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 Essential Utilities (WTRG) revenue becomes net income?

For TTM through Q1 2026, Essential Utilities turned $2.55B of revenue into $557M of net income — a net margin of 21.8%. The waterfall shows where the rest goes: cost of revenue, operating expenses, non-operating items, and taxes.

What are Essential Utilities (WTRG) gross, operating, and net margins?

For TTM through Q1 2026, Essential Utilities reported a gross margin of 47%, an operating margin of 35%, and a net margin of 21.8%. Each subtotal in the waterfall corresponds to one of these margins.

Why does Essential Utilities (WTRG) 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.

Essential Utilities (WTRG) Income Statement Waterfall

Revenue

$2.55B

Gross Margin

+47.0%

Operating Margin

+35.0%

Net Margin

+21.8%

Income statement waterfall for Essential Utilities (WTRG) — TTM through Q1 2026

Net income: $557M

Margin breakdown for Essential Utilities (WTRG) — TTM through Q1 2026

Line item	Amount	Running total
Revenue	$2.55B	$2.55B
Cost of Revenue	-$1.35B	$1.2B
Gross Profit	$1.2B	$1.2B
Operating Expenses	-$306M	$893M
Operating Income	$893M	$893M
Other Income / Expense	-$305M	$587M
Pre-tax Income	$587M	$587M
Income Tax	-$30.4M	$557M
Net Income	$557M	$557M

Revenue$2.55B
Cost of Revenue-$1.35B
Gross Profit$1.2B
Operating Expenses-$306M
Operating Income$893M
Other Income / Expense-$305M
Pre-tax Income$587M
Income Tax-$30.4M
Net Income$557M

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