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 West Pharmaceutical Services (WST) revenue becomes net income?

For TTM through Q1 2026, West Pharmaceutical Services turned $3.22B of revenue into $543M of net income — a net margin of 16.9%. The waterfall shows where the rest goes: cost of revenue, operating expenses, non-operating items, and taxes.

What are West Pharmaceutical Services (WST) gross, operating, and net margins?

For TTM through Q1 2026, West Pharmaceutical Services reported a gross margin of 36.2%, an operating margin of 20.7%, and a net margin of 16.9%. Each subtotal in the waterfall corresponds to one of these margins.

Why does West Pharmaceutical Services (WST) 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.

West Pharmaceutical Services (WST) Income Statement Waterfall

Revenue

$3.22B

Gross Margin

+36.2%

Operating Margin

+20.7%

Net Margin

+16.9%

Income statement waterfall for West Pharmaceutical Services (WST) — TTM through Q1 2026

Net income: $543M

Margin breakdown for West Pharmaceutical Services (WST) — TTM through Q1 2026

Line item	Amount	Running total
Revenue	$3.22B	$3.22B
Cost of Revenue	-$2.05B	$1.17B
Gross Profit	$1.17B	$1.17B
Operating Expenses	-$501M	$666M
Operating Income	$666M	$666M
Other Income / Expense	$15.9M	$682M
Pre-tax Income	$682M	$682M
Income Tax	-$142M	$539M
Net Income	$543M	$543M

Revenue$3.22B
Cost of Revenue-$2.05B
Gross Profit$1.17B
Operating Expenses-$501M
Operating Income$666M
Other Income / Expense$15.9M
Pre-tax Income$682M
Income Tax-$142M
Net Income$543M

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