported a gross margin of 7.2%, an operating margin of 4.6%, and a net margin of 3.3%. Each subtotal in the waterfall corresponds to one of these margins.

Why does Valero Energy (VLO) 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.

Valero Energy (VLO) Income Statement Waterfall

Revenue

$126B

Gross Margin

+7.2%

Operating Margin

+4.6%

Net Margin

+3.3%

Income statement waterfall for Valero Energy (VLO) — TTM through Q1 2026

Net income: $4.21B

Margin breakdown for Valero Energy (VLO) — TTM through Q1 2026

Line item	Amount	Running total
Revenue	$126B	$126B
Cost of Revenue	-$117B	$9.14B
Gross Profit	$9.14B	$9.14B
Operating Expenses	-$3.32B	$5.81B
Operating Income	$5.81B	$5.81B
Other Income / Expense	-$167M	$5.65B
Pre-tax Income	$5.65B	$5.65B
Income Tax	-$1.43B	$4.22B
Net Income	$4.21B	$4.21B

Revenue$126B
Cost of Revenue-$117B
Gross Profit$9.14B
Operating Expenses-$3.32B
Operating Income$5.81B
Other Income / Expense-$167M
Pre-tax Income$5.65B
Income Tax-$1.43B
Net Income$4.21B

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