Xylem Posts 26 Percent Second Quarter Revenue Increase
Xylem Inc., global water technology company and pump manufacturer, reported second-quarter revenue of $2.169 billion on strong execution and demand, and second-quarter earnings per share were up 78 percent on a reported basis and 11 percent on an adjusted basis, exceeding Xylem’s previous guidance. Orders grew 12 percent on a reported basis and declined 1 percent organically.
Xylem’s second quarter revenue in 2023 totaled $1.722 billion, giving the company a 26-percent year-over-year increase. For the first six months of 2024, total revenue was $4.202 billion compared to $3.170 billion in the first half of 2023, a 32.6-percent incline.
“The team continued to build on Xylem’s momentum and outperformed expectations on all metrics in the second quarter,” said Xylem’s president and CEO, Matthew Pine. “Healthy demand, combined with the team’s disciplined operational execution, delivered significant margin expansion in the quarter. Evoqua integration and synergies are also well on track.
“We are further raising our full-year revenue, margin and earnings guidance. We are confident in the team’s commitment to realizing our operational potential, and underlying demand in our largest markets remains resilient despite likely macro variability in the second half. Our diversified portfolio of mission critical solutions is ideally positioned to meet global demand from intensifying water challenges.”
Net income was $194 million, or $0.80 per share. Net income margin increased 360 basis points to 8.9 percent. These results are driven by strong operational performance, partially offset by higher purchase accounting intangible amortization.
Second quarter adjusted EBITDA margin was 20.8 percent, reflecting a year-over-year increase of 170 basis points. Productivity savings, volume, and price drove the margin expansion, exceeding the impact of inflation, strategic investments and mix.
Improved outlook
Xylem now expects full-year 2024 revenue of $8.55 billion, up approximately 16 percent on a reported basis and up approximately 5 to 6 percent on an organic basis. This represents an increase from the company’s previous full-year guidance of 15 to 16 percent on a reported basis and 4 to 6 percent on an organic basis.
Full-year 2024 adjusted EBITDA margin is expected to be approximately 20.5 percent, increased from the previous guide of 20.0 percent. This results in adjusted earnings per share of $4.18 to $4.28, raised from the previous range of $4.10 to $4.25. Full-year free cash flow conversion to net income is expected to be at least 120 percent, an increase compared to the prior guidance of 115 percent.
Further 2024 planning assumptions are included in Xylem’s second-quarter earnings materials posted at www.xylem.com/investors.
About the Author
Michael Roth
Editor
Michael Roth has covered the equipment rental industry full time for RER since 1989 and has served as the magazine’s editor in chief since 1994. He has nearly 30 years experience as a professional journalist. Roth has visited hundreds of rental centers and industry manufacturers, written hundreds of feature stories for RER and thousands of news stories for the magazine and its electronic newsletter RER Reports. Roth has interviewed leading executives for most of the industry’s largest rental companies and manufacturers as well as hundreds of smaller independent companies. He has visited with and reported on rental companies and manufacturers in Europe, Central America and Asia as well as Mexico, Canada and the United States. Roth was co-founder of RER Reports, the industry’s first weekly newsletter, which began as a fax newsletter in 1996, and later became an online newsletter. Roth has spoken at conventions sponsored by the American Rental Association, Associated Equipment Distributors, California Rental Association and other industry events and has spoken before industry groups in several countries. He lives and works in Los Angeles when he’s not traveling to cover industry events.
