Xylem Stock Earnings Reports

Xylem reported a resilient Q1 2026: revenue and orders were roughly flat year-over-year, ending backlog rose to $4.7 billion and book-to-bill was above 1. The company delivered 20.6% adjusted EBITDA margin and EPS of $1.12 (up 9%). Management continues disciplined capital deployment: an ~8% dividend increase in January, a new $1.5 billion repurchase authorization, and $581 million of buybacks executed in Q1. They announced a $219 million acquisition of a German water-quality instruments business to expand analytics and sensing capabilities, and WSS subsequently secured its largest-ever outsourced water contract — $850 million over 20 years (roughly 75% services / 25% capital). China remains a headwind (about -30% this quarter) and some walk-away actions from low-value contracts (80/20 program) pressured short-term revenue, concentrated in H1. The international metering divestiture is delayed to the end of Q2, which modestly changed reported figures. Updated full-year guidance: reported revenue $9.2–9.3B (organic growth unchanged at 2%–4%), adjusted EBITDA margin 22.9%–23.3% (70–110 bps expansion YoY), and EPS guidance unchanged at $5.35–$5.60. MCS margins are expected to improve sequentially and exit the year well above 25% post-divestiture. Free cash flow started strong and management reiterates commitment to a low double-digit free cash flow margin long term. Balance sheet remains healthy; M&A pipeline and service-led, higher-margin opportunities are priorities.