In This Article:
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Revenue Growth: Up 3% in the quarter, driven by outperformance in Measurement & Control Solutions (MCS).
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EBITDA Margin: Increased by 120 basis points to 20.4%.
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EPS: $1.03, surpassing the midpoint of guidance by $0.08 and a 14% increase over the prior year.
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Net Debt to Adjusted EBITDA: 0.5 times.
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Free Cash Flow: Decreased by $53 million year-to-date, impacted by outsourced water projects and payables.
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Ending Backlog: $5.1 billion with a book-to-bill ratio above 1.
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Measurement & Control Solutions (MCS) Revenue: Up 6% versus the prior year.
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Water Infrastructure Revenue: Increased 5%, driven by strong treatment and transport demand.
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Applied Water Revenue: Up 1% compared to the prior year.
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Full Year Revenue Guidance: $8.7 billion to $8.8 billion, with organic revenue growth of 3% to 4%.
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Full Year EBITDA Margin Guidance: 21.3% to 21.8%.
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Full Year EPS Guidance: $4.50 to $4.70.
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Second Quarter Revenue Growth Guidance: 1% to 2% on a reported basis, 2% to 3% organically.
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Second Quarter EPS Guidance: $1.12 to $1.16.
Release Date: April 29, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Xylem Inc (NYSE:XYL) reported a strong start to 2025 with Q1 results exceeding expectations, driven by resilient demand and a book-to-bill ratio above 1.
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The company achieved revenue growth across all segments and delivered a 120 basis points expansion in EBITDA margin, resulting in double-digit EPS growth.
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Xylem Inc (NYSE:XYL) reaffirmed its full-year 2025 guidance for both revenue and earnings per share, indicating confidence in its business outlook.
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The company has implemented pricing and supply chain programs to offset the majority of impacts from current tariffs, showcasing its agility in managing external challenges.
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Xylem Inc (NYSE:XYL) has made significant progress in its simplification efforts, leading to improved productivity and margin expansion, and has successfully integrated Evoqua, delivering cost synergies faster than planned.
Negative Points
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Orders were down slightly compared to last year, particularly in the Water Solutions and Services (WSS) and Measurement & Control Solutions (MCS) segments, due to challenging comparisons.
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Free cash flow decreased by $53 million year-to-date, driven by outsourced water projects and payables, despite higher net income.
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The company faces ongoing economic challenges in China, leading to double-digit declines in orders within the Water Infrastructure segment.
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EBITDA margin in the Measurement & Control Solutions segment was 170 basis points lower than the prior year, primarily due to energy water mix challenges.
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Xylem Inc (NYSE:XYL) anticipates some demand falloff in the second half of the year due to pricing actions and evolving trade dynamics, although the extent is uncertain.