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 Waters Corporation (WAT) revenue becomes net income?

For TTM through Q2 2026, Waters Corporation turned $3.77B of revenue into $449M of net income — a net margin of 11.9%. The waterfall shows where the rest goes: cost of revenue, operating expenses, non-operating items, and taxes.

What are Waters Corporation (WAT) gross, operating, and net margins?

For TTM through Q2 2026, Waters Corporation reported a gross margin of 55%, an operating margin of 17.1%, and a net margin of 11.9%. Each subtotal in the waterfall corresponds to one of these margins.

Why does Waters Corporation (WAT) 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.

Waters Corporation (WAT) Income Statement Waterfall

Revenue

$3.77B

Gross Margin

+55.0%

Operating Margin

+17.1%

Net Margin

+11.9%

Income statement waterfall for Waters Corporation (WAT) — TTM through Q2 2026

Net income: $449M

Margin breakdown for Waters Corporation (WAT) — TTM through Q2 2026

Line item	Amount	Running total
Revenue	$3.77B	$3.77B
Cost of Revenue	-$1.7B	$2.07B
Gross Profit	$2.07B	$2.07B
Operating Expenses	-$1.43B	$644M
Operating Income	$644M	$644M
Other Income / Expense	-$120M	$524M
Pre-tax Income	$524M	$524M
Income Tax	-$74.7M	$449M
Net Income	$449M	$449M

Revenue$3.77B
Cost of Revenue-$1.7B
Gross Profit$2.07B
Operating Expenses-$1.43B
Operating Income$644M
Other Income / Expense-$120M
Pre-tax Income$524M
Income Tax-$74.7M
Net Income$449M

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