Xylem Tops Q3 Earnings & Revenue Estimates, Updates '25 Outlook

Xylem Inc.’s XYL third-quarter 2025 adjusted earnings of $1.37 per share beat the Zacks Consensus Estimate of $1.24. The bottom line increased 23% year over year.

XYL’s revenues of $2.27 billion beat the consensus estimate of $2.22 billion. The top line increased 7.8% year over year, driven by solid demand across segments. Organic revenues rose 7%

However, orders of $2.18 billion decreased 0.9% year over year on a reported basis and 2% on an organic basis.

XYL's Segmental Details

Revenues in the Water Infrastructure segment totaled $656 million, up 5% year over year. Organic sales increased 5% year over year, buoyed by the solid demand for its products and solutions for the treatment and transport of water. The Zacks Consensus Estimate was pegged at $647 million.

The Applied Water segment generated revenues of $456 million, up 2% year over year. Organic sales were up 1% on a year-over-year basis. The segmental performance was driven by strength in the building solutions market. The consensus estimate was pegged at $464 million.

Quarterly revenues of the Measurement & Control Solutions segment totaled $522 million, up 14% year over year. The Zacks Consensus Estimate was pegged at $503 million. Organic sales were up 11% year over year, driven by smart metering demand.

Quarterly revenues at the Water Solutions and Services segment totaled $634 million, up 10% year over year. Organic sales were up 10% year over year, supported by an increase in dewatering, service and capital projects. The consensus estimate was pegged at $605 million.

XYL’s Margin Profile

Xylem’s adjusted EBITDA was $527 million, up 17.9% from the year-ago quarter’s level. The margin improved to 23.2% from 21.2% in the prior-year quarter.

Adjusted operating income was $429 million, up 22.6% year over year. Adjusted operating margin increased to 18.9% from 16.6% in the year-earlier quarter.

Xylem’s Balance Sheet and Cash Flow

Exiting the third quarter, Xylem had cash and cash equivalents of $1.19 billion compared with $1.12 billion at the end of December 2024. Long-term debt was $1.91 billion at the end of the quarter compared with $1.98 billion at the end of December 2024.

In the first nine months of 2025, XYL generated net cash of $698 million from operating activities compared with $688 million in the year-ago period. Capital expenditure was $248 million, up 12.2% from the year-earlier period.

Rewards to Shareholders

In the first nine months, Xylem paid dividends of $293 million, up 11.4% year over year. The company also bought back shares worth $14 million in the same period compared with $19 million in the year-ago period.

XYL's 2025 Guidance

Xylem has updated its 2025 outlook. The company now expects revenues to be approximately $9.0 billion for 2025 compared with $8.9–$9.0 billion anticipated earlier. This indicates an increase of 5-6% from the prior-year level on a reported basis and 4-5% on an organic basis.

Adjusted EBITDA margin is estimated to be approximately 22-22.3%, indicating an expansion of 140-170 basis points from the year-earlier actual.

XYL forecasts adjusted earnings to be in the range of $5.03–$5.08 per share compared with $4.70 – $4.85 expected earlier. This metric indicates an increase from earnings of $4.27 per share in 2024.

XYL’s Zacks Rank

The company currently carries a Zacks Rank #2 (Buy). 

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Other Companies

Dover Corporation DOV reported earnings of $2.62 per share in third-quarter 2025, beating the Zacks Consensus Estimate of $2.50. This compares with earnings of $2.27 per share a year ago.

Dover posted revenues of $2.08 billion in the quarter, missing the Zacks Consensus Estimate by 0.6%. This compares with year-ago revenues of $1.98 billion.

Ardagh Metal Packaging S.A. AMBP came out with earnings of eight cents per share in the third quarter of 2025, beating the Zacks Consensus Estimate of seven cents. This compares with earnings of eight cents per share a year ago.

Ardagh Metal posted revenues of $1.43 billion in the quarter, beating the Zacks Consensus Estimate by 2.7%. This compares with year-ago revenues of $1.31 billion. 

Packaging Corporation of America PKG reported earnings of $2.73 per share in the third quarter, missing the Zacks Consensus Estimate of $2.83. This compares with earnings of $2.65 per share a year ago.

Packaging Corp. posted revenues of $2.31 billion in the quarter, surpassing the Zacks Consensus Estimate by 2.2%. This compares with year-ago revenues of $2.18 billion.

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