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 Warner Bros. Discovery (WBD) revenue becomes net income?

For TTM through Q1 2026, Warner Bros. Discovery turned $37.2B of revenue into -$1.74B of net income — a net margin of -4.7%. The waterfall shows where the rest goes: cost of revenue, operating expenses, non-operating items, and taxes.

What are Warner Bros. Discovery (WBD) gross, operating, and net margins?

For TTM through Q1 2026, Warner Bros. Discovery reported a gross margin of 41.5%, an operating margin of 4.1%, and a net margin of -4.7%. Each subtotal in the waterfall corresponds to one of these margins.

Why does Warner Bros. Discovery (WBD) 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.

Warner Bros. Discovery (WBD) Income Statement Waterfall

Revenue

$37.2B

Gross Margin

+41.5%

Operating Margin

+4.1%

Net Margin

-4.7%

Income statement waterfall for Warner Bros. Discovery (WBD) — TTM through Q1 2026

Net income: -$1.74B

Margin breakdown for Warner Bros. Discovery (WBD) — TTM through Q1 2026

Line item	Amount	Running total
Revenue	$37.2B	$37.2B
Cost of Revenue	-$21.8B	$15.4B
Gross Profit	$15.4B	$15.4B
Operating Expenses	-$13.9B	$1.51B
Operating Income	$1.51B	$1.51B
Other Income / Expense	-$2.56B	-$1.05B
Pre-tax Income	-$1.05B	-$1.05B
Income Tax	-$661M	-$1.71B
Other Items	-$28M	-$1.74B
Net Loss	-$1.74B	-$1.74B

Revenue$37.2B
Cost of Revenue-$21.8B
Gross Profit$15.4B
Operating Expenses-$13.9B
Operating Income$1.51B
Other Income / Expense-$2.56B
Pre-tax Income-$1.05B
Income Tax-$661M
Other Items-$28M
Net Loss-$1.74B

Want to see what changed vs last year?Profit Bridge

Frequently asked questions

Data & methodology

Warner Bros. Discovery (WBD) Key Financials

Charts, filings, and peer comparison for every metric

Explore more

Deep-dives across the income statement, cash flow, capital return, and valuation

Overview

WBD Overview

Counters

Income Statement

Cash Flow

Capital Return

How this company returns cash to shareholders — buybacks, dividends, and stock splits.

Forecast & Valuation