Xylem Inc

Q2 performance: solid momentum + margin strength - Revenue up ~1% YoY; supported by strength in key markets offset by ~27% China decline and ~$2m walkaway revenue impact. - Ending backlog: $5.3B with book-to-bill > 1 (supported notably by the Dow WSS order; WSS orders +41% YoY; growth in 3 of 4 segments). - EBITDA margin: 23.3%, up 150 bps YoY, driven by productivity, price/mix more than offsetting inflation/lower volume. - EPS: $1.46, +16% YoY; free cash flow strong (higher net income, partially offset by outsourced water contracts). - Net debt/adj. EBITDA: 0.8x (increased due to opportunistic share repurchases in the quarter).

Segment highlights (what drove growth vs what dragged) - Water Infrastructure: orders -4% (China treatment weakness tied to “80/20” walkaway; but transport strong). Revenue +3% with transport offsetting treatment softness; EBITDA margin +480 bps (best segment performer). - MCS (Measurement & Control Solutions): orders +2%, revenue -1%; EBITDA margin 21.1% (-200 bps YoY) due to unfavorable mix/inflation/volume partially offset by productivity/price. - Applied Water: orders +9% with book-to-bill well above 1; revenue +3% YoY (notably data center orders +300% YoY; also commercial buildings strength in North America). - Water Solutions & Services (WSS): big demand surge; revenue +1% YoY; segment EBITDA margin 25.3% (+90 bps), helped by price/mix/productivity and the finalized Dow contract impacts.

Forecasts / outlook update (full-year + Q3) - Full-year reported revenue: ~$9.2B (~+2% growth YoY). Organic revenue growth: 2%–3% (tightened vs prior 2%–4% guidance). - Full-year EBITDA margin: 23.1%–23.5% (raised vs prior range). - EPS guidance raised: from $5.35–$5.60 to $5.55–$5.70. - Cash flow: still targeting low-double-digit free cash flow margin for the year. - Q3 outlook: revenue flat reported / ~+3% organic; EBITDA margin ~23.5%–24%; EPS $1.42–$1.47.