Xylem Inc. Reports $2,125 Million Revenue in Q1 2026, Driven by Foreign Currency Impacts

Xylem Inc. reported a revenue of $2,125 million for the first quarter of 2026, reflecting a 2.7% increase from $2,069 million in the same period of 2025. The growth was primarily driven by favorable foreign currency impacts amounting to $65 million, which contributed 3.1% to the revenue increase. However, organic revenue experienced a slight decline of $9 million, or 0.4%, attributed to reduced capital project revenue in the U.S. and lower backlog execution in Western Europe. The company's net income attributable to Xylem rose to $193 million, up 14.2% from $169 million in the prior year, resulting in earnings per share of $0.79, a 14.5% increase compared to $0.69 in the previous year.

In terms of operational performance, Xylem's orders for the quarter reached $2,228 million, a 3.2% increase from $2,158 million in the prior year, although organic orders declined by 0.3%. The company reported a total backlog of $4,712 million, down 7.5% from $5,095 million a year earlier, primarily due to revenue growth outpacing order intake. The decrease was most pronounced in the Measurement and Control Solutions and Water Solutions and Services segments, while the Water Infrastructure and Applied Water segments saw backlog growth.

Strategically, Xylem has been active in acquisitions, including a definitive agreement to acquire a company specializing in optical sensing and measurement systems for water quality monitoring for approximately €190 million ($219 million). This acquisition is expected to enhance Xylem's Measurement and Control Solutions segment and is anticipated to close later in 2026. Additionally, the company has continued to invest in its existing operations, with capital expenditures of $90 million during the quarter, up from $71 million in the same period last year.

The company also faced increased restructuring and asset impairment charges, totaling $31 million in the first quarter of 2026, compared to $21 million in the prior year. These costs are part of ongoing efforts to streamline operations and improve strategic positioning. Despite these challenges, Xylem's adjusted operating income increased to $342 million, reflecting a 5.2% rise from $325 million in the previous year, with an adjusted operating margin of 16.1%.

Looking ahead, Xylem has raised its total revenue growth outlook to between 2% and 3% for 2026, while maintaining its organic revenue growth forecast at 2% to 4%. The company acknowledges the ongoing volatility in the market, influenced by geopolitical, trade, and macroeconomic uncertainties, which may impact its ability to meet these expectations.