01—Abstract
Summary
Summary of the 10-Q filed October 31, 2024. Cited figures are marked; the original filing is the authoritative source.
Xylem Inc. reported third-quarter 2024 revenue of $2,104 milliona, up 1.3% from $2,076 million a year earlier, with organic revenue up 1.1%, driven mainly by Measurement and Control Solutions.
Net income rose to $217 millionb from $152 million, and diluted EPS was $0.89 versus $0.63. Operating income increased to $280 million (13.3% operating margin) from $191 million (9.2%), helped by lower special charges, restructuring and acquired intangible amortization. Orders were $2,201 million, up 8.4%, and total backlog reached $5,253 million at September 30, 2024.
For the nine months, revenue was $6,306 millionc, up 20.2%, including $782 million from acquisitions and divestitures, with organic revenue up 5.4%. Net income was $564 million and diluted EPS was $2.32. Operating cash flow was $688 million, and free cash flow was $467 million compared with $205 million a year earlier.
Cash and cash equivalents were $989 milliond, total debt was $1,994 million, and the company repaid its €250 million term loan in April 2024. Management updated its 2024 outlook to total revenue growth of 15% and organic revenue growth of approximately 5%. Subsequent to quarter-end, Xylem sent notice to exercise a call option to acquire an additional 35.9% equity interest in Idrica for approximately €146 million ($163 million), with closing expected in December 2024.
02—Key points
Key Highlights
- Third-quarter revenue of $2,104 million rose 1.3%, with organic growth of 1.1%; Measurement and Control Solutions led with organic growth of 10.7%.
- Third-quarter operating margin expanded to 13.3% from 9.2%, and net income rose 42.8% to $217 million.
- Diluted EPS was $0.89 in the quarter versus $0.63; adjusted EPS was $1.11, up 12.1%.
- Nine-month revenue of $6,306 million rose 20.2%, with organic growth of 5.4% and $782 million from acquisitions and divestitures.
- Orders of $2,201 million in the quarter rose 8.4%, and backlog of $5,253 million was up 1.6% from a year earlier.
- Operating cash flow of $688 million and free cash flow of $467 million for the nine months, with cash of $989 million at quarter-end.
- 2024 outlook updated to total revenue growth of 15% and organic revenue growth of approximately 5%.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q3 FY2024, Xylem kept $0.10.
- Revenue$2.10B100.0%
- Cost of revenue−$1.32B62.7%
- Gross profit$784.0M37.3%
- Operating costs−$504.0M24.0%
- Operating income$280.0M13.3%
- Interest, other & tax−$63.0M3.0%
- Net income$217.0M10.3%
04—Financials
Financial Highlights
Figures from 10-QQ3 FY2024filed October 31, 2024Financial Statements
Q3 FY2024 against Q3 FY2023
| Line item | Q3 FY2024Q3 FY2023 | Change |
|---|---|---|
| Revenue | $2.10B$2.08B | +1.3% |
| Cost of Revenue | $1.32B$1.31B | +0.6% |
| Gross Profit | $784.00M$764.00M | +2.6% |
| R&D Expenses | $55.00M$61.00M | −9.8% |
| SG&A Expenses | $445.00M$491.00M | −9.4% |
| Operating Income | $280.00M$191.00M | +46.6% |
| Interest Expense | $10.00M$14.00M | −28.6% |
| Net Income | $217.00M$152.00M | +42.8% |
| EPS (Basic) | $0.89$0.63 | +41.3% |
| EPS (Diluted) | $0.89$0.63 | +41.3% |
| Shares Outstanding (Basic) | 242.93M240.87M | +0.9% |
| Shares Outstanding (Diluted) | 243.75M242.19M | +0.6% |
05—Questions
Frequently Asked Questions
How did Xylem perform in the third quarter of 2024?
Revenue was $2,104 million, up 1.3% from $2,076 million, with organic growth of 1.1%. Operating income rose to $280 million from $191 million, net income increased to $217 million from $152 million, and diluted EPS was $0.89 versus $0.63.
Which segments drove growth?
Measurement and Control Solutions had the strongest quarter, with revenue up 10.9% and organic growth of 10.7%, driven by smart metering in the U.S. Water Infrastructure revenue rose 1.8%, while Applied Water revenue fell 3.9% and Water Solutions and Services revenue fell 1.7%.
How did the Evoqua acquisition affect results?
Acquisitions and divestitures contributed $782 million of revenue growth for the nine months ended September 30, 2024, but none in the third quarter. The filing also notes $163 million of acquired intangible amortization for the nine months, and the company has been recording integration-related special charges and restructuring costs.
What is Xylem's liquidity and debt position?
At September 30, 2024, cash and cash equivalents were $989 million and total debt was $1,994 million. The company repaid its €250 million term loan on April 19, 2024, and its $1 billion 2023 revolving credit facility was undrawn, giving available liquidity of approximately $2 billion.
What changes to guidance and subsequent events should investors note?
Xylem updated its 2024 outlook to total revenue growth of 15% and organic revenue growth of approximately 5%. After quarter-end, it sent notice to exercise a call option to acquire an additional 35.9% stake in Idrica for approximately €146 million ($163 million), with closing expected in December 2024.
06—Continue