First-Quarter Highlights
-- Orders of $2.2 billion, up 3% on a reported basis and flat organically
-- Revenue of $2.1 billion, up 3% on a reported basis and flat
organically
-- Earnings per share of $0.79, up 14%; $1.12 on an adjusted basis, up 9%
WASHINGTON--(BUSINESS WIRE)--April 28, 2026--
In the Xylem Inc. Non-GAAP Reconciliation Reported vs. Organic Revenue table, the last column in the fourth row, Measurement and Control Solutions, should read 1% (instead of (1%)).
The updated release reads:
XYLEM REPORTS FIRST QUARTER RESULTS
First-Quarter Highlights
-- Orders of $2.2 billion, up 3% on a reported basis and flat organically
-- Revenue of $2.1 billion, up 3% on a reported basis and flat
organically
-- Earnings per share of $0.79, up 14%; $1.12 on an adjusted basis, up 9%
Xylem Inc. $(XYL)$, a leading global water solutions company dedicated to solving the world's most challenging water issues, today reported first-quarter 2026 results. The Company delivered total revenue of $2.1 billion, on strong execution. First-quarter earnings per share were up 14 percent on a reported basis and 9 percent on an adjusted basis.
"We entered the year with sustained momentum and solid demand across key end markets," said Matthew Pine, Xylem's CEO. "While the external environment remains dynamic, our teams are executing well, staying close to customers, and advancing long-term priorities." Pine added, "Our steady progress this quarter demonstrates that our multi-year operating transformation is gaining traction, with disciplined execution and operational rigor."
Net income attributable to Xylem for the quarter was $193 million, or $0.79 per share. Net income margin increased 90 basis points to 9.1 percent. These results are driven by strong operational performance and a reduction in the estimated loss on sale of businesses, partially offset by increased restructuring and realignment costs. Adjusted net income attributable to Xylem was $272 million, or $1.12 per share, which excludes the loss on sale of businesses, purchase accounting intangible amortization, restructuring and realignment costs, and special charges.
First-quarter adjusted earnings before interest, tax, depreciation, and amortization (EBITDA) margin was 20.6 percent, reflecting a year-over-year increase of 20 basis points. Productivity savings and strong price realization drove the margin expansion, exceeding the impact of inflation, mix, and lower volumes.
Outlook
Xylem now forecasts full-year 2026 revenue of approximately $9.2 to $9.3 billion, up approximately 2 to 3 percent on a reported basis, versus 1 to 3 percent previously guided, and up approximately 2 to 4 percent on an organic basis, as previously guided.
Full-year 2026 adjusted EBITDA margin is expected to be approximately 22.9 to 23.3 percent, an increase of 70 to 110 basis points from Xylem's 2025 adjusted results. This results in full-year adjusted earnings per share of $5.35 to $5.60, in line with the previous guidance range. Full-year free cash flow margin is still expected to be approximately 10.2 to 11.0 percent.
Further 2026 planning assumptions are included in Xylem's first-quarter 2026 earnings materials posted at www.xylem.com/investors. Excluding revenue, Xylem provides guidance only on a non-GAAP basis due to the inherent difficulty in forecasting certain amounts that would be included in GAAP earnings, such as discrete tax items, without unreasonable effort.
Supplemental information on Xylem's first-quarter earnings, as well as definitions of and reconciliations for certain non-GAAP items is posted at www.xylem.com/investors.
About Xylem
Xylem (XYL) is a Fortune 500 global water solutions company that empowers customers and communities to build a more water-secure world. Our 22,000 employees delivered revenue of $9 billion in 2025, optimizing water and resource management with innovation and expertise. Join us at www.xylem.com and Let's Solve Water.
Xylem uses our Investor Relations website, www.xylem.com/en-us/investors, as a means of disclosing information which may be of interest or material to our investors and for complying with disclosure obligations under Regulation FD. Accordingly, investors should monitor our Investor Relations website, in addition to following our press releases, SEC filings, public conference calls, webcasts, and social media.
Forward-Looking Statements
This press release contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Generally, the words "anticipate," "estimate," "expect," "project," "intend," "plan," "contemplate," "predict," "forecast," "likely," "believe," "target," "goal," "objective," "will," "could," "would," "should," "potential," "may" and similar expressions or their negative, may, but are not necessary to, identify forward-looking statements. By their nature, forward-looking statements address uncertain matters and include any statements that: are not historical, such as statements about our strategy, financial plans, outlook, objectives, plans, intentions or goals (including those related to our social, environmental and other sustainability goals); or address possible or future results of operations or financial performance, including statements relating to orders, revenues, operating margins and earnings per share growth.
Although we believe that the expectations reflected in any of our forward-looking statements are reasonable, actual results could differ materially from those projected or assumed in any of our forward-looking statements. Our future financial condition and results of operations, as well as any forward-looking statements, are subject to change and to inherent risks and uncertainties, many of which are beyond our control. Important factors that could cause our actual results, performance and achievements, or industry results to differ materially from estimates or projections contained in or implied by our forward-looking statements include, among others, the following: the impact of overall industry and general economic conditions, including industrial, governmental, and public and private sector spending, interest rates, availability of funding for our customers, inflation and governments' related monetary policy in response, and the strength of the real estate markets, on economic activity and our operations; geopolitical matters, including nationalism, protectionism and anti-global sentiment, volatility involving the U.S. and other governments, ongoing, escalation or outbreak of international conflicts, and regulatory, trade protection, economic and other risks associated with our global sales and operations; manufacturing and operating cost increases due to macroeconomic conditions, including inflation, energy supply, supply chain shortages, logistics challenges, labor shortages, trade agreements, tariffs, and other trade protection measures, and other factors; demand for our products, disruption, competition or pricing pressures in the markets we serve; cybersecurity incidents, data breaches, or other disruptions of information technology systems on which we or our customers rely, or involving our connected products and services; lack of availability or delays in receiving parts and raw materials from our supply chain, including semiconductors or other key components; operational disruptions at our facilities or that of third parties upon which we rely; safe and compliant treatment and handling of water, wastewater and hazardous materials; failure to successfully execute large projects, including as respects performance guarantees and customers' budgets, timelines and safety requirements; our ability to retain, compete for and attract leadership, other key talent and labor; defects, security, warranty and liability claims, and recalls related to our products; uncertainty around productivity, simplification, restructuring and realignment actions and related costs and savings; our ability to execute strategic investments for growth, including acquisitions and divestitures; availability, regulation or interference with radio spectrum used by certain of our products; volatility in served markets or impacts on our business and operations due to weather conditions, volatile weather events, or changing climate patterns; risks related to our sustainability efforts and related disclosures; fluctuations in foreign currency exchange rates; difficulty predicting our financial results; risk of future impairments to goodwill and other intangible assets; changes in our effective tax rates or tax expenses; failure to comply with, or changes in, laws or regulations, pertaining to our business conduct, operations, products and services, including anti-corruption, artificial intelligence, data privacy and security, trade, competition, the environment, and health and safety; legal, governmental or regulatory claims, investigations or proceedings and associated contingent liabilities; matters related to intellectual property infringement or expiration of rights; and other factors set forth under "Item 1A. Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2025 and in subsequent filings we make with the Securities and Exchange Commission ("SEC").
Forward-looking and other statements in this press release regarding our environmental and other sustainability plans and goals are not an indication that these statements are necessarily material to investors, to our business, operating results, financial condition, outlook, or strategy, to our impacts on sustainability matters or other parties, or are required to be disclosed in our filings with the SEC or other regulatory authorities, and are not intended to create legal rights or obligations. In addition, historical, current, and forward-looking social, environmental and sustainability-related statements may be based on: standards for measuring progress that are still developing, internal controls and processes that continue to evolve, and assumptions that are subject to change in the future.
All forward-looking statements made herein are based on information currently available to us as of the date of this press release. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.
XYLEM INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED INCOME STATEMENTS (Unaudited)
(in millions, except per share data)
For the three months ended March 31, 2026 2025
-------------------------------------------------- ------- ---------
Revenue from products $1,757 $1,709
Revenue from services 368 360
----- -----
Revenue 2,125 2,069
Cost of revenue from products 1,057 1,041
Cost of revenue from services 265 260
----- -----
Cost of revenue 1,322 1,301
----- -----
Gross profit 803 768
Selling, general and administrative expenses 472 460
Research and development expenses 56 56
Restructuring and asset impairment charges 31 21
----- -----
Operating income 244 231
Interest expense (4) (8)
Other non-operating income, net -- 4
Gain/(Loss) on sale of businesses 4 (10)
----- -----
Income before taxes 244 217
Income tax expense (55) (50)
----- -----
Net income $ 189 $ 167
===== =====
Net loss attributable to non-controlling
interests 4 2
----- -----
Net income attributable to Xylem $ 193 $ 169
===== =====
Earnings per share:
Basic $ 0.79 $ 0.69
Diluted $ 0.79 $ 0.69
Weighted average number of shares:
Basic 242.8 243.1
Diluted 243.4 243.8
XYLEM INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (in millions)
March 31, December 31,
2026 2025
------------------------------------------- ----------- ----------------
ASSETS
Current assets:
Cash and cash equivalents $ 808 $ 1,479
Receivables, less allowances for
discounts, returns and credit losses of
$53 and $68 in 2026 and 2025,
respectively 1,796 1,759
Inventories 991 983
Prepaid and other current assets 243 244
Assets held for sale 192 176
------ ---------
Total current assets 4,030 4,641
Property, plant and equipment, net 1,151 1,159
Goodwill 8,292 8,332
Other intangible assets, net 2,213 2,272
Other non-current assets 1,268 1,230
------ ---------
Total assets $ 16,954 $ 17,634
====== =========
LIABILITIES, REDEEMABLE NON-CONTROLLING INTEREST, AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 969 $ 1,013
Accrued and other current liabilities 1,182 1,237
Short-term borrowings and current
maturities of long-term debt 531 534
Liabilities held for sale 73 72
------ ---------
Total current liabilities 2,755 2,856
Long-term debt 1,407 1,408
Accrued post-retirement benefit
obligations 308 317
Deferred income tax liabilities 437 405
Other non-current accrued liabilities 818 899
------ ---------
Total liabilities 5,725 5,885
------ ---------
Redeemable non-controlling interest 249 258
Stockholders' equity:
Common stock -- par value $0.01 per
share:
Authorized 750.0 shares, issued 260.3
shares and 259.9 shares in 2026 and
2025, respectively 3 3
Capital in excess of par value 8,772 8,759
Retained earnings 3,794 3,706
Treasury stock -- at cost 21.2 shares
and 16.3 shares in 2026 and 2025,
respectively (1,368) (768)
Accumulated other comprehensive loss (229) (220)
------ ---------
Total stockholders' equity 10,972 11,480
------ ---------
Non-controlling interests 8 11
Total equity 10,980 11,491
------ ---------
Total liabilities, redeemable
non-controlling interest, and
stockholders' equity $ 16,954 $ 17,634
====== =========
XYLEM INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (in
millions)
For the three months ended March 31, 2026 2025
-------------------------------------------------- ------- ---------
Operating Activities
Net income $ 189 $ 169
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation 65 68
Amortization 75 77
Share-based compensation 13 12
Restructuring and asset impairment charges 31 21
(Gain) Loss from sale of businesses (4) 10
Other, net (8) 11
Payments for restructuring (37) (21)
Changes in assets and liabilities (net of
acquisitions):
Changes in receivables (58) (48)
Changes in inventories (18) (9)
Changes in accounts payable (61) (64)
Changes in long term receivables (31) (32)
Other, net (48) (161)
-------------------------------------------------- ----- -----
Net Cash -- Operating activities 108 33
-------------------------------------------------- ----- -----
Investing Activities
Capital expenditures (90) (71)
Acquisitions of businesses, net of cash
acquired -- (7)
Proceeds from sale of businesses, net of cash
disposed -- 48
Proceeds from the sale of property, plant and
equipment 1 5
Cash paid for investments -- (1)
Cash paid for asset acquisition (1) --
Cash received from cross-currency swaps 14 12
Other, net -- (1)
-------------------------------------------------- ----- -----
Net Cash -- Investing activities (76) (15)
-------------------------------------------------- ----- -----
Financing Activities
Short-term debt issued, net -- 1
Long-term debt repaid (4) (4)
Repurchase of common stock (563) (13)
Proceeds from exercise of employee stock
options -- 6
Dividends paid (106) (98)
Other, net (10) (8)
-------------------------------------------------- ----- -----
Net Cash -- Financing activities (683) (116)
-------------------------------------------------- ----- -----
Effect of exchange rate changes on cash (15) 25
-------------------------------------------------- ----- -----
Increase in cash classified within assets held
for sale (5) --
Decrease in cash classified within assets held
for sale -- 11
-------------------------------------------------- ----- -----
Changes in cash classified within assets held
for sale (5) 11
-------------------------------------------------- ----- -----
Net change in cash and cash equivalents (671) (62)
Cash and cash equivalents at beginning of year 1,479 1,121
-------------------------------------------------- ----- -----
Cash and cash equivalents at end of period $ 808 $1,059
-------------------------------------------------- ===== =====
Supplemental disclosure of cash flow
information:
Cash paid during the period for:
Interest $ 11 $ 12
Income taxes (net of refunds received) $ 28 $ 37
Xylem Inc. Non-GAAP Measures
Management reviews key performance indicators including revenue, gross
margins, segment operating income and margins, orders growth, working capital
and backlog, among others. In addition, we consider certain non-GAAP (or
"adjusted") measures to be useful to management and investors evaluating our
operating performance for the periods presented, and to provide a tool for
evaluating our ongoing operations, liquidity and management of assets. This
information can assist investors in assessing our financial performance and
measures our ability to generate capital for deployment among competing
strategic alternatives and initiatives, including but not limited to,
dividends, acquisitions, share repurchases and debt repayment. Excluding
revenue, Xylem provides guidance only on a non-GAAP basis due to the inherent
difficulty in forecasting certain amounts that would be included in GAAP
earnings, such as discrete tax items, without unreasonable effort. These
adjusted metrics are consistent with how management views our business and are
used to make financial, operating and planning decisions. These metrics,
however, are not measures of financial performance under GAAP and should not
be considered a substitute for revenue, operating income, net income, earnings
per share (basic and diluted) or net cash from operating activities as
determined in accordance with GAAP. We consider the following items to
represent the non-GAAP measures that we consider to be key performance
indicators, as well as the related reconciling items to the most directly
comparable measure calculated and presented in accordance with GAAP. The
non-GAAP measures may not be comparable to similarly titled measures reported
by other companies.
"Organic revenue" and "Organic orders" defined as revenue and orders,
respectively, excluding the impact of fluctuations in foreign currency
translation and contributions from acquisitions and divestitures. Divestitures
include sales or discontinuance of insignificant portions of our business that
did not meet the criteria for classification as a discontinued operation. The
period-over-period change resulting from foreign currency translation impacts
is determined by translating current period and prior period activity using
the same currency conversion rate.
"EBITDA" defined as earnings before interest, taxes, depreciation and
amortization expense. "Adjusted EBITDA" and "Adjusted Segment EBITDA" reflect
the adjustments to EBITDA and segment EBITDA, respectively, to exclude
share-based compensation charges, restructuring and realignment costs, gain or
loss from sale of businesses and special charges.
"Adjusted EBITDA Margin" and "Adjusted Segment EBITDA Margin" defined as
adjusted EBITDA and adjusted segment EBITDA divided by total revenue and
segment revenue, respectively.
"Adjusted Operating Income", "Adjusted Segment Operating Income", "Adjusted
Net Income" and "Adjusted EPS" defined as operating income, segment operating
income, net income attributable to Xylem and earnings per share attributable
to Xylem, adjusted to exclude restructuring and realignment costs,
amortization of acquired intangible assets, gain or loss from sale of
businesses, special charges and tax-related special items, as applicable.
"Adjusted Operating Margin" and "Adjusted Segment Operating Margin" defined as
adjusted operating income and adjusted segment operating income divided by
total revenue and segment revenue, respectively.
"Free Cash Flow" defined as net cash from operating activities, as reported in
the Statement of Cash Flows, less capital expenditures. Our definition of free
cash flow does not consider certain non-discretionary cash payments, such as
debt.
"Free Cash Flow Margin" defined as free cash flow, adjusted (as applicable)
for significant cash paid or received for non-operational tax, acquisition or
divestiture activities; divided by revenue.
"Realignment costs" defined as costs not included in restructuring costs that
are incurred as part of actions taken to reposition our business, including
items such as professional fees, severance, relocation, travel, facility
set-up and other costs.
"Special charges" defined as non-recurring costs incurred by the Company, such
as those related to acquisitions and integrations, divestitures and non-cash
impairment charges.
"Tax-related special items" defined as tax items, such as tax return versus
tax provision adjustments, tax exam impacts, tax law change impacts, excess
tax benefits/losses and other discrete tax adjustments.
Xylem Inc. Non-GAAP Reconciliation
Reported vs. Organic Orders ($ Millions)
(As Reported - GAAP) (As Adjusted - Organic)
$(F)$ = $(G)$ =
$(A)$ $(B)$ $(CUL3)$ $(D)$ $(E)$ B+C+D+E F/(A-D)
Change % Change Change % Change
------- ------------
2026 v. 2026 v. FX Adj. 2026 Adj. 2026
Orders Orders 2025 2025 Book-to-Bill Acquisitions Divestitures Impact v. 2025 v. 2025
------ ------ -------- ---------- -------------- -------------- ------------ -------- --------- -----------
2026 2025
-----------
Quarter Ended
March 31
Xylem Inc. 2,228 2,158 70 3% 105% (12) 5 (70) (7) 0%
Water
Infrastructure 675 626 49 8% 112% (8) 5 (32) 14 2%
Applied Water 512 486 26 5% 114% - - (15) 11 2%
Measurement and
Control
Solutions 475 402 73 18% 94% - - (11) 62 15%
Water Solutions
and Services 566 644 (78) (12%) 100% (4) - (12) (94) (15%)
--- ----
Xylem Inc. Non-GAAP Reconciliation
Reported vs. Organic Revenue ($ Millions)
(As Reported - GAAP) (As Adjusted - Organic)
(F) = (G) =
(A) (B) (C) (D) (E) B+C+D+E F/(A-D)
Change % Change Change % Change
------ ------------
2026
v. 2026 v. FX Adj. 2026 Adj. 2026 v.
Revenue Revenue 2025 2025 Acquisitions Divestitures Impact v. 2025 2025
------- ------- ------ --------- -------------- ------------ -------- --------- ------------
2026 2025
------------
Quarter Ended
March 31
Xylem Inc. 2,125 2,069 56 3% (5) 5 (65) (9) 0%
Water
Infrastructure 603 581 22 4% (3) 5 (29) (5) (1%)
Applied Water 448 435 13 3% - - (14) (1) 0%
Measurement and
Control
Solutions 508 490 18 4% - - (11) 7 1%
Water Solutions
and Services 566 563 3 1% (2) - (11) (10) (2%)
------
Xylem Inc. Non-GAAP Reconciliation
Adjusted Diluted EPS
($ Millions, except per share amounts)
Q1 2026 Q1 2025
As As
Reported Adjustments Adjusted Reported Adjustments Adjusted
---------- --------------- ---------- ---------- --------------- ----------
Total Revenue 2,125 - 2,125 2,069 - 2,069
Operating Income 244 98 a 342 231 94 a 325
Operating Margin 11.5% 16.1% 11.2% 15.7%
Interest Expense (4) - (4) (8) - (8)
Other Non-Operating
Income (Expense) - 5 b 5 4 - 4
Gain/(Loss) From
Sale of
Businesses 4 (4) c - (10) 10 c -
----- ----- --- ----- ----- ----- ---- -----
Income before Taxes 244 99 343 217 104 321
Provision for
Income Taxes (55) (20) d (75) (50) (22) d (72)
----- ----- --- ----- ----- ----- --- -----
Net Income 189 79 268 167 82 249
===== ===== ==== ===== ===== ===== ==== =====
Net Loss
Attributable to
Non-controlling
Interests 4 - 4 2 - 2
----- ----- ---- ----- ----- ----- ---- -----
Net Income
Attributable to
Xylem 193 79 272 169 82 251
===== ===== ==== ===== ===== ===== ==== =====
Diluted Shares 243.4 243.4 243.8 243.8
Diluted EPS $ 0.79 $ 0.33 $ 1.12 $ 0.69 $ 0.34 $ 1.03
a Restructuring & realignment costs: 2026 - $38 million; 2025 - $27 million
Special charges: 2026 - $5 million of acquisition, divestiture & integration costs; 2025 - $8 million
of acquisition, divestiture & integration costs and $4 million of intangible asset impairment charges
Purchase accounting intangible amortization: 2026 - $55 million; 2025 - $55 million
b Other special charges
c Gain/(Loss) from sale of businesses as per income statement for all periods presented
d 2026 - Net tax impact on pre-tax adjustments (notes a, b and c) of $21 million and $1 million of
other tax special expense items; 2025 - Net tax impact on pre-tax adjustments (note a and b) of $22
million
Xylem Inc. Non-GAAP Reconciliation
EBITDA and Adjusted EBITDA by Quarter ($ Millions)
2026
Q1 Q2 Q3 Q4 Total
Net Income
attributable to
Xylem 193 193
Net Income margin 9.1% 9.1%
Depreciation 65 65
Amortization 75 75
Interest Expense
(Income), net (4) (4)
Income Tax
Expense 55 55
----- ----- ----- ----- -----
EBITDA 384 384
Share-based
Compensation 13 13
Restructuring &
Realignment 38 38
Special Charges 10 10
Loss/(Gain) from
sale of
businesses (4) (4)
Loss attributable
to
non-controlling
interest (4) (4)
----- ----- ----- ----- -----
Adjusted EBITDA 437 437
===== ===== ===== ===== =====
Revenue 2,125 2,125
----- ----- ----- ----- -----
Adjusted EBITDA
Margin 20.6% 20.6%
----- ----- ----- ----- -----
2025
Q1 Q2 Q3 Q4 Total
Net Income
attributable to
Xylem 169 226 227 335 957
Net Income margin 8.2% 9.8% 10.0% 14.0% 10.6%
Depreciation 68 69 64 66 267
Amortization 77 76 78 77 308
Interest Expense
(Income), net - 3 - (1) 2
Income Tax
Expense 50 75 71 35 231
----- ----- ----- ----- -----
EBITDA 364 449 440 512 1,765
Share-based
Compensation 12 13 12 16 53
Restructuring &
Realignment 27 29 30 45 131
Special Charges 12 13 9 2 36
Loss/(Gain) from
sale of
businesses 10 - 37 (16) 31
Loss attributable
to
non-controlling
interest (2) (2) (1) (2) (7)
----- ----- ----- ----- -----
Adjusted EBITDA 423 502 527 557 2,009
===== ===== ===== ===== =====
Revenue 2,069 2,301 2,268 2,397 9,035
----- ----- ----- ----- -----
Adjusted EBITDA
Margin 20.4% 21.8% 23.2% 23.2% 22.2%
----- ----- ----- ----- -----
View source version on businesswire.com: https://www.businesswire.com/news/home/20260427390392/en/
CONTACT: Media
Press Office
+1 (978) 704-5149
PressOffice@xylem.com
Investors
Michael Travers
+1 (724) 772-1597
Michael.Travers@xylem.com
(END) Dow Jones Newswires
April 28, 2026 10:28 ET (14:28 GMT)
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