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 $37.21B 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

$37.21B

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	$37.21B	$37.21B
Cost of Revenue	−$21.78B	$15.43B
Gross Profit	$15.43B	$15.43B
Operating Expenses	−$13.92B	$1.51B
Operating Income	$1.51B	$1.51B
Other Income / Expense	−$2.56B	−$1.05B
Pre-tax Income	−$1.05B	−$1.05B
Income Tax	−$661.00M	−$1.71B
Other Items	−$28.00M	−$1.74B
Net Loss	−$1.74B	−$1.74B

Revenue$37.21B
Cost of Revenue−$21.78B
Gross Profit$15.43B
Operating Expenses−$13.92B
Operating Income$1.51B
Other Income / Expense−$2.56B
Pre-tax Income−$1.05B
Income Tax−$661.00M
Other Items−$28.00M
Net Loss−$1.74B

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

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

Frequently asked questions

+What is an income statement waterfall?

+How much of Warner Bros. Discovery (WBD) revenue becomes net income?

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

+Why does Warner Bros. Discovery (WBD) 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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