01—Abstract
Summary
Summary of the 10-Q filed October 28, 2025. Cited figures are marked; the original filing is the authoritative source.
Xylem Inc. reported third-quarter 2025 revenue of $2,268 milliona, up 7.8% from $2,104 million in the prior-year quarter, with organic revenue growth of 6.9% led by double-digit organic growth in Measurement and Control Solutions and Water Solutions and Services.
Operating income rose to $334 millionb (operating margin of 14.7%) from $280 million, while net income attributable to Xylem was $227 million, or $0.93 per diluted share, versus $217 million and $0.89 a year earlier. Results were weighed down by a $37 million loss on sale of businesses in the quarter, which included a $39 million loss on assets held for sale related to the international metering business. Orders were $2,181 million, down 0.9% from the prior year, and total backlog was $4,819 million at September 30, 2025, down 8.3% year over year.
For the nine months ended September 30, 2025, revenue was $6,638 millionc (up 5.3%), operating income was $870 million, and net income attributable to Xylem was $622 million, or $2.55 per diluted share. Operating cash flow was $698 million and capital expenditures were $248 million, leaving free cash flow of $450 million, compared with $467 million a year earlier. Cash and cash equivalents were $1,191 million at quarter-end, and the company cited available liquidity of approximately $2.2 billion, including $1 billion of undrawn credit facilities.
The company raised its 2025 total revenue growth outlook to 5% to 6% and organic revenue growth outlook to 4% to 5%. During the period, Xylem completed the acquisition of EnviroMix for $106 milliond in cash, reclassified its international metering business as held for sale, and divested the former Evoqua Magneto business.
The company also recorded restructuring and asset impairment charges of $70 million for the nine months, and management expects restructuring costs of $90 million to $100 million for the full year. The Swedish tax assessment remains under litigation, with no unrecognized tax benefit recorded as of September 30, 2025.
02—Key points
Key Highlights
- Third-quarter revenue of $2,268 million rose 7.8% year over year, with organic growth of 6.9%; Measurement and Control Solutions revenue increased 14.0% and Water Solutions and Services increased 10.1%.
- Operating income of $334 million (14.7% operating margin) rose from $280 million (13.3% margin), while gross margin expanded 160 basis points to 38.9%.
- Net income attributable to Xylem was $227 million, or $0.93 per diluted share, compared with $217 million, or $0.89, in the prior-year quarter; the quarter included a $37 million loss on sale of businesses.
- Adjusted EBITDA was $527 million (23.2% margin) in the quarter versus $447 million (21.2% margin) a year earlier, and adjusted earnings per share were $1.37 versus $1.11.
- Orders of $2,181 million declined 0.9%, and total backlog of $4,819 million was down 8.3% from September 30, 2024.
- Nine-month free cash flow was $450 million, down from $467 million, as operating cash flow rose to $698 million and capital expenditures increased to $248 million.
- The company raised its 2025 outlook to 5% to 6% total revenue growth and 4% to 5% organic revenue growth, and acquired EnviroMix for $106 million.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q3 FY2025, Xylem kept $0.10.
- Revenue$2.27B100.0%
- Cost of revenue−$1.39B61.1%
- Gross profit$883.0M38.9%
- Operating costs−$549.0M24.2%
- Operating income$334.0M14.7%
- Interest, other & tax−$107.0M4.7%
- Net income$227.0M10.0%
04—Financials
Financial Highlights
Figures from 10-QQ3 FY2025filed October 28, 2025Financial Statements
Q3 FY2025 against Q3 FY2024
| Line item | Q3 FY2025Q3 FY2024 | Change |
|---|---|---|
| Revenue | $2.27B$2.10B | +7.8% |
| Cost of Revenue | $1.39B$1.32B | +4.9% |
| Gross Profit | $883.00M$784.00M | +12.6% |
| R&D Expenses | $52.00M$55.00M | −5.5% |
| SG&A Expenses | $474.00M$445.00M | +6.5% |
| Operating Income | $334.00M$280.00M | +19.3% |
| Net Income | $227.00M$217.00M | +4.6% |
| EPS (Basic) | $0.93$0.89 | +4.5% |
| EPS (Diluted) | $0.93$0.89 | +4.5% |
| Shares Outstanding (Basic) | 243.45M242.93M | +0.2% |
| Shares Outstanding (Diluted) | 244.09M243.75M | +0.1% |
05—Questions
Frequently Asked Questions
How did Xylem perform in the third quarter of 2025?
Revenue rose 7.8% to $2,268 million, with organic growth of 6.9% across all segments. Operating income increased 19.3% to $334 million, and net income attributable to Xylem was $227 million, or $0.93 per diluted share, up from $0.89 a year earlier.
What drove the increase in revenue and margins?
The company attributed revenue growth primarily to organic growth, including price realization and increased volume in the U.S. and Canada. Gross margin expansion was driven by 430 basis points of favorable operational impacts, led by 230 basis points of productivity savings and 140 basis points of price realization, partially offset by 200 basis points of inflation.
Were there any notable one-time items affecting results?
Yes. The company recorded a $37 million loss on sale of businesses in the third quarter, and $47 million for the nine months. This includes a $39 million loss on assets held for sale for the international metering business. Restructuring and asset impairment charges were $23 million in the quarter and $70 million for the nine months.
What is Xylem's liquidity and capital position?
Cash and cash equivalents totaled $1,191 million at September 30, 2025, and the company reported available liquidity of approximately $2.2 billion, consisting of $1.2 billion of cash and $1 billion of available credit facilities. Total debt was $1,962 million, and the 2023 Credit Facility was undrawn.
What is the outlook for 2025?
Xylem raised its 2025 total revenue growth outlook to 5% to 6% and organic revenue growth outlook to 4% to 5%. The company also expects restructuring costs of $90 million to $100 million for the full year.
06—Continue