Quick Summary
- Xylem delivered Q1 adjusted EPS of $1.12, surpassing the analyst consensus of $1.09
- Quarterly revenue reached $2.1 billion, falling just short of the $2.11 billion forecast
- Order backlog reached $2.2 billion, representing a 3% year-over-year increase
- Company elevated its full-year 2026 revenue forecast to $9.2B–$9.3B
- Shares climbed 1.6% in premarket activity before Tuesday’s trading session
Xylem delivered a first-quarter performance Tuesday morning that showcased strength in profitability while revenue figures came in marginally below Wall Street’s projections.
The water infrastructure technology provider announced adjusted earnings per share of $1.12 for Q1, outpacing the Street’s expectation of $1.09. This marked an improvement from the $1.03 reported in the comparable quarter last year.
Quarterly revenue totaled $2.1 billion, reflecting a 3% increase on a reported basis compared to the prior-year period. When measured organically — excluding foreign exchange impacts and M&A activity — revenue held steady year over year. Wall Street had anticipated $2.11 billion, making this a narrow top-line miss.
Incoming orders totaled $2.2 billion, marking a 3% uptick on a reported basis year over year, though organic order growth remained flat. The fact that orders outpaced revenue signals positive momentum for upcoming quarters.
Adjusted EBITDA margin improved by 20 basis points year over year, reaching 20.6%. The company attributed this expansion to operational efficiencies and strategic pricing actions, which successfully countered inflationary pressures and volume headwinds.
Chief Executive Officer Matthew Pine offered a cautiously optimistic outlook. “We entered the year with sustained momentum and solid demand across key end markets,” he noted. “While the external environment remains dynamic, our teams are executing well, staying close to customers, and advancing long-term priorities.”
Revenue Forecast Sees Upward Revision
Xylem increased its full-year 2026 revenue projection modestly. The company now anticipates revenue between $9.2 billion and $9.3 billion, an increase from the previous range of $9.1 billion to $9.2 billion. This represents expected growth of 2% to 3% on a reported basis.
The full-year adjusted EPS outlook remained unchanged at $5.35 to $5.60. The range’s midpoint of $5.48 falls slightly below the Street’s consensus estimate of $5.49.
Management also projects full-year adjusted EBITDA margin to land between 22.9% and 23.3%, which would represent a 70 to 110 basis point expansion compared to 2025 performance.
Jefferies analyst Stephen Volkmann characterized the quarterly results as “in line.” While not particularly effusive praise, investors appeared satisfied with the overall picture.
Stock Performance Update
Xylem shares advanced 1.6% in premarket trading, reaching $125.50, despite broader market futures trending slightly negative.
Entering Tuesday’s session, XYL had declined 9% year to date and posted modest gains of just 6% over the trailing twelve months. The stock experienced an 8% decline following its Q4 earnings release in February.
Reported EPS for the first quarter came in at $0.79, representing a 14% improvement from the $0.69 posted in last year’s corresponding period.
The Q1 results appear to have at least temporarily halted the stock’s recent decline.
