Xylem Inc. (XYL.N) reported a 20% rise in fourth-quarter adjusted profit on Tuesday, bolstered by robust demand across its water technology portfolio and productivity gains that offset inflationary pressures.
The Washington-based company, a leading provider of global water solutions, also issued a 2026 financial forecast that anticipates continued margin expansion and organic revenue growth.
Quarterly Performance
Xylem’s fourth-quarter revenue rose 6% to $2.4 billion, or 4% on an organic basis. The company reported net income of $335 million, or $1.37 per share, compared to $326 million, or $1.34 per share, in the prior-year period.
On an adjusted basis, Xylem earned $1.42 per share, beating the previous year’s $1.18. The results were primarily driven by strong price realization and productivity savings, which helped push adjusted EBITDA margins up 220 basis points to 23.2%.
The team delivered an exceptionally strong fourth quarter, capping a year of solid execution and transformation across Xylem. The company achieved record full-year levels for revenue, adjusted EBITDA margin, and adjusted earnings per share.
Segment Results
The company’s Measurement and Control Solutions segment saw the strongest top-line growth, with revenue climbing 14% to $534 million, led by smart metering demand.
The Water Infrastructure segment reported flat revenue of $749 million, as growth in treatment and strength in the U.S. market were offset by declines in China. However, the segment’s adjusted EBITDA margin expanded significantly by 510 basis points to 29.2%.
Applied Water revenue grew 5% to $475 million, while Water Solutions and Services revenue rose 5% to $639 million.
Dividend Increase
Reflecting confidence in its cash flow, Xylem’s Board of Directors declared a first-quarter dividend of $0.43 per share, an 8% increase over the previous year. The dividend is payable on March 24, 2026.
The company ended 2025 with $1.48 billion in cash and cash equivalents. Full-year free cash flow was $910 million, resulting in a free cash flow margin of 10.2%.
2026 Outlook
Xylem initiated its full-year 2026 guidance, forecasting revenue of $9.1 billion to $9.2 billion, representing reported growth of 1% to 3% and organic growth of 2% to 4%.
The company expects adjusted earnings per share between $5.35 and $5.60 for 2026. It also projects full-year adjusted EBITDA margins to reach approximately 22.9% to 23.3%, an expansion of 70 to 110 basis points over 2025 results.