Xylem Inc.
For the period ended Jun 30, 2026. Filed Jul 28, 2026.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2026 · Filed Jul 28, 2026
XYL$97.83-2.2%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2026-03-31; filed 2026-04-28.
0001524472-26-000068
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-06-30; filed 2026-07-28.
0001524472-26-000110
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 116 previous paragraphs and 137 current paragraphs.
72 unchanged; 33 reworded; 31 added; 11 removed; 0 previous and 1 current paragraphs rearranged.
Tables are not compared: 13 previous and 18 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (31)
Current report
(a)Foreign currency translation impact for the year due to the strengthening in value of various currencies against the U.S. Dollar, the largest being the Euro, Australian Dollar, Hungarian Forint, Chinese Yuan and the Norwegian Krone.
Current report
(a)Foreign currency translation impact for the year due to the strengthening in value of various currencies against the U.S. Dollar, the largest being the Euro, Australian Dollar, British Pound, Hungarian Forint, Chinese Yuan and the Swedish Krona.
Current report
Water Infrastructure revenue increased $33 million, or 5.1%, for the second quarter of 2026 as compared to the prior year. Revenue growth for the quarter included organic growth of $17 million, or 2.6%, and $14 million of favorable impacts from foreign currency translation. Revenue growth also included the net impact of additional revenue of $4 million from acquisitions and a loss of $2 million of revenue from divestitures. Revenue in the transport application grew $28 million organically due to increased sales volume in the U.S. and increased capital project revenue in western Europe, partially offset by reduced backlog execution in the emerging markets. Revenue growth was partially offset by organic revenue declines in the treatment application of $11 million due to decreased sales volume in Western Europe, targeted exits on non-strategic capital revenue and market softness in Emerging Markets, partially offset by favorable timing of capital projects in the U.S.
Current report
Applied Water revenue increased $18 million, or 3.7% for the second quarter of 2026 as compared to the prior year. Revenue growth for the quarter included organic revenue growth of $13 million, or 2.7%, and $5 million of favorable foreign currency translation. Building solutions revenue grew $14 million organically, due primarily to backlog execution and price in the U.S. and increased sales volume in western Europe related to the commercial market, partially offset by declines in the residential market in western Europe and the emerging markets. Organic revenue growth was partially offset by organic declines of $1 million in the industrial application due to changing customer dynamics coupled with lower backlog execution in western Europe, partially offset by increased data center project revenue in the U.S.
Current report
Applied Water revenue increased $31 million, or 3.4% for the six months ended June 30, 2026 as compared to the prior year. Revenue growth for the period included $19 million of favorable foreign currency translation and organic revenue growth of $12 million, or 1.3%. Building solutions revenue grew $21 million organically, due primarily to commercial backlog execution and price in the U.S. and increased sales volume in western Europe, partially offset by residential declines in the emerging markets and western Europe. Organic revenue growth was partially offset by organic declines of $9 million in the industrial application driven by the same factors impacting the second quarter revenue declines.
Current report
Measurement and Control Solutions revenue decreased $14 million, or 1.4%, for the six months ended June 30, 2026 as compared to the prior year. The decrease in revenue was primarily due to a $29 million loss of revenue from divestitures, coupled with flat organic revenue, partially offset by $15 million of favorable foreign currency translation. Organic revenue growth was essentially flat for both the smart metering and other and analytics applications, driven by driven by increased energy sales volume in North America offset by lower shippable backlog coming into the year in water in North America.
Current report
Water Solutions and Services revenue increased $16 million, or 2.5%, for the second quarter of 2026 as compared to the prior year. The revenue growth was primarily driven by $7 million, or 1.1%, of organic growth, $6 million of favorable impacts from foreign currency translation and $3 million of acquisition activity. Revenue in the capital and other applications grew by $8 million organically, primarily due to increased capital project revenue recognized in North America as the result of a contract modification and increased dewatering sales in western Europe. Organic revenue growth was partially offset by $1 million of organic declines in the service application, driven by unfavorable service project timing in the U.S. almost entirely offset by service volume in the emerging markets.
Current report
(a)Foreign currency translation impact for the year due to the strengthening in value of various currencies against the U.S. Dollar, the largest being the Euro, Australian Dollar, Hungarian Forint, Chinese Yuan and the Norwegian Krone.
Current report
(a)Foreign currency translation impact for the year due to the strengthening in value of various currencies against the U.S. Dollar, the largest being the Euro, Australian Dollar, Hungarian Forint, Chinese Yuan and the Norwegian Krone.
Current report
Gross margin as a percentage of revenue increased 160 basis points to 39.6% for the six months ended June 30, 2026, as compared to 38.0% for the six months ended June 30, 2025. The gross margin increase included net favorable impacts of 40 basis points from decreases in special charges and acquired intangible amortization partially offset by increased restructuring and realignment costs as compared to the prior year. Gross margin expansion included 460 basis points of favorable operational impacts, led by 260 basis points of productivity savings and 150 basis points of price realization. These increases in gross margin were partially offset by 340 basis points of unfavorable operational impacts driven by 240 basis points of inflation and 40 basis points of decreased volume.
Current report
SG&A expenses remained flat at $503 million, and decreased to 21.5% of revenue in the second quarter of 2026, as compared to 21.9% of revenue, in the comparable 2025 period. In the second quarter of 2026, SG&A benefited from productivity savings, decreased special charges and realignment cost, which was offset by inflation, unfavorable foreign currency effects and increased spending on strategic investments.
Current report
Operating income was $390 million (operating margin of 16.7%) during the second quarter of 2026, an increase of $85 million, or 27.9%, when compared to operating income of $305 million (operating margin of 13.3%) during the prior year. Operating margin increased 340 basis points. Operating margin expansion included 180 basis points of favorable impacts from lower special charges, restructuring and realignment costs, and acquired intangible amortization relative to the prior year period. Additionally, operating margin expansion included 680 basis points of favorable operational impacts consisting mostly of 350 basis points of productivity savings, 240 basis points of price realization and 80 basis points of favorable mix. These favorable impacts were partially offset by 520 basis points of unfavorable operational impacts, driven by 270 basis points of inflation and 160 basis points of decreased volume. Excluding restructuring and realignment costs, acquired intangible asset amortization, and special charges, adjusted operating income was $447 million (adjusted operating margin of 19.1%) for the second quarter of 2026 as compared to adjusted operating income of $402 million (adjusted operating margin of 17.5%) during the comparable quarter in the prior year.
Current report
Operating income was $634 million (operating margin of 14.2%) during the six months ended June 30, 2026, an increase of $98 million, or 18.3%, when compared to operating income of $536 million (operating margin of 12.3%) during the prior year. Operating margin increased 190 basis points. Operating margin expansion included 80 basis points of favorable impacts from lower special charges, acquired intangible amortization, and restructuring and realignment costs relative to the prior year period. Additionally, operating margin expansion included 600 basis points of favorable operational impacts driven by 390 basis points of productivity savings and 200 basis points of price realization. These favorable impacts were partially offset by 490 basis points of unfavorable operational impacts, driven by of 280 basis points of inflation and 130 basis points of decreased volume. Excluding restructuring and realignment costs, acquired intangible asset amortization, and special charges, adjusted operating income was $789 million (adjusted operating margin of 17.7%) for the six months ended June 30, 2026 as compared to adjusted operating income of $727 million (adjusted operating margin of 16.6%) during the comparable quarter in the prior year, an increase of 110 basis points.
Current report
Adjusted EBITDA was $981 million (adjusted EBITDA margin of 22.0%) during the six months ended June 30, 2026, an increase of $56 million, or 6.1%, when compared to adjusted EBITDA of $925 million (adjusted EBITDA margin of 21.2%) during the comparable quarter in the prior year, an increase to adjusted EBITDA margin of 80 basis points. The increase in adjusted EBITDA margin was primarily driven by the same factors impacting the adjusted operating margin increase.
Current report
Operating income for our Water Infrastructure segment was $157 million (operating margin of 23.0%) during the second quarter of 2026, an increase of $54 million, or 52.4%, when compared to operating income of $103 million (operating margin of 15.8%) during the prior year, or a total increase in operating margin of 720 basis points. Operating margin expansion included net favorable impacts of 210 basis points from decreased restructuring and realignment costs, special charges and acquired intangible asset amortization as compared to the prior year. Additionally, operating margin expansion included 870 basis points of favorable operating impacts driven by 490 basis points of productivity improvements, 190 basis points of favorable mix and 80 basis points of price realization. Margin expansion was partially offset by 360 basis points of unfavorable operational impacts, driven by 200 basis points of inflation and 60 basis points of increased spending on strategic investments. Excluding restructuring and realignment costs, amortization of acquired intangibles, and special charges, adjusted operating income was $168 million (adjusted operating margin of 24.6%) for the second quarter of 2026 as compared to adjusted operating income of $127 million (adjusted operating margin of 19.5%) for the second quarter of 2025, an increase of 510 basis points.
Current report
Adjusted EBITDA was $182 million (adjusted EBITDA margin of 26.6%) for the second quarter of 2026, an increase of $40 million, or 28.2%, when compared to adjusted EBITDA of $142 million (adjusted EBITDA margin of 21.8%) during the prior year. The increase in adjusted EBITDA margin of 480 basis points was primarily driven by the same factors impacting the increase in adjusted operating margin.
Current report
Operating income for our Water Infrastructure segment was $233 million (operating margin of 18.1%) during the six months ended June 30, 2026, an increase of $50 million, or 27.3%, when compared to operating income of $183 million (operating margin of 14.9%) during the prior year, or a total increase in operating margin of 320 basis points. Operating margin expansion included 680 basis points of favorable operating impacts driven by 510 basis points of productivity savings and 70 basis points of favorable price realization. Margin expansion was partially offset by 360 basis points of unfavorable operational impacts, driven by 230 basis points of inflation and 50 basis points of increased spending on strategic investments. Excluding restructuring and realignment costs, amortization of acquired intangibles, and special charges, adjusted operating income was $285 million (adjusted operating margin of 22.2%) for the six months ended June 30, 2026 as compared to adjusted operating income of $234 million (adjusted operating margin of 19.0%) for the six months ended June 30, 2025, an increase of 320 basis points.
Current report
Adjusted EBITDA was $314 million (adjusted EBITDA margin of 24.4%) for the six months ended June 30, 2026, an increase of $52 million, or 19.8%, when compared to adjusted EBITDA of $262 million (adjusted EBITDA margin of 21.3%) during the prior year. The increase in adjusted EBITDA margin of 310 basis points was primarily driven by the same factors impacting the increase in adjusted operating margin.
Current report
Operating income for our Applied Water segment was $101 million (operating margin of 20.2%) during the second quarter of 2026, an increase of $17 million, or 20.2%, when compared to operating income of $84 million (operating margin of 17.4%) during the prior year, or a total increase in operating margin of 280 basis points. Operating margin expansion included 270 basis points from decreased restructuring and realignment costs and an increase in income from special items as compared to the prior year. Additionally, operating margin expansion included 770 basis points of favorable operational impacts consisting primarily of 610 basis points of productivity savings and 140 basis points of price realization. Operating margin expansion was offset by 760 basis points of unfavorable operational impacts driven primarily by 480 basis points of inflation, 140 basis points of decreased volume and 70 basis points of unfavorable foreign currency impacts. Excluding restructuring and realignment costs, adjusted operating income was $98 million (adjusted operating margin of 19.6%) for the second quarter of 2026 as compared to adjusted operating income of $94 million (adjusted operating margin of 19.5%) for the second quarter of 2025, an increase of 10 basis points.
Current report
Operating income for our Applied Water segment was $178 million (operating margin of 18.8%) during the six months ended June 30, 2026, an increase of $22 million, or 14.1%, when compared to operating income of $156 million (operating margin of 17.0%) during the prior year, or a total increase in operating margin of 180 basis points. Operating margin expansion included 170 basis points from decreased restructuring and realignment costs and an increase in income from special items as compared to the prior year. Additionally, operating margin expansion included 850 basis points of favorable operational impacts consisting primarily of 680 basis points of productivity savings and 160 basis points of price realization. Operating margin expansion was offset by 840 basis points of unfavorable operational impacts driven primarily by 420 basis points of inflation, 200 basis points of decreased volume, 110 basis points of unfavorable mix, and 60 basis points of increased spending on strategic investments. Excluding restructuring and realignment costs, adjusted operating income was $177 million (adjusted operating margin of 18.7%) for the six months ended June 30, 2026 as compared to adjusted operating income of $171 million (adjusted operating margin of 18.6%) for the six months ended June 30, 2025, an increase of 10 basis points.
Current report
Adjusted EBITDA was $194 million (adjusted EBITDA margin of 20.4%) for the six months ended June 30, 2026, an increase of $4 million, or 2.1%, when compared to adjusted EBITDA of $190 million (adjusted EBITDA margin of 20.7%) during the prior year, a decrease of 30 basis points. The decrease in adjusted EBITDA margin was primarily due to the same factors impacting the increase in adjusted operating margin; however, adjusted EBITDA did not benefit from the relative impact of decreased depreciation expense.
Current report
Adjusted EBITDA was $107 million (adjusted EBITDA margin of 21.1%) for the second quarter of 2026, a decrease of $18 million, or 14.4%, when compared to adjusted EBITDA of $125 million (adjusted EBITDA margin of 23.1%) during the prior year, a decrease of 200 basis points. The decrease in adjusted EBITDA margin was primarily due to the same factors as those impacting the decrease in adjusted operating margin.
Current report
Operating income for our Measurement and Control Solutions segment was $120 million (operating margin of 11.8%) during the six months ended June 30, 2026, a decrease of $4 million, or 3.2%, when compared to operating income of $124 million (operating margin of 12.0%) during the prior year, or a total decrease in operating margin of 20 basis points. The operating margin declines were partially offset by net favorable impacts of 100 basis points from lower special charges and restructuring and realignment costs compared to the prior year. Additionally, operating margin declines included 610 basis points of unfavorable operational impacts, driven primarily by 240 basis points of inflation, 200 basis points of unfavorable mix and 80 basis points of decreased volume. The decline in margin was partially offset by positive operational impacts of 490 basis points driven by 280 basis points of productivity savings and 170 basis points of price realization. Excluding restructuring and realignment costs, acquired intangible asset amortization and special charges, adjusted operating income was $166 million (adjusted operating margin of 16.3%) for the six months ended June 30, 2026 as compared to adjusted operating income of $180 million (adjusted operating margin of 17.5%) for the six months ended June 30, 2025, a decrease of 120 basis points.
Current report
Adjusted EBITDA was $213 million (adjusted EBITDA margin of 21.0%) for the six months ended June 30, 2026, a decrease of $15 million, or 6.6%, when compared to adjusted EBITDA of $228 million (adjusted EBITDA margin of 22.1%) during the prior year, a decrease of 110 basis points. The decrease in adjusted EBITDA margin was primarily due to the same factors as those impacting the decrease in adjusted operating margin.
Current report
Operating income for our Water Solutions and Services segment was $91 million (operating margin of 14.1%) during the second quarter of 2026, an increase of $13 million, or 16.7%, when compared to operating income of $78 million (operating margin of 12.4%) during the prior year, or a total increase in operating margin of 170 basis points. Operating margin expansion included 910 basis points of favorable operational impacts, driven by 570 basis points of price realization, including contract expansion benefit, 250 basis points of favorable mix, and 70 basis points of productivity savings. Margin expansion was partially offset by unfavorable operational impacts of 740 basis points driven primarily by 430 basis points of unfavorable volume, and 230 basis points of inflation. Excluding special charges, acquired intangible asset amortization, and restructuring and realignment costs, adjusted operating income was $120 million (adjusted operating margin of 18.6%) for the second quarter of 2026 as compared to adjusted operating income of $106 million (adjusted operating margin of 16.9%) for the second quarter of 2025, an increase of 170 basis points.
Current report
Adjusted EBITDA was $163 million (adjusted EBITDA margin of 25.3%) for the second quarter of 2026, an increase of $10 million, or 6.5%, when compared to adjusted EBITDA of $153 million (adjusted EBITDA margin of 24.4%) during the prior year, an increase of 90 basis points. The increase in adjusted EBITDA margin was primarily due to the same factors as those impacting the increase in adjusted operating margin; however, adjusted EBITDA margin did not benefit from the relative impact of decreased depreciation and amortization expense.
Current report
Operating income for our Water Solutions and Services segment was $147 million (operating margin of 12.1%) during the six months ended June 30, 2026, an increase of $25 million, or 20.5%, when compared to operating income of $122 million (operating margin of 10.2%) during the prior year, or a total increase in operating margin of 190 basis points. The operating margin expansion included favorable impacts of 50 basis points from decreased special charges and acquired intangible asset amortization relative to the prior year period. Additionally, operating margin expansion included 750 basis points of favorable operational impacts including 410 basis points of price realization, 160 basis points of favorable mix, and 120 basis points of productivity savings. Margin expansion was partially offset by unfavorable operational impacts of 610 basis points driven primarily by 280 basis points of unfavorable volume and 260 basis points of inflation. Excluding special charges, acquired intangible asset amortization, and restructuring and realignment costs, adjusted operating income was $203 million (adjusted operating margin of 16.8%) for the six months ended June 30, 2026 as compared to adjusted operating income of $184 million (adjusted operating margin of 15.4%) for the six months ended June 30, 2025, an increase of 140 basis points.
Current report
Adjusted EBITDA was $288 million (adjusted EBITDA margin of 23.8%) for the six months ended June 30, 2026, an increase of $13 million, or 4.7%, when compared to adjusted EBITDA of $275 million (adjusted EBITDA margin of 23.1%) during the prior year, an increase of 70 basis points. The increase in adjusted EBITDA margin was primarily due to the same factors as those impacting the increase in adjusted operating margin; however, adjusted EBITDA margin did not benefit from the relative impact of decreased depreciation and amortization expense.
Current report
Operating loss for corporate and other decreased $5 million, or 10.2%, during the six months ended June 30, 2026 compared to the prior year period. Operating loss decreased primarily due to lower special charges. Excluding special charges, adjusted operating loss for corporate and other remained flat for the six months ended June 30, 2026.
Current report
Interest expense was $11 million for the six months ended June 30, 2026, compared to $17 million for the comparable prior year period. The decrease in interest expense was primarily driven by the same dynamics impacting the decrease for the quarter.
Current report
See Note 1, "Background and Basis of Presentation," of our condensed consolidated financial statements for a description of tariff developments in 2026.
Removed paragraphs (11)
Previous report
(a)Foreign currency translation impact for the year due to the strengthening in value of various currencies against the U.S. Dollar, the largest being the Euro, British Pound, Australian Dollar and the Canadian Dollar.
Previous report
Applied Water revenue increased $13 million, or 3.0% for the first quarter of 2026 as compared to the prior year. Revenue growth for the quarter included $14 million of favorable foreign currency translation partially offset by organic revenue declines of $1 million, or 0.2%. Revenue in the industrial application declined by $8 million organically, primarily due to order softness in western Europe and the emerging markets, partially offset by favorable price realization in the U.S. These declines were partially offset by organic growth of $7 million from building solutions, primarily due to commercial backlog execution in the U.S., partially offset by residential softness in the emerging markets.
Previous report
(a)Foreign currency translation impact for the year due to the strengthening in value of various currencies against the U.S. Dollar, the largest being the Euro, British Pound, Australian Dollar and the Canadian Dollar.
Previous report
Operating income was $244 million (operating margin of 11.5%) during the first quarter of 2026, an increase of $13 million, or 5.6%, when compared to operating income of $231 million (operating margin of 11.2%) during the prior year. Operating margin increased 30 basis points. Operating margin expansion was partially offset by 10 basis points of net unfavorable impacts from increased restructuring and realignment costs, flat acquired intangible amortization and decreased special charges relative to the prior year period. Additionally, operating margin expansion included 610 basis points of favorable operational impacts driven by 430 basis points of productivity savings and 150 basis points of price realization. These favorable impacts were partially offset by 570 basis points of unfavorable operational impacts, consisting of 300 basis points of inflation, 120 basis points of unfavorable mix, 100 basis points of decreased volume, and 50 basis points of increased spending on strategic investments. Excluding restructuring and realignment costs, acquired intangible asset amortization, and special charges, adjusted operating income was $342 million (adjusted operating margin of 16.1%) for the first quarter of 2026 as compared to adjusted operating income of $325 million (adjusted operating margin of 15.7%) during the comparable quarter in the prior year.
Previous report
Operating income for our Water Infrastructure segment was $76 million (operating margin of 12.6%) during the first quarter of 2026, a decrease of $4 million, or 5.0%, when compared to operating income of $80 million (operating margin of 13.8%) during the prior year, or a total decrease in operating margin of 120 basis points. Operating margin declines included net unfavorable impacts of 220 basis points from increased restructuring and realignment costs and acquired intangible asset amortization and a slight decrease in special charges as compared to the prior year. Additionally, operating margin declines included 480 basis points of unfavorable operating impacts driven by 250 basis points of inflation, 120 basis points of unfavorable mix, and 50 basis points of foreign currency impacts. Margin declines were partially offset by 580 basis points of favorable operational impacts, driven by 520 basis points of productivity savings. Excluding restructuring and realignment costs, amortization of acquired intangibles, and special charges, adjusted operating income was $117 million (adjusted operating margin of 19.4%) for the first quarter of 2026 as compared to adjusted operating income of $107 million (adjusted operating margin of 18.4%) for the first quarter of 2025, an increase of 100 basis points.
Previous report
Adjusted EBITDA was $132 million (adjusted EBITDA margin of 21.9%) for the first quarter of 2026, an increase of $12 million, or 10.0%, when compared to adjusted EBITDA of $120 million (adjusted EBITDA margin of 20.7%) during the prior year. The increase in adjusted EBITDA margin of 120 basis points was primarily driven by the same factors impacting the increase in adjusted operating margin.
Previous report
Operating income for our Applied Water segment was $77 million (operating margin of 17.2%) during the first quarter of 2026, an increase of $5 million, or 6.9%, when compared to operating income of $72 million (operating margin of 16.6%) during the prior year, or a total increase in operating margin of 60 basis points. Operating margin expansion included 70 basis points from decreased restructuring and realignment costs as compared to the prior year. Additionally, operating margin expansion included 920 basis points of favorable operational impacts consisting of 750 basis points of productivity savings and 170 basis points of price realization. Operating margin expansion was offset by 930 basis points of unfavorable operational impacts driven primarily by 350 basis points of inflation, 260 basis points of decreased volume, 210 basis points of unfavorable mix, and 100 basis points of increased spending on strategic investments. Excluding restructuring and realignment costs, adjusted operating income was $79 million (adjusted operating margin of 17.6%) for the first quarter of 2026 as compared to adjusted operating income of $77 million (adjusted operating margin of 17.7%) for the first quarter of 2025, a decrease of 10 basis points.
Previous report
Adjusted EBITDA was $88 million (adjusted EBITDA margin of 19.6%) for the first quarter of 2026, an increase of $3 million, or 4.0%, when compared to adjusted EBITDA of $85 million (adjusted EBITDA margin of 19.5%) during the prior year, an increase of 10 basis points. The increase in adjusted EBITDA margin was primarily due to the same factors impacting the decrease in adjusted operating margin; however, adjusted EBITDA was not negatively affected by the relative impact of increased share-based compensation.
Previous report
Operating income for our Water Solutions and Services segment was $56 million (operating margin of 9.9%) during the first quarter of 2026, an increase of $12 million, or 27.3%, when compared to operating income of $44 million (operating margin of 7.8%) during the prior year, or a total increase in operating margin of 210 basis points. The operating margin expansion included favorable impacts of 130 basis points from decreased special charges, restructuring and realignment costs, and acquired intangible asset amortization relative to the prior year period. Additionally, operating margin expansion included 530 basis points of favorable operational impacts including 210 basis points of price realization, 170 basis points of productivity savings, 60 basis points of favorable foreign currency impacts and 50 basis points of favorable mix. Margin expansion was partially offset by unfavorable operational impacts of 450 basis points driven by 310 basis points of inflation and 100 basis points of unfavorable volume. Excluding special charges, acquired intangible asset amortization, and restructuring and realignment costs, adjusted operating income was $83 million (adjusted operating margin of 14.7%) for the first quarter of 2026 as compared to adjusted operating income of $78 million (adjusted operating margin of 13.9%) for the first quarter of 2025, an increase of 80 basis points.
Previous report
Adjusted EBITDA was $125 million (adjusted EBITDA margin of 22.1%) for the first quarter of 2026, an increase of $3 million, or 2%, when compared to adjusted EBITDA of $122 million (adjusted EBITDA margin of 21.7%) during the prior year, an increase of 40 basis points. The increase in adjusted EBITDA margin was primarily due to the same factors as those impacting the increase in adjusted operating margin; however, adjusted EBITDA margin did not benefit from the relative impact of decreased depreciation and amortization expense.
Previous report
On February 20, 2026, the United States Supreme Court issued a decision invalidating the broad-based tariffs imposed under the International Emergency Economic Powers Act, which the Company had previously been subject to on certain import transactions. As of March 31, 2026, we have not recorded a receivable related to potential tariff refunds due to the uncertainty regarding the timing and amount of such refunds at this time. We will continue to assess these developments as additional information becomes available.
Reworded paragraphs (33)
Previous wording
Xylem reported revenue for the first quarter of 2026 of $2,125 million, an increase of 2.7% compared to $2,069 million reported in the first quarter of 2025. The revenue increase consisted primarily of favorable foreign currency impacts of $65 million, or 3.1%, partially offset by slight organic declines of $9 million, or 0.4%.
Current wording
Xylem reported revenue for the second quarter of 2026 of $2,336 million, an increase of 1.5% compared to $2,301 million reported in the second quarter of 2025. The revenue increase consisted primarily of organic growth of $30 million, or 1.3%, and favorable foreign currency impacts of $29 million. Revenue growth was partially offset by the net impact of $31 million of revenue loss from divestitures and $7 million of additional revenue from acquisitions.
Previous wording
•Orders of $2,228 million, up 3.2% from $2,158 million in the prior year period, and down 0.3% on an organic basis.
Current wording
•Orders of $3,086 million, up 42.0% from $2,174 million in the prior year period, and up 40.9% on an organic basis.
Previous wording
•Earnings per share of $0.79, up 14.5% compared to prior year ($1.12, up 8.7% versus prior year, on an adjusted basis).
Current wording
•Earnings per share of $1.11, up 19.4% compared to prior year ($1.46, up 15.9% versus prior year, on an adjusted basis).
Previous wording
•Net income attributable to Xylem as a percent of revenue of 9.1%, up 90 basis points compared to 8.2% in the prior year. Adjusted EBITDA margin of 20.6%, up 20 basis points when compared to 20.4% in the prior year.
Current wording
•Net income attributable to Xylem as a percent of revenue of 11.3%, up 150 basis points compared to 9.8% in the prior year. Adjusted EBITDA margin of 23.3%, up 150 basis points when compared to 21.8% in the prior year.
Previous wording
•“special charges" defined as non-recurring costs incurred by the Company, such as those related to acquisitions and integrations, divestitures, non-cash impairment charges and other non-cash special charges.
Current wording
•“special charges" defined as non-recurring costs incurred by the Company, such as those related to acquisitions and integrations, divestitures, non-cash impairment charges and other special charges. In 2026, these charges include reductions of expense related to the refunds of certain tariffs previously imposed under the International Emergency Economic Powers Act (“IEEPA”).
Previous wording
•"free cash flow" defined as net cash from operating activities, as reported in the Statement of Cash Flows, less capital expenditures. Our definition of "free cash flow" does not consider certain non-discretionary cash payments, such as debt. The following table provides a reconciliation of free cash flow.
Current wording
•"free cash flow" defined as net cash from operating activities, less capital expenditures, as reported in the Statement of Cash Flows. Our definition of "free cash flow" does not consider certain non-discretionary cash payments, such as debt. The following table provides a reconciliation of free cash flow.
Previous wording
Revenue generated during the three months ended March 31, 2026 and 2025 was $2,125 million and $2,069 million, respectively, reflecting an increase of $56 million, or 2.7%, compared to the prior year. Organic revenue decreased $9 million, or 0.4% for the three months ended March 31, 2026. Foreign currency translation had a favorable impact on revenue of $65 million for the three months ended March 31, 2026. The net increase in revenue from acquisitions of $5 million was offset by a corresponding loss of revenue from divestitures for the three months ended March 31, 2026. The decrease in organic revenue for the three months ended March 31, 2026 is primarily due to reduced capital project revenue in the U.S. in our Water Solutions and Services segment, and reduced backlog execution due to lower opening backlog in western Europe across multiple segments. Organic declines were partially offset by modest organic growth in our Measurement and Control Solutions segment where U.S. energy growth outpaced declines in water.
Current wording
Revenue generated during the three and six months ended June 30, 2026 was $2,336 million and $4,461 million, respectively, reflecting an increase of $35 million, or 1.5%, and an increase of $91 million, or 2.1% compared to the prior year. Organic revenue increased $30 million, or 1.3%, and $21 million, or 0.5% for the three and six months ended June 30, 2026, respectively. Foreign currency translation had a favorable impact on revenue of $29 million for the three months ended June 30, 2026, and a favorable impact on revenue of $94 million for the six months ended June 30, 2026. The loss of revenue from divestitures of $31 million was partially offset by a corresponding increase in revenue from acquisitions of $7 million for the three months ended June 30, 2026. For the six months ended June 30, 2026 the loss of revenue from divestitures of $36 million was partially offset by a corresponding increase in revenue from acquisitions of $12 million. The increase in organic revenue for the three months ended June 30, 2026 is primarily due to increased sales volume in the U.S. in our Water Infrastructure segment and strong data center project growth in our Applied Water segment. The increase in organic revenue for the six months ended June 30, 2026 is primarily due to increased sales volume in the U.S. in our Water Infrastructure segment and strong price realization and backlog execution in the U.S. in our Applied Water segment.
Previous wording
The following table illustrates the impact from organic growth, recent acquisitions and divestitures, and foreign currency translation in relation to revenue during the three months ended March 31, 2026:
Current wording
The following tables illustrate the impact from organic growth, recent acquisitions and divestitures, and foreign currency translation in relation to revenue during the three and six months ended June 30, 2026:
Previous wording
Water Infrastructure revenue increased $22 million, or 3.8%, for the first quarter of 2026 as compared to the prior year. Revenue growth for the quarter included $29 million of favorable impacts from foreign currency translation partially offset by organic revenue declines of $5 million, or 0.9%, and the net impact of a loss of $5 million of revenue from divestitures and additional revenue of $3 million from acquisitions. Revenue in the treatment application declined $8 million organically. Organic declines in the treatment application were driven by unfavorable order volume and strong prior year project revenue in the emerging markets, and reduced backlog execution in western Europe, partially offset by favorable timing of capital projects in the U.S. Organic revenue declines in the treatment application were partially offset by organic revenue growth in the transport application of $3 million, driven by backlog execution and price realization in the U.S., partially offset by unfavorable sales volume in western Europe and project timing in the emerging markets.
Current wording
Water Infrastructure revenue increased $55 million, or 4.5%, for the six months ended June 30, 2026 as compared to the prior year. Revenue growth for the period included $43 million of favorable impacts from foreign currency translation and organic revenue growth of $12 million, or 1.0%. Revenue growth also included the net impact of $7 million of additional revenue from acquisitions offset by a loss of revenue of $7 million from divestitures. Revenue growth was driven by $31 million of organic growth in the transport application due to increased sales volume and strong backlog execution in the U.S. partially offset by market softness and reduced backlog execution in the emerging markets. Revenue in the treatment application declined by $19 million organically. Organic declines in the treatment application were driven by targeted exits on non-strategic capital revenue, market softness in emerging markets and reduced sales volume and capital project revenue in western Europe, partially offset by favorable timing of capital projects in the U.S.
Previous wording
Measurement and Control Solutions revenue increased $18 million, or 3.7%, for the first quarter of 2026 as compared to the prior year. The revenue growth was driven $11 million of favorable foreign currency translation and organic growth of $7 million, or 1.4%. Organic revenue growth during the quarter was driven by $7 million from the smart metering and other applications, driven by strong backlog execution and price realization in energy in the U.S. partially offset by declines in the U.S. in water with lower shippable backlog coming into the year and unfavorable sales volume in energy in Canada. Organic revenue growth in the analytics application was essentially flat year over year.
Current wording
Measurement and Control Solutions revenue decreased $32 million, or 5.9%, for the second quarter of 2026 as compared to the prior year. The decrease in revenue was primarily due to a $29 million loss of revenue from divestitures and $7 million, or 1.4%, of decreased organic revenue, partially offset by $4 million of favorable foreign currency translation. Organic revenue declines were driven by $7 million from the smart metering and other applications, driven by the U.S., which had lower shippable backlog coming into the quarter in water partially offset by increased sales volume in energy. Organic revenue remained flat in the analytics application as compared to the prior year.
Previous wording
Water Solutions and Services revenue increased $3 million, or 0.5%, for the first quarter of 2026 as compared to the prior year. The revenue growth was primarily driven by $11 million of favorable impacts from foreign currency translation and $2 million of acquisition activity, partially offset by organic revenue declines of $10 million, or 1.8%. Revenue in the capital and other applications declined by $14 million organically, primarily due to reduced capital project revenue and sales volume in the U.S., partially offset by sales volume in the emerging markets. Organic revenue from the service application increased by $4 million due to rental price realization and sales volume in dewatering in the U.S.
Current wording
Water Solutions and Services revenue increased $19 million, or 1.6%, for the six months ended June 30, 2026 as compared to the prior year. The revenue growth was primarily driven by $17 million of favorable impacts from foreign currency and $5 million of acquisition activity, offset by $3 million, or 0.3%, of organic declines. Revenue in the capital and other applications declined by $6 million organically, primarily due to reduced sales volume, partially offset by a favorable contract modification adjustment, in North America, with favorable sales volume in the emerging markets and western Europe also contributing to the offset. Organic revenue from the service application increased by $3 million due to service and rental volume in the emerging markets.
Previous wording
The following tables illustrate the impact from organic decline/growth, recent acquisitions and divestitures, and foreign currency translation in relation to orders during the three months ended March 31, 2026:
Current wording
The following tables illustrate the impact from organic decline/growth, recent acquisitions and divestitures, and foreign currency translation in relation to orders during the three and six months ended June 30, 2026:
Previous wording
Backlog includes orders on hand as well as contractual customer agreements at the end of the period. Delivery schedules vary from customer to customer based on their requirements. Annual or multi-year contracts are subject to rescheduling and cancellation by customers due to the long-term nature of the contracts. As such, beginning total backlog, plus orders, minus revenues, will not equal ending total backlog due to contract adjustments, foreign currency fluctuations, and other factors. Typically, capital projects require longer lead production cycles and deployment schedules and delays occur from time to time. Total backlog was $4,712 million at March 31, 2026, a decrease of $383 million, or 7.5%, as compared to March 31, 2025 backlog of $5,095 million. The decrease in backlog was driven by increased revenue outpacing order intake and contract wins in the current period, partially offset by favorable impacts from foreign currency translation. The backlog decrease was led by the Measurement and Control Solutions and Water Solutions and Services segments due to strong backlog execution and improved lead times. These backlog declines were partially offset by backlog growth in the Water Infrastructure and Applied Water segments primarily due to orders and contract wins outpacing revenue, and favorable foreign currency impacts. Backlog increased $97 million, or 2.1%, at March 31, 2026, as compared to December 31, 2025 backlog of $4,615 million. We anticipate that approximately 60% of the backlog as of March 31, 2026 will be recognized as revenue in the remainder of 2026. There were no significant order cancellations during the quarter.
Current wording
Backlog includes orders on hand as well as contractual customer agreements at the end of the period. Delivery schedules vary from customer to customer based on their requirements. Annual or multi-year contracts are subject to rescheduling and cancellation by customers due to the long-term nature of the contracts. As such, beginning total backlog, plus orders, minus revenues, will not equal ending total backlog due to contract adjustments, foreign currency fluctuations, and other factors. Typically, capital projects require longer lead production cycles and deployment schedules and delays occur from time to time. Total backlog was $5,315 million at June 30, 2026, an increase of $297 million, or 5.9%, as compared to June 30, 2025 backlog of $5,018 million. The backlog increase was due to strong order intake in the Water Solutions and Services and Applied Water segments, including the securing of a significant contract in Water Solutions and Services during the three months ended June 30, 2026. The backlog increase was partially offset by backlog declines in the Measurement and Control Solutions and Water Infrastructure segments primarily due to revenue outpacing orders and contract wins. Backlog increased $700 million, or 15.2%, at June 30, 2026, as compared to December 31, 2025 backlog of $4,615 million. The increase in backlog as compared to December 31, 2025 was driven primarily by strong order intake, including the securing of a significant contract in the Water Solutions and Services segment, partially offset by backlog declines in the Measurement and Control Solutions segment due to revenue outpacing orders and contract wins. We anticipate that approximately 40% of the backlog as of June 30, 2026 will be recognized as revenue in the remainder of 2026. There were no significant order cancellations during the quarter.
Previous wording
Gross margin as a percentage of revenue increased 70 basis points to 37.8% for the three months ended March 31, 2026, as compared to 37.1% for the three months ended March 31, 2025. The gross margin increase was partially offset by net unfavorable impacts of 10 basis points from increases in restructuring and realignment costs, flat special charges, and decreased acquired intangible amortization and special charges as compared to the prior year. Gross margin expansion was driven by 460 basis points of favorable operational impacts, led by 310 basis points of productivity savings and 110 basis points of price realization. These increases in gross margin were partially offset by 380 basis points of unfavorable operational impacts driven by 240 basis points of inflation and 120 basis points of unfavorable mix.
Current wording
Gross margin as a percentage of revenue increased 240 basis points to 41.2% for the three months ended June 30, 2026, as compared to 38.8% for the three months ended June 30, 2025. The gross margin increase included net favorable impacts of 70 basis points from decreases in special charges and acquired intangible amortization partially offset by increased restructuring and realignment costs as compared to the prior year. Gross margin expansion included 550 basis points of favorable operational impacts, driven by 230 basis points of productivity savings, 180 basis points of price realization, and 80 basis points of favorable mix. These increases in gross margin were partially offset by 380 basis points of unfavorable operational impacts driven by 240 basis points of inflation and 80 basis points of decreased volume.
Previous wording
The following table presents operating expenses for the three months ended March 31, 2026 and 2025:
Current wording
The following table presents operating expenses for the three and six months ended June 30, 2026 and 2025:
Previous wording
SG&A expenses increased by $12 million to $472 million, or 22.2% of revenue, in the first quarter of 2026, as compared to $460 million, or 22.2% of revenue, in the comparable 2025 period. The increase in SG&A in the first quarter of 2026 as compared to the prior year was driven by unfavorable currency impacts, inflation, and increased spending on strategic investments, partially offset by productivity savings, and lower realignment and special charges.
Current wording
SG&A expenses increased by $12 million to $975 million, or 21.9% of revenue, in the six months ended June 30, 2026, as compared to $963 million, or 22.0% of revenue, in the six months ended June 30, 2025. The increase in SG&A in the six months ended June 30, 2026 as compared to the prior year was driven by unfavorable currency impacts, inflation and increased spending on strategic investments, partially offset by productivity savings and lower special charges and realignment costs.
Previous wording
R&D expense was $56 million, or 2.6% of revenue, in the first quarter of 2026, as compared to $56 million, or 2.7% of revenue, in the first quarter of 2025. R&D expense was fairly consistent year over year and in line with planned spending in this area.
Current wording
R&D expense was $59 million, or 2.5% of revenue, in the second quarter of 2026, as compared to $58 million, or 2.5% of revenue, in the second quarter of 2025, and was $115 million, or 2.6% of revenue, in the six months ended June 30, 2026, as compared to $114 million, or 2.6% of revenue, in the six months ended June 30, 2025. R&D expense was fairly consistent year over year and in line with planned spending in this area.
Previous wording
From time to time, the Company incurs costs related to restructuring actions undertaken to optimize its cost base and improve its strategic positioning. During the three months ended March 31, 2026 and 2025, we incurred restructuring charges of $31 million and $17 million, respectively.
Current wording
From time to time, the Company incurs costs related to restructuring actions undertaken to optimize its cost base and improve its strategic positioning. During the three and six months ended June 30, 2026, we incurred restructuring charges of $11 million and $42 million, respectively. During the three and six months ended June 30, 2025, we incurred restructuring charges of $22 million and $39 million, respectively.
Previous wording
There were no actions commenced in the three months ended March 31, 2026. Actions commenced in 2025 were primarily related to simplification actions, informed by 80/20 principles, to streamline the organization and better serve our customers. We currently expect to incur between $40 and $55 million in restructuring costs for the full year.
Current wording
Actions commenced in 2025 and 2026 were primarily related to simplification actions, informed by 80/20 principles, to streamline the organization and better serve our customers. We currently expect to incur between $50 and $65 million in restructuring costs for the full year.
Previous wording
Refer to Note 9, "Goodwill and Other Intangible Assets" for more information on intangible asset impairment charges incurred during the three months ended March 31, 2026 and March 31, 2025.
Current wording
Refer to Note 9, "Goodwill and Other Intangible Assets" for more information on intangible asset impairment charges incurred during the three and six months ended June 30, 2026 and June 30, 2025.
Previous wording
Adjusted EBITDA was $437 million (adjusted EBITDA margin of 20.6%) during the first quarter of 2026, an increase of $14 million, or 3.0%, when compared to adjusted EBITDA of $423 million (adjusted EBITDA margin of 20.4%) during the comparable quarter in the prior year, an increase to adjusted EBITDA margin of 20 basis points. The increase in adjusted EBITDA margin was primarily driven by the same factors impacting the adjusted operating margin increase.
Current wording
Adjusted EBITDA was $544 million (adjusted EBITDA margin of 23.3%) during the second quarter of 2026, an increase of $42 million, or 8.4%, when compared to adjusted EBITDA of $502 million (adjusted EBITDA margin of 21.8%) during the comparable quarter in the prior year, an increase to adjusted EBITDA margin of 150 basis points. The increase in adjusted EBITDA margin was primarily driven by the same factors impacting the adjusted operating margin increase.
Previous wording
Net income attributable to Xylem for the first quarter was $193 million (net income margin of 9.1%), an increase of $24 million as compared to net income attributable to Xylem in the prior year of $169 million (net income margin of 8.2%). The increase in net income attributable to Xylem was driven by increased operating income of $13 million, $14 million of decreased loss on sale of businesses, decreased interest expense of $4 million, and an increase in the net loss attributable to non-controlling interest of $2 million, partially offset by increased income tax expense of $5 million and decreased non-operating income of $4 million.
Current wording
Net income attributable to Xylem for the six months ended June 30, 2026 was $456 million (net income margin of 10.2%), an increase of $61 million as compared to net income attributable to Xylem in the prior year of $395 million (net income margin of 9.0%). The increase in net income attributable to Xylem was driven by increased operating income of $98 million, decreased interest expense of $6 million and an increase in the net loss attributable to non-controlling interest of $2 million, partially offset by increased income tax expense of $33 million, increased non-operating loss of $10 million and increased loss from sale of businesses of $2 million.
Previous wording
Adjusted EBITDA was $106 million (adjusted EBITDA margin of 20.9%) for the first quarter of 2026, an increase of $3 million, or 3%, when compared to adjusted EBITDA of $103 million (adjusted EBITDA margin of 21.0%) during the prior year, a decrease of 10 basis points. The decrease in adjusted EBITDA margin was primarily due to the same factors as those impacting the decrease in adjusted operating margin.
Current wording
Adjusted EBITDA was $106 million (adjusted EBITDA margin of 21.2%) for the second quarter of 2026, an increase of $1 million, or 1.0%, when compared to adjusted EBITDA of $105 million (adjusted EBITDA margin of 21.7%) during the prior year, a decrease of 50 basis points. The decrease in adjusted EBITDA margin was primarily due to the same factors impacting the increase in adjusted operating margin; however, adjusted EBITDA did not benefit from the relative impact of decreased depreciation expense.
Previous wording
Operating income for our Measurement and Control Solutions segment was $57 million (operating margin of 11.2%) during the first quarter of 2026, an increase of $1 million, or 1.8%, when compared to operating income of $56 million (operating margin of 11.4%) during the prior year, or a total decrease in operating margin of 20 basis points. The operating margin declines were partially offset by net favorable impacts of 20 basis points from flat acquired intangible asset amortization, lower special charges and increased restructuring and realignment costs on increased revenue compared to the prior year. Additionally, operating margin declines included 570 basis points of unfavorable operational impacts, primarily consisting of 230 basis points of unfavorable mix, 210 basis points of inflation, 60 basis points of increased spending on strategic investments, and 60 basis points of decreased volume. The decline in margin was partially offset by positive operational impacts of 530 basis points driven by 320 basis points of productivity savings and 200 basis points of price realization. Excluding restructuring and realignment costs, acquired intangible asset amortization and special charges, adjusted operating income was $83 million (adjusted operating margin of 16.3%) for the first quarter of 2026 as compared to adjusted operating income of $82 million (adjusted operating margin of 16.7%) for the first quarter of 2025, a decrease of 40 basis points.
Current wording
Operating income for our Measurement and Control Solutions segment was $63 million (operating margin of 12.4%) during the second quarter of 2026, a decrease of $5 million, or 7.4%, when compared to operating income of $68 million (operating margin of 12.6%) during the prior year, or a total decrease in operating margin of 20 basis points. The operating margin declines were partially offset by net favorable impacts of 160 basis points from lower special charges and restructuring and realignment costs compared to the prior year. Additionally, operating margin declines included 620 basis points of unfavorable operational impacts, primarily consisting of 270 basis points of inflation, 170 basis points of unfavorable mix and 100 basis points of decreased volume. The decline in margin was partially offset by positive operational impacts of 440 basis points consisting of 240 basis points of productivity savings, 140 basis points of price realization, and 60 basis points of favorable margin impact from divestiture activity. Excluding restructuring and realignment costs, acquired intangible asset amortization and special charges, adjusted operating income was $83 million (adjusted operating margin of 16.3%) for the second quarter of 2026 as compared to adjusted operating income of $98 million (adjusted operating margin of 18.1%) for the second quarter of 2025, a decrease of 180 basis points.
Previous wording
Operating loss for corporate and other increased $1 million, or 4.8%, during the first quarter of 2026 compared to the prior year period. Operating loss increased primarily due to increased spending on and timing of strategic investments and inflation. Excluding special charges, adjusted operating loss for corporate and other increased $1 million, or 5.3%, for the three months ended March 31, 2026, driven by the same factors as those driving the increase in operating loss.
Current wording
Operating loss for corporate and other decreased $6 million, or 21.4%, during the second quarter of 2026 compared to the prior year period. Operating loss decreased primarily due to lower special charges and spending on and timing of strategic investments. Excluding special charges, adjusted operating loss for corporate and other decreased $1 million, or 4.3%, for the three months ended June 30, 2026, driven by lower spending on and timing of strategic investments.
Previous wording
Interest expense was $4 million for the three months ended March 31, 2026, compared to $8 million for the comparable prior year period. The decrease in interest expense was primarily driven by increased interest income generated on cross currency swaps reducing interest expense.
Current wording
Interest expense was $7 million for the three months ended June 30, 2026, compared to $9 million for the comparable prior year period. The decrease in interest expense was primarily driven by increased interest income generated on cross currency swaps reducing interest expense and lower outstanding equipment financing obligations, partially offset by increased interest expense from the Senior Notes due 2033 and Blue Notes due 2036.
Previous wording
The income tax provision for the three months ended March 31, 2026 was $55 million resulting in an effective tax rate of 22.3%, compared to $50 million of expense resulting in an effective tax rate of 23.1% for the same period in 2025. The effective tax rate for the three month period ended March 31, 2026 was lower than the effective tax rate for the same period in 2025, primarily due to earnings mix.
Current wording
The income tax provision for the three months ended June 30, 2026 was $103 million resulting in an effective tax rate of 28.3%, compared to $75 million of expense resulting in an effective tax rate of 25.0% for the same period in 2025. The income tax provision for the six months ended June 30, 2026 was $158 million resulting in an effective tax rate of 26.0%, compared to $125 million of expense resulting in an effective tax rate of 24.2% for the same period in 2025. The effective tax rate for the three and six month period ended June 30, 2026 was higher than the effective tax rate for the same period in 2025, primarily due to the impact of the 2026 international metering business divestiture.
Previous wording
(a)The impact is primarily due to weakening of the Euro, Chilean Peso and the Canadian Dollar against the U.S. Dollar.
Current wording
(a)The impact is primarily due to weakening of the Euro, Canadian Dollar and the Chilean Peso against the U.S. Dollar.
Previous wording
Cash generated by operating activities was $108 million for the three months ended March 31, 2026 as compared to cash generated by operating activities of $33 million in the comparable prior year period. The increase in cash provided was primarily driven by timing of payments for accrued expenses and lower annual incentives, offset by increased investment in working capital and higher payments for restructuring.
Current wording
Cash generated by operating activities was $398 million for the six months ended June 30, 2026 as compared to cash generated by operating activities of $338 million in the comparable prior year period. The increase in cash provided was primarily driven by increased cash earnings, timing of payments for prepaid and accrued expenses, as well as lower annual incentives, offset by increased investment in working capital and increased use of cash related to long-term outsourced water projects.
Previous wording
Cash used in investing activities was $76 million for the three months ended March 31, 2026 as compared to $15 million used in the comparable prior year period. The increase in cash used primarily reflects lower proceeds from sale of businesses, and increased investments in capital expenditures.
Current wording
Cash used in investing activities was $98 million for the six months ended June 30, 2026 as compared to $140 million used in the comparable prior year period. The decrease in cash used primarily reflects lower cash paid for asset acquisitions and higher proceeds from sales of businesses and fixed assets, offset by increased investments in capital expenditures.
Previous wording
Cash used in financing activities was $683 million for the three months ended March 31, 2026 as compared to cash used of $116 million in the comparable prior year period. The increase in cash used reflects the repurchase of common stock during the quarter, and higher dividend payments.
Current wording
Cash used in financing activities was $484 million for the six months ended June 30, 2026 as compared to cash used of $244 million in the comparable prior year period. The increase in cash used reflects the repurchase of common stock and higher dividend payments during the period, offset by the issuance of new long-term debt in the form of senior notes.
Previous wording
Based on our current global cash positions, cash flows from operations and access to the capital markets, we believe there is sufficient liquidity to meet our funding requirements and service debt and other obligations in both the U.S. and outside of the U.S. during the year. Currently, we have available liquidity of approximately $1.8 billion, consisting of $808 million of cash and $1 billion of available credit facilities as disclosed in Note 12, "Credit Facilities and Debt", of our condensed consolidated financial statements.
Current wording
Based on our current global cash positions, cash flows from operations and access to the capital markets, we believe there is sufficient liquidity to meet our funding requirements and service debt and other obligations in both the U.S. and outside of the U.S. during the year. Currently, we have available liquidity of approximately $2.3 billion, consisting of $1.3 billion of cash and $1 billion of available credit facilities as disclosed in Note 12, "Credit Facilities and Debt", of our condensed consolidated financial statements.
Previous wording
We are raising our total revenue growth outlook to 2% to 3%, and maintaining our organic revenue growth outlook at 2% to 4% in 2026. Our outlook is being provided in the context of the current volatility, including due to geopolitical, trade, macroeconomic and regulatory uncertainty. Our ability to meet our expectations is subject to a number of risks, including, but not limited to, those described in "Item 1A. Risk Factors" in our 2025 Annual Report.
Current wording
We are updating our total revenue growth outlook to approximately 2%, and updating our organic revenue growth outlook to 2% to 3% in 2026. Our outlook is being provided in the context of the current volatility, including due to geopolitical, trade, macroeconomic and regulatory uncertainty. Our ability to meet our expectations is subject to a number of risks, including, but not limited to, those described in "Item 1A. Risk Factors" in our 2025 Annual Report.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
Net income attributable to Xylem for the second quarter was $263 million (net income margin of 11.3%), an increase of $37 million as compared to net income attributable to Xylem in the prior year of $226 million (net income margin of 9.8%). The increase in net income attributable to Xylem was driven by increased operating income of $85 million and decreased interest expense of $2 million, partially offset by increased income tax expense of $28 million, loss on sale of businesses of $16 million and increased non-operating expense of $6 million.