Xylem(US:XYL)2025-10-28 14:45Revenue and Income - Revenue for Q3 2025 reached $2,268 million, a 7.8% increase from $2,104 million in Q3 2024[9] - Net income for the nine months ended September 30, 2025, was $617 million, up 9.4% from $564 million in the same period of 2024[10] - Revenue from contracts with customers for the nine months ended September 30, 2025, was $6,406 million, representing an increase of 8% compared to $5,920 million for the same period in 2024[49] - Total revenue for the three months ended September 30, 2025, was $2,268 million, an increase from $2,104 million in the same period of 2024, representing a growth of approximately 7.8%[129] - For the nine months ended September 30, 2025, total revenue reached $6,638 million, compared to $6,306 million for the same period in 2024, marking an increase of 5.3%[131] - Net income attributable to Xylem for the nine months ended September 30, 2025, was $622 million, a 10% increase from $564 million in the prior year[180] Profitability and Margins - Gross profit for Q3 2025 was $883 million, representing a gross margin of 38.9%, compared to $784 million in Q3 2024[9] - Operating income for the nine months ended September 30, 2025, was $870 million, an increase of 17.3% from $742 million in 2024[9] - Adjusted EBITDA margin improved to 23.2%, up 200 basis points from 21.2% in the prior year[144] - Operating income for Q3 2025 was $334 million, a 19.3% increase from $280 million in Q3 2024, with an operating margin of 14.7%[176] - Adjusted EBITDA for Q3 2025 was $527 million, an 18.0% increase from $447 million in Q3 2024, with an adjusted EBITDA margin of 23.2%[178] Expenses and Costs - Research and development expenses for the nine months ended September 30, 2025, totaled $166 million, a decrease of 3.5% from $172 million in 2024[9] - Total operating expenses for the three months were $549 million, an 8.9% increase year-over-year, resulting in an expense to revenue ratio of 24.2%[150] - SG&A expenses increased by $29 million to $474 million, or 20.9% of revenue, in Q3 2025, driven by $15 million in strategic investments and $13 million in inflation[170] - Restructuring charges for Q3 2025 were $23 million, significantly higher than $4 million in Q3 2024, reflecting efforts to streamline operations[172] Acquisitions and Divestitures - The company acquired Vacom Systems, LLC for a total cash consideration of $42 million, with $37 million paid at closing and the remainder to be paid over the next 12 to 18 months[25] - The company acquired Simply Clean Air and Water, Inc. for a net cash acquisition price of $7 million[27] - The acquisition of EMX Holdings, Inc. was completed for a total fair value of consideration transferred of $106 million, paid in cash[29] - The company divested its Evoqua Magneto business for a cash selling price of $61 million, resulting in a loss of $8 million[34] - The company acquired a 25.1% equity interest in Global Omnium Idrica, S.L. for $51 million, later increasing its stake to 61.0% for $154 million[38][39] Assets and Liabilities - Total assets increased to $17,295 million as of September 30, 2025, compared to $16,493 million at the end of 2024[12] - Cash and cash equivalents at the end of Q3 2025 were $1,191 million, up from $1,121 million at the end of 2024[12] - As of September 30, 2025, total debt outstanding was $1,962 million, with long-term debt amounting to $1,913 million[84] - The balance of stockholders' equity as of September 30, 2025, is $11,219 million, reflecting an increase from previous periods due to net income and other comprehensive income[103] Shareholder Information - Basic earnings per share for Q3 2025 were $0.93, an increase from $0.89 in Q3 2024[66] - Dividends declared for the nine months ended September 30, 2024, totaled $261 million, with a consistent rate of $0.36 per share[104] - The company repurchased 0.1 million shares of common stock for $14 million during the nine months ended September 30, 2025[116] - The company has up to $182 million in shares that may still be purchased under its share repurchase program as of September 30, 2025[116] Segment Performance - Segment operating income for Water Infrastructure was $113 million for Q3 2025, compared to $96 million in Q3 2024, reflecting a year-over-year increase of 17.7%[130] - Operating income for the Water Infrastructure segment increased by 26.5% to $296 million, with an operating margin of 15.7%[182] - Measurement and Control Solutions segment reported a 9.8% increase in adjusted operating income to $270 million, with an adjusted operating margin of 17.4%[182] - Water Solutions and Services segment's adjusted operating income increased by 12.7% to $311 million, with an adjusted operating margin of 17.0%[182] Future Outlook - The company anticipates continued growth in revenue and operating margins, supported by strategic investments in new technologies and market expansion initiatives[138] - The company faces risks including supply chain disruptions, inflation, and geopolitical events that could impact future performance[139]