Xylem Inc. Reports $2,069 Million Revenue and 10.5% Net Income Increase in Q1 2025

Xylem Inc. reported a revenue of $2,069 million for the first quarter of 2025, reflecting a 1.8% increase from $2,033 million in the same period of 2024. The growth was primarily driven by organic revenue growth of 3.3%, particularly in the Measurement and Control Solutions segment, which saw strong volume increases. Net income attributable to Xylem rose to $169 million, or $0.69 per diluted share, marking a 10.5% increase from $153 million, or $0.63 per diluted share, in the prior year. The company's net income margin improved to 8.2%, up from 7.5% in the previous year.

In terms of operational performance, Xylem's orders totaled $2,158 million, a decline of 3.9% compared to $2,246 million in the prior year, with organic orders down 2.4%. The decrease in orders was attributed to a combination of factors, including unfavorable foreign currency translation and a reduction in backlog, which stood at $5,095 million at the end of March 2025, down 3.4% from the previous year. The company anticipates that approximately 50% of this backlog will be recognized as revenue in the remainder of 2025.

Strategically, Xylem made significant moves in the first quarter, including the acquisition of Simply Clean Air and Water, Inc. for $7 million, enhancing its Water Solutions and Services segment. Additionally, the company divested its Evoqua Magneto business for $61 million, resulting in a loss of $10 million recorded in the current period. These strategic actions are part of Xylem's ongoing efforts to streamline operations and focus on core competencies.

Operationally, Xylem's employee headcount increased to approximately 16,000, reflecting the integration of new acquisitions. The company also reported a restructuring charge of $17 million during the quarter, aimed at further simplifying its organizational structure. The gross margin for the quarter was 37.1%, a slight increase from 37.0% in the previous year, driven by productivity savings and price realization, although partially offset by inflationary pressures.

Looking ahead, Xylem maintains its revenue growth outlook for 2025 at 1% to 2%, with organic revenue growth projected at 3% to 4%. This outlook is set against a backdrop of ongoing geopolitical and macroeconomic uncertainties. The company remains focused on leveraging its strong market position and operational efficiencies to navigate these challenges and drive future growth.