1) Strategy & Leadership
- Xylem reported a strong start to 2026, building on momentum from 2025.
- The company is focused on long-term value creation, leveraging reduced complexity and disciplined execution.
- A new $1.5 billion share repurchase authorization was announced, with $581 million executed in Q1.
- Xylem signed an agreement to acquire a German firm specializing in water quality instruments, enhancing its capabilities in environmental monitoring.
- Leadership updates include Snehal Desai as Chief Growth and Commercial Officer and Sivan Zamir as Chief Innovation and Product Officer to drive growth and innovation.

2) Financial & Segment Results
- Q1 revenue was flat YoY, consistent with expectations, with an ending backlog of $4.7 billion and a book-to-bill ratio above 1.
- EBITDA margin improved to 20.6%, up 20 basis points YoY, driven by productivity and pricing.
- Q1 EPS was $1.12, a 9% increase YoY.
- Segment performance:
| Segment | Orders Growth | Revenue Change | EBITDA Margin | |-----------------------------|---------------|----------------|------------------| | Measurement & Control | +15% | +1% | 20.9% (down 10 bps) | | Water Infrastructure | +2% | -1% | 22.1% (up 40 bps) | | Applied Water | +2% | Flat | Below expectations (up 10 bps) | | Water Solutions & Services | Decline | -2% | Not specified |

3) Problems / Headwinds
- Orders were flat YoY due to project timing in Water Solutions & Services (WSS) and headwinds in China.
- China experienced a 30% YoY decline, attributed to market conditions and strategic business decisions.
- Inflationary pressures and supply chain disruptions continue to pose challenges, although Xylem remains price-cost positive overall.

4) Operational or Product Plans
- Xylem is focused on simplifying operations and enhancing capabilities to improve customer engagement.
- The company is optimistic about achieving double-digit order growth in the water segment throughout the year.
- The divestiture of the international metering business is expected to close by the end of Q2, impacting future guidance.
- Continued emphasis on sustainability and long-term infrastructure investments is a priority, with a $1.5 trillion need identified in U.S. water infrastructure.

5) Guidance & Outlook / Investor Angle
- Full-year revenue guidance is now $9.2 billion to $9.3 billion, reflecting 2% to 3% growth.
- EBITDA margin is expected to remain between 22.9% and 23.3%, with a focus on productivity and price offsetting inflation.
- Q2 revenue growth is anticipated at 2% to 3% reported and approximately 1% organically, with EPS projected at $1.31 to $1.36.
- The company is committed to maintaining a low double-digit free cash flow margin in its long-term financial framework.

Bottom line: Xylem's strong Q1 results and strategic initiatives position it well for continued growth, despite external challenges. The company's focus on disciplined execution, innovation, and capital allocation reflects confidence in delivering long-term shareholder value.