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Xylem Inc. (XYL)

Description

Xylem Inc. is a leading global water technology company that designs, manufactures, and services engineered products and solutions across the water cycle—transport, treatment, measurement, and efficient use—for municipal, industrial, residential, and commercial customers.

Historical Reports

Financial Information

Report Date
2025-03-01
Report Period
Full Year 2024
Debt
$2.016 billion
Debt History
Debt shrank 11.7% year‑over‑year (from $2.284 B in 2023 to $2.016 B in 2024).
Debt Trend
Decreasing

Profit Information

Profit
$890 million
Profit History
Net income grew 46.1% year‑over‑year (from $609 M in 2023 to $890 M in 2024).
Profit Trend
Increasing

Detailed Report

Xylem Inc. 2024 Annual Financial Report

Report Date: 2025-03-01
Period Covered: Full Year 2024
Form Type: 10‑K

1. Executive Summary

  • Revenue: $8.562 B (+16% YoY; +16.4% constant currency)
  • Net Income: $890 M (+46% YoY)
  • Adjusted EBITDA: $1.763 B (20.6% margin)
  • Free Cash Flow: $942 M
  • Debt (net): $2.016 B (down 11.7% YoY)
  • Backlog: $5.070 B (recognized ~$5.088 B in prior year)

2. Profit & Debt Analysis

  • Profit Drivers:
    • Strong operating leverage in Measurement & Control and Water Solution Service segments.
    • Productivity savings (2.7 pp) and pricing realization (1.3 pp) drove gross margin to 37.5% (up 60 bps).
    • One‑time gain of $152 M on remeasurement of previously held equity interest in Idrica.
  • Debt Reduction:
    • Aggressive pay‑down of revolver and term debt; debt decreased from $2.284 B to $2.016 B.
    • Leverage ratio improved, supporting investment grade rating maintenance.

3. Segment Highlights

  1. Water Infrastructure (30% of Revenue)
    • Revenue: $2.555 B (+15% YoY)
    • Adjusted Margin: 17.8% (+1.2 pp)
  2. Applied Water (21% of Revenue)
    • Revenue: $1.793 B (–3% YoY)
    • Adjusted Margin: 16.0% (–1.5 pp)
  3. Measurement & Control Solutions (22% of Revenue)
    • Revenue: $1.871 B (+16% YoY)
    • Adjusted Margin: 17.5% (+4.3 pp)
  4. Water Solution Service (27% of Revenue)
    • Revenue: $2.343 B (+39% YoY, driven by Evoqua acquisition)
    • Adjusted Margin: 15.7% (+1.1 pp)

4. Key Drivers & Risks

  • Positive Drivers:
    • Large installed base enabling service upsell.
    • Strong project backlog in smart metering and dewatering.
  • Headwinds:
    • Inflationary pressure on raw materials and energy (1.5 pp margin drag).
    • Applied Water softness in residential/commercial markets.
    • Integration costs and one‑time restructuring ($55 M in 2024).

5. Pros & Cons

Pros:

  • Diversified global footprint (150 countries)
  • High‑margin recurring service revenues
  • Solid free cash flow conversion (112% of net income)

Cons:

  • Exposure to raw material cost volatility
  • Moderate execution risk on large, multi‑year projects
  • Cyclical end‑market demand (industrial/residential)

Analyst’s Rating: Maintain “Buy” – Xylem’s leadership in water technology, improving margins, and strong balance sheet position it for continued growth in 2025.

Statistics Breakdown

Revenue by Segment (2024):

  • Water Infrastructure: $2,555 M (30%)
  • Applied Water: $1,793 M (21%)
  • Measurement & Control Solutions: $1,871 M (22%)
  • Water Solution Service: $2,343 M (27%)

Revenue by Region (2024):

  • United States: $4,862 M (57%)
  • Western Europe: $1,745 M (20%)
  • Emerging Markets: $1,274 M (15%)
  • Other: $681 M (8%)

Company Direction Insights

Xylem enters 2025 with strong momentum: margins have expanded through cost discipline and pricing, and its service business is scaling profitably after the Evoqua acquisition. The company’s healthy backlog and leading technology in smart metering and digital water solutions support mid‑teen organic revenue growth guidance. Risks include inflationary input costs and end‑market cyclicality in Applied Water. Overall, Xylem’s robust free cash flow and debt reduction strategy underpin continued share repurchases and dividend growth, positioning it well for long‑term value creation.