Xylem (XYL) Q2 Revenue Up 6%

Core Insights - Xylem reported better-than-expected financial results for Q2 2025, with non-GAAP EPS of $1.26 exceeding analyst estimates of $1.15 and GAAP revenue of $2.3 billion surpassing the anticipated $2.21 billion [1][2] - The company raised its full-year 2025 guidance for both revenue and adjusted EPS, indicating positive momentum for the remainder of the fiscal year [1][11] Financial Performance - Non-GAAP EPS for Q2 2025 was $1.26, a 16% increase from $1.09 in Q2 2024 [2] - GAAP revenue reached $2.3 billion, reflecting a 6% year-over-year growth from $2.17 billion in Q2 2024 [2] - GAAP operating margin improved to 13.3%, up 1.6 percentage points from the previous year [2][6] - Adjusted EBITDA margin set a new high at 21.8%, an increase of 1.0 percentage point [2][7] - Net income under GAAP was $226 million, a 16.5% increase from $194 million in Q2 2024 [2] Business Segments - Revenue growth was observed across all four main divisions: Water Infrastructure (+3%), Applied Water (+6%), Measurement and Control Solutions (+12%), and Water Solutions and Services (+5%) [5] - The Measurement and Control Solutions segment experienced the highest growth at 12%, driven by demand for smart devices and data-driven services [6] Strategic Focus - Xylem specializes in water management solutions, including pumps, smart meters, and treatment systems, serving municipal, industrial, and commercial customers [3] - The company emphasizes sustainability initiatives, digital transformation, and operational efficiency, with ongoing investments in R&D focused on smart metering and analytics [4][8] Future Outlook - Full-year GAAP revenue guidance was raised to $8.9–$9.0 billion, up from $8.7–$8.8 billion, and adjusted EPS guidance increased to $4.70–$4.85 [11] - Management projects an adjusted EBITDA margin of 21.3–21.8%, reflecting confidence in sustained operational improvement [11] - Ongoing restructuring and realignment activities are aimed at streamlining operations and enhancing customer focus [10]