Xylem Reports Third Quarter 2026 Results and Announces Strategic Actions to Accelerate Growth

Quarterly earnings improved despite lower revenue, while Xylem reduced its full-year revenue and adjusted earnings forecasts.

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• Strong orders and backlog, solid earnings performance and margin expansion reflect operational excellence despite a more cautious spending environment
• Company accelerates transformation strategy, announces intent to divest Applied Water International and Specialty Flow Control; and move to three segment structure in 2027

WASHINGTON--(BUSINESS WIRE)-- Xylem Inc. (NYSE: XYL), a leading global water solutions company dedicated to solving the world’s most challenging water issues, today reported third-quarter 2026 results and announced actions to further accelerate its portfolio transformation.

While revenue was impacted by project timing and more cautious spending decisions, strong order activity and solid earnings performance demonstrated the resilience of the business and the benefits of the company’s transformation. Xylem also announced its intent to divest Applied Water International and Specialty Flow Control, and beginning in 2027, the alignment of its businesses from four segments to three.

Third Quarter Results

Highlights:

• Orders of $2.3 billion, up 7% on a reported basis and 10% organically
• Revenue of $2.2 billion, down 3% on a reported basis and flat organically
• Earnings per share of $1.25, up 34%; $1.44 on an adjusted basis, up 5%

Third quarter results reflected a mixed operating environment. The company delivered total revenue of $2.2 billion against a dynamic backdrop. Third-quarter earnings per share were up 34 percent on a reported basis and 5 percent on an adjusted basis.

Net income attributable to Xylem for the quarter was $291 million, or $1.25 per share. Net income margin increased 320 basis points to 13.2 percent. These results are primarily driven by strong operational performance and lower loss on sale of businesses, partially offset by increased interest and income tax expense. Adjusted net income attributable to Xylem was $336 million, or $1.44 per share, which excludes purchase accounting intangible amortization, loss on sale of businesses, restructuring and realignment costs, and special charges, including the impact of IEEPA tariff refunds.

Third-quarter adjusted earnings before interest, tax, depreciation, and amortization (EBITDA) margin was 23.9 percent, reflecting a year-over-year increase of 70 basis points. Productivity savings and strong price realization drove the margin expansion, exceeding the impact of inflation, lower volumes, and mix.

Outlook

Xylem now forecasts full-year 2026 revenue of approximately $8.95 billion, down 1 percent year over year on a reported basis, versus prior guidance of up 2 percent, and flat on an organic basis, versus prior guidance of up 2 to 3 percent.

Full-year 2026 adjusted EBITDA margin is expected to be approximately 23.2 percent, an increase of 100 basis points versus Xylem’s 2025 adjusted results. This results in full-year adjusted earnings per share of $5.40 to $5.45, down from the previous guidance range of $5.55 to $5.70. Full-year free cash flow margin is expected to be approximately 10.2 percent, versus 10.2 to 11.0 percent previously guided.

Further 2026 planning assumptions are included in Xylem’s third-quarter 2026 earnings materials posted at www.xylem.com/investors. Excluding revenue, Xylem provides guidance only on a non-GAAP basis due to the inherent difficulty in forecasting certain amounts that would be included in GAAP earnings, such as discrete tax items, without unreasonable effort.

Supplemental information on Xylem’s third-quarter earnings, as well as definitions of and reconciliations for certain non-GAAP items is posted at www.xylem.com/investors.

Sharpening Xylem’s Focus for Growth

Xylem's planned divestiture of Applied Water International and Specialty Flow Control and its move to a three-segment structure are designed to create a more focused company aligned around customer needs and long-term growth priorities.

The planned divestitures further sharpen Xylem’s focus, enabling the company to direct capital toward the technologies, capabilities and markets that align most closely with its long-term strategy. Xylem is already seeing momentum in high-growth industry verticals, including data centers and microelectronics, reinforcing the opportunity to increase investment and exposure in these markets.

Beginning January 1, 2027, Xylem will align its business into three segments: Treatment and Services, Flow Solutions, and Measurement and Analytics. The new structure brings together complementary technologies and capabilities around the core activities of moving water, treating water, and measuring and optimizing water systems. By bringing together businesses with shared customers, technologies and growth opportunities, Xylem expects to unlock greater value across the portfolio and operate with greater simplicity, speed and accountability. Treatment and Services will be led by Rodney Aulick; Flow Solutions will be led by Joe Johnston; and Measurement and Analytics will be led by Meredith Emmerich.

“We’re moving with urgency to shape Xylem around the markets where our capabilities can deliver the greatest customer value and strongest long-term growth," said Matthew Pine, president and CEO of Xylem. "The resilience we’ve built, evident this quarter, allows us to make those choices deliberately and from a position of strength.”

About Xylem

Xylem (XYL) is a Fortune 500 global water solutions company that empowers customers and communities to build a more water-secure world. Our 22,000 employees delivered revenue of $9 billion in 2025, optimizing water and resource management with innovation and expertise. Join us at www.xylem.com and Let’s Solve Water.

Xylem uses our Investor Relations website, www.xylem.com/investors, as a means of disclosing information which may be of interest or material to our investors and for complying with disclosure obligations under Regulation FD. Accordingly, investors should monitor our Investor Relations website, in addition to following our press releases, SEC filings, public conference calls, webcasts, and social media.

Forward-Looking Statements

This press release contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Generally, the words “anticipate,” “estimate,” “expect,” “project,” “intend,” “plan,” “contemplate,” “predict,” “forecast,” “likely,” “believe,” “target,” “goal,” “objective,” “will,” “could,” “would,” “should,” “potential,” “may” and similar expressions or their negative, may, but are not necessarily to, identify forward-looking statements. By their nature, forward-looking statements address uncertain matters and include any statements that: are not historical, such as statements about our strategy, financial plans, outlook, objectives, plans, intentions or goals (including those related to our social, environmental and other sustainability goals); or address possible or future results of operations or financial performance, including statements relating to orders, revenues, operating margins and earnings per share growth.

Although we believe that the expectations reflected in any of our forward-looking statements are reasonable, actual results could differ materially from those projected or assumed in any of our forward-looking statements. Our future financial condition and results of operations, as well as any forward-looking statements, are subject to change and to inherent risks and uncertainties, many of which are beyond our control. Important factors that could cause our actual results, performance and achievements, or industry results to differ materially from estimates or projections contained in or implied by our forward-looking statements include, among others, the following: the impact of overall industry and general economic conditions, including industrial, governmental, and public and private sector demand and spending, interest rates, availability of funding to our customers, timing of customers’ capital spending and project deployments, inflation and governments' related monetary policy in response, and the strength of the real estate markets, on economic activity and our operations; geopolitical matters, including nationalism, protectionism and anti-global sentiment, volatility involving the U.S. and other governments, ongoing, escalation or outbreak of international conflicts, and regulatory, trade protection, economic and other risks associated with our global sales and operations; manufacturing and operating cost increases due to macroeconomic conditions, including inflation, energy supply, supply chain shortages, logistics challenges, labor shortages, trade agreements, tariffs, and other trade protection measures, and other factors; demand for our products, disruption, competition or pricing pressures in the markets we serve; cybersecurity incidents, data breaches, or other disruptions of information technology systems on which we or our customers rely, or involving our connected products and services; lack of availability or delays in receiving parts and raw materials from our supply chain, including semiconductors or other key components; operational disruptions at our facilities or that of third parties upon which we rely; safe and compliant treatment and handling of water, wastewater and hazardous materials; failure to successfully execute large projects, including as respects performance guarantees and customers’ budgets, timelines and safety requirements; our ability to retain, compete for, and attract leadership, other key talent and labor; defects, security, warranty and liability claims, and recalls related to our products; uncertainty around productivity, simplification, restructuring and realignment actions and related costs and savings; our ability to execute strategic investments for growth and portfolio optimization actions, including acquisitions and divestitures; availability, regulation or interference with radio spectrum used by certain of our products; volatility in served markets or impacts on our business and operations due to weather conditions, volatile weather events, or changing climate patterns; risks related to our sustainability efforts and related disclosures; fluctuations in foreign currency exchange rates; our level of indebtedness, including debt incurred to finance the pending Cornell Pump and Roper Pump acquisition; difficulty predicting our financial results; risk of future impairments to goodwill and other intangible assets; changes in our effective tax rates or tax expenses; failure to comply with, or changes in, laws or regulations, pertaining to our business conduct, operations, products and services, including anti-corruption, artificial intelligence, data privacy and security, trade, competition, the environment, and health and safety; legal, governmental or regulatory claims, investigations or proceedings and associated contingent liabilities; matters related to intellectual property infringement or expiration of rights; and other factors set forth under “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2025 and in subsequent filings we make with the Securities and Exchange Commission (“SEC”).

All forward-looking statements made herein are based on information currently available to us as of the date of this press release. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

XYLEM INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED INCOME STATEMENTS (Unaudited)
(in millions, except per share data)
	Three Months								Nine Months
For the periods ended September 30,	2026				2025				2026				2025
Revenue from products	$	1,807			$	1,867			$	5,517			$	5,487
Revenue from services		394				401				1,145				1,151
Revenue		2,201				2,268				6,662				6,638
Cost of revenue from products		1,026				1,109				3,176				3,279
Cost of revenue from services		268				276				813				816
Cost of revenue		1,294				1,385				3,989				4,095
Gross profit		907				883				2,673				2,543
Selling, general and administrative expenses		458				474				1,433				1,437
Research and development expenses		56				52				171				166
Restructuring and asset impairment charges		8				23				50				70
Operating income		385				334				1,019				870
Interest expense		(21	)			(6	)			(32	)			(23	)
Other non-operating income, net		6				6				3				13
Loss on sale of businesses		(5	)			(37	)			(17	)			(47	)
Income before taxes		365				297				973				813
Income tax expense		(77	)			(71	)			(235	)			(196	)
Net income	$	288			$	226			$	738			$	617
Net loss attributable to non-controlling interests		3				1				9				5
Net income attributable to Xylem	$	291			$	227			$	747			$	622
Earnings per share:
Basic	$	1.25			$	0.93			$	3.15			$	2.56
Diluted	$	1.25			$	0.93			$	3.14			$	2.55
Weighted average number of shares:
Basic		232.7				243.5				237.3				243.3
Diluted		233.0				244.1				237.7				243.9

XYLEM INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (in millions)
	September 30, 2026				December 31, 2025
ASSETS
Current assets:
Cash and cash equivalents	$	708			$	1,479
Receivables, less allowances for discounts, returns and credit losses of $58 and $68 in 2026 and 2025, respectively		1,965				1,759
Inventories		1,052				983
Prepaid and other current assets		227				244
Assets held for sale		—				176
Total current assets		3,952				4,641
Property, plant and equipment, net		1,203				1,159
Goodwill		8,524				8,332
Other intangible assets, net		2,220				2,272
Other non-current assets		1,427				1,230
Total assets	$	17,326			$	17,634
LIABILITIES, REDEEMABLE NON-CONTROLLING INTEREST, AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	1,055			$	1,013
Accrued and other current liabilities		1,257				1,237
Short-term borrowings and current maturities of long-term debt		530				534
Liabilities held for sale		—				72
Total current liabilities		2,842				2,856
Long-term debt, net		2,365				1,408
Accrued post-retirement benefit obligations		295				317
Deferred income tax liabilities		453				405
Other non-current accrued liabilities		860				899
Total liabilities		6,815				5,885
Redeemable non-controlling interest		239				258
Stockholders’ equity:
Common stock — par value $0.01 per share:
Authorized 750.0 shares, issued 260.3 and 259.9 shares in 2026 and 2025, respectively		3				3
Capital in excess of par value		8,801				8,759
Retained earnings		4,147				3,706
Treasury stock – at cost 30.0 shares and 16.3 shares in 2026 and 2025, respectively		(2,375	)			(768	)
Accumulated other comprehensive loss		(307	)			(220	)
Total stockholders’ equity		10,269				11,480
Non-controlling interest		3				11
Total equity		10,272				11,491
Total liabilities, redeemable non-controlling interest, and stockholders’ equity	$	17,326			$	17,634

XYLEM INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (in millions)
For the nine months ended September 30,	2026				2025
Operating Activities
Net income	$	738			$	617
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation		195				201
Amortization		222				231
Share-based compensation		39				37
Restructuring and asset impairment charges		50				70
Loss from sale of businesses		17				47
Other, net		(32	)			3
Payments for restructuring		(59	)			(48	)
Changes in assets and liabilities (net of acquisitions):
Changes in receivables		(201	)			(113	)
Changes in inventories		(72	)			(30	)
Changes in accounts payable		29				(45	)
Changes in accrued and deferred taxes		14				(12	)
Changes in long term receivables		(147	)			(108	)
Other, net		(64	)			(152	)
Net Cash — Operating activities		729				698
Investing Activities
Capital expenditures		(268	)			(248	)
Acquisitions of businesses, net of cash acquired		(425	)			(113	)
Proceeds from sale of businesses, net of cash disposed		95				48
Proceeds from the sale of property, plant and equipment		12				15
Cash received from investments		8				5
Cash paid for investments		(10	)			(26	)
Cash paid for equity investments		(4	)			(5	)
Cash paid for asset acquisition		(2	)			(37	)
Cash received from cross-currency swaps		39				31
Other, net		1				1
Net Cash — Investing activities		(554	)			(329	)
Financing Activities
Short-term debt issued, net		4				8
Short-term debt repaid		(5	)			(7	)
Long-term debt issued, net		990				—
Long-term debt repaid, net		(10	)			(60	)
Repurchase of common stock		(1,580	)			(14	)
Proceeds from exercise of employee stock options		3				11
Dividends paid		(307	)			(293	)
Other, net		(30	)			(27	)
Net Cash — Financing activities		(935	)			(382	)
Effect of exchange rate changes on cash		(23	)			83
Increase in cash classified within assets held for sale		—				(11	)
Decrease in cash classified within assets held for sale		12				11
Changes in cash classified within assets held for sale		12				—
Net change in cash and cash equivalents		(771	)			70
Cash and cash equivalents at beginning of year		1,479				1,121
Cash and cash equivalents at end of period	$	708			$	1,191
Supplemental disclosure of cash flow information:
Cash paid during the year for:
Interest	$	39			$	43
Income taxes (net of refunds received)	$	221			$	208

Xylem Inc. Non-GAAP Measures

Management reviews key performance indicators including revenue, gross margins, segment operating income and margins, orders growth, working capital and backlog, among others. In addition, we consider certain non-GAAP (or "adjusted") measures to be useful to management and investors evaluating our operating performance for the periods presented, and to provide a tool for evaluating our ongoing operations, liquidity and management of assets. This information can assist investors in assessing our financial performance and measures our ability to generate capital for deployment among competing strategic alternatives and initiatives, including but not limited to, dividends, acquisitions, share repurchases and debt repayment. Excluding revenue, Xylem provides guidance only on a non-GAAP basis due to the inherent difficulty in forecasting certain amounts that would be included in GAAP earnings, such as discrete tax items, without unreasonable effort. These adjusted metrics are consistent with how management views our business and are used to make financial, operating and planning decisions. These metrics, however, are not measures of financial performance under GAAP and should not be considered a substitute for revenue, operating income, net income, earnings per share (basic and diluted) or net cash from operating activities as determined in accordance with GAAP. We consider the following items to represent the non-GAAP measures that we consider to be key performance indicators, as well as the related reconciling items to the most directly comparable measure calculated and presented in accordance with GAAP. The non-GAAP measures may not be comparable to similarly titled measures reported by other companies.

“Organic revenue" and "Organic orders” defined as revenue and orders, respectively, excluding the impact of fluctuations in foreign currency translation and contributions from acquisitions and divestitures. Divestitures include sales or discontinuance of insignificant portions of our business that did not meet the criteria for classification as a discontinued operation. The period-over-period change resulting from foreign currency translation impacts is determined by translating current period and prior period activity using the same currency conversion rate.

“EBITDA” defined as earnings before interest, taxes, depreciation and amortization expense. “Adjusted EBITDA” and "Adjusted Segment EBITDA" reflect the adjustments to EBITDA and segment EBITDA, respectively, to exclude share-based compensation charges, restructuring and realignment costs, gain or loss from sale of businesses and special charges.

"Adjusted EBITDA Margin" and "Adjusted Segment EBITDA Margin" defined as adjusted EBITDA and adjusted segment EBITDA divided by total revenue and segment revenue, respectively.

"Adjusted Operating Income", "Adjusted Segment Operating Income", "Adjusted Net Income" and “Adjusted EPS” defined as operating income, segment operating income, net income attributable to Xylem and earnings per share attributable to Xylem, adjusted to exclude restructuring and realignment costs, amortization of acquired intangible assets, gain or loss from sale of businesses, special charges and tax-related special items, as applicable.

"Adjusted Operating Margin" and "Adjusted Segment Operating Margin" defined as adjusted operating income and adjusted segment operating income divided by total revenue and segment revenue, respectively.

“Free Cash Flow” defined as net cash from operating activities, less capital expenditures, as reported in the Statement of Cash Flows. Our definition of free cash flow does not consider certain non-discretionary cash payments, such as debt.

"Free Cash Flow Margin" defined as free cash flow, adjusted (as applicable) for significant cash paid or received for non-operational tax, acquisition or divestiture activities; divided by revenue.

“Realignment costs” defined as costs not included in restructuring costs that are incurred as part of actions taken to reposition our business, including items such as professional fees, severance, relocation, travel, facility set-up and other costs.

“Special charges" defined as non-recurring costs incurred by the Company, such as those related to acquisitions and integrations, divestitures non-cash impairment charges and other special charges. In 2026, these charges include reductions of expense related to the refunds of certain tariffs previously imposed under the International, Emergency Economic Powers Act ("IEEPA").

“Tax-related special items" defined as tax items, such as tax return versus tax provision adjustments, tax exam impacts, tax law change impacts, excess tax benefits/losses and other discrete tax adjustments.

Xylem Inc. Non-GAAP Reconciliation
Reported vs. Organic Orders ($ Millions)
	(As Reported)													(As Adjusted - Organic)
			(A)		(B)									(C)			(D)		(E)			(F) = B+C+D+E			(G) = F/(A-D)
					Change			% Change						Acquisitions			Divestitures					Change			% Change
	Orders		Orders		2026 v. 2025			2026 v. 2025			Book-to-Bill								FX Impact			Adj. 2026 v. 2025			Adj. 2026 v. 2025
	2026		2025
Nine Months Ended September 30
Xylem Inc.	7,645		6,513		1,132			17	%		115	%		(38	)		102		(115	)		1,081			17	%
Water Infrastructure	2,019		1,981		38			2	%		105	%		(23	)		12		(47	)		(20	)		(1	%)
Applied Water	1,552		1,419		133			9	%		108	%		-			10		(20	)		123			9	%
Measurement and Control Solutions	1,409		1,285		124			10	%		97	%		(4	)		80		(14	)		186			15	%
Water Solutions and Services	2,665		1,828		837			46	%		145	%		(11	)		-		(34	)		792			43	%
Quarter Ended September 30
Xylem Inc.	2,331		2,181		150			7	%		106	%		(11	)		74		(4	)		209			10	%
Water Infrastructure	675		683		(8	)		(1	%)		105	%		(2	)		4		(2	)		(8	)		(1	%)
Applied Water	502		445		57			13	%		103	%		-			10		-			67			15	%
Measurement and Control Solutions	504		446		58			13	%		116	%		(4	)		60		-			114			30	%
Water Solutions and Services	650		607		43			7	%		103	%		(5	)		-		(2	)		36			6	%
Quarter Ended June 30
Xylem Inc.	3,086		2,174		912			42	%		132	%		(15	)		23		(41	)		879			41	%
Water Infrastructure	669		672		(3	)		(0	%)		98	%		(13	)		3		(13	)		(26	)		(4	%)
Applied Water	538		488		50			10	%		107	%		-			-		(5	)		45			9	%
Measurement and Control Solutions	430		437		(7	)		(2	%)		85	%		-			20		(3	)		10			2	%
Water Solutions and Services	1,449		577		872			151	%		225	%		(2	)		-		(20	)		850			147	%
Quarter Ended March 31
Xylem Inc.	2,228		2,158		70			3	%		105	%		(12	)		5		(70	)		(7	)		(0	%)
Water Infrastructure	675		626		49			8	%		112	%		(8	)		5		(32	)		14			2	%
Applied Water	512		486		26			5	%		114	%		-			-		(15	)		11			2	%
Measurement and Control Solutions	475		402		73			18	%		94	%		-			-		(11	)		62			15	%
Water Solutions and Services	566		644		(78	)		(12	%)		100	%		(4	)		-		(12	)		(94	)		(15	%)

Xylem Inc. Non-GAAP Reconciliation
Reported vs. Organic Revenue ($ Millions)
	(As Reported - GAAP)										(As Adjusted - Organic)
			(A)		(B)						(C)			(D)		(E)			(F) = B+C+D+E			(G) = F/(A-D)
					Change			% Change			Acquisitions			Divestitures					Change			% Change
	Revenue		Revenue		2026 v. 2025			2026 v. 2025								FX Impact			Adj. 2026 v. 2025			Adj. 2026 v. 2025
	2026		2025
Nine Months Ended September 30
Xylem Inc.	6,662		6,638		24			0	%		(29	)		116		(97	)		14			0	%
Water Infrastructure	1,931		1,887		44			2	%		(8	)		13		(45	)		4			0	%
Applied Water	1,438		1,374		64			5	%		-			6		(19	)		51			4	%
Measurement and Control Solutions	1,452		1,552		(100	)		(6	%)		(6	)		97		(14	)		(23	)		(2	%)
Water Solutions and Services	1,841		1,825		16			1	%		(15	)		-		(19	)		(18	)		(1	%)
Quarter Ended September 30
Xylem Inc.	2,201		2,268		(67	)		(3	%)		(17	)		80		(3	)		(7	)		(0	%)
Water Infrastructure	645		656		(11	)		(2	%)		(1	)		6		(2	)		(8	)		(1	%)
Applied Water	489		456		33			7	%		-			6		-			39			9	%
Measurement and Control Solutions	436		522		(86	)		(16	%)		(6	)		68		1			(23	)		(5	%)
Water Solutions and Services	631		634		(3	)		(0	%)		(10	)		-		(2	)		(15	)		(2	%)
Quarter Ended June 30
Xylem Inc.	2,336		2,301		35			2	%		(7	)		31		(29	)		30			1	%
Water Infrastructure	683		650		33			5	%		(4	)		2		(14	)		17			3	%
Applied Water	501		483		18			4	%		-			-		(5	)		13			3	%
Measurement and Control Solutions	508		540		(32	)		(6	%)		-			29		(4	)		(7	)		(1	%)
Water Solutions and Services	644		628		16			3	%		(3	)		-		(6	)		7			1	%
Quarter Ended March 31
Xylem Inc.	2,125		2,069		56			3	%		(5	)		5		(65	)		(9	)		(0	%)
Water Infrastructure	603		581		22			4	%		(3	)		5		(29	)		(5	)		(1	%)
Applied Water	448		435		13			3	%		-			-		(14	)		(1	)		(0	%)
Measurement and Control Solutions	508		490		18			4	%		-			-		(11	)		7			1	%
Water Solutions and Services	566		563		3			1	%		(2	)		-		(11	)		(10	)		(2	%)

Xylem Inc. Non-GAAP Reconciliation
Adjusted Diluted EPS
($ Millions, except per share amounts)
		Q3 2026												Q3 2025
		As Reported				Adjustments				Adjusted				As Reported				Adjustments				Adjusted
	Total Revenue		2,201				-				2,201				2,268				-				2,268
	Operating Income		385				43		a		428				334				95		a		429
	Operating Margin		17.5	%							19.4	%			14.7	%							18.9	%
	Interest Expense		(21	)			-				(21	)			(6	)			-				(6	)
	Other Non-Operating Income (Expense)		6				-				6				6				-				6
	Gain/(Loss) From Sale of Businesses		(5	)			5		b		-				(37	)			37		b		-
	Income before Taxes		365				48				413				297				132				429
	Provision for Income Taxes		(77	)			(3	)	c		(80	)			(71	)			(26	)	c		(97	)
	Net Income		288				45				333				226				106				332
	Net Loss Attributable to Non-controlling Interests		3				-				3				1				-				1
	Net Income Attributable to Xylem		291				45				336				227				106				333
	Diluted Shares		233.0								233.0				244.1								244.1
	Diluted EPS	$	1.25			$	0.19			$	1.44			$	0.93			$	0.44			$	1.37
a	Restructuring & realignment costs: 2026 - $14 million; 2025 - $31 million
	Special charges: 2026 - $10 million of acquisition, divestiture & integration costs, offset by $33 million of IEEPA tariff refunds ; 2025 - $9 million of acquisition, divestiture & integration costs
	Purchase accounting intangible amortization: 2026 - $52 million; 2025 - $55 million
b	Gain/(Loss) from sale of businesses as per income statement for all periods presented
c	2026 - Net tax impact on pre-tax adjustments (notes a and b) of $8 million, offset by $5 million of other tax special expense items; 2025 - Net tax impact on pre-tax adjustments (notes a and b) of $27 million, offset by $1 million of other tax special expense items;

Xylem Inc. Non-GAAP Reconciliation
EBITDA and Adjusted EBITDA by Quarter ($ Millions)
2026
		Q1			Q2			Q3			Q4			Total
Net Income attributable to Xylem		193			263			291						747
Net Income margin		9.1	%		11.3	%		13.2	%		N/A			11.2	%
Depreciation		65			65			65						195
Amortization		75			75			72						222
Interest Expense (Income), net		(4	)		2			15						13
Income Tax Expense		55			103			77						235
EBITDA		384			508			520			-			1,412
EBITDA Margin		18.1	%		21.7	%		23.6	%		N/A			21.2	%
Share-based Compensation		13			12			14						39
Restructuring & Realignment		38			13			14						65
Special Charges		10			(3	)		(23	)					(16	)
Loss/(Gain) from sale of businesses		(4	)		16			5						17
Loss attributable to non-controlling interests		(4	)		(2	)		(3	)					(9	)
Adjusted EBITDA		437			544			527			-			1,508
Revenue		2,125			2,336			2,201						6,662
Adjusted EBITDA Margin		20.6	%		23.3	%		23.9	%		N/A			22.6	%
2025
		Q1			Q2			Q3			Q4			Total
Net Income attributable to Xylem		169			226			227			335			957
Net Income margin		8.2	%		9.8	%		10.0	%		14.0	%		10.6	%
Depreciation		68			69			64			66			267
Amortization		77			76			78			77			308
Interest Expense (Income), net		-			3			-			(1	)		2
Income Tax Expense		50			75			71			35			231
EBITDA		364			449			440			512			1,765
EBITDA Margin		17.6	%		19.5	%		19.4	%		21.4	%		19.5	%
Share-based Compensation		12			13			12			16			53
Restructuring & Realignment		27			29			30			45			131
Special Charges		12			13			9			2			36
Loss/(Gain) from sale of businesses		10			-			37			(16	)		31
Loss attributable to non-controlling interests		(2	)		(2	)		(1	)		(2	)		(7	)
Adjusted EBITDA		423			502			527			557			2,009
Revenue		2,069			2,301			2,268			2,397			9,035
Adjusted EBITDA Margin		20.4	%		21.8	%		23.2	%		23.2	%		22.2	%

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20261027035471/en/

Media
Press Office +1 (978) 704-5149
PressOffice@xylem.com

Investors
Greg Giometti
Michael Travers
Investor.Relations@xylem.com

Source: Xylem Inc.

Key Terms

ebitda financial

EBITDA stands for earnings before interest, taxes, depreciation, and amortization. It measures a company's profitability by focusing on the money it makes from its core operations, ignoring expenses like taxes and accounting adjustments. Investors use EBITDA to compare how well different companies are performing financially, as it provides a clearer picture of operational success without the influence of financial structure or accounting choices.

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non-gaap financial

Non-GAAP refers to financial measures that companies use to show their earnings or performance without including certain expenses or income that are often added back to give a different picture. It matters because it can make a company's results look better or more favorable, but it may also hide important costs, so investors need to look at both GAAP (official rules) and non-GAAP numbers to get a full understanding.

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gaap financial

GAAP, or Generally Accepted Accounting Principles, are a set of standardized rules and guidelines that companies follow when preparing their financial statements. They ensure consistency, transparency, and comparability across different companies, making it easier for investors to understand and compare financial information accurately. This helps investors make informed decisions based on trustworthy and uniform financial reports.

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ieepa regulatory

A U.S. law that gives the president broad authority to control trade, freeze assets, and block financial transactions during a declared national emergency. Investors care because those powers can abruptly restrict a company's ability to sell products, access cash, or do business with certain countries or parties, creating sudden risks to revenues, supply chains and share prices — like an emergency brake that can stop or reroute parts of a business overnight.