Recent developments include Xylem's Q3 2026 financial results, strategic segment reorganization, and planned divestitures, with mixed revenue performance across segments and improved profitability metrics.

• Xylem reported Q3 2026 revenue of $2,201 million, down 3.0% year-over-year, impacted by divestitures, acquisitions, organic declines, and currency effects [N2].
• Orders increased 6.9% overall and 9.9% organically in Q3 2026 [N2].
• Earnings per share rose to $1.25 in Q3 2026, a 34.4% increase compared to prior year, with net income margin improving to 13.2% [N5].
• Adjusted EBITDA margin increased to 23.9% in Q3 2026, up 70 basis points year-over-year [N3].
• Water Infrastructure segment revenue decreased 1.7% in Q3 2026 due to organic declines and divestitures, partially offset by acquisitions and currency effects [N2].
• Applied Water segment revenue increased 7.2% in Q3 2026 driven by organic growth in industrial and building solutions applications [N2].
• Measurement and Control Solutions segment revenue declined 16.5% in Q3 2026 due to divestitures and organic declines in smart metering and analytics applications [N2].
• Water Solutions and Services segment revenue decreased 0.5% in Q3 2026 due to organic declines in service and rental volumes, partially offset by acquisitions and currency effects [N2].
• The company announced a strategic segment reorganization and planned divestitures during Q3 2026 [N2].
• Liquidity ratios as of September 30, 2026 showed a current ratio of 1.39 and cash ratio of 0.32, with cash and equivalents of $708 million [S2].

Xylem's broad portfolio and segment diversification allow it to capture growth opportunities across water infrastructure, applied water, and smart metering markets. Strategic segment reorganization and planned divestitures may enhance operational focus and efficiency. Continued order growth and margin expansion indicate potential for improved profitability. The company's investments in technology and services position it to address increasing global water challenges and regulatory demands.

Revenue declines in key segments such as Measurement and Control Solutions and Water Infrastructure highlight exposure to market softness and project timing risks. Organic revenue declines in service and rental volumes may reflect competitive pressures or demand fluctuations. Divestitures reduce revenue base and may impact scale. The company faces risks from geopolitical uncertainties, currency fluctuations, and integration challenges from acquisitions and divestitures.

Xylem's moat is supported by its diversified product and service portfolio across critical water cycle applications, established global presence, and integrated solutions that address complex water infrastructure and management needs. Its engineering expertise, broad customer base, and ongoing innovation in smart metering and water treatment technologies contribute to competitive differentiation. The company's scale and segment specialization provide barriers to entry and customer switching costs.

• Market and Geographic Risks: Softness in certain geographic markets such as China and Western Europe, and emerging markets, can impact revenue and backlog execution.
• Operational Risks: Timing of project execution and backlog fulfillment affects revenue recognition and organic growth.
• Strategic Risks: Divestitures and acquisitions may disrupt operations and reduce revenue in affected segments.
• Financial Risks: Goodwill impairment assessments involve significant management judgment and assumptions, posing valuation risks.
• Regulatory and Environmental Risks: Changes in water regulations and environmental standards may require ongoing investment and adaptation.

• Xylem Inc. is a leading global water technology company designing, manufacturing, and servicing engineered products and solutions across critical water cycle applications.
• The company operates in four reportable segments: Water Infrastructure, Applied Water, Measurement and Control Solutions, and Water Solutions and Services.
• Water Infrastructure segment provides pump systems for water transport, filtration, treatment, and wastewater management.
• Applied Water segment serves water usage applications including pressure boosting for HVAC and fire protection in residential and commercial markets.
• Measurement and Control Solutions segment delivers communications, smart metering, measurement, control capabilities, and analytical instrumentation for water quality and flow.
• Water Solutions and Services segment offers tailored services including on-demand water, outsourced water, recycle/reuse, pipeline assessment, specialty dewatering, and emergency response.
• For the third quarter ended September 30, 2026, Xylem reported revenue of $2,201 million, a 3.0% decrease compared to the prior year quarter, impacted by divestitures, acquisitions, organic declines, and currency effects.
• Orders for the quarter increased 6.9% overall and 9.9% organically.
• Earnings per share for Q3 2026 were $1.25, a 34.4% increase compared to prior year, with net income margin improving to 13.2% from 10.0%.
• Adjusted EBITDA margin for the quarter was 23.9%, up 70 basis points year-over-year.
• Segment revenue changes for Q3 2026 included a 1.7% decrease in Water Infrastructure, 7.2% increase in Applied Water, 16.5% decrease in Measurement and Control Solutions, and 0.5% decrease in Water Solutions and Services.
• Organic revenue declines in Measurement and Control Solutions were driven by reduced electric metering sales volume and lower project revenue in analytics applications.
• Water Infrastructure organic revenue declined in treatment applications due to timing and market softness but grew in transport applications due to backlog execution in the U.S.
• Applied Water organic revenue growth was driven by industrial and building solutions applications, partially offset by residential market declines.
• Water Solutions and Services organic revenue declined due to lower service and rental volume in the U.S. and capital project revenue declines in North America.
• For the nine months ended September 30, 2026, revenue was $6,662 million, a 0.4% increase compared to prior year, with organic growth of 0.2%.
• Liquidity as of September 30, 2026 included cash and equivalents of $708 million, current assets of $3.952 billion, current liabilities of $2.842 billion, resulting in a current ratio of 1.39 and cash ratio of 0.32.
• Net income for the nine months ended September 30, 2026 was $291 million with basic and diluted EPS of $1.25 for Q3 2026.
• The company announced a strategic segment reorganization and planned divestitures in Q3 2026.
• Goodwill impairment testing is performed annually with $8.3 billion goodwill balance as of December 31, 2025, with no impairment recognized.
• The company uses both income and market approaches to estimate fair value of reporting units for goodwill impairment testing.
• Xylem's financial statements are audited with unqualified opinions on financial position and internal controls as of December 31, 2025.
• The company provides adjusted financial metrics excluding restructuring, amortization, special charges, and tax-related items for performance evaluation.
• Management monitors key performance indicators including revenue, gross margins, segment operating income, orders growth, working capital, and backlog.
• The company faces risks including market softness in certain regions, timing of project execution, and impacts from divestitures and acquisitions.