Xylem cuts 2026 revenue outlook to $8.95 billion as organic orders grow 10%
Key Facts
Xylem cut its 2026 revenue outlook to about $8.95 billion, compared with about $9.2 billion in its estimate following second-quarter results, citing project timing and more cautious spending decisions that weighed on revenue. According to Investing.com coverage, the new guidance is below analysts’ consensus of $9.19 billion. In contrast, the company recorded orders of $2.3 billion in the third quarter, up 7% on a reported basis and 10% organically. Xylem said strong order activity and solid earnings performance showed the resilience of its business despite revenue pressures. Shares fell 4.5% in premarket trading after results were released on October 27, 2026.
The new guidance marks a shift from the second-quarter estimate, when Xylem forecast revenue of about $9.2 billion for 2026, with reported growth of about 2% and organic growth of between 2% and 3%. The company also cut its annual adjusted EPS range to $5.40–$5.45 from $5.55–$5.70 previously. The new range is below analysts’ consensus of $5.65, according to Investing.com. The company forecast an adjusted EBITDA margin of about 23.2% and a free cash flow margin of about 10.2% for 2026. Xylem shares closed at $108.24 on October 26, according to EL7 data.
For the third quarter, adjusted EPS was $1.44, one cent below analysts’ estimate of $1.45, according to Investing.com. In the second quarter, the company reported revenue of $2.3 billion, up 2% on a reported basis and 1% organically, while orders totaled $3.1 billion, up 42% on a reported basis and 41% organically. In the third quarter, orders totaled $2.3 billion and grew 7% on a reported basis and 10% organically. The figures put strong orders alongside the effects of project timing and more cautious spending on revenue. The company said solid earnings performance, together with order activity, showed business resilience.
Xylem said project timing and more cautious spending decisions weighed on revenue, while productivity savings and price realization supported margins. Adjusted EBITDA margin rose to 23.9% in the third quarter, up 70 basis points year over year. The company attributed the margin expansion to productivity savings and strong price realization. For the full year, it expects an adjusted margin of about 23.2%, alongside a free cash flow margin of about 10.2%. The revenue and EPS outlook cuts therefore accompany an annual improvement in the third-quarter margin, according to figures reported by the company.
The company’s portfolio reshaping plan includes its intention to exit its Applied Water International and Specialty Flow Control units. Xylem said it is seeing momentum in high-growth industrial sectors, including data centers and microelectronics. It will also reorganize its businesses into three segments effective January 1, 2027: Treatment and Services, Flow Solutions, and Measurement and Analytics. The reorganization is part of the strategic actions the company announced with its third-quarter results, alongside its divestiture plans. Xylem revenue was $9.035 billion in 2025, up 5.5% from $8.562 billion in 2024, according to its filing with the U.S. Securities and Exchange Commission.