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Xylem 8-K Report, Financial Results (May 2, 2024)

Reports
Earnings & Results·Exhibits & Filings
Filing Date
Filed May 2, 2024
Period End
May 2, 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. Leadership change8-K · Aug ’20Aug ’20
  3. Deal closed8-K · May ’23May ’23
  4. Leadership change8-K · Oct ’26Oct ’26

01—Abstract

Summary

Summary of the 8-K filed May 2, 2024. Cited figures are marked; the original filing is the authoritative source.

Xylem Inc. (NYSE: XYL) reported first-quarter 2024 results on May 2, 2024, with revenue of $2.0 billiona (up 40% on a reported basis and 7% organically) and orders of $2.2 billion (up 43% reported, 3% organic).

Net income was $153 millionb, or $0.63 per diluted share, compared with $99 million, or $0.54 per diluted share, a year earlier. Adjusted net income was $219 million, or $0.90 per share, and the adjusted EBITDA margin was 19.2%, a year-over-year increase of 290 basis points. Management attributed the margin expansion to productivity savings, favorable mix, price and volume, which more than offset inflation and strategic investments.

The company cited record first-quarter margins and progress on synergies from its integration of Evoqua. Xylem raised its full-year 2024 guidance. Revenue is now expected to be approximately $8.5 billionc, up approximately 15 to 16 percent on a reported basis and 4 to 6 percent organically, compared with the prior guidance of 14 to 15 percent reported and 3 to 5 percent organic.

Full-year adjusted EBITDA margin is now expected to be approximately 20.0 percent, up from 19.4 to 19.9 percent, and adjusted EPS guidance was lifted to $4.10 to $4.25d from $4.00 to $4.20. Free cash flow conversion to net income is still expected to be approximately 115 percent. The balance sheet shows cash and equivalents of $947 million at March 31, 2024, and long-term debt of $1,985 million, down from $2,268 million at December 31, 2023.

Operating cash flow was $89 million in the quarter, compared with negative $19 million a year earlier, and free cash flow was $15 million. The filing furnishes the earnings press release as Exhibit 99.1 under Item 2.02.

02—Key points

Key Highlights

  1. Q1 2024 revenue of $2,033 million, up 40% reported and 7% organic, versus $1,448 million in Q1 2023.
  2. Orders of $2,246 million, up 43% reported and 3% organically.
  3. Net income of $153 million ($0.63 per diluted share) versus $99 million ($0.54) a year earlier; adjusted EPS of $0.90, up from $0.79.
  4. Adjusted EBITDA margin of 19.2%, up 290 basis points year over year, with adjusted EBITDA of $391 million.
  5. Full-year 2024 revenue guidance raised to approximately $8.5 billion, with reported growth of 15 to 16 percent and organic growth of 4 to 6 percent.
  6. Full-year adjusted EPS guidance raised to $4.10 to $4.25 from $4.00 to $4.20; adjusted EBITDA margin guidance raised to approximately 20.0%.
  7. Operating cash flow of $89 million and free cash flow of $15 million in Q1 2024, compared with negative $19 million and negative $35 million in Q1 2023.

03—Questions

Frequently Asked Questions

  1. How did Xylem perform in the first quarter of 2024?

    Revenue was $2,033 million, up 40% on a reported basis and 7% organically. Net income was $153 million, or $0.63 per diluted share, and adjusted EPS was $0.90. Adjusted EBITDA margin was 19.2%, up 290 basis points from a year earlier.

  2. What changed in Xylem's full-year 2024 outlook?

    Revenue guidance was raised to approximately $8.5 billion, with reported growth of 15 to 16 percent (previously 14 to 15 percent) and organic growth of 4 to 6 percent (previously 3 to 5 percent). Adjusted EBITDA margin guidance rose to approximately 20.0% from 19.4 to 19.9%, and adjusted EPS guidance rose to $4.10 to $4.25 from $4.00 to $4.20.

  3. What drove the margin improvement?

    Management said productivity savings, favorable mix, price and volume drove the margin expansion, exceeding the impact of inflation and strategic investments. The company also said it is on track to capture synergies from its integration with Evoqua.

  4. How much of the growth came from acquisitions?

    The non-GAAP reconciliation shows acquisitions and divestitures contributed $621 million to the increase in orders and $480 million to the increase in revenue, which is why reported growth far exceeds organic growth. Water Solutions and Services revenue rose 171% reported, with $343 million from acquisitions and divestitures.

  5. How is the company's cash generation and balance sheet position?

    Operating cash flow was $89 million in Q1 2024, against negative $19 million a year earlier, and capital expenditures were $74 million. Cash and cash equivalents were $947 million at March 31, 2024, and long-term debt was $1,985 million, down from $2,268 million at December 31, 2023. Full-year free cash flow conversion to net income is still expected to be approximately 115 percent.

04—Continue

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