Computed from published fixed rules, not a model's judgement — though one input, the count of high-severity risks, comes from the AI analysis below.
Not investment advice and not a price target: it scores the quarter's fundamentals, not the stock. Full methodology →
AI Takeaway
Xylem (XYL) delivered solid Q1 2026 results with revenue up 2.7% YoY to $2.13B, net income surging 14.2% to $193M, and operating cash flow jumping 227.3% to $108M, while the company returned $563M to shareholders via buybacks.
Revenue
$2.13B
+2.71% YoY
EPS (Diluted)
$0.79
+14.49% YoY
Gross Margin
37.8%
+0.7 pts YoY
Operating Income
$244M
+5.63% YoY
Source: SEC XBRL
Xylem (XYL) reported Q1 FY2026 revenue of $2.13B, up 2.7% year over year. Operating margin was 11.5%, up 0.3 points from 11.2% a year earlier. Operating cash flow was $108M, up 227.3% year over year. XYL's fiscal Q1 FY2026 corresponds to calendar Q1 2026.
Last 4 quarters: 3 beats
| Quarter | Actual EPS (USD) | Consensus (USD) | Result |
|---|---|---|---|
| Jun 2026 | 1.46 | 1.35 | Beat +8.1% |
| Mar 2026This filing | 1.12 | 1.10 | Beat +2.2% |
| Dec 2025 | 1.42 | 1.42 | Miss -0.3% |
| Sep 2025 | 1.37 | 1.25 | Beat +10.0% |
Adjusted (non-GAAP) EPS of $1.12 versus the $1.10 analyst consensus — a +2.2% beat for Mar 2026. Analyst consensus is quoted on the adjusted (non-GAAP) basis the street uses. GAAP diluted EPS for this quarter was $0.79.
Compiled by AI from this SEC filing
Xylem grew Q1 2026 revenue by 2.7% YoY to $2.125B (from $2.069B), reflecting continued demand across its water technology segments. Gross profit expanded 4.6% to $803M, outpacing revenue growth and signaling improving product mix or pricing power.
Source: 10-Q Income Statement, Q1 2026
Gross margin improved to 37.79% from 37.12% a year ago (+0.67 pp), and operating margin edged up to 11.48% from 11.16% (+0.32 pp). Net margin reached 9.08%, reflecting disciplined cost management even as SG&A rose 2.6% to $472M.
Source: 10-Q Income Statement & Key Ratios, Q1 2026
Operating cash flow surged 227.3% YoY to $108M from just $33M in Q1 2025, indicating significantly improved working capital management and earnings quality. This recovery supports the company's ability to fund capital allocation priorities.
Source: 10-Q Cash Flow Statement, Q1 2026
Xylem repurchased $563M in shares during Q1 2026, a dramatic increase from just $13M in Q1 2025 (+4,230.8% YoY). This contributed to the 14.5% YoY increase in both basic and diluted EPS to $0.79, and was a primary driver of the $683M financing cash outflow.
Source: 10-Q Cash Flow Statement, Q1 2026
Cash & equivalents declined 23.7% YoY to $808M, while current liabilities surged 27.2% to $2.755B, compressing the current ratio to 1.46. Long-term debt declined modestly to $1.95B, and stockholders' equity grew 1.4% to $10.97B, suggesting the balance sheet remains solid but near-term liquidity warrants monitoring.
Source: 10-Q Balance Sheet, Q1 2026
Compiled by AI from this SEC filing · 0 high, 3 medium, 2 low
Current liabilities jumped 27.2% YoY to $2.755B while cash fell 23.7% to $808M, resulting in a current ratio of 1.46. Although still above 1.0, this tightening liquidity position could constrain operational flexibility if business conditions deteriorate or short-term obligations accelerate.
Source: 10-Q Balance Sheet, Q1 2026
Xylem deployed $563M in share repurchases in a single quarter, driving financing cash outflows of $683M. While accretive to EPS, this aggressive capital return reduces the cash buffer (now $808M) and could limit the company's ability to pursue acquisitions or weather unexpected headwinds.
Source: 10-Q Cash Flow Statement, Q1 2026
SG&A expenses rose 2.6% YoY to $472M in Q1 2026, growing nearly in line with revenue. At 22.2% of revenue, SG&A remains a significant cost burden, and any acceleration in these expenses without corresponding revenue growth could compress operating margins.
Source: 10-Q Income Statement, Q1 2026
Investing cash outflows widened to -$76M from -$15M in Q1 2025, a 406.7% increase. While the absolute level is manageable, the trend suggests rising capital expenditure requirements that, combined with the buyback program, could strain free cash flow generation going forward.
Source: 10-Q Cash Flow Statement, Q1 2026
R&D expense was flat at $56M YoY (0.0% growth) despite 2.7% revenue growth, meaning R&D as a percentage of revenue is declining. For a water technology company competing on innovation, sustained underinvestment in R&D could erode long-term competitive positioning.
Source: 10-Q Income Statement, Q1 2026
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Revenue $B | 2.13 $B | 2.07 $B | +2.71% |
Cost of Revenue $B | 1.32 $B | 1.30 $B | +1.61% |
Gross Profit $M | 803.00 $M | 768.00 $M | +4.56% |
Operating Income $M | 244.00 $M | 231.00 $M | +5.63% |
Net Income $M | 193.00 $M | 169.00 $M | +14.20% |
EPS (Basic) $ | 0.79 $ | 0.69 $ | +14.49% |
EPS (Diluted) $ | 0.79 $ | 0.69 $ | +14.49% |
R&D Expense $M | 56.00 $M | 56.00 $M | 0.00% |
SG&A Expense $M | 472.00 $M | 460.00 $M | +2.61% |
Answers draw on this SEC filing and the data on this page
Xylem's Q2 FY2026 revenue grew 1.5% YoY to $2,336M while operating margin expanded 340bps to 16.7% and net income rose 16.4% to $263M, driven by productivity savings and price realization, alongside a striking 42% surge in orders to $3,086M largely fueled by a major Water Solutions and Services contract.
Xylem (XYL) delivered strong FY2025 results with revenue growing 5.5% to $9.0B, operating income surging 21.2% to $1.2B, and net income rising 7.5% to $957M, reflecting meaningful margin expansion and disciplined cost management.
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