Xylem : 1Q 2026 Earnings Package

Published: 2026-04-28 07:18:15 ET XYL

Published on 04/28/2026 at 07:18 am EDT

2026 First Quarter

Results and Earnings

April 28, 2026

1Q 2026 Performance Summary

($ in millions, unless otherwise noted)

Xylem Consolidated

Measurement

and

Control Solutions

Water Infrastructure

Applied Water

Water Solutions and Services

Reported 1Q

Adj* 1Q

Orders

2,228

Overall Growth

Organic Growth*

(0%)

Revenue

2,125

Overall Growth

Organic Growth*

(0%)

Operating Income

244

342

Operating Margin

11.5%

16.1%

EBITDA*

384

437

EBITDA Margin*

18.1%

20.6%

Earnings Per Share

$0.79

$1.12

Reported 1Q

Adj* 1Q

475

18%

15%

508

11.2%

16.3%

105

106

20.7%

20.9%

Reported 1Q

Adj* 1Q

675

603

(1%)

117

12.6%

19.4%

100

132

16.6%

21.9%

Reported 1Q

Adj* 1Q

512

448

(0%)

17.2%

17.6%

18.8%

19.6%

Reported 1Q

Adj* 1Q

566

(12%)

(15%)

566

(2%)

9.9%

14.7%

116

125

20.5%

22.1%

2026 1Q Earnings Highlights

Solid demand with book-to-bill >1, strong MCS orders growth

Revenue and earnings in line with expectations, significant free cash flow* growth

Accelerating capital deployment, repurchased $581M in shares and signed an Analytics acquisition for $219M

Self improvement initiatives enhancing ability to mitigate macro uncertainty Largest order ever received in April for WSS - $850M

M&A pipeline is strong, progressing to our long-term target

1Q 2026 Financial Performance

Orders

$2,158 $2,228

Revenue

$2,069

$2,125

Adj. EBITDA Margin*

+20 bps

20.4% 20.6%

YTD Free Cash Flow*

$1.03

$1.12

$18

Organic* (0%)

147%

1Q 2025 1Q 2026

1Q 2025 1Q 2026 -$38

2025 2026

YTD FCF Margin* (2%) 1%

Resilient demand with book-to-bill ratio >1x

Strength in MCS

$4.7B backlog

Strength in Energy Metering, Dewatering, Transport and Building Solutions

US remains our strongest geography

Improvement driven by productivity and price more than offsetting inflation, mix, and volume

$0.06 organic operations

$0.03 other including interest income and lower tax rate

Free cash flow* driven by timing of accruals and lower payments, partly offset by restructuring costs and higher capex

0.6x net debt / adjusted EBITDA* (TTM)

1Q 2026 Segment Performance Summary

Measurement and Control Solutions

Water Infrastructure

Applied Water

Water Solutions and Services

Orders / Organic Growth*

$475M

+15%

$675M +2%

$512M +2%

$566M

(15%)

Revenue / Organic Growth*

$508M +1%

$603M (1%)

$448M (0%)

$566M (2%)

Adj. EBITDA

Margin* / Expansion

20.9%

$106M

-10 bps YoY

21.9%

$132M

+120 bps YoY

19.6%

$88M

+10 bps YoY

22.1%

$125M

+40 bps YoY

Orders growth driven by Water Metering

Revenue growth led by Energy Metering demand and execution of backlog

Margin decline led by mix and inflation offset by productivity and price

Orders growth driven by Transport

Revenue decline driven by Treatment offset by Transport

Margin up due to productivity

offset by inflation and mix

Orders growth driven by US data centers

Revenue growth in commercial offset by declines in industrial and residential end markets

Margin up due to productivity and price offset by inflation, volume and mix

Orders decline driven by capital timing

Revenue decline driven by capital timing partly offset by Dewatering

Margin up led by price and productivity offset by inflation and volume

Full-Year Highlights

Organic revenue* growth driven by healthy demand, backlog execution, and price more than offsetting 80/20 headwinds

Margin driven by productivity, volume, and price offsetting inflation and investments

Cash flow impaired by remaining restructuring costs, system investments and outsourced water projects

Prior FY Guide**

Updated FY Guide***

2Q Guide

FY 2026 and 2Q 2026 Guidance

Revenue

$9.1 - 9.2B

1 - 3% Total Growth

2 - 4% Organic* Growth

$9.2 - 9.3B

2 - 3% Total Growth

2 - 4% Organic* Growth

$2.3 - $2.4B

2 - 3% Total Growth

~1% Organic* Growth

Adjusted EBITDA

Margin*

~22.9 - 23.3%

+70 - 110 bps expansion

~22.9 - 23.3%

+70 - 110 bps expansion

22.0-22.5%

+20 - 70 bps expansion

Adjusted EPS*

$5.35 - $5.60

$1.31 - $1.36

Free Cash Flow Margin*

10.2-11% margin

*See appendix for definitions of non-GAAP measures

Key Takeaways

Started the year with solid momentum

2025 Sustainability Report highlights execution of 2025 goals

Multi-year operating transformation is gaining traction

Appendix

9 1Q 2026 Results & Earnings

FY 2026 Guidance Key Assumptions

FY 2026 Assumptions

Corporate Expense

~$85M

Restructuring & Realignment Costs*

$70M - $90M

Capex

~$350M

Estimated Tax Rate1

~22 - 23%

Purchase Accounting Intangible Amortization

~$220M

EUR / USD Rate

1.17

*See appendix for definitions of non-GAAP measures and non-GAAP reconciliations

Segment Key Facts

Water Solutions and Services

Treatment, transport and assessment services solutions with an extensive service network and highly recurring revenue

Key brands: Grindex, Godwin, MarCor

Geographic split: US ~75% / Rest of World ~25%

End-market split: Industrials ~80% / Utilities ~20%

Channels: Primarily direct

Market drivers: Outsourced service, water scarcity, regulation, emerging contaminants

Competitive advantage: Service network, mobile fleet, SOPHIS digital solutions, technology agnostic business model

Advanced technology solutions for water and energy, including smart metering and test & measurement

Key brands: Sensus, Smith-Blair, WTW, Xylem Vue, YSI

Geography split: US ~75% / W. Europe ~15% / EM & Other ~10%

End-market Split: Clean Water Utilities ~90% / Industrials ~10%

Channels: Primarily indirect, some direct for larger projects

Market drivers: AMI adoption acceleration, connected solutions, non-revenue water, affordability, labor shortages

Competitive advantage: Deep application expertise and technology leadership, long-standing customer relationships, FlexNet, Idrica

~27%

~20%

Portfolio

breakdown by FY25 revenue

~23%

~30%

Applied Water

Industrial and buildings solutions applications including pumps, valves, heat exchangers, controls, and dispensing equipment

Key brands: Bell & Gossett, Flojet, Goulds, Lowara

Geographic split: US ~55% / W. Europe ~20% / EM & Other ~25%

End-market split: Industrials ~45% / Building Solutions ~55%

Channels: Primarily indirect

Market drivers: Urbanization, climate, regulation, labor shortage

Competitive advantage: Established footprint, strong channel partnerships, quality & reliability

Water Infrastructure

Products and solutions for the transportation and treatment of water, including pumps, filtration and treatment equipment, and controls

Key brands: Flygt, Wedeco, Sanitaire, Defender

Geographic split: US ~35% / W. Europe ~35% / EM & Other ~30%

End-market Split: Wastewater Utilities ~60% / Industrials ~40%

Channels: Primarily direct

Market drivers: Water scarcity, affordability, aging infrastructure, regulations, sustainability

Competitive advantage: Innovation leadership, significant global installed base, digital offerings

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 and earnings per share, 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.

"Free cash flow Conversion" defined as free cash flow, or adjusted free cash flow as applicable; divided by net income, excluding the gain on sale of businesses and other non-recurring, significant non-cash impacts, such as non-cash impairment charges and significant deferred tax items. "Adjusted free cash flow" used in free cash flow conversion defined as free cash flow adjusted for significant cash items for which the corresponding income statement impact does not occur within the same fiscal year.

"Free cash flow margin" defined as free cash flow, adjusted 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 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.

Reported vs. Organic Orders ($ Millions)

Reported vs. Organic Revenue ($ Millions)

Adjusted Operating Income ($ Millions)

Q1 2026 2025

Total Revenue

Restructuring & Realignment Costs

Total Xylem 2,125 2,069

Water Infrastructure

603

581

Applied Water

448

435

Measurement and Control Solutions

508

490

Water Solutions and Services

566

563

Corporate/ Other

Total Xylem 38 27

Water Infrastructure

Applied Water

Measurement and Control Solutions

Water Solutions and Services

Corporate/ Other

Purchase Accounting Intangible Amortization Adjustment

Operating Income (Loss)

244

231

(22)

(21)

Operating Margin

11.5%

11.2%

12.6%

13.8%

17.2%

16.6%

11.2%

11.4%

9.9%

7.8%

N/A

Total Xylem

Water Infrastructure

Applied Water

Measurement and Control Solutions

Water Solutions and Services

Corporate/ Other

Total Xylem

Water Infrastructure

Applied Water

Measurement and Control Solutions

Water Solutions and Services

Corporate/ Other

Total Xylem 55 55

Water Infrastructure 11 10

Applied Water - -

Measurement and Control Solutions 19 19

Water Solutions and Services 25 26

Corporate/ Other - -

Special Charges

Total Xylem

Water Infrastructure

Applied Water

Measurement and Control Solutions

Water Solutions and Services

Corporate/ Other

Adjusted Operating Income (Loss)

Total Xylem

342

325

Water Infrastructure

117

107

Applied Water

Measurement and Control Solutions

Water Solutions and Services

Corporate/ Other

(20)

(19)

Adjusted Operating Margin

Total Xylem

16.1%

15.7%

Water Infrastructure

19.4%

18.4%

Applied Water

17.6%

17.7%

Measurement and Control Solutions

16.3%

16.7%

Water Solutions and Services

14.7%

13.9%

Corporate/ Other

N/A

Adjusted Diluted EPS ($ Millions, except per share amounts)

Xylem Inc. Non-GAAP Reconciliation

EBITDA and Adjusted EBITDA by Quarter ($ Millions)

2026

Q1 Q2 Q3 Q4 Total

Net Income attributable to Xylem

193

Net Income margin

9.1%

Depreciation

Amortization

Interest Expense (Income), net

(4)

Income Tax Expense

EBITDA

384

Share-based Compensation

Restructuring & Realignment

Special Charges

Loss/(Gain) from sale of businesses

(4)

Loss attributable to non-controlling interest

(4)

Adjusted EBITDA

437

Revenue

2,125

Adjusted EBITDA Margin

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

64 66

267

Amortization

78 77

308

Interest Expense (Income), net

(1)

Income Tax Expense

231

EBITDA

364

449

440

512

1,765

Share-based Compensation

Restructuring & Realignment

131

Special Charges

Loss/(Gain) from sale of businesses

(16)

Loss attributable to non-controlling interest

(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%

22.2%

Xylem Inc. Non-GAAP Reconciliation

EBITDA and Adjusted EBITDA by Quarter ($ Millions) Water Infrastucture

Xylem Inc. Non-GAAP Reconciliation

EBITDA and Adjusted EBITDA by Quarter ($ Millions) Applied Water

2026

Q1 Q2 Q3 Q4 Total

Operating Income 76 76

Operating Margin

12.6%

(Loss)/Gain from sale of businesses

Depreciation

Amortization

Other non-operating expense, excluding interest income

(2)

EBITDA

100

Share-based Compensation

Restructuring & Realignment

Special Charges

Loss/(Gain) from sale of businesses

Adjusted EBITDA

132

Revenue

603

Adjusted EBITDA Margin

21.9%

2025

Q1 Q2 Q3 Q4 Total

Operating Income 80 103 113 166 462

Q1 Q2 Q3 Q4 Total

Operating Income 77 77

Operating Margin

17.2%

(Gain) attributable to non-controlling interest

Depreciation

Amortization

Other non-operating expense, excluding interest income

(1)

EBITDA

Share-based Compensation

Restructuring & Realignment

Special Charges

Gain attributable to non-controlling interest

Adjusted EBITDA

Revenue

448

Adjusted EBITDA Margin

19.6%

2025

Q1 Q2 Q3 Q4 Total

Operating Income 72 84 85 71 312

Operating Margin

13.8%

15.8%

17.2%

22.2%

17.5%

(Loss)/Gain from sale of businesses

(10)

(7)

Depreciation

Amortization

Other non-operating expense, excluding interest income

(2)

(6)

EBITDA

125

139

192

547

Share-based Compensation

Restructuring & Realignment

Special Charges

Loss/(Gain) from sale of businesses

(2)

(1)

Adjusted EBITDA

120

142

160

219

641

Revenue

581

650

656

749

2,636

Adjusted EBITDA Margin

20.7%

21.8%

24.4%

29.2%

24.3%

Operating Margin

16.6%

17.4%

18.6%

14.9%

16.9%

(Gain) attributable to non-controlling interest

(1)

Depreciation

Amortization

Other non-operating expense, excluding interest income

(1)

EBITDA

344

Share-based Compensation

Restructuring & Realignment

Special Charges

Gain attributable to non-controlling interest

Adjusted EBITDA

105

378

Revenue

435

483

456

475

1,849

Adjusted EBITDA Margin

19.5%

21.7%

18.7%

20.4%

Xylem Inc. Non-GAAP Reconciliation

EBITDA and Adjusted EBITDA by Quarter ($ Millions) Water Solutions and Services

Xylem Inc. Non-GAAP Reconciliation

EBITDA and Adjusted EBITDA by Quarter ($ Millions) Measurement and Control Solutions

2026

Q1 Q2 Q3 Q4 Total

Operating Income 56 56

Operating Margin

9.9%

Depreciation

Amortization

Other non-operating expense, excluding interest income

(5)

(Gain) attributable to non-controlling interest

EBITDA

116

Share-based Compensation

Restructuring & Realignment

Special Charges

Gain attributable to non-controlling interest

Adjusted EBITDA

125

Revenue

566

Adjusted EBITDA Margin

22.1%

2025

Q1 Q2 Q3 Q4 Total

Operating Margin

7.8%

12.4%

15.5%

12.8%

12.3%

(Loss)/Gain from sale of businesses

Depreciation

159

Amortization

108

Other non-operating expense, excluding interest income

(1)

(Gain) attributable to non-controlling interest

- - (1) - (1)

EBITDA

112

148

161

146

567

Share-based Compensation

Restructuring & Realignment

Special Charges

Loss/(Gain) from sale of businesses

Gain attributable to non-controlling interest

Adjusted EBITDA

122

153

167

153

595

Revenue

563

628

634

639

2,464

Adjusted EBITDA Margin

21.7%

24.4%

26.3%

23.9%

24.1%

Operating Income 44 78 98 82 302

Q1 Q2 Q3 Q4 Total

Operating Income 57 57

Operating Margin

11.2%

Loss attributable to non-controlling interest

(Loss)/Gain from sale of businesses

Depreciation

Amortization

Other non-operating expense, excluding interest income

EBITDA

105

Share-based Compensation

Restructuring & Realignment

Special Charges

Loss/(Gain) from sale of businesses

(4)

(Loss) attributable to non-controlling interest

(4)

Adjusted EBITDA

106

Revenue

508

Adjusted EBITDA Margin

20.9%

2025

Q1 Q2 Q3 Q4 Total

Operating Income 56 68 64 56 244

Operating Margin

11.4%

12.6%

12.3%

10.5%

11.7%

Loss attributable to non-controlling interest

(Loss)/Gain from sale of businesses

(39)

(24)

Depreciation

Amortization

135

Other non-operating expense, excluding interest income

(1)

(2)

EBITDA

115

395

Share-based Compensation

Restructuring & Realignment

Special Charges

Loss/(Gain) from sale of businesses

(15)

(Loss) attributable to non-controlling interest

(4)

(2)

(3)

(9)

Adjusted EBITDA

103

125

114

108

450

Revenue

490

540

522

534

2,086

Adjusted EBITDA Margin

21.0%

23.1%

21.8%

20.2%

21.6%

Net Cash - Operating Activities vs. Free Cash Flow ($ Millions)

2026 2025

Net Cash - Operating Activities

$108

$33

Capital Expenditures - PPE

(66)

(55)

Capital Expenditures - Software

(24)

(16)

Capital Expenditures

(90)

(71)

Free Cash Flow

$18

($38)

Cash Paid for Significant Divestiture Activities

Adjusted Free Cash Flow for Margin Calculation

$25

($38)

Revenue

$2,125

$2,069

Operating Cash Flow Margin

5.1%

1.6%

Free Cash Flow Margin

1.2%

(1.8%)

Thank you.

1Q 2026 Results & Earnings

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Xylem Inc. published this content on April 28, 2026, and is solely responsible for the information contained herein. Distributed via Public Technologies (PUBT), unedited and unaltered, on April 28, 2026 at 11:17 UTC.