Xylem Inc

Strong Q1 Performance: Xylem reported a solid start to 2025, with revenue growth across all segments and EPS of $1.30, which surpassed guidance by $0.08 and represented a 14% increase year-over-year (YOY). EBITDA margins improved by 120 basis points to 20.4%, attributed to productivity gains and effective pricing strategies.

Full-Year Guidance Reaffirmed: The company reaffirmed its full-year 2025 revenue guidance of $8.7 billion to $8.8 billion (up from a previous range of $8.6 billion to $8.7 billion), reflecting organic revenue growth expectations of 3% to 4%. The EBITDA margin is expected to expand between 70 to 120 basis points YOY, between 21.3% to 21.8%, and EPS remains guided at $4.50 to $4.70.

Challenges from Tariffs and Inflation: Despite a strong performance, Xylem faces challenges related to tariffs, particularly from imports from China and the EU, which are expected to add approximately $30 million in costs. There is uncertainty regarding potential demand impacts due to these tariffs, though the company believes it can manage any demand softening through implemented pricing actions.