Core Viewpoint - Xylem Inc reported strong fourth-quarter earnings, exceeding analyst expectations in both earnings per share and sales figures [1][2]. Financial Performance - The company posted quarterly earnings of $1.42 per share, surpassing the analyst consensus estimate of $1.41 per share [1]. - Quarterly sales reached $2.397 billion, exceeding the analyst consensus estimate of $2.374 billion [1]. - For FY2026, Xylem projects adjusted EPS between $5.35 and $5.56, slightly below market estimates of $5.56 [1]. - The company anticipates sales of $9.100 billion to $9.200 billion, compared to expectations of $9.331 billion [1]. Management Commentary - CEO Matthew Pine highlighted the strong fourth quarter as part of a year of solid execution and transformation, achieving record full-year revenue, adjusted EBITDA margin, and adjusted EPS [2]. - Pine noted broad-based demand across major end markets and healthy organic revenue and orders growth, providing momentum heading into 2026 [2]. Stock Performance and Analyst Ratings - Following the earnings announcement, Xylem shares dipped 2.1% to trade at $126.24 [2]. - Barclays analyst William Grippin maintained an Overweight rating on Xylem but lowered the price target from $166 to $156 [4]. - RBC Capital analyst Deane Dray maintained an Outperform rating while reducing the price target from $176 to $162 [4].

Core Viewpoint - The company's stock price dropped significantly by 8.04% to $128.92 following the release of its latest financial report, which did not meet market expectations [1] Financial Performance - For Q4 2025, the company reported a revenue of $2.397 billion, representing a year-over-year growth of 6.16%, and a net profit of $335 million, with a growth of 2.76% [2] - The full-year revenue for 2025 was $9.035 billion, showing a year-over-year increase of 5.51%, which is a notable decline from the 16% growth in 2024 [3] Market Reaction - The market's negative response was attributed to the slowdown in revenue growth and concerns over profit sustainability, as the net profit margin for Q4 was 13.98%, indicating limited growth [3] - Trading volume surged to 5.02 million shares with a turnover rate of 2.06%, reflecting significant selling pressure [2]

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Economic Indicators - Nonfarm payrolls are expected to increase by +68,000 in January, with the unemployment rate remaining unchanged at 4.4% [1] - Average hourly earnings are projected to rise by +0.3% month-over-month and +3.7% year-over-year in January [1] - Initial weekly unemployment claims are anticipated to decrease by -7,000 to 224,000 [1] - Existing home sales in January are expected to decline by -4.3% month-over-month to 4.16 million [1] - January CPI is expected to rise by +2.5% year-over-year, with core CPI also expected to increase by +2.5% year-over-year [1] Retail Sales and Employment Costs - US December retail sales were unchanged month-over-month, falling short of expectations of +0.4% [2] - The employment cost index for Q4 rose by +0.7% quarter-over-quarter, which is the smallest increase in 4.5 years and below the expected +0.8% [2] Stock Market Performance - Stock indexes experienced mixed trading, with the Dow Jones reaching a new all-time high while the S&P 500 closed down -0.33% and the Nasdaq down -0.56% [6][5] - The broader market initially found support from weaker-than-expected retail sales and employment cost index reports, which lowered bond yields [5] Earnings Season Insights - Over half of the S&P 500 companies have reported earnings, with 78% beating expectations [7] - S&P earnings growth is expected to rise by +8.4% in Q4, marking the tenth consecutive quarter of year-over-year growth [7] - Excluding the Magnificent Seven tech stocks, Q4 earnings are projected to increase by +4.6% [7] Interest Rates and Bond Market - The markets are pricing in a 23% chance of a -25 basis point rate cut at the next Federal Reserve meeting [8] - The 10-year T-note yield fell to a 3.5-week low of 4.13%, supported by weaker-than-expected economic reports [9] Sector Performance - AI-infrastructure stocks faced pressure, with Western Digital down more than -7% and other tech stocks also declining [12] - Wealth-management stocks dropped significantly, with Raymond James Financial down more than -8% due to concerns over AI disruption [13] - Homebuilding stocks rose after the drop in mortgage rates, with Toll Brothers up more than +6% [14] Company-Specific Developments - Goodyear Tire & Rubber Co reported Q4 adjusted EPS of 39 cents, below the consensus of 49 cents, leading to a decline of more than -14% [15] - Incyte forecasted dull-year total net product revenue of $4.77 billion to $4.94 billion, causing a drop of more than -8% [16] - Spotify reported a record 38 million monthly active users in Q4, leading to a rise of more than +17% [17]

Core Viewpoint - Xylem Inc. (XYL) shares experienced a significant decline of up to 10% following the company's 2026 revenue guidance, which did not meet Wall Street expectations [3]. Company Summary - Xylem forecasts its 2026 revenue to be approximately $9.1 billion to $9.2 billion, indicating a shortfall compared to market expectations [3].

Financial Data and Key Metrics Changes - The company reported record revenue, EBITDA, and earnings per share for both Q4 and the full year 2025, with Q4 revenue growing by 4% despite a challenging comparison of 7% growth in the same period last year [8][9] - Full-year revenue growth was solid at 5%, with EBITDA margin expanding by 160 basis points to 22.2% [9][12] - The company achieved a record quarterly EPS of $1.42, a 20% increase over the prior year, and maintained a strong balance sheet with net debt to adjusted EBITDA of 0.2x [9][12] Business Line Data and Key Metrics Changes - In Measurement and Control Solutions (MCS), orders were up 22%, driven by smart metering demand, with revenue increasing by 10% [10][11] - Water Infrastructure saw orders down 1% in the quarter, with revenue flat due to strong demand in the U.S. offset by a nearly 30% decline in China [10][11] - Applied Water reported a 5% increase in orders and a 3% revenue growth, primarily driven by strength in U.S. commercial buildings [11] - Water Solutions and Services (WSS) experienced a 7% increase in orders and a 4% revenue growth, supported by strength in capital and services [11] Market Data and Key Metrics Changes - The backlog finished at $4.6 billion, with a book-to-bill ratio near 1 for both the quarter and the full year [8] - The company anticipates resilient demand in its largest end markets, with strong backlog conversion expected in 2026 [7][12] Company Strategy and Development Direction - The company is entering phase II of its transformation, focusing on strengthening its growth engine through sales force effectiveness, product management, and innovation [6][7] - Phase III will involve investing in long-term competitiveness, expanding breakthrough innovation, and deepening exposure to attractive future water markets [7] - The company is committed to simplifying its product offerings and focusing on higher-quality earnings, which may create short-term top-line headwinds [7][12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in resilient demand and strong backlog conversion, despite acknowledging challenges in project timing and market conditions, particularly in China [12][51] - The company expects to see sequential revenue improvement throughout 2026 as project kickoffs accelerate in the latter half of the year [12][13] - Management highlighted the importance of water as a foundational element for economic growth and the company's unique position in providing solutions across the water value chain [18][19] Other Important Information - The company is committed to maintaining a low double-digit free cash flow margin in its long-term financial framework [16] - The anticipated divestiture of the international metering business is expected to close at the end of Q1 2026, with a small EPS impact of $0.02-$0.03 [72] Q&A Session Summary Question: Can you provide a two-year progress report on margin improvement and portfolio optimization? - Management noted significant progress in operational model transformation and integration of Evoqua, achieving synergies 18 months early and improving employee engagement ratings [26][28] Question: Can you elaborate on the 80/20 walk-away revenues? - Management explained that the 80/20 initiative is becoming integral to operations, focusing on resource allocation and simplifying the business, which may lead to a 2% headwind in revenue for 2026 [31][32] Question: When will the 80/20 initiative start benefiting the company? - Management indicated that 2026 is seen as an inflection point, with expectations of building a growth engine and improving sales force effectiveness [39] Question: What are the plans for share buybacks or M&A? - Management stated that priorities include investing in core business and M&A, with a target of around $1 billion a year for capital deployment towards M&A [40][41] Question: Can you provide context on the backlog and project hesitancy? - Management acknowledged that project timing and local competition in China have impacted backlog and revenue guidance, but expressed confidence in the commercial funnel [48][51] Question: What is the outlook for smart meters and project delays? - Management remains confident in MCS achieving high single-digit growth long-term, attributing near-term challenges to project timing and backlog normalization [56][58]

Financial Data and Key Metrics Changes - The company reported record revenue, EBITDA, and earnings per share for both Q4 and the full year 2025, with revenue growth of 4% in Q4 and 5% for the full year [8][9] - Full-year EBITDA margin expanded by 160 basis points to 22.2%, with quarterly EBITDA margin at 23.2%, up 220 basis points year-over-year [9] - The company achieved a record quarterly EPS of $1.42, representing a 20% increase over the prior year [9] Business Line Data and Key Metrics Changes - Measurement and Control Solutions (MCS) saw orders up 22% in Q4, driven by smart metering demand, with revenue up 10% [10] - Water Infrastructure orders were down 1% in Q4, with revenue flat due to strong U.S. demand offset by a nearly 30% decline in China [10] - Applied Water orders increased by 5%, with revenues up 3%, primarily driven by strength in U.S. commercial buildings [11] - Water Solutions and Services (WSS) experienced a 7% increase in orders and 4% revenue growth, supported by strength in capital and services [11] Market Data and Key Metrics Changes - The backlog finished at $4.6 billion, with a book-to-bill ratio near 1 for both the quarter and the full year [8] - The company noted resilient demand in its largest end markets, with strong backlog conversion expected [7] Company Strategy and Development Direction - The company is in phase two of its transformation, focusing on strengthening its growth engine through sales force effectiveness, product management, and innovation [6] - The strategy includes purposeful walkaways from lower-quality revenue to drive higher-quality earnings, which may create short-term top-line headwinds [7] - The company aims to build on its core franchises and expand breakthrough innovation while deepening exposure to attractive future water markets [7] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in resilient demand and strong commercial positioning despite broader market conditions and volatility [17] - The company anticipates a challenging first quarter in 2026, with expectations for sequential revenue improvement throughout the year [12][13] - Management highlighted the importance of water as a foundational element for economic growth and the need for innovative solutions in the water sector [18][19] Other Important Information - The company is committed to a long-term financial framework with a low double-digit free cash flow margin [16] - The divestiture of the international metering business is expected to close at the end of Q1 2026, with a small EPS impact of $0.02-$0.03 [72] Q&A Session Summary Question: Can you provide a two-year progress report on margin improvement and portfolio optimization? - Management highlighted significant progress in operational model transformation and employee engagement, with a focus on leveraging simplicity for growth [26][30] Question: Why is the 80/20 walk-away revenue accelerating into the second year? - Management explained that the 80/20 approach is becoming integral to operations, focusing on resource allocation and optimizing overhead to support long-term growth [32][33] Question: When will the 80/20 strategy shift from a headwind to a tailwind? - Management indicated that 2026 is seen as an inflection point, with efforts to improve sales force effectiveness and customer engagement [38] Question: What are the plans for share buybacks versus M&A? - Management stated that priorities include investing in core business and M&A, with share buybacks being opportunistic [40][41] Question: What is the status of the backlog and project timing? - Management noted that project timing has been variable, impacting backlog and revenue guidance for 2026, but expressed confidence in the commercial funnel [48][49] Question: What steps are being taken regarding the softness in the China market? - Management acknowledged challenges in China, focusing on higher-quality opportunities and restructuring operations to align with market conditions [50][51] Question: Can you elaborate on the smart meters market and project delays? - Management remains confident in MCS's long-term growth, attributing near-term challenges to project timing and backlog normalization [56][58]

Financial Data and Key Metrics Changes - The company reported record revenue, EBITDA, and earnings per share for both Q4 and the full year 2025, with revenue growth of 4% in Q4 and 5% for the full year [8][9] - Full-year EBITDA margin expanded by 160 basis points to 22.2%, with quarterly EBITDA margin at 23.2%, up 220 basis points year-over-year [9] - The company achieved a record quarterly EPS of $1.42, representing a 20% increase over the prior year [9] Business Line Data and Key Metrics Changes - Measurement and Control Solutions (MCS) saw orders up 22% in Q4, driven by smart metering demand, with revenue up 10% [10] - Water Infrastructure orders were down 1% in Q4, with revenue flat due to strong demand in the U.S. offset by a nearly 30% decline in China [10] - Applied Water orders increased by 5%, with revenues up 3%, primarily driven by strength in U.S. commercial buildings [11] - Water Solutions and Services (WSS) reported a 7% increase in orders and 4% revenue growth, with an EBITDA margin of 23.9%, up 110 basis points year-over-year [11] Market Data and Key Metrics Changes - The backlog finished at $4.6 billion, with a book-to-bill ratio near 1 for both the quarter and the full year [8] - The company anticipates resilient demand in its largest end markets, despite short-term headwinds from strategic walkaways from lower-quality revenue [6][12] Company Strategy and Development Direction - The company is entering phase two of its transformation, focusing on strengthening its growth engine through sales force effectiveness, product management, and innovation [5][6] - Phase three will involve investing in long-term competitiveness and expanding into attractive future water markets [6] - The company is committed to simplifying its product offerings and enhancing customer focus, which may create short-term top-line headwinds but aims to drive higher-quality earnings [6][12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in resilient demand and strong backlog conversion, expecting to build on commercial and operational momentum in 2026 [6][17] - The company is monitoring broader market conditions, including tariffs, but maintains a positive outlook for the year [17] - Management highlighted the importance of water as a foundational element for economic growth and the need for innovative solutions in the water sector [18][19] Other Important Information - The company plans to close the divestiture of its international metering business by the end of Q1 2026, with an EPS impact of $0.02-$0.03 [72] - The company is targeting around $1 billion a year for capital deployment towards M&A, focusing on small to medium bolt-on acquisitions [41] Q&A Session Summary Question: Can you provide a two-year progress report on margin improvement and portfolio optimization? - Management acknowledged significant progress in operational model transformation and integration of Evoqua, with early delivery of synergies [26][28] Question: Why is the 80/20 walk-away revenue increasing into the second year? - Management explained that the 80/20 approach is becoming integral to operations, focusing on resource allocation and optimizing overhead to support long-term growth [32][33] Question: When will the 80/20 actions transition from a headwind to a tailwind? - Management indicated that 2026 is an inflection point, with expectations for improved sales force effectiveness and customer focus [40] Question: What is the outlook for the backlog and project hesitancy? - Management noted that the backlog is healthy but acknowledged project delays due to various factors, including inflation and project scope changes [50][68] Question: What are the expectations for smart meters and project delays? - Management remains confident in MCS achieving high single-digit growth long-term, attributing near-term challenges to project timing and backlog normalization [58] Question: What is the impact of divestitures on EPS? - The divestiture of the international metering business is expected to have a small EPS impact of $0.02-$0.03 for the year [72]

分组1 - Xylem reported quarterly earnings of $1.42 per share, matching the Zacks Consensus Estimate, and showing an increase from $1.18 per share a year ago, resulting in an earnings surprise of +0.35% [1] - The company achieved revenues of $2.4 billion for the quarter ended December 2025, exceeding the Zacks Consensus Estimate by 0.86%, and up from $2.26 billion year-over-year [2] - Xylem has surpassed consensus EPS estimates in all four of the last quarters, indicating consistent performance [2] 分组2 - The stock has gained approximately 2.9% since the beginning of the year, outperforming the S&P 500's gain of 1.7% [3] - The current consensus EPS estimate for the upcoming quarter is $1.15 on revenues of $2.15 billion, and for the current fiscal year, it is $5.52 on revenues of $9.33 billion [7] - The Waste Removal Services industry, to which Xylem belongs, is currently ranked in the bottom 28% of over 250 Zacks industries, which may impact stock performance [8]

2025 Fourth Quarter Results and Earnings February 10, 2026 Forward-looking and other statements in this presentation regarding our environmental and other sustainability efforts, plans and goals are not an indication that these statements are necessarily material to investors, to our business, operating results, financial condition, outlook, or strategy, to our impacts on sustainability matters or other parties, or are required to be disclosed in our filings with the SEC or other regulatory authorities, and ...