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Xylem 8-K Report, Financial Results (Feb 6, 2024)

Reports
Earnings & Results·Exhibits & Filings
Filing Date
Filed February 6, 2024
Period End
February 6, 2024
Security
XYL
In the record · 2016–202610-K1110-Q338-K102

XYL filed 11 annual reports (10-K), 33 quarterly reports (10-Q) and 102 current reports (8-K) between 2016 and 2026.

  1. Material agreement8-K · Dec ’17Dec ’17
  2. Material agreement8-K · Jun ’20Jun ’20
  3. Leadership change8-K · Dec ’22Dec ’22
  4. Leadership change8-K · Oct ’26Oct ’26

01—Abstract

Summary

Summary of the 8-K filed February 6, 2024. Cited figures are marked; the original filing is the authoritative source.

Xylem Inc. (NYSE: XYL) reported fourth-quarter and full-year 2023 results on February 6, 2024, in a press release furnished as Exhibit 99.1.

For the full year, revenue was $7.4 billiona ($7,364 million), up 33% on a reported basis and 12% organically, and diluted EPS was $2.79, up 42%, or $3.78 on an adjusted basis, up 20%. Fourth-quarter revenue was $2.1 billion, up 41% reported and 9% organically, with orders of $2.0 billion, up 42% reported and 10% organically. Net income for the quarter was $266 million, or $1.10 per share, while adjusted EPS was $0.99, down 1%.

The company credited productivity savings, price realization and higher volume for a 90 basis point year-over-year increase in fourth-quarter adjusted EBITDA margin, which was 19.6%. Management cited the integration of Evoqua as ahead of schedule. The filing also shows large year-over-year increases in goodwill ($7,587 millionb versus $2,719 million) and other intangible assets ($2,529 million versus $930 million), and full-year acquisitions of businesses of $476 million in cash flow.

The press release notes that fourth-quarter and full-year results benefited from non-recurring tax benefits, partly offset by acquisition and integration costs, purchase accounting amortization, special charges and restructuring costs. For 2024, Xylem guided to revenue of approximately $8.4 to $8.5 billionc, up approximately 14 to 15% reported and 3 to 5% organically, adjusted EBITDA margin of approximately 19.4% to 19.9%, and free cash flow conversion to net income of approximately 115%. The board declared a first-quarter dividend of $0.36 per share, an increase of 9%, payable March 20, 2024, to holders of record as of February 21, 2024.

02—Key points

Key Highlights

  1. Full-year 2023 revenue of $7.4 billion, up 33% reported and 12% organic; diluted EPS of $2.79, up 42%.
  2. Adjusted full-year diluted EPS of $3.78, up 20%, versus GAAP EPS of $2.79.
  3. Fourth-quarter revenue of $2.1 billion, up 41% reported and 9% organic; orders of $2.0 billion, up 42% reported and 10% organic.
  4. Fourth-quarter net income of $266 million ($1.10 per share), with adjusted EPS of $0.99, down 1%.
  5. Fourth-quarter adjusted EBITDA margin of 19.6%, up 90 basis points year over year, driven by productivity, price and volume.
  6. 2024 guidance: revenue of $8.4 to $8.5 billion, adjusted EBITDA margin of 19.4% to 19.9%, and free cash flow conversion of about 115%.
  7. Quarterly dividend raised 9% to $0.36 per share, payable March 20, 2024.

03—Questions

Frequently Asked Questions

  1. How did Xylem perform in the fourth quarter of 2023?

    Revenue was $2.1 billion, up 41% on a reported basis and 9% organically. Orders were $2.0 billion, up 42% reported and 10% organic. GAAP net income was $266 million, or $1.10 per share, and adjusted EPS was $0.99, down 1%.

  2. Why do GAAP and adjusted earnings differ so much for 2023?

    The filing attributes GAAP results partly to non-recurring tax benefits, offset by acquisition and integration costs related to Evoqua, purchase accounting intangible amortization, special charges, and restructuring and realignment costs. For the full year, GAAP diluted EPS was $2.79 versus adjusted EPS of $3.78.

  3. What is Xylem's 2024 outlook?

    Xylem forecasts 2024 revenue of approximately $8.4 to $8.5 billion, up about 14% to 15% reported and 3% to 5% organically. It expects an adjusted EBITDA margin of approximately 19.4% to 19.9%, an increase of 50 to 100 basis points from 2023 adjusted results, and free cash flow conversion to net income of about 115%.

  4. What is happening with the Evoqua integration?

    CEO Matthew Pine said the Evoqua integration is ahead of schedule, and the company is using the combined offering to address more customer water challenges. The filing shows goodwill rising to $7,587 million from $2,719 million and other intangible assets rising to $2,529 million from $930 million.

  5. What dividend did Xylem declare?

    The board declared a first-quarter dividend of $0.36 per share, an increase of 9%. It is payable March 20, 2024, to shareholders of record as of February 21, 2024.

04—Continue

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