Xylem Stock Earnings Reports

Xylem reported a strong Q3 2025 driven by broad-based revenue growth (7% organic in the quarter) and margin expansion. Key financial highlights: record quarterly EBITDA margin above 23% (up ~200 bps YoY), Q3 EPS of $1.37 (up 23% YoY), backlog of about $5 billion, net debt/adjusted EBITDA of 0.4x, and year-to-date free cash flow modestly below prior year (impacted by outsourced water projects and restructuring payments). Management raised full-year 2025 guidance to approximately $9.0B revenue (5–6% total / 4–5% organic growth), EBITDA margin 22.0–22.3% (140–170 bps expansion), and adjusted EPS $5.03–$5.08 (up from $4.70–$4.85); Q4 revenue is expected around $2.4B and EBITDA margin roughly 23%. Segment performance was strong overall: Measurement & Control Solutions (MCS) +11% orders and revenue with $1.5B backlog; Water Infrastructure revenue +5% and EBITDA margin +400 bps; Applied Water showed sequential recovery but China remains a material headwind; Water Solutions & Services grew revenue 10% despite order timing. Management is accelerating its simplification program (80/20 and operating model transformation), which they credit for productivity and margin gains, and announced the sale of the international metering business (2024 revenue ~$250M) for $125M, expected to improve MCS margins ~100 bps on a run-rate basis. Management flagged an updated annualized tariff impact near $180M (including additional Section 232 derivatives) but said pricing and supply-chain levers should substantially offset most of the impact with slight margin dilution. Risks/near-term watch items: continued macro uncertainty (tariffs, FX), China demand softness, and timing of large capital projects (some order timing delays). Capital allocation priorities remain: strategic M&A (~$1B/year of targeted bolt-on deployment), dividends, and opportunistic buybacks.