01—Abstract
Summary
Summary of the 8-K filed October 28, 2025. Cited figures are marked; the original filing is the authoritative source.
Xylem Inc. (NYSE: XYL) reported third-quarter 2025 results on October 28, 2025, with revenue of $2.3 billiona, up 8% on a reported basis and 7% organically.
Net income attributable to Xylem was $227 millionb, or $0.93 per share, up from $0.89 in the prior-year quarter. On an adjusted basis, earnings per share were $1.37, up 23%, and the adjusted EBITDA margin was 23.2%, a year-over-year increase of 200 basis points. Management attributed the margin expansion to productivity savings, strong price realization and volume, which exceeded the impact of inflation, investments and mix.
Reported net income margin declined 30 basis points to 10.0%, reflecting a loss from the sale of businesses and higher tax expense, partially offset by lower interest expense. Xylem raised its full-year 2025 guidance. Revenue is now expected at approximately $9.0 billionc, up roughly 5 to 6% on a reported basis (previously 4 to 5%) and up roughly 4 to 5% organically.
Full-year adjusted EBITDA margin is forecast at 22.0% to 22.3%, and adjusted EPS at $5.03 to $5.08d, versus the prior range of $4.70 to $4.85. Full-year free cash flow margin is still expected to be approximately 9% to 10%. Management stated that the company is solidly on track to deliver its long-term financial framework, while noting ongoing geopolitical, trade, macroeconomic and regulatory uncertainty.
The nine-month results show revenue of $6.64 billion, up 5% on a reported basis, and diluted EPS of $2.55 versus $2.32. Operating cash flow for the nine months was $698 million, compared with $688 million a year earlier, and capital expenditures were $248 million.
Goodwill rose to $8.28 billion from $7.98 billion at year-end 2024, and assets held for sale increased to $158 million. The filing itself is an 8-K furnishing the earnings press release as Exhibit 99.1.
02—Key points
Key Highlights
- Third-quarter revenue of $2.3 billion, up 8% reported and 7% organic; Measurement and Control Solutions and Water Solutions and Services each grew by double digits.
- Q3 reported diluted EPS of $0.93, up from $0.89; adjusted EPS of $1.37, up 23%.
- Adjusted EBITDA margin of 23.2% in Q3, up 200 basis points year over year, driven by productivity savings and price realization.
- Full-year 2025 revenue guidance raised to approximately $9.0 billion (up roughly 5% to 6% reported, from 4% to 5%).
- Full-year 2025 adjusted EPS guidance raised to $5.03 to $5.08, from $4.70 to $4.85; adjusted EBITDA margin guided to 22.0% to 22.3%.
- Q3 loss on sale of businesses of $37 million and income tax expense of $71 million weighed on reported net income, which margin fell 30 basis points to 10.0%.
- Free cash flow margin guidance maintained at approximately 9% to 10% for full-year 2025.
03—Questions
Frequently Asked Questions
How did Xylem perform in the third quarter of 2025?
Revenue was $2.3 billion, up 8% on a reported basis and 7% organically. Reported EPS was $0.93, up 4%, and adjusted EPS was $1.37, up 23%. Adjusted EBITDA margin reached 23.2%, up 200 basis points.
What changed in Xylem's full-year 2025 outlook?
Management raised revenue guidance to approximately $9.0 billion, up 5% to 6% reported (previously 4% to 5%), and raised adjusted EPS guidance to $5.03 to $5.08 from $4.70 to $4.85. The adjusted EBITDA margin is expected at 22.0% to 22.3%, and the free cash flow margin outlook of 9% to 10% is unchanged.
Why did reported net income grow less than adjusted earnings?
The filing states that reported results were affected by an increased loss from the sale of businesses ($37 million in Q3 versus $2 million a year earlier) and higher tax expense ($71 million versus $52 million), partially offset by strong operating performance and lower interest expense. Adjusted figures exclude these items along with purchase accounting amortization and restructuring costs.
What drove the margin improvement?
Management attributed the adjusted EBITDA margin expansion to productivity savings, strong price realization and volume, which together exceeded the impact of inflation, investments and mix. CEO Matthew Pine cited the impact of the company's simplification initiatives.
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