Xylem Reports Third Quarter 2025 Results

• Revenue of $2.3 billion, up 8% on a reported basis; 7% organically
• Earnings per share of $0.93, up 4%; $1.37 on an adjusted basis, up 23%
• Raising full-year 2025 revenue and adjusted earnings per share guidance

Xylem Inc. (NYSE:XYL), a leading global water solutions company dedicated to solving the world's most challenging water issues, today reported third-quarter 2025 results. The Company delivered total revenue of $2.3 billion, on strong execution and demand. Third-quarter earnings per share were up 4 percent on a reported basis and 23 percent on an adjusted basis.

"The team delivered another strong quarter, exceeding expectations with disciplined execution on continuing commercial momentum," said Matthew Pine, Xylem's president and CEO. "Revenue grew across all segments, with double-digit gains in Measurement and Control Solutions and Water Solutions and Services. Record adjusted EBITDA margin reflected the impact of our simplification initiatives, with strong margin expansion contributing to 23 percent adjusted EPS growth."

"Resilient market demand for our solutions and our team's accelerating performance give us the confidence to raise our full-year guidance. We are solidly on track to deliver our long-term financial framework and drive sustainable growth and value creation over the cycle."

Net income attributable to Xylem for the quarter was $227 million, or $0.93 per share. Net income margin declined 30 basis points to 10.0 percent. These results are driven by strong operational performance and decreased interest expense, offset by increased loss from the sale of businesses and tax expense. Adjusted net income was $333 million, or $1.37 per share, which excludes the impacts of purchase accounting intangible amortization, restructuring and realignment costs, special charges, loss from the sale of businesses and the net tax impact of these adjustments.

Third-quarter adjusted earnings before interest, tax, depreciation, and amortization (EBITDA) margin was 23.2 percent, reflecting a year-over-year increase of 200 basis points. Productivity savings, strong price realization, and volume drove the margin expansion, exceeding the impact of inflation, investments, and mix.

Outlook

Xylem now forecasts full-year 2025 revenue of approximately $9.0 billion, up approximately 5 to 6 percent on a reported basis, versus 4 to 5 percent previously guided, and up approximately 4 to 5 percent on an organic basis.

Full-year 2025 adjusted EBITDA margin is expected to be approximately 22.0 to 22.3 percent, an increase of 140 to 170 basis points from Xylem's 2024 adjusted earnings. This results in full-year adjusted earnings per share of $5.03 to $5.08, versus the previous guide of $4.70 to $4.85. Full-year free cash flow margin is still expected to be approximately 9 to 10 percent.

Further 2025 planning assumptions are included in Xylem's third-quarter 2025 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. Outlook is being provided in the context of the current volatility, including due to geopolitical, trade, macroeconomic and regulatory uncertainty.

Supplemental information on Xylem's third-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 23,000 diverse employees delivered revenue of $8.6 billion in 2024, optimizing water and resource management with innovation and expertise. Join us at www.xylem.com and Let's Solve Water.

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," "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, inflation and related monetary policy by governments in response to inflation, and the strength of the residential and commercial real estate markets, on economic activity and our operations; geopolitical events, including ongoing, possible escalation or outbreak of international conflicts, as well as regulatory, economic and other risks associated with our global sales and operations, including those related to domestic content requirements applicable to projects receiving governmental funding; manufacturing and operating cost increases due to macroeconomic conditions, including inflation, energy supply, supply chain shortages, logistics challenges, tight labor markets, prevailing price changes, tariffs, trade policies or agreements and other factors; demand for our products, disruption, competition or pricing pressures in the markets we serve; cybersecurity incidents or other disruptions of information technology systems on which we rely, or involving our connected products and services; lack of availability or delays in receiving parts and raw materials from our supply chain, including electronic components (in particular, semiconductors); disruptions in operations 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 with respect to meeting performance guarantees and customers' budgets, timelines and safety requirements; our ability to retain and attract leadership and other key talent, as well as competition for overall talent and labor; defects, security, warranty and liability claims, and recalls related to our products; uncertainty around 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, including the effects of climate change; risks related to our sustainability commitments 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; financial market risks related to our pension and other defined benefit plans; 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, climate change 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, 2024 ("2024 Annual Report") 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. 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.

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