Xylem Inc
LSE:0M29
Xylem Inc
Amidst the surge for sustainable solutions in water management, Xylem Inc. has steadily emerged as a beacon of innovation. Born as a spin-off from ITT Corporation in 2011, Xylem has constructed a narrative that's deeply rooted in both history and a visionary embrace of the future. Imagine a world where water scarcity is not a crippling fear, and water systems are seamlessly efficient. Xylem is on a mission to create this reality, using cutting-edge technology and expansive expertise to tackle water challenges globally. The company's operations pulsate through three key segments: Water Infrastructure, Applied Water, and Measurement & Control Solutions. By leveraging its core competencies, Xylem designs advanced pumps, treatment equipment, and smart metering technologies, playing a critical role in transporting, treating, and managing scarce water resources.
The heart of Xylem's profit engine lies in its diverse portfolio, serving municipal, industrial, commercial, and agricultural customers across the globe. Their business model marries manufacturing prowess with service-oriented offerings like analytics and data-driven insights into water consumption patterns. The company recognizes that the challenges of water scarcity and infrastructure modernization cannot be met through equipment alone. Hence, envision Xylem not just as a purveyor of products, but as an orchestrator of comprehensive solutions that capitalize on the burgeoning demand for sustainable water resource management. This holistic approach ensures a steady stream of revenue and positions Xylem as an undeniable leader in a market defined by necessity and innovation.
Amidst the surge for sustainable solutions in water management, Xylem Inc. has steadily emerged as a beacon of innovation. Born as a spin-off from ITT Corporation in 2011, Xylem has constructed a narrative that's deeply rooted in both history and a visionary embrace of the future. Imagine a world where water scarcity is not a crippling fear, and water systems are seamlessly efficient. Xylem is on a mission to create this reality, using cutting-edge technology and expansive expertise to tackle water challenges globally. The company's operations pulsate through three key segments: Water Infrastructure, Applied Water, and Measurement & Control Solutions. By leveraging its core competencies, Xylem designs advanced pumps, treatment equipment, and smart metering technologies, playing a critical role in transporting, treating, and managing scarce water resources.
The heart of Xylem's profit engine lies in its diverse portfolio, serving municipal, industrial, commercial, and agricultural customers across the globe. Their business model marries manufacturing prowess with service-oriented offerings like analytics and data-driven insights into water consumption patterns. The company recognizes that the challenges of water scarcity and infrastructure modernization cannot be met through equipment alone. Hence, envision Xylem not just as a purveyor of products, but as an orchestrator of comprehensive solutions that capitalize on the burgeoning demand for sustainable water resource management. This holistic approach ensures a steady stream of revenue and positions Xylem as an undeniable leader in a market defined by necessity and innovation.
Record Performance: Xylem achieved record revenue, EBITDA, and EPS for both Q4 and full year 2025, highlighting strong execution and operational discipline.
Margin Expansion: Full year EBITDA margin rose 160 basis points to 22.2%, and Q4 margin was 23.2%, driven by productivity and pricing outweighing inflation.
2026 Outlook: Management forecasts 2026 revenue of $9.1–$9.2 billion (up 1–3%), organic revenue growth of 2–4%, and EBITDA margin of 22.9–23.3%, with EPS expected at $5.35–$5.60.
Simplification Impact: Xylem is accelerating its 80/20 simplification efforts in 2026, which will create a 2% top-line headwind but is expected to improve earnings quality and margins.
China Weakness: Sales and orders in China declined sharply, with headcount reduced by over 40% to align with lower demand, as Xylem focuses on more profitable opportunities.
Strong Backlog: The company’s backlog stands at $4.6 billion, supporting confidence in sequential revenue improvement through 2026 despite some Q1 softness from project delays.
M&A and Capital Allocation: Xylem plans to deploy around $1 billion per year for M&A, prioritizing bolt-on acquisitions, with share buybacks considered opportunistically.
