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What changed in Xylem Inc.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Xylem Inc.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+436 added−557 removedSource: 10-K (2026-02-25) vs 10-K (2025-03-03)

Top changes in Xylem Inc.'s 2025 10-K

436 paragraphs added · 557 removed · 379 edited across 9 sections

Item 1. Business

Business — how the company describes what it does

84 edited+8 added−24 removed38 unchanged
Biggest changeOur compensation programs are driven by our commitment to fair and equitable compensation as well as alignment to a pay-for-performance culture. We conduct an annual pay equity assessment based on gender and U.S. minority classifications and make pay adjustments as appropriate based on the results.
Biggest changeWe conduct an annual pay equity assessment based on gender and U.S. minority classifications and make pay adjustments as appropriate based on the results. Career Development We are focused on enhancing the capabilities of our colleagues that are needed for the Company to win in the marketplace. We also are focused on internal talent movement across functions, geographies and businesses.
Setting us apart is a unique set of global assets that include: • Market-leading brands, some of which have been in use for more than 100 years • Global distribution networks consisting of direct sales forces and independent channel partners serving a diverse customer base in approximately 150 countries • A substantial global installed base of products and solutions across the water cycle that provides for steady parts, replacement and service revenue • A strong history of providing innovative products, solutions, services and business models to customers • A dedicated, experienced, qualified and technologically advanced group of employees focused on safely satisfying our customers' requirements to transport, treat or measure clean water or wastewater and measure energy usage • A strong financial position and cash generation profile that enables us to fund strategic organic and inorganic growth initiatives, and consistently return capital to shareholders • A demonstrated commitment to corporate governance, social and environmental sustainability and delivering a positive impact to our customers, communities and employees Except as otherwise indicated or unless the context otherwise requires, “Xylem,” “we,” “us,” “our” and “the Company” refer to Xylem Inc. and its subsidiaries.
Setting us apart is a unique set of global assets that include: • Market-leading brands, some of which have been in use for more than 100 years • Global distribution networks consisting of direct sales forces and independent channel partners serving a diverse customer base in approximately 150 countries • A substantial global installed base of products and solutions across the water cycle that provides for steady parts, replacement and service revenue • A strong history of providing innovative products, services, solutions and business models to customers • A dedicated, experienced, qualified and technologically advanced group of employees focused on safely satisfying our customers' requirements to transport, treat or measure clean water or wastewater and measure energy usage • A strong financial position and cash generation profile that enables us to fund strategic organic and inorganic growth initiatives, and consistently return capital to shareholders • A demonstrated commitment to corporate governance, social and environmental sustainability and delivering a positive impact to our customers, communities and employees Except as otherwise indicated or unless the context otherwise requires, “Xylem,” “we,” “us,” “our” and “the Company” refer to Xylem Inc. and its subsidiaries.
Utilities and other customers require products, solutions, services, technology and application expertise from their Equipment, Technology and Services providers to address trends such as rising pollution, stricter regulations, increasing operational costs and the increased outsourcing of process knowledge.
Utilities and other customers require products, services, solutions, technology and application expertise from their Equipment, Technology and Services providers to address trends such as rising pollution, stricter regulations, increasing operational costs and the increased outsourcing of process knowledge.
In addition to utilities, Equipment, Technology and Service companies also provide distinct technologies and application expertise and services to a wide array of entities, including farms, mines, power plants, industrial facilities (such as food and beverage and pharmaceutical manufacturers) and residential and commercial customers seeking to address similar trends.
In addition to utilities, Equipment, Technology and Service companies also provide distinct technologies, services, and application expertise to a wide array of entities, including farms, mines, power plants, industrial facilities, such as food and beverage and pharmaceutical manufacturers, and residential and commercial customers seeking to address similar trends.
At the center of our offering is the FlexNet communication network, which provides a common communications platform and infrastructure for essential metering services. This two-way communication technology remotely connects a wide variety of smart points in a given network with protocols, frequently on Federal Communications Commission ("FCC") licensed spectrum in the U.S., to enable reliable, resilient and secure transmissions.
At the center of our offering is the FlexNet communication network, which provides a common communication platform and infrastructure for essential metering services. This two-way communication technology remotely connects a wide variety of smart points in a given network with protocols, frequently on Federal Communications Commission ("FCC") licensed spectrum in the U.S., to enable reliable, resilient and secure transmissions.
We seek to foster a high-impact culture – that is, one in which our colleagues are inspired to innovate, empowered to lead, and accountable to deliver – creating an environment that is purpose-driven, people-centered, respectful and inclusive.
We seek to foster a high-impact culture – one in which our colleagues are inspired to innovate, empowered to lead and accountable to deliver – creating an environment that is purpose-driven, people-centered, respectful and inclusive.
While environmental and climate change laws and regulations are subject to change, such changes can be difficult to predict reliably and the timing of potential changes is uncertain. We do not believe, based on current circumstances, that compliance costs pursuant to such regulations will have a material adverse effect on our financial position or results of operations.
While environmental laws and regulations are subject to change, such changes can be difficult to predict reliably and the timing of potential changes is uncertain. We do not believe, based on current circumstances, that compliance costs pursuant to such regulations will have a material adverse effect on our financial position or results of operations.
We are currently engaged in site investigations and remediation activities to address environmental cleanup from past operations at a number of current and former manufacturing facilities. We do not 11 anticipate these liabilities will have a material adverse effect on our consolidated financial position or results of operations.
We are currently engaged in site investigations and remediation activities to address environmental cleanup from past operations at a number of current and former manufacturing facilities. We do not anticipate these liabilities will have a material adverse effect on our consolidated financial position or results of operations.
Accordingly, in 2019, we evolved our approach to leverage sustainability in our decision making toward long-term value creation for our shareholders, customers, employees and communities in which we operate and we announced a comprehensive slate of 2025 sustainability goals. Additionally, in 2024, we announced several new ambitious 2030 commitments.
Accordingly, in 2019, we evolved our approach to leverage sustainability in our decision making toward long-term value creation for our shareholders, customers, employees and communities in which we operate, and we announced a comprehensive slate of 2025 sustainability goals. Additionally, in 2024, we announced several new ambitious 2030 goals.
The segment delivers communications, smart metering, measurement and control capabilities, and critical infrastructure technologies that allow customers to more effectively use their distribution networks for the delivery, monitoring and control of critical resources such as water, electricity and natural gas.
This segment delivers communications, smart metering, measurement and control capabilities and critical infrastructure technologies that allow customers to more effectively use their distribution networks for the delivery, monitoring and control of critical resources, such as water, electricity and natural gas.
In order to reach these customers, we leverage our application expertise in process water and wastewater treatment, our internal and external partners, and extensive service branch networks across the globe, including a rental fleet of transfer and treatment assets.
In order to reach these customers, we leverage our application expertise in process water and 9 wastewater treatment, our internal and external partners, and extensive service branch networks across the globe, including a rental fleet of transfer and treatment assets.
Our Industry Our vision is to create a world in which water issues are no longer a constraint to health, prosperity and sustainable development. Our purpose is to empower our customers and communities to build a more water secure world. Our planet faces serious water challenges.
Our Industry Our vision is to create a world in which water issues are no longer a constraint to health, prosperity and sustainable development. Our purpose is to empower our employees, customers and communities to build a more water secure world. Our planet faces serious water challenges.
In 2021, in partnership with Goldman Sachs, we continued our work towards further integrating our business and finance strategies with sustainability by creating a cash account tied to performance of select 2025 Sustainability goals.
In 2021, in partnership with Goldman Sachs, we continued 12 our work towards further integrating our business and finance strategies with sustainability by creating a cash account tied to performance of select 2025 Sustainability goals.
We believe that our overall success and long-term growth depend, in part, on our continued ability to attract and retain highly skilled colleagues, with a diverse variety of backgrounds, experiences, and perspectives, the reflect our customers and communities, including senior leaders and individuals with skills in our strategic competencies, such as engineering, innovation, digital technologies, sales excellence, sustainability and product and project management, as well as production, field service and technical services talent.
We believe that our overall success and long-term growth depend, in part, on our continued ability to attract and retain highly skilled colleagues, with a variety of backgrounds, experiences and perspectives that reflect our customers and communities, including senior leaders and individuals with skills in our strategic competencies, such as engineering, innovation, digital technologies, sales excellence, sustainability and product and project management, as well as production, field service and technical services talent.
Several trends are increasing demand for this application expertise: (i) the need for efficient transport and treatment solutions due to the increase in water scarcity, (ii) the increase in both the type and amount of contaminants found in the water supply, (iii) the need to increase system resilience and efficiencies due to aged infrastructure and affordability, (iv) increasing environmental regulations, and (v) the need to reduce carbon emissions generated from transporting and treating water.
Several trends are increasing demand for this application expertise: (i) the need for efficient transport and treatment solutions due to the increase in water scarcity and electricity costs, (ii) the increase in both the type and amount of contaminants found in the water supply, (iii) the need to increase system resilience and efficiencies due to aged infrastructure and affordability, (iv) increasing environmental regulations, and (v) the need to reduce carbon emissions generated from transporting and treating water.
The Water Solutions and Services segment also includes sales and rental of specialty dewatering pumps, scalable products, and related equipment, technology and services, which provide the safe removal or draining of groundwater and surface water from construction sites or other industrial sites, and bypass pumping for the repair of aging utility infrastructure, as well as emergency water transport and removal during severe weather events.
The Water Solutions and Services segment also includes the sale and rental of specialty dewatering pumps, scalable products, and related equipment, technology and services, which provide the safe removal or draining of groundwater and surface water from construction sites or other industrial sites, and bypass pumping for the repair of aging utility infrastructure, as well as emergency water transport and removal during severe weather events.
We are putting the needs and experiences of our customers at the forefront of everything we do. By listening to our customers and understanding their challenges, we aim to deliver innovative solutions that not only meet but exceed their expectations. This approach helps us build strong, lasting relationships and helps align our products and services with customer needs.
We are putting the needs and experiences of our customers at the forefront of everything we do. By listening to our customers and understanding their challenges, we aim to deliver innovative solutions that not only meet but exceed their expectations. This approach helps us build strong, lasting relationships and aligns our products and services with customer needs.
Competition in the Applied Water segment focuses on brand reputation, application expertise, product delivery, performance and energy efficiency, quality and reliability, and price. We compete by offering innovative and high-quality products, coupled with world-class application expertise. We believe our distribution through well-established channels and our reputation for quality significantly enhance our market position.
Competition in the Applied Water segment focuses on brand reputation, application expertise, product delivery, performance and energy efficiency, quality, reliability and price. We compete by offering innovative and high-quality products, coupled with world-class application expertise. We believe our distribution through well-established channels and our reputation for quality significantly enhances our market position.
The information on our website is not, and shall not be deemed to be, a part hereof or incorporated into this or any of our other filings with the SEC. In addition, the public may read or copy any materials filed with the SEC, free of charge, at www.sec.gov. 15
The information on our website is not, and shall not be deemed to be, a part hereof or incorporated into this or any of our other filings with the SEC. In addition, the public may read or copy any materials filed with the SEC, free of charge, at www.sec.gov. 14
Governmental Regulations Environmental Regulations Our global operations are subject to various laws and regulations governing the environment and climate change, such as those promulgated by the U.S. Environmental Protection Agency and similar state and foreign environmental agencies, including related to the discharge of pollutants and the management and disposal of hazardous substances.
Governmental Regulations Environmental Regulations Our global operations are subject to various laws and regulations governing the environment, such as those promulgated by the U.S. Environmental Protection Agency and similar state and foreign environmental agencies, including related to the discharge of pollutants and the management and disposal of hazardous substances.
Customers Our business is not dependent on any single customer or a few customers, the loss of which would have a material adverse effect on our Company. No individual customer accounted for more than 5% of our consolidated revenues in 2024, 2023 or 2022.
Customers Our business is not dependent on any single customer or a few customers, the loss of which would have a material adverse effect on our Company. No individual customer accounted for more than 5% of our consolidated revenues in 2025, 2024 or 2023.
In the U.S., deteriorating pipe systems, theft or inaccurate meters result in approximately one out of every six gallons of treated and transported water being lost prior to reaching the end customer.
In the U.S., deteriorating pipe systems, theft or inaccurate meters result in approximately one out of every five gallons of treated and transported water being lost prior to reaching the end customer.
FCC; lobbying activity; health and safety; the environment; air emissions; potable and non-potable water; wastewater discharge; and the generation, handling, storage, use, transport, treatment and disposal of non-hazardous and hazardous materials and wastes, among other matters. We have policies and procedures in place to promote compliance with these laws, regulations and permits.
FCC; lobbying activity; health and safety; the environment; air emissions; potable and non-potable water; wastewater discharge; and the generation, handling, storage, use, transport, treatment and disposal of non-hazardous and hazardous materials and wastes. We have policies and procedures in place to promote compliance with these laws, regulations and permits.
These pillars include Decarbonizing the Water Sector, by providing solutions that support energy efficiency and reduced emissions for our customers; Accelerating Water Stewardship, by enabling leading practices in effective water management; and Advancing Water and Sanitation Hygiene (WASH) for All, by providing innovative solutions to increase services to underserved communities around the world.
These pillars include decarbonizing the water sector, by providing solutions that support energy efficiency and reduced emissions for our customers; accelerating water stewardship, by enabling leading practices in effective water management; and advancing WASH for all, by providing innovative solutions designed to increase services to underserved communities around the world.
As we look beyond 2025, we have established three high-impact pillars of our sustainability efforts aligned with our strategy and long-term value creation, that deliver sustainable outcomes across our value chain, as well as where we believe we can uniquely provide outsized impact for our customers and communities.
As we look beyond 2025, we have established three high-impact pillars of our sustainability efforts aligned with our strategy and long-term value creation, that aim to deliver sustainable outcomes across our value chain, as well as where we believe we can provide outsized impact for our customers and communities.
Our Water Solutions and Services segment reaches customers across various municipalities as well as industrial vertical markets such as life sciences, microelectronics, food and beverage, chemical processing, and power 9 generation.
Our Water Solutions and Services segment reaches customers across industrial vertical markets, such as life sciences, microelectronics, food and beverage, chemical processing and power generation, and various municipalities.
We anticipate that approximately 50% of the backlog at December 31, 2024 will be recognized as revenue during 2025. Research and Development Research and development (“R&D”) is a key foundation of our growth strategy and we focus on the design and development of products, services, solutions and application know-how that address anticipated customer needs and emerging trends.
We anticipate that approximately 60% of the backlog at December 31, 2025 will be recognized as revenue during 2026. Research and Development Research and development (“R&D”) is a key foundation of our growth strategy, and we focus on the design and development of products, services, solutions and application know-how that address anticipated customer needs and emerging trends.
Our Purpose and Values Our purpose is to empower our customers and communities to build a more water-secure world and, together with our values, provides the foundation for how we want to grow as a company and behave as an industry leader and as ethical corporate citizens.
Our Purpose and Values Our purpose is to empower our customers and communities to build a more water-secure world, and, together with our values, provides the foundation for how we want to grow as a company and behave as both an industry leader and an ethical corporate citizen.
Less than 1% of the total water available on earth is fresh water, and the supply is threatened by factors such as the draining of aquifers, increased pollution and the effects of climate change. Demand for fresh water is rising rapidly due to population growth, industrial expansion, and increased agricultural development, with consumption estimated to double every 20 years.
Less than 1% of the total water available on earth is fresh water, and the supply is threatened by factors such as the draining of aquifers, increased pollution and changing climate patterns. Demand for fresh water is rising rapidly due to population growth, industrial expansion, and increased agricultural development, with consumption estimated to double every 20 years.
We anticipate we will continue to develop and invest in our R&D capabilities to promote a steady flow of innovative, high-quality and reliable products and integrated solutions to further strengthen our position in the markets we serve.
We anticipate we will continue to develop and invest in our R&D capabilities to promote a steady flow of innovative, high-quality and reliable products and integrated solutions to further strengthen our position in the markets we serve. We have R&D capabilities around the world.
Based on employee survey feedback, we regularly augment our holistic well-being strategies, including the expansion of our Employee Assistance Program support across the globe, mental health awareness training and additional mental health resources as well as student loan repayment support.
Based on employee survey feedback, we regularly augment our holistic well-being strategies, including the expansion of our Employee Assistance Program support across the globe, additional mental health resources, and student loan repayment support.
Capitalized Software We offer software as a product or service directly to external customers, which is included within "Other intangible assets, net" on our Consolidated Balance Sheets. As of December 31, 2024 and 2023 we had net capitalized software used in sales and services to external customers of $185 million and $209 million, respectively.
Capitalized Software We offer software as a product or service directly to external customers, which is included within "Other intangible assets, net" on our Consolidated Balance Sheets. As of December 31, 2025 and 2024, we had net capitalized software used in sales and services to external customers of $175 million and $185 million, respectively.
We have a long history of innovation, and we are focusing on the powerful capabilities of smart technology, integrated management and data analytics. We believe our financial performance and commitment to sustainability go hand in hand.
We have a long history of innovation, and we are focusing on the powerful capabilities of smart technology, integrated management and data analytics. We believe our financial performance and focus on sustainability go hand in hand.
This seasonality is dependent on factors such as customers' capital spending, as well as the effects of climate change and weather conditions, including heavy flooding, prolonged droughts and fluctuations in temperatures or weather patterns, all of which can positively or negatively impact portions of our business.
This seasonality is dependent on factors such as customers' capital spending, as well as the effects of severe weather-related conditions, including heavy flooding, prolonged droughts and fluctuations in temperatures or weather patterns, all of which can positively or negatively impact portions of our business.
As such, beginning total backlog, plus orders, minus revenues, will not equal ending total backlog due to contract adjustments, foreign 10 currency fluctuations, and other factors. Typically, capital projects require longer lead production cycles and deployment schedules, and delays occur from time to time. Total backlog was $5,070 million at December 31, 2024 and $5,088 million at December 31, 2023.
As such, beginning total backlog, plus orders, minus revenues, will not equal ending total backlog due to contract adjustments, foreign currency fluctuations and other factors. Typically, capital projects require longer lead production cycles and deployment schedules, and delays occur from time to time. Total backlog was $4,615 million at December 31, 2025 10 and $5,070 million at December 31, 2024.
Our strategic plan firmly embeds sustainability at the heart of our competitive advantage and unique business model, and aligns each of our five core strategic pillars to the overarching goal of integrating sustainability into everything we do.
Our strategy firmly embeds sustainability at the heart of our competitive advantage and unique business model and aligns each of our five strategic pillars to the overarching goal of integrating sustainability into everything we do.
The market for individuals with these competencies remains competitive, but we believe our culture and purpose are differentiators in attracting and retaining talent. As of December 31, 2024, Xylem employed approximately 23,000 employees worldwide.
The market for individuals with these competencies remains competitive, but we believe our culture and purpose are differentiators in attracting and retaining talent. As of December 31, 2025, Xylem employed approximately 22,000 employees worldwide.
Population growth and urbanization, climate and regulation on energy efficiency, and digitalization enabling self-service and preventive maintenance are macro growth drivers of these markets, driving the need for housing, food, community services and retail goods within growing city centers.
Population growth and urbanization, changing climate patterns and regulation on energy efficiency, and digitalization enabling self-service and preventive maintenance are macro growth drivers of these markets, driving the need for housing, commercial real estate, food, community services and retail goods within growing city centers.
Our communications networks enable customers to automate and optimize meter reading, bill customers, monitor flow rates and detect and enable rapid response to changing and unsafe conditions. In short, our communications offerings provide insight into operations and enable our customers to manage the entire scope of their operations remotely through their networks and to optimize their operational costs.
Our communication network enables customers to automate and optimize meter reading, bill customers, monitor flow rates and detect and enable rapid response to changing and unsafe conditions. In short, our communication offerings provide insights into operations and enable our customers to manage the entire scope of their operations remotely through their networks and to optimize their operational costs.
Xylem approaches sustainability as a way to generate economic value while also creating value for our customers and society, thus meeting the needs of both.
Xylem approaches sustainability as a way to generate economic value while also creating value for our customers and society, thus helping us meet the needs of both.
As a leading global water technology company, we address some of the world’s most urgent sustainability challenges - responsible stewardship of our shared water resources and resiliency of communities to climate change. Technology is playing an increasingly important role in helping the world solve water issues.
As a leading global water technology company, we work to address some of the world’s most urgent sustainability challenges - responsible stewardship of our shared water resources and resiliency of communities to the effects of volatile weather patterns. Technology is playing an increasingly important role in helping the world solve water issues.
Water scarcity and conservation, as well as the need to prevent revenue loss (via inaccurate meter readings, leaks or theft) are among the drivers of smart meter and leak detection technologies. Our Sensus-branded meters are well positioned in the smart metering sector, the fastest growing sector of the global meter industry.
Water scarcity and conservation, as well as the need to prevent revenue loss (via inaccurate meter readings, leaks or theft) are among the drivers of smart meter and leak detection technologies. Our metering business is well positioned in the North America smart metering sector, the fastest growing sector of the global meter industry.
ITEM 1. BUSINESS Business Overview Xylem is a leading global water technology company with 2024 revenues of $8.6 billion and approximately 23,000 employees worldwide. We design, manufacture and service engineered products and solutions across a wide variety of critical applications primarily in the water sector.
ITEM 1. BUSINESS Business Overview Xylem is a leading global water technology company with 2025 revenues of $9.0 billion and approximately 22,000 employees worldwide. We design, manufacture and service engineered products and solutions across a wide variety of critical applications, primarily in the water sector.
We have approximately 9,200 employees in the U.S., 7,900 in western Europe, and 5,200 in the emerging markets, with the remaining 900 in other geographies in which we operate. Approximately 12% of our U.S. colleagues are represented by labor unions. Outside the United States, certain of our colleagues are represented by work councils.
We have approximately 9,000 employees in the U.S., 7,000 in western Europe, and 5,000 in the emerging markets, with the remaining 1,000 in other geographies in which we operate. Approximately 10% of our U.S. colleagues are represented by labor unions. Outside the United States, certain of our colleagues are represented by works councils.
Compensation and Benefits Xylem strives to provide our colleagues with competitive compensation and benefits offerings and takes a total rewards approach that integrates programs for compensation, benefits, recognition and well-being. Individual program components may differ by country, role or level.
Compensation and Benefits Xylem strives to provide our colleagues with competitive compensation and benefits offerings and takes a total rewards approach that integrates programs for compensation, benefits, recognition and well-being. Individual program components may differ by country, role or level. Our compensation programs are driven by our pay-for-performance philosophy and commitment to fair and equitable compensation.
Revenue (in millions) 2024 2023 2022 $ Amount % of Total $ Amount % of Total $ Amount % of Total United States $ 4,862 57 % $ 3,956 54 % $ 2,573 47 % Western Europe 1,745 20 % 1,655 22 % 1,411 26 % Emerging Markets (a) 1,274 15 % 1,182 16 % 1,074 19 % Other 681 8 % 571 8 % 464 8 % Total $ 8,562 $ 7,364 $ 5,522 (a) Emerging Markets includes results from the following regions: Eastern Europe, the Middle East and Africa, Latin America and Asia Pacific (excluding Japan, Australia and New Zealand, which are included in "Other") Supply and Seasonality We have a global manufacturing and assembly footprint, with production facilities in Europe, North America, Latin America, Asia and the Middle East.
Revenue (in millions) 2025 2024 2023 $ Amount % of Total $ Amount % of Total $ Amount % of Total United States $ 5,209 58 % $ 4,862 57 % $ 3,956 54 % Western Europe 1,839 20 % 1,745 20 % 1,655 22 % Emerging Markets (a) 1,221 14 % 1,274 15 % 1,182 16 % Other 766 8 % 681 8 % 571 8 % Total $ 9,035 $ 8,562 $ 7,364 (a) Emerging Markets includes results from the following regions: Eastern Europe, the Middle East and Africa, Latin America and Asia Pacific (excluding Japan, Australia and New Zealand, which are included in "Other") Supply and Seasonality We have a global manufacturing and assembly footprint, with production facilities in Europe, North America, Latin America, Asia and the Middle East.
Our sustainability strategy and an update on our progress towards achieving our goals are outlined in our annual Sustainability Report, which is aligned with the Global Reporting Initiative and the Sustainability Accounting Standards Board frameworks.
Our sustainability strategy and an update on our progress towards achieving our goals are outlined in our annual Sustainability Report, which has been prepared with reference to the Global Reporting Initiative and the Sustainability Accounting Standards Board frameworks.
All of our businesses require various parts and raw materials, the availability and prices of which may fluctuate. Parts and raw materials commonly used in our products include motors, fabricated parts, castings, magnets, bearings, seals, batteries, printed circuit boards ("PCBs") and electronic components, including semiconductors, as well as commodities, including steel, brass, nickel, copper, aluminum, rare earth minerals, and plastics.
Parts, components and raw materials commonly used in our products include motors, fabricated parts, castings, magnets, bearings, seals, batteries, printed circuit boards ("PCBs") and electronic components, including semiconductors, as well as commodities, including steel, brass, nickel, copper, aluminum, rare earth minerals and plastics.
In setting our sustainability strategy and goals, we are aligned with the United Nations Sustainable Development Goals ("UNSDGs"), not only to substantiate our contribution to achieving global objectives, but also to be transparent in our communication to stakeholders by providing details on our responsibility to build a sustainable future.
Our sustainability strategy and goals are informed by the United Nations Sustainable Development Goals ("UNSDGs"), not only to substantiate our contribution to helping achieve global objectives, but also to be transparent in our communication to stakeholders by providing details on our efforts to build a sustainable future.
Other Regulations As a company with global operations, we are subject to complex U.S. federal, state and local and foreign laws, regulations and permits in the countries where we conduct business, including related to trade, such as tariffs, imports and exports; anti-bribery and corruption; antitrust and competition; data security and privacy, such as the EU General Data Protection Regulation (“GDPR”) and the China Personal Information Protection Law ('PIPL"); use of regulated radio spectrum, including that of the U.S.
At December 31, 2025, we had estimated and accrued $4 million related to environmental matters. 11 Other Regulations As a company with global operations, we are subject to complex U.S. federal, state and local and foreign laws, regulations and permits in the countries where we conduct business, including related to, among other matters: trade, such as tariffs and import and export restrictions; anti-bribery and corruption; antitrust and competition; data security and privacy, such as the EU General Data Protection Regulation (“GDPR”) and the China Personal Information Protection Law ('PIPL"); use of regulated radio spectrum, including that of the U.S.
As part of expanding our bandwidth and to increase our access to technology, we have built innovation eco-system partnerships with academic institutions as well as other technology firms, start-up accelerators and venture capital organizations.
These piloting and testing facilities enable us to serve our strategic markets globally. As part of expanding our bandwidth and to increase our access to technology, we have built innovation eco-system partnerships with academic institutions as well as other technology firms, start-up accelerators and venture capital organizations.
See Note 21, “Segment and Geographic Data,” in our consolidated financial statements for financial information about segments and geographic areas. 6 The table and descriptions below provide an overview of our business segments: Market Applications 2024 Revenue (in millions) % Revenue Major Products Primary Brands Water Infrastructure Transport $ 1,498 59 % • Water and wastewater pumps • Filtration, disinfection and biological treatment equipment • Flygt • Ionpure • Vortisand • Wallace & Tiernan • Wedeco Treatment 1,057 41 % $ 2,555 100 % Applied Water Building Solutions $ 997 56 % • Pumps • Valves • Heat exchangers • Controls • Dispensing equipment systems • Rule • Bell & Gossett • Flojet • Goulds Water Technology • Jabsco • Lowara • Standard Xchange Industrial Water 796 44 % $ 1,793 100 % Measurement and Control Solutions Smart Metering and Other $ 1,519 81 % • Smart meters • Network communication devices • Data analytics • Test instruments • Controls • Sensor devices • Software & managed services • Critical infrastructure services • Sensus • Smith Blair • WTW • YSI • Xylem Vue Analytics 352 19 % $ 1,871 100 % Water Solutions and Services Capital and other $ 1,355 58 % • Preventative maintenance services • Rapid response mobile services • Digitally enabled/outsourced solutions • Process and wastewater treatment systems • Environmental remediation • Odor and corrosion control • Filtration • Reverse osmosis • Continuous deionization • Mobile dewatering equipment and rental services • AquaPro • WaterOne • Ion Pure • Flygt • Pure Technologies • Godwin Services 988 42 % $ 2,343 100 % 7 Water Infrastructure Through two closely linked applications, transport and treatment, our Water Infrastructure segment primarily supports the process that collects water from a source, treats it and distributes it to users, and then treats and returns the wastewater responsibly to the environment.
See Note 21, “Segment and Geographic Data,” in our consolidated financial statements for financial information about segments and geographic areas. 6 The table and descriptions below provide an overview of our business segments: Market Applications 2025 Revenue (in millions) % Revenue Major Products Primary Brands Water Infrastructure Transport $ 1,556 59 % • Water and wastewater pumps • Filtration, disinfection and biological treatment equipment • Flygt • Ionpure • Leopold • Neptune Benson • Sanitare • Wallace & Tiernan • Wedeco Treatment 1,080 41 % $ 2,636 100 % Applied Water Building Solutions $ 1,037 56 % • Pumps • Valves • Heat exchangers • Controls • Dispensing equipment systems • Bell & Gossett • Flojet • Goulds Water Technology • Jabsco • Lowara • Rule Industrial Water 812 44 % $ 1,849 100 % Measurement and Control Solutions Smart Metering and Other $ 1,726 83 % • Smart meters • Network communication devices • Data analytics • Test instruments • Controls • Sensor devices • Software & managed services • Critical infrastructure services • Ebro • Sensus • Sentec • Smith Blair • WTW • YSI • Xylem Vue Analytics 360 17 % $ 2,086 100 % Water Solutions and Services Capital and Other $ 1,459 59 % • Preventative maintenance services • Rapid response mobile services • Digitally enabled/outsourced solutions • Process and wastewater treatment systems • Environmental remediation • Odor and corrosion control • Filtration • Reverse osmosis • Continuous deionization • Mobile dewatering equipment and rental services • Godwin • Grindex • Mar Cor Services 1,005 41 % $ 2,464 100 % 7 Water Infrastructure Through two closely linked applications, transport and treatment, our Water Infrastructure segment primarily supports the process that collects water from a source, treats it and distributes it to users, and then treats and returns the wastewater responsibly to the environment.
Our customers often face all four of these challenges, ranging from inefficient and aging water distribution networks and energy-intensive or unreliable water and wastewater management 4 systems (requiring improvements in water affordability); droughts and pollution which limit the amount of water readily available (causing water scarcity); or exposure to natural disasters such as floods (requiring improvements in resilience).
Our customers often face all four of these challenges, ranging from inefficient and aging water distribution networks and energy‑intensive or unreliable water and wastewater management systems (reducing water affordability); increasing variability in influent quality, alongside stormwater runoff, industrial discharges, and emerging contaminants (impacting water quality); exposure to natural disasters such as floods (requiring improvements in resilience); or droughts and pollution that limit the amount of water readily available (causing water scarcity).
We set ourselves apart in the industry by focusing on our communication network, innovation, new product development and service offerings that deliver tangible savings from efficiency of operating costs in meter reading and billing, and reduction of non-revenue water through improved meter accuracy, reduced theft and identification of leaks.
We set ourselves apart in the industry by focusing on our communication network, innovation, new product development and service offerings which deliver tangible savings by supporting operational efficiencies in meter reading and billing, and reducing non-revenue water through improved meter accuracy, reduced theft, and leak identification.
"Resilience" refers to the management of water-related risks, including climate change mitigation, and the resilience of water infrastructure. "Water scarcity" refers to the management of the limited supply of water due to climate change, overpopulation and pollution.
"Resilience" refers to the management of water-related risks, including adaptation to changing climate patterns, and the resilience of water infrastructure. "Water scarcity" refers to the management of the limited supply of water due to 4 environmental impacts, overpopulation and pollution.
Water Solutions and Services Our Water Solutions and Services segment provides tailored services and solutions, in collaboration with customers, including on‑demand water, outsourced water, recycle/reuse, specialty dewatering and emergency response service alternatives, to improve operational reliability, performance and environmental compliance.
We provide a differentiated offering in the reliability and accuracy of our products often in rugged, remote and hazardous locations. Water Solutions and Services Our Water Solutions and Services segment provides tailored services and solutions, in collaboration with customers, including on‑demand water, outsourced water, recycle/reuse, specialty dewatering and emergency response service alternatives, to improve operational reliability, performance and environmental compliance.
We devote our technology, time and talent to advance the smarter use of water in service of our purpose and our colleagues are guided by our core values, respect, responsibility, integrity and creativity.
We devote our technology, time and talent to advance the smarter use of water in service of our purpose and our colleagues are guided by our core values, respect, responsibility, integrity and creativity. Health and Safety Protecting the safety, health and well-being of our colleagues is one of our highest priorities and is also regularly assessed in our business reviews.
Health and Safety Protecting the safety, health and well-being of our colleagues is one of our highest priorities and also regularly assessed in our business reviews. We have a strong Environmental, Health and Safety program that focuses on governance, risk reduction, training and education, and leadership accountability to provide our colleagues with safe and healthy workplaces.
We have a strong Environmental, Health and Safety program that focuses on governance, risk reduction, training and education, and leadership accountability, and is designed to provide our colleagues with safe and healthy workplaces.
In 2022, we announced investments in CNote’s Impact Cash™ platform, a mechanism through which we invest and deposit cash at scale in community finance institutions that strengthen and transform underserved communities.
Facility fees under the 2023 Credit Facility are also adjusted based on Xylem's credit rating and the KPIs. In 2022, we announced investments in CNote’s Impact Cash™ platform, a mechanism through which we invest and deposit cash at scale in community finance institutions that strengthen and transform underserved communities.
A direct sales approach, with key account management, is employed for large utilities and government programs. Macro growth drivers include increasing regulation, aging infrastructure and worldwide movement towards smart grid implementation and advanced metering infrastructure (“AMI").
Direct sales are often made in markets without established distribution channels; however, some distribution channels are used in more developed markets. A direct sales approach, with key account management, is employed for large utilities and government programs. Macro growth drivers include increasing regulation, aging infrastructure, optimizing operational costs and worldwide movement towards smart grid implementation and advanced metering infrastructure.
We leverage the 80/20 principle to focus on the most impactful opportunities to drive value for our customers. Additionally, we seek to create synergies across our businesses to enhance customer value and streamline operations. We are committed to simplifying how we do business and equipping our sales teams with the tools, training, and insights needed to engage customers effectively.
We leverage the 80/20 principle to focus on the most impactful opportunities to drive value for our customers. Additionally, we seek to create synergies across our businesses to enhance customer value and streamline operations.
This problem of "non-revenue" water is a major financial challenge of many utilities globally, especially in developing markets where non-revenue water can represent 10% to 60% or more of net water produced and the treatment and energy costs to transport water is substantial. These and other challenges create opportunities for growth in the global water industry.
This problem of "non-revenue" water is a major financial challenge of many utilities globally, especially in developing markets where non-revenue water can represent 10% to more than 60% of net water produced and the treatment and energy costs to transport water is substantial. It is estimated that approximately 4% of the world's electricity is used to move and transport water.
For each pillar, we have set forth 2030 goals aligned to both practices to deliver impact for our customers and communities.
For each pillar, we have set forth 2030 goals designed to drive impact across our value chain and for our customers and communities.
Our sustainability leadership, including the skill-based volunteering by employees, provides Xylem with distinct advantages in competitive talent markets. • High-Impact Culture. We continuously refine Xylem’s operating model to better serve our customers and create value for our shareholders. Our organizational culture is fundamental to those objectives.
Additionally, we are partnering with venture impact funds, philanthropic organizations, customers and suppliers to develop long-term commercial opportunities in new markets. Our sustainability leadership, including volunteering by our employees, provides Xylem with distinct advantages in competitive talent markets. • High-Impact Culture. We continuously refine Xylem’s operating model to better serve our customers and create value for our shareholders.
The 2023 Credit Facility includes a pricing grid that determines the applicable margin based on Xylem's credit rating, with a further adjustment based on Xylem's achievement of certain sustainability related key performance indicators (the "KPIs"). Facility fees under the 2023 Credit Facility are also adjusted based on Xylem's credit rating and the KPIs.
In 2023, we entered into a five-year revolving credit facility (the "2023 Credit Facility") with Citibank, N.A., as Administrative Agent, and a syndicate of lenders. The 2023 Credit Facility includes a pricing grid that determines the applicable margin based on Xylem's credit rating, with a further adjustment based on Xylem's achievement of certain sustainability related key performance indicators (the "KPIs").
R&D activities are initially conducted in our technology centers, located in conjunction with some of our major manufacturing facilities to enable an efficient and robust development process. We have several global technical centers and local development teams around the world where we are supporting global needs and accelerating the customization of our products, services and solutions to address local needs.
We have several global technical centers and local development teams where we are supporting global needs and accelerating the customization of our products, services and solutions to address local needs. In some cases, our R&D activities are conducted at our piloting and testing facilities and at strategic customer sites.
We have activated our high-impact culture through three high-impact behaviors: inspired to innovate, accountable to deliver, and empowered to lead. These behaviors drive our employees to learn and innovate every day, to know their role in contributing to our purpose and strategy, and to deliver on our commitments to our customers and communities.
These behaviors drive our employees to learn and innovate every day, to understand their role in contributing to our purpose and strategy, and to deliver on our commitments to our investors, customers and communities.
To further enhance our understanding and management of risks and opportunities related to sustainability, we are committed to continuous progress aligned with the core principles of the United Nations Global Compact, CEO Water Mandate, Race to Zero, Women’s Empowerment Principles, and the Human Rights Campaign Foundation’s Global Business Coalition, among others. 12 In 2023, we entered into a five-year revolving credit facility (the "2023 Credit Facility") with Citibank, N.A., as Administrative Agent, and a syndicate of lenders.
To further enhance our understanding and management of risks and opportunities related to sustainability, we are focused on continued progress informed by the core principles of the United Nations Global Compact, CEO Water Mandate, Race to Zero, Women’s Empowerment Principles, and the Human Rights Campaign Foundation’s Global Business Coalition, among others.
Our ability to deliver innovative product offerings has enabled us to compete effectively, to cultivate and maintain customer relationships and to serve and expand into many niche and new markets.
Our ability to deliver innovative product offerings has enabled us to compete effectively, cultivate and maintain customer relationships and serve and expand into many niche and new markets. 8 Measurement and Control Solutions Measurement and Control Solutions develops advanced technology solutions that enable intelligent use, optimization and conservation of critical water and energy resources.
We also remain committed to reach Net Zero greenhouse gas ("GHG") emissions across our value chain before 2050. This commitment reinforces our alignment with sector-wide efforts to reduce carbon footprints and advance sustainability. Following the 2023 acquisition of Evoqua, we updated our emissions baseline and 2030 science-based targets, which have been approved by the Science Based Target initiative (SBTi).
We also remain focused on our efforts to reach Net Zero greenhouse gas ("GHG") emissions across our value chain before 2050. This goal reinforces our alignment with sector-wide efforts to reduce carbon footprints and advance sustainability.
We estimate the total addressable market size of the global water industry, excluding operational expenditures related to labor, energy, and chemicals, to be approximately $750 billion. Global water needs cannot be met without streamlining the water industry’s cost structure with technologies that fundamentally change the provision and management of water.
Global water needs cannot be met without streamlining the water industry’s cost structure with technologies that fundamentally change the provision and management of water.
The majority of our sales in the U.S. are conducted through strong, long-standing relationships with leading distributors and dedicated channel partners for the water and energy markets. Internationally, direct sales are often made in markets without established distribution channels; however, some distribution channels are used in more developed markets.
The majority of our sales in North America are conducted through strong, long-standing relationships with leading distributors and dedicated channel partners for the water and energy markets. Outside of North America, nearly all of our sales are for the water market.
Our goal is to deliver consistent financial performance that benefits our shareholders and supports our long-term vision, building a stable and prosperous future for the company. • Operational Excellence. We are committed to being a leading operator by continuously improving our processes, systems, and capabilities to enhance efficiency and effectiveness.
Additionally, we are dedicated to building high-margin, recurring revenue in growing markets, intelligent solutions and services. Our goal is to deliver consistent financial performance that benefits our shareholders and supports our long-term vision, building a stable and prosperous future for the Company. • Operational Excellence.
Our key competitors in the Water Infrastructure segment include De Nora, Grundfos, KSB Inc., ProMinent, Sulzer Ltd., Trojan (Veralto Corporation), and Veolia. Applied Water Applied Water encompasses the uses of water to serve a diverse set of customers in the building solutions and industrial water end markets.
Applied Water Applied Water encompasses the uses of water to serve a diverse set of customers in the building solutions and industrial water end markets.
We believe that our relations with our employees are good, including with those represented by labor unions and/or works councils. We conduct regular employee surveys and listening sessions to understand our employees’ perspectives, identify areas for additional focus and establish action plans.
We believe that our relations with our employees are good, including relations with those represented by labor unions and/or works councils.
We strive to be a sustainability leader by integrating sustainability into our business strategy, with a strong emphasis on advancing favorable long-term financial and sustainability outcomes for our customers through our solutions. We also aim to minimize our environmental impact, promote resource conservation, and support customers and the communities we serve together.
Ultimately, we aim to run our company with discipline, maintaining operations that are streamlined and consistently aligned with our strategic goals. • Sustainability Leadership. We strive to be a sustainability leader by integrating sustainability into our business strategy, with a strong emphasis on advancing favorable long-term financial and sustainability outcomes for our customers through our products, services and solutions.
Our priorities are focused in three areas: decarbonizing the water sector, accelerating corporate water stewardship, and advancing WASH (Water, Sanitation, and Hygiene) access and capacity building. Additionally, we are partnering with venture impact funds, philanthropic organizations, customers, and suppliers to develop long-term commercial opportunities in new markets.
We also aim to minimize our environmental impact, promote resource conservation and support our customers and the communities we serve together. Our priorities are focused in three areas: decarbonizing the water sector, accelerating corporate water stewardship, and advancing water, sanitation and hygiene ("WASH") access and capacity building.
We work to establish favorable employment conditions that promote positive relationships between our colleagues and their managers, facilitate communication among our colleagues and support their development. Available Information We are required to file annual, quarterly and current reports, proxy statements and other information with the SEC.
Available Information We are required to file annual, quarterly and current reports, proxy statements and other information with the SEC.
We have a broad range of talent development programs and experiences to facilitate the continued professional growth and leadership development of our colleagues and to strengthen our succession plans. These programs span across all levels, businesses and functions, including entry-level talent recruitment programs, development programs for emerging leaders, people leader training and executive leadership development.
These approaches are designed to facilitate the professional growth and leadership development of our colleagues and to strengthen our succession breadth and depth. We also have formal programs and trainings to attract, develop and retain the best talent, including entry-level talent recruitment programs and development programs for general managers, emerging high-potential leaders and people leaders.
Our YSI and WTW-branded instruments have a strong position in the analytical instrumentation market and provide critical readings of various water quality, level and flow parameters for customers. We provide a differentiated offering in the reliability and accuracy of our products often in rugged, remote and hazardous locations.
Our water quality instruments have a strong position in the analytical instrumentation market and provide critical readings of various water quality, level and flow parameters for customers. Xylem Vue is a unified software analytics platform built for water utilities to manage their operations from end-to-end.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeOur operations, supply chain and sales both within the U.S. and internationally are subject, in varying degrees, to risks and uncertainties inherent in doing business globally, including: • nationalism, populism, protectionism, anti-global sentiment and changes in trade protection measures, including the imposition of increased or new embargoes, tariffs and other trade barriers, import and export regulations or restrictions, licensing requirements, domestic content requirements, and governments’ countermeasures in response; • uncertainty, volatility and impacts from the evolving global geopolitical environment involving the U.S. federal government and other countries’ governments, including the relationships among the U.S., European Union, Middle East, Russia, China, Taiwan, or other foreign countries, and the international community at large; • threat, outbreak, uncertainty or escalation of terrorism, political instability, insurrection, war, other armed conflict, including between Russia and Ukraine, and in the Middle East, with the potential for regional escalation, and other global safety and security concerns; • threat or outbreak of epidemics, global health crises or pandemics, and related uncertainties; • impacts from significant shifts in U.S. immigration policy, such as a tightened labor market and inflation; 16 • changes in tax laws and potential negative consequences from the interpretation, application and enforcement by governmental authorities of tax laws and policies, as well as changes in other laws, regulations and policies or how they are interpreted or administered; • disruptions in global or regional supply chains, our operations, or those of third parties upon which we rely, including due to labor disruptions, supply shortages, increased or new tariffs and freight and logistics challenges; • unanticipated regulatory changes or unfavorable circumstances arising from U.S. or host country laws, regulations or policies, including those related to water quality, the environment and energy efficiency, infrastructure and data transmission, security, privacy, and artificial intelligence; • theft, compromise, misappropriation or challenges in protecting our technology, intellectual property or data; and • shocks to the global financial system, including due to the outbreak or threat of war, armed conflict, other geopolitical conflicts, terrorism or global health crises, the effects of climate change, or other idiosyncratic events.
Biggest changeOur operations, supply chain and sales both within the U.S. and internationally are subject, to varying degrees, to risks and uncertainties inherent in doing business globally, including: • nationalism, populism, protectionism, anti-global sentiment and changes in trade protection measures, including the imposition of increased or new embargoes, tariffs and other trade barriers, import and export regulations or restrictions, licensing requirements, domestic content requirements, and retaliatory measures; • uncertainty, volatility and impacts from the evolving global geopolitical environment involving the U.S. and other countries’ governments, including the relationships among the U.S., European Union (“EU”), Middle East, Latin America, Russia, India, China, Taiwan, or other foreign countries, and the international community at large; • any actual or potential threat, outbreak, uncertainty or escalation of terrorism, political instability, insurrection, war, or other armed conflicts, including between Russia and Ukraine, the U.S. and Venezuela or Iran, and in the Middle East, and other global safety and security concerns; 15 • threat or outbreak of epidemics, global health crises, or pandemics and related uncertainties; • impacts from significant shifts in U.S. immigration policy, such as a tightened labor market and inflation; • disruptions in global or regional supply chains, our operations, or those of third parties upon which we rely, including due to labor disruptions, supply shortages, trade restrictions, increased or new tariffs and freight and logistics challenges; • changes to applicable U.S. or host country laws, regulations or policies, including those related to tax, water quality, the environment, energy efficiency, infrastructure, data transmission, security or privacy, labor, and artificial intelligence (“AI”), as well as potential negative consequences from the interpretation, application and enforcement of such measures; • theft, compromise, misappropriation or challenges in protecting our technology, intellectual property or data, including from cybersecurity and AI threats.
Our businesses are impacted by short cycle and book-and-bill business to varying degrees, which may be difficult to predict, or we have limited visibility into, particularly for the business that we transact through our significant distribution network.
Our businesses are impacted by short cycle and book-and-bill business to varying degrees, which may be difficult to predict, or we may have limited visibility into particularly for the business we transact through our significant distribution network.
Bribery Act of 2010 and similar anti-corruption laws in other jurisdictions generally prohibit companies and their intermediaries from making improper 26 payments to government officials or other persons for the purpose of obtaining or retaining business.
Bribery Act of 2010 and similar anti-corruption laws in other jurisdictions generally prohibit companies and their intermediaries from making improper payments to government officials or other persons for the purpose of obtaining or retaining business.
Starting in 2024, we launched initiatives focused on improving margins and customer centricity through a range of business simplification, strategic pricing and operational productivity measures across our offerings, operations and customer base.
Starting in 2024, we launched initiatives focused on improving margins and customer centricity through a range of business simplification, strategic pricing and productivity measures across our offerings, operations and customer base.
Acquisitions involve a number of risks and present financial, managerial and operational challenges, including: diversion of management’s time and attention from existing businesses and operations; insufficient internal controls over financial or compliance activities or financial reporting of acquired businesses; failure to realize expected synergies; impact on our ability to achieve some or all of our sustainability commitments; assumption of new material risks associated with the acquired businesses; and loss of key employees of the acquired businesses.
Acquisitions involve a number of risks and present financial, managerial and operational challenges, including: diversion of management’s time and attention from existing businesses and operations; insufficient internal controls over financial or compliance activities or financial reporting of acquired businesses; failure to realize expected synergies; impact on our ability to achieve some or all of our sustainability aspirations; assumption of new material risks associated with the acquired businesses; and loss of key employees of the acquired businesses.
We believe the principal points of competition are performance, quality and reliability, price, life cycle cost, security, speed of development and commercialization of new technologies, processes and business models, brand reputation, application expertise, energy efficiency, timeliness of delivery, proximity of our service centers to customers, effectiveness of our distribution channels, and customers’ experience in doing business with us directly or through our channel partners.
The principal points of competition are performance, quality, reliability, price, life cycle cost, security, speed of development and commercialization of new technologies, processes and business models, brand reputation, application expertise, energy efficiency, delivery timeliness, proximity of our service centers to customers, effectiveness of our distribution channels, and customers’ experience in doing business with us directly or through our channel partners.
Our water and wastewater treatment offerings involve unique risks and require compliance with a variety of laws or regulations, including the Clean Water Act and the Safe Drinking Water Act.
Our water and wastewater treatment offerings involve unique risks and require compliance with a variety of laws and regulations, including the Clean Water Act and the Safe Drinking Water Act.
We may not achieve some of the expected benefits of our simplification and productivity initiatives or restructuring and realignment plans, or such initiatives and plans may adversely affect our business.
We may not achieve the expected benefits of our simplification, productivity, restructuring, or realignment plans, or such initiatives and plans may adversely affect our business.
We regularly assess the likelihood of favorable or unfavorable outcomes resulting from these examinations to determine the adequacy of our provision for income taxes, including unrecognized tax benefits; however, unanticipated developments in an audit or litigation could materially and adversely affect us.
We regularly assess the likelihood of favorable or unfavorable outcomes resulting from these examinations to determine the adequacy of our provision for income taxes, including unrecognized tax benefits; however, unanticipated audit or litigation developments could materially and adversely affect us.
In 2024, a physical risk analysis of our facilities using the Task Force on Climate Related Financial Disclosures framework indicated that our exposure to certain reviewed physical hazards (e.g. drought, wildfire, temperature extremes, water stress, etc.) is expected to remain low through 2030 under assessed GHG emission mitigation scenarios; but as we approach 2050, exposure to drought and temperature extremes may increase due to the effects of climate change.
In 2024, a physical risk analysis of our facilities using the Task Force on Climate Related Financial Disclosures framework indicated that our exposure to certain reviewed physical hazards (e.g. drought, wildfire, temperature extremes, water stress, etc.) is expected to remain low through 2030 under assessed GHG emission mitigation scenarios; but as we approach 2050, exposure to drought and temperature extremes may increase.
We face risks related to legal and regulatory proceedings. We are subject to various laws, regulations and other requirements of U.S. and foreign governmental authorities, any violation of which could potentially create substantial liability and damage our reputation.
We face risks related to legal and regulatory proceedings. We are subject to various U.S. and foreign laws, regulations and other requirements, any violation of which could potentially create substantial liability and damage our reputation.
Economic and industry factors that have had, or could in the future have, a material impact on our businesses and demand for our products and services include: (i) the overall strength of, and our customers’ confidence in, local and global macroeconomic conditions; (ii) inflation and related monetary policy actions by governments in response, (iii) overall strength of industrial, governmental, public and private sector spending; (iv) overall strength of the industrial, residential and commercial real estate markets; (v) federal, state, local and municipal governments’ environmental, energy efficiency, fiscal, trade and procurement laws, regulations and policies, including as respects domestic content; (vi) the availability of commercial financing for our customers and end-users; and (vii) the degree of funding for our public sector customers, including for water infrastructure investments.
Economic and industry factors that have had, or may in the future have, a material impact on our businesses and demand for our products and services include: (i) overall strength of, and our customers’ confidence in, local and global macroeconomic conditions; (ii) inflation and related monetary policy actions by governments in response; (iii) overall strength of industrial, governmental, public and private sector spending; (iv) overall strength of the industrial, residential and commercial real estate markets; (v) federal, state, local and municipal governments’ environmental, energy efficiency, fiscal, trade and procurement laws, regulations and policies, including domestic content requirements; (vi) availability of commercial financing for our customers and end-users; and (vii) availability of funding for our public sector customers, including for water infrastructure investments.
Water and wastewater treatment operations, including those related to emerging contaminants, as well as the generation, handling, storage, use, transport, treatment, release or disposal of hazardous materials may result in contamination, environmental, personal or other liabilities, or pose other significant risks that could cause us to incur significant costs and reputational harm.
Water and wastewater treatment operations, including those related to emerging contaminants, as well as the generation, handling, storage, use, transport, treatment, release or disposal of hazardous materials may result in contamination, environmental, personal or other liabilities, or pose other significant risks that could result in significant costs and reputational harm.
Fluctuations in temperatures may result in varying demand for our products used in residential and commercial hydronic applications, where homes and buildings use circulating water to heat and cool living spaces.
Temperature fluctuations may result in varying demand for our products used in residential and commercial hydronic applications, where homes and buildings use circulating water to heat and cool living spaces.
As of December 31, 2024, the net carrying value of our goodwill and other indefinite-lived intangible assets totaled approximately $8 billion. In accordance with generally accepted accounting principles, we evaluate these assets for impairment at least annually, or more frequently if changes in events or circumstances indicate it is more likely than not that a potential impairment could exist.
As of December 31, 2025, the net carrying value of our goodwill and other indefinite-lived intangible assets totaled approximately $9 billion. In accordance with generally accepted accounting principles, we evaluate these assets for impairment at least annually, or more frequently if changes in events or circumstances indicate it is more likely than not that a potential impairment could exist.
To date, none have resulted in any material adverse impact to or theft, misuse or loss of information of our business, operations, products and services, or customers.
To date, none have resulted in any material adverse impacts or theft, misuse, or loss of information of our business, operations, products and services, or customers.
Given the global nature of our business, a number of factors may increase our effective tax rates and tax expense, including: • the geographic mix of jurisdictions in which profits are earned and taxed; • the statutory tax rates and tax laws in jurisdictions in which we conduct business; • the resolution of tax issues arising from tax examinations by various tax authorities; and • the valuation of our deferred tax assets and liabilities.
Given the global nature of our business, a number of factors may increase our effective tax rates and tax expense, including: (i) the geographic mix of jurisdictions in which profits are earned and taxed; (ii) the statutory tax rates and tax laws in jurisdictions in which we conduct business; (iii) the resolution of tax issues arising from tax examinations by various tax authorities; and (iv) the valuation of our deferred tax assets and liabilities.
Accordingly, our financial results for any given period have been and will continue to be difficult to predict. We may incur impairment charges for our goodwill and other indefinite-lived intangible assets. We have a significant amount of goodwill and purchased intangible assets on our Consolidated Balance Sheets as a result of acquisitions.
As a result, our financial results for any given period have been, and will remain, difficult to predict. We may incur impairment charges for our goodwill and other indefinite-lived intangible assets. We have a significant amount of goodwill and purchased intangible assets on our Consolidated Balance Sheets as a result of acquisitions.
The aforementioned factors and other macroeconomic impacts, including actual or potential economic slowdowns, recession or other prolonged downturns in the global economy or our markets, supply chain dynamics and shortages, tight labor markets, inflation, and significant government debt and deficit levels, have had and may in the future have, a material adverse effect on demand for our products and solutions and therefore our business, financial condition, cash flows, results of operations and stock price.
These and other macroeconomic impacts, including actual or potential economic slowdowns, recessions or other prolonged downturns in the global economy or our markets, supply chain dynamics and shortages, labor shortages, inflation, and significant government debt and deficit levels, have had and may in the future have, a material adverse effect on demand for our products and solutions and therefore our business, financial condition, cash flows, results of operations and stock price.
For example, following an examination regarding aspects of the reorganization of our European business that occurred in 2013, the Swedish tax authority issued a tax assessment to Xylem’s Swedish subsidiary in 2019, which we are appealing as further described in Note 7, “Income Taxes.” This examination as well as other examinations can result in increased tax assessments, and settlement or litigation about the assessments and final resolution could be unfavorable to Xylem.
For example, following an examination regarding aspects of the 2013 reorganization of our European business, the Swedish tax authority issued a tax assessment to Xylem’s Swedish subsidiary in 2019, which we are appealing as further described in Note 7, “Income Taxes.” This and other examinations can result in increased tax assessments, and settlement or litigation outcomes that could be unfavorable to Xylem.
Moreover, a delay in or failure to detect a cybersecurity incident or the full extent of an incident could exacerbate the effects of the incident.
Any delay in or failure to detect a cybersecurity incident or the full extent of an incident could exacerbate the effects of the incident.
"Quantitative and Qualitative Disclosures about Market Risk" for additional information on foreign exchange risk. Our financial results may fluctuate from period to period and can be difficult to predict.
Refer to Item 7A. "Quantitative and Qualitative Disclosures about Market Risk" for additional information on foreign exchange risk. Our financial results may fluctuate from period to period and can be difficult to predict.
Actions we take to mitigate volatility in manufacturing and operating costs may not be successful and, as a result, our business, financial condition, cash flows and results of operations could be materially and adversely affected. 17 Risks Related to Our Business and Operations We may be unable to compete successfully in our markets or develop and commercialize innovative and disruptive solutions and technologies.
Actions we take to mitigate cost volatility may not be successful and, as a result, our business, financial condition, cash flows and results of operations could be materially and adversely affected. Risks Related to Our Business and Operations We may be unable to compete successfully in our markets or develop and commercialize innovative and disruptive solutions and technologies.
To the extent we introduce new products designed for use in the U.S. or another country, such products may require significant modification or redesign in order to meet frequency requirements and other regulatory specifications. Limitations on frequency availability or the cost of making necessary modifications may preclude us from selling our products in certain countries.
New products designed for use in the U.S. or another country may require significant modification or redesign to meet frequency requirements and other regulatory specifications. Limitations on frequency availability or the cost of making necessary modifications may preclude us from selling our products in certain countries.
Increasing public and governmental concern regarding the environment and the effects of climate change has, and may continue to, result in new or increased legal and regulatory requirements, policies and taxes intended to limit environmental damage and GHG emissions. These may encompass pollution and discharges, emissions trading schemes, carbon, fuel or other taxes.
Increasing public and governmental concern regarding the environment and the effects of volatile weather and changing climate patterns has, and may continue to, result in new or increased legal and regulatory requirements, policies and taxes intended to limit environmental damage and GHG emissions. These may encompass pollution and discharges, emissions trading schemes, and carbon, fuel or other taxes.
Prolonged drought conditions may increase demand for our pumping technology used in agriculture and turf irrigation applications. Demand for water reuse applications, such as those provided by our treatment business, may also increase as communities look to address water scarcity challenges.
Prolonged drought conditions may increase demand for our pumping technology used in agriculture and turf irrigation applications. Demand for water reuse applications, such as those provided by our treatment business, may increase as communities address water scarcity.
Defects, inadequacies or quality issues in the manufacture, design, software, security or service of our products (including finished goods, parts or components that we source from third parties), unanticipated or improper use, or inadequate disclosure of risks relating to the use of our products, could result in product safety, product security, regulatory or environmental risks, personal injury, death, and property or environmental damage.
Defects or quality issues in the manufacture, design, software, AI capabilities, security or service of our products (including finished goods, parts or components that we source from third parties), unanticipated or improper use, or inadequate disclosure of risks about the use of our products, could result in product safety, product security, regulatory or environmental risks, personal injury, death, and property or environmental damage.
In addition, we may be adversely impacted by: (i) the failure to efficiently, effectively and timely integrate acquired businesses into our operations, technology, financial and other systems, (ii) the failure of acquired businesses to meet or exceed expected returns, which in the past has led to, and in the future may lead to, accounting impairments, or (iii) the discovery of unanticipated liabilities, cybersecurity concerns, control or compliance issues, environmental matters, labor relations difficulties, or other issues for which we lack contractual protections, insurance or indemnities.
In addition, we may be adversely impacted by: (i) failure to efficiently, effectively and timely integrate acquired businesses into our operations, technology, financial and other systems; (ii) failure of acquired businesses to meet expected returns, which in the past has led to, and in the future may lead to, accounting impairments; or (iii) failure to discover liabilities, adverse operational issues, cybersecurity issues, control or compliance issues, environmental matters, labor difficulties, or other issues for which we lack contractual protections, insurance or indemnities.
We may face increased scrutiny from the investment community, regulators, media (including social media) and other stakeholders related to our sustainability activities, commitments, goals, targets and objectives, and our methodologies and timelines for pursuing them.
We may face increased scrutiny from the investment community, regulators, media (including social media) and other stakeholders regarding our sustainability activities, goals, targets and objectives, and our methodologies and timelines for pursuing them.
We may be unable to find partners or customers that have access to sufficient frequencies in some markets to sustain or develop our planned operations, or that have access to sufficient frequencies at a commercially feasible price or at all.
We may be unable to secure partners or customers that have access to sufficient frequencies in some markets to sustain or develop our planned operations, or that have access to sufficient frequencies at a commercially feasible cost or at all.
In addition, our businesses are impacted by long-cycle business including large projects, which could be unexpectedly canceled, or whose timing can change based upon customer requirements due to a number of factors affecting the projects that are beyond our knowledge or control, such as funding, readiness of the project and regulatory approvals.
Our businesses are also impacted by long-cycle business including large projects, which could be unexpectedly canceled, or whose timing can change based upon customer requirements due to a number of factors beyond our knowledge or control, such as funding, project readiness, or regulatory approvals.
Given our global operations, we are subject to regulation under a wide variety of U.S. and non-U.S. laws, regulations and policies related to anti-bribery and corruption, trade including tariffs, exports and imports, anti-trust and competition, money laundering, and employment. Our policies mandate compliance with these laws and regulations. The U.S. Foreign Corrupt Practices Act (the "FCPA"), the U.K.
Our global operations are subject to a wide variety of U.S. and non-U.S. laws, regulations and policies related to anti-bribery and corruption, trade (such as tariffs, exports and imports), anti-trust and competition, money laundering, and employment. Our policies mandate compliance with these laws and regulations. The U.S. Foreign Corrupt Practices Act (the "FCPA"), the U.K.
In support of our growth strategy, we continue to realign and enhance our portfolio by pursuing the acquisition of companies, assets, technologies, product lines and customer channels that complement or expand our existing business or improve our competitive position, and divesting non-core or less strategic businesses.
To support our growth strategy, we continue to realign and enhance our portfolio by pursuing the acquisition of companies, assets, technologies, product lines and customer channels that complement or expand our business or improve competitiveness, while divesting non-core or less strategic businesses.
In addition, as discussed above, we are subject to increasing regulatory requirements around disclosures related to our business’ impact on climate change. Compliance with all of these requirements is complex. Applicable requirements change frequently and the timing and substance of future changes is uncertain and difficult to predict.
In addition, as discussed above, we are subject to increasing regulatory requirements around disclosures of our business’ impacts on the environment. Compliance with all of these requirements is complex. Requirements change frequently and the timing and substance of future changes is uncertain and difficult to predict.
We may be unable to retain our existing leadership, engineering, technology, sales, services and other key talent or attract new qualified talent with diverse backgrounds, experiences and perspectives.
We may be unable to retain key leadership, engineering, technology, sales, service and other talent or attract new qualified talent with diverse backgrounds, experiences and perspectives.
With sales in approximately 150 countries, we compete across a wide range of geographies and end markets.
With sales, directly or indirectly, in approximately 150 countries, we compete across a wide range of geographies and end markets.
These commitments, goals, targets and other objectives reflect our current plans and there is no guarantee that they will be achieved or maintained. Our efforts to research, establish, accomplish and accurately report on these commitments, goals, targets and objectives expose us to operational, reputational, financial, legal, and other risks.
These goals, targets and objectives reflect our current plans but there 22 is no guarantee that they will be achieved or maintained. Efforts to establish, achieve and accurately report on these goals, targets and objectives expose us to operational, reputational, financial, legal, and other risks.
The unpredictable nature, frequency, and severity of, and changes in weather events, patterns and related conditions, such as heavy flooding, prolonged droughts, wildfires, rainfall amounts and intensity, sea levels, and fluctuations in temperatures, including as a result of climate change, can positively or negatively impact portions of our business and therefore result in volatility in our financial results.
The unpredictable nature, frequency, and severity of, and changes in weather events, patterns and related conditions - such as heavy flooding, prolonged droughts, wildfires, rainfall amounts and intensity, sea levels, and fluctuations in temperatures - can positively or negatively impact portions of our business and create volatility in our financial results.
Failure to successfully execute our growth strategy via acquisitions and successfully integrate these acquisitions could adversely affect our competitive position, business, financial condition or results of operations.
Failure to successfully execute our growth strategy via acquisitions or successfully integrate them, or failure to execute divestitures could adversely affect our competitive position, business, financial condition or results of operations.
Our business relies on a large and complex network of suppliers (and their suppliers), contract manufacturers and subcontractors that perform manufacturing and customer-related services for us, commodity markets, and freight and logistics providers to secure and ship finished goods and raw materials, parts, and electronic and other components used in our products.
Our business depends on a large and complex network of suppliers and indirect suppliers, contract manufacturers and subcontractors that perform manufacturing and customer-related services for us, commodities markets, and logistics providers to secure and ship finished goods and raw materials, parts, and electronic and other components used in our products.
From time to time, we have and may continue to initiate simplification, productivity, restructuring and realignment actions for various reasons, including to optimize our cost structure, increase profitability, drive growth, improve our operational efficiency and effectiveness, and enable us to better serve our customers, or in response to impacts from business and economic conditions.
Periodically, we have and may continue to initiate simplification, productivity, restructuring, and realignment actions for various reasons, including to optimize our cost structure, increase profitability, drive growth, improve our operational efficiency and effectiveness, and enable us to better serve our customers, or respond to business and economic conditions.
In addition, under certain applicable environmental laws and regulations, including the Resource Conservation and Recovery Act ("RCRA") and the Comprehensive Environmental Response, Compensation, and Liability Act ("CERCLA"), we could be strictly, jointly and severally liable for releases of regulated substances at our current or former properties or the properties of others, or by other businesses that previously owned or used our current or former properties.
Under environmental laws and regulations, such as the 19 Resource Conservation and Recovery Act ("RCRA") and the Comprehensive Environmental Response, Compensation, and Liability Act ("CERCLA"), we could be strictly, jointly and severally liable for releases of regulated substances at our current or former properties or the properties of others, or by other businesses that previously owned or used our current or former properties.
Certain of our operations, products and services are governed by various federal, state, and local or foreign laws and regulations for the protection of the public, our employees and the environment, including those related to: emissions; potable and non-potable water; wastewater treatment and discharge; the generation, handling, storage, use, transport, treatment and disposal of non-hazardous and hazardous materials and wastes; the use of U.S.
Our operations, products and services are subject to various federal, state, and local or foreign laws and regulations designed to protect the public, employees and the environment, including those related to: emissions; potable and non-potable water; wastewater treatment and discharge; the generation, handling, storage, use, transport, treatment and disposal of non-hazardous and hazardous materials and wastes; use of U.S.
While we maintain insurance coverage designed to address certain aspects of business interruption and cybersecurity risks, it may not be sufficient to cover all losses or all types of claims.
While we maintain insurance coverage designed to address aspects of business interruption and cybersecurity risks, such coverage may not be sufficient to cover all losses or all types of claims that may arise.
Such measures may include: differentiating our offerings and pricing among customers and channels; adjusting the prices of certain offerings; rationalizing certain of our offerings; modernizing our systems by standardizing key enterprise applications; rationalizing our footprint; write-offs on affected assets; and simplifying our supply chain.
Such measures may include differentiating our offerings and pricing among customers and channels; adjusting the prices of certain offerings; rationalizing certain of our offerings; modernizing our systems by standardizing key enterprise applications; rationalizing footprint; writing off assets; and simplifying our supply chain.
Furthermore, our Water Solutions and Services segment engages in business activities including manufacturing, waste recycling and treatment processes that involve the use, treatment, storage, transfer, handling and/or disposal of non-hazardous and hazardous materials, chemicals and wastes, subject to applicable federal, state and local laws and regulations.
Our Water Solutions and Services segment engages in manufacturing, waste recycling, and treatment processes involving the use, treatment, storage, transfer, handling and/or disposal of hazardous and non-hazardous materials, chemicals and wastes, subject to applicable federal, state and local laws and regulations.
The regulations that govern our use of radio spectrum may change or new products may be allowed under the regulations that cause interference with our products, which may require us to modify our products or seek new partnerships. In addition, we may not be able to secure suitable partners for co-development 23 of products.
The regulations that govern our use of radio spectrum may change or new products may be allowed under the regulations that cause interference with our products, which may require us to modify our products or seek new partnerships. We may also be unable to secure suitable partners for co-development of products.
We rely on a complex global supply chain, which is subject to dynamic conditions, volatility, unexpected changes and disruptions due to macroeconomic and geopolitical conditions. These supply chain challenges have affected, and may continue to affect, our cost structure, production and ability to timely fill customer orders.
We rely on a complex global supply chain, which is subject to volatile and dynamic conditions, unexpected changes and disruptions from macroeconomic and geopolitical conditions. These supply chain challenges have affected, and may continue to affect, our costs, production, and ability to timely fill customer orders.
In addition, we outsource certain critical business processes and activities, including in the areas of Finance, Human Resources, Procurement, Travel and Information Technology. Certain of our businesses require that we or our subcontractors have access to customer sites to provide our products and services.
We also outsource certain critical business processes and activities, including in the areas of Finance, Human Resources, Commercial Services, Procurement, Travel and Information Technology. Some of our businesses require us or our subcontractors to access customer sites to provide our products and services.
We may not be able to complete acquisitions or divestitures on favorable terms, timing or at all, or obtain financing that may be needed to consummate acquisitions.
We may be unable to complete acquisitions or divestitures on favorable terms, timing, or at all, or obtain financing needed to consummate acquisitions.
In the event that we believe or have reason to believe that our employees or business partners have or may have violated applicable laws, regulations or policies, including anti-corruption laws, we are required to investigate the relevant facts and circumstances. This can be expensive and require significant time and attention from senior management.
If we believe or have reason to believe that employees or business partners have or may have violated applicable anti-corruption or other laws, regulations or policies, we are required to investigate the relevant facts and circumstances. Investigations can be expensive and require significant time and attention from senior management.
Our success depends to a significant extent on our ability to attract, retain and develop highly qualified employees in leadership positions, and in strategic or core competencies, including engineering, innovation, systems modernization, digital technologies, commercial excellence, service, and project management, as well as general production-related talent.
Our success depends to a significant extent on our ability to attract, retain and develop highly qualified employees in leadership positions, and in strategic or core areas, such as engineering, innovation, systems modernization, digital technologies, commercial excellence, service, project management, and production.
Developments such as the adoption of new environmental or 27 climate change laws and regulations, enforcement actions or litigation, discovery of previously unknown or more extensive contamination conditions, obsolescence of our products, interruption or suspension of our operations, an inability to recover costs associated with any such developments, or the financial insolvency of other responsible parties, could have material adverse effects on our business, financial condition, cash flows, results of operations, and reputation.
Developments such as new environmental laws and regulations, enforcement actions, litigation, discovery of previously unknown or more extensive contamination conditions, product obsolescence, operational disruptions, inability to recover costs associated with any such developments, or the financial insolvency of other responsible parties, could have material adverse effects on our business, financial condition, cash flows, results of operations, and reputation.
Cybersecurity incidents and related data breaches or other disruptions involving our enterprise information technology and operations, our connected products and services, or information technology on which we or our customers rely, could materially and adversely affect our business.
Cybersecurity incidents, data breaches, or other disruptions, and software and system implementations involving our enterprise or operational information technology, connected products and services, or information technology on which we or our customers rely, could materially and adversely affect our business.
For example, certain events may disrupt customers’ operations, creating shutdowns that prevent our site access or defer our performance of services or sale of equipment. Heavy flooding and rain events may increase demand for our solutions that help manage water and stormwater overflows or remove and transfer excess or unwanted water.
For example, certain events may disrupt customer operations, causing shutdowns that prevent site access or delay performance of services or equipment sales. Heavy flooding and rain events may increase demand for our solutions that help manage water and stormwater overflows or remove and transfer excess or unwanted water.
Such laws and regulations include the Occupational Health and Safety Act, the federal Safe Drinking Water Act, the Clean Water Act, the Clean Air Act, RCRA, CERCLA, the Toxic Substances Control Act, the Federal Insecticide, Fungicide and Rodenticide Act, the EU’s Restriction of Hazardous Substance Directive, and the EU’s Registration, Evaluation and Authorization of Chemicals Directive, as well as others enacted in response to environmental and climate change concerns.
These laws and regulations include the Occupational Health and Safety Act, the federal Safe Drinking Water Act, the Clean Water Act, the Clean Air Act, RCRA, CERCLA, the Toxic Substances Control Act, the Federal Insecticide, Fungicide and Rodenticide Act, the EU’s Restriction of Hazardous Substance Directive, and the EU’s Registration, Evaluation and Authorization of Chemicals Directive, and others enacted to address environmental concerns.
Regardless of the protection measures we, or the third parties we rely on, have implemented, information technology and communications networks may be susceptible to damage or disruption due to causes such as: equipment, system or application failure, including as a result of maintenance, obsolescence, unsupportability or age; human error or malfeasance; vandalism; natural disaster; fire; power, communication or other utility outage or failure; and cybersecurity incidents, including ransomware, denial-of-service, vendor e-mail compromise, deepfake attacks, malware, phishing, and computer viruses resulting from a wide ranging threat landscape, including attacks by nation states and others.
Regardless of the protection measures we, or the third parties we rely on, have implemented, IT and communication networks may be susceptible to damage or disruption due to causes, such as: equipment, system or application failure, including as a result of maintenance, obsolescence, unsupportability or age; application upgrades or implementations; human error or malfeasance; vandalism; natural disasters; fire; utility outages; and cybersecurity incidents, including ransomware, denial-of-service, e-mail compromises, deepfake attacks, malware, phishing, and viruses resulting from a wide ranging threat landscape, including attacks by nation states and others.
Any threatened or actual escalation of the aforementioned conditions and related impacts may disrupt supply, increase the cost of energy or logistics, or delay or interrupt our supplies from suppliers. We have also experienced, and continue to experience, fluctuating freight and logistics costs, and delivery delays related to port congestion, labor actions and other challenges.
Actual or threatened escalation of these conditions may disrupt supply, increase energy or logistics costs, or delay or interrupt supplies from suppliers. We have experienced, and may continue to experience, fluctuating freight and logistics costs, and delivery delays from port congestion, labor actions and other challenges.
Any violation could result in substantial fines, sanctions, civil and/or criminal penalties, termination of relationships with business partners, or curtailment of operations in certain jurisdictions, and as a result might materially and adversely affect our business, results of operations or financial condition. In addition, actual or alleged violations could damage our reputation and ability to do business.
Violations could result in fines, sanctions, civil and/or criminal penalties, termination of relationships with business partners, or curtailment of operations, and as a result might materially and adversely affect our business, results of operations or financial condition. Actual or alleged violations could also harm our reputation and ability to do business.
We also rely on key third parties, such as direct and indirect suppliers, contract manufacturers, cloud-based service providers, and outsourced business process providers, including in the areas of Information Technology, Finance, Human Resources, Procurement and Travel.
We also rely on key third parties, such as direct and indirect suppliers, contract manufacturers, cloud-based service providers, and outsourced business process providers, including in our businesses and functions, such as Information Technology, Finance, Human Resources, Commercial Services, Procurement and Travel.
In addition, certain of our products may be subject to product safety regulations. For example, certain of our products supplied to the medical industry are subject to U.S. Food and Drug Administration 510(k). The aforementioned laws and regulations establish, among other things, criteria and standards we must comply with and may require licensing, permitting, approval or reporting.
Some of our products may be subject to product safety regulations. For example, certain of our products supplied to the medical industry are subject to Section 510(k) of the U.S. Food, Drug and Cosmetic Act. These laws and regulations establish, among other things, criteria and standards we must comply with and may require licensing, permitting, approvals or reporting.
Geopolitical, regulatory, economic, foreign exchange and other risks associated with our global sales, supply chain and operations may adversely affect our business. In 2024, 57% of our total revenue was from sales to U.S. customers and 43% was from sales to customers outside the U.S. We expect our revenue profile to be similar moving forward.
Geopolitical, regulatory, economic, foreign exchange and other risks associated with our global sales, supply chain and operations may adversely affect our business. In 2025, 58% of our total revenue was from sales to U.S. customers and 42% was from sales to customers outside the U.S. We expect a similar revenue profile going forward.
Our operations and businesses rely on our facilities and a complex and highly reactive global supply chain, including suppliers (and their suppliers), some of which are a single- or sole-source, distributors, contract manufacturers, subcontractors, joint venture partners, utilities providers, and freight and logistics providers.
Our operations and businesses depend on our facilities and a complex and highly reactive global supply chain, including suppliers, indirect suppliers, and multi-tiered suppliers, some of which are single- or sole-source, as well as distributors, contract manufacturers, subcontractors, joint venture partners, and utilities and logistics providers.
The lack of availability of radio spectrum or an inability or delay in modifying our products to meet frequency requirements, or the cost of completing such modifications, could have material adverse effects on our business, financial condition, and results of operations.
Lack of radio spectrum availability or an inability or delay in modifying our products to meet frequency requirements, or the cost of completing such modifications, could materially and adversely affect our business, financial condition, and results of operations.
Our failure to comply with applicable laws, regulations, policies and taxes may result in substantial litigation and defense costs, fines, penalties and criminal sanctions; facility shutdowns to address violations; and investments in costly pollution control equipment or operational changes to limit emissions or discharges.
Failure to comply may result in litigation and defense costs, fines, penalties and criminal sanctions; facility shutdowns to address violations; and investments in costly pollution control equipment or operational changes to limit emissions or discharges.
Weather conditions, including the effects of climate change and associated efforts by governmental or regulatory authorities to mitigate such effects, may cause volatility in our served markets and demand for our products.
Weather conditions, including the effects of changing climate patterns and related governmental or regulatory efforts to mitigate such effects, may cause volatility in our served markets and demand for our products.
We offer our technologies, products and services in highly competitive markets.
We operate in highly competitive markets for our technologies, products and services.
FCC-licensed radio spectrum (as detailed above); and our employees’ health and safety.
FCC-licensed radio spectrum (as detailed above); and employee health and safety.
A cybersecurity incident or other damage or disruption to information technology and communications networks, or involving our connected products and services, may have adverse effects on us, our customers or third parties on which we rely, including: interference with operations and services, potentially with public health and safety risks involving certain of our customers; disruption of production, supply chain, shipments, billing, collections and customer service; disruption to data analytics; disruption to remote monitoring and control of operational systems; unauthorized access, disclosure, misappropriation, misuse, destruction, compromise or theft of our financial, operational or other proprietary information, including intellectual property and trade secrets, or data pertaining to our employees, customers or suppliers; damage to employee, customer and business partner relationships; recall of our products; legal claims, proceedings or regulatory enforcement actions, and fines or penalties; increased costs to prevent, respond to or mitigate cybersecurity incidents; and damage to our brands and reputation.
A cybersecurity incident or other damage or disruption to IT and communications networks, or involving our connected products and services, may have adverse effects on us, our customers or third parties on which we rely by interfering with operations and services, potentially with public health and safety risks involving certain of our 17 customers; disrupting production, supply chain, shipments, billing, collections and customer service; disrupting data analytics or remote monitoring and control of operational systems; enabling unauthorized access, disclosure, misappropriation, misuse, destruction, compromise, or theft of our financial, operational or other proprietary information, including intellectual property and trade secrets, or data pertaining to our employees, customers or suppliers; damaging employee, customer or partner relationships; triggering product recalls, legal claims, or regulatory actions, fines or penalties; increasing prevention and response costs; and harming our brands and reputation.
Beyond the risks indicated above, our operations in emerging markets are subject to additional risks and uncertainties, including: (i) governments may impose or increase withholding or other taxes on remittances and other payments to us; (ii) governments may seek to nationalize our assets; (iii) governments may impose or increase investment barriers or other restrictions affecting our business; (iv) difficulty in enforcing commercial agreements or collecting receivables; (v) pricing pressure on our products and services; (vi) elevated business conduct risks; and (vii) challenges in our ability to attract and retain qualified talent and labor.
Beyond the risks indicated above, our operations in emerging markets are subject to additional risks and uncertainties, including: (i) imposition of or increases in withholding or other taxes on remittances and other payments to us; (ii) nationalization of our assets; (iii) imposition of or increases in investment barriers or other restrictions; (iv) difficulty enforcing commercial agreements or collecting receivables; (v) pricing pressure on our products and services; (vi) elevated business conduct risks; and (vii) challenges in attracting and retaining qualified talent and labor.
While we attempt to provide our customers with reasonable measures to safeguard our products and services from cybersecurity threats, the potential for a cybersecurity incident remains. In addition, certain of our customers continue to use digitally enabled products that we designed, manufactured and sold at a time when current security features were not available.
While we attempt to provide our customers with reasonable measures to safeguard our products and services from cybersecurity threats, the potential for a cybersecurity incident remains. In addition, certain of our customers continue to use older digitally enabled products that lack current security features.
Dollar or Euro could affect our ability to sell products competitively and control our cost structure, which has had and may continue to have a material adverse effect on our business, financial condition, cash flows and results of operations.
Changes in the value of currencies of the countries in which we do business relative to the value of the U.S. Dollar or Euro could affect our ability to sell products competitively and control our cost structure, which has had and may continue to have a material adverse effect on our business, financial condition, cash flows and results of operations.
Changes in environmental requirements, laws and regulations, or increased public awareness around the presence and health impacts of human-made chemicals and naturally occurring contaminants in drinking water, could increase or decrease demand for our products and services, increase our costs, result in the obsolescence of our products, or lead to an interruption of suspension of our operations.
Changes in environmental laws or regulations, or increased public awareness of the presence and health impacts of human-made chemicals and naturally occurring contaminants in drinking water, could increase or decrease demand for our products and services, increase costs, render products obsolete, increase our potential liability with respect to the handling or disposal of these contaminants or lead to an interruption or suspension of our operations.
As a result, our success in attracting and retaining employees, particularly in the areas of services, digital technologies, innovation and data science, has depended, and will continue to depend, on our ability to offer attractive career growth opportunities, work arrangements, compensation and benefits, and also policies and ways of working that support employee well-being.
Success in attracting and retaining employees, particularly in the areas of services, digital technologies, including AI, innovation, and data science, depends in part on our ability to offer attractive career growth opportunities, work arrangements, compensation and benefits, and policies and ways of working that support employee well-being.
Our competitive position and future growth depend upon a number of factors, including our ability to successfully: (i) enhance and differentiate our product and service offerings, business models and customer experience by increasing efficiency or security, or adding innovative features or disruptive or emerging technologies, such as artificial intelligence, that address emerging regulations and trends, meet customers’ needs, and prevent commoditization, (ii) defend our market share against an ever-expanding number of competitors, including new or non-traditional competitors from outside our industry, such as large technology firms,(iii) continue to invest in and maintain our distribution network of channel partners, (iv) attract, develop, retain and train individuals with the requisite innovation, digital and technical capabilities, expertise and understanding of customers’ needs to develop, commercialize and sell new technologies, products, services and solutions, (v) continue to leverage and expand our external ecosystem of innovation partners with joint venture partners, universities, venture capital, the start-up community and other technology innovators, (vi) continue to invest in our manufacturing, research and development, engineering, sales and marketing, modernization of our systems, and digitization of customer solutions, service and support tools, (vii) win and execute large contracts on schedule and on budget, and (viii) optimize our supply chain and manufacturing to enable predictable and efficient delivery to customers, and compete for business subject to governmental procurement laws, regulations and policies, including sustainability and domestic content requirements in the U.S. and globally, as they may evolve over time.
Our competitive position and future growth depend on a number of factors, including our ability to: (i) enhance and differentiate our offerings, business models and customer experience through efficiency, security, and the addition of innovative features or technologies, such as AI, that address emerging regulations and trends, meet customers’ needs, and prevent commoditization; (ii) defend our market share against an ever-expanding number of competitors, including new or non-traditional competitors from outside our industry, such as large technology firms; (iii) invest in and maintain our network of channel partners; (iv) attract, develop, retain and train talent with commercial, innovation, digital and technical expertise, and understanding of customers’ needs to develop and commercialize new technologies; (v) leverage and expand our ecosystem of innovation partners, including universities, venture capital, start-ups, and other technology innovators; (vi) invest in manufacturing, research and development, engineering, sales, marketing, systems modernization, AI, and digitization of customer solution and support tools; (vii) win and execute large contracts on schedule and on budget; and (viii) optimize our supply chain and manufacturing to enable predictable and efficient delivery to customers, and to compete for business subject to procurement laws, regulations and government policies, and regulations governing sustainability and domestic content in various jurisdictions.
Cybersecurity incidents may impact hardware, software and information installed, stored or transmitted by our products and services after they have been purchased and incorporated into customers’ and other third parties’ products, facilities, systems or infrastructure, including critical infrastructure applications.
Our connected products and services may be susceptible to damage or disruption from the same causes described above. Cybersecurity incidents may impact hardware, software and information installed, stored or transmitted by our products and services after they have been purchased and incorporated into customers’ and other third parties’ products, facilities, systems or infrastructure, including critical infrastructure applications.
In addition, we continue to evolve our culture, where colleagues are inspired to innovate, empowered to lead and accountable to deliver, and includes advancing inclusion and belonging. Our high-impact culture has been and will remain critical to attracting and retaining talent needed to execute our strategy, drive innovation, remain competitive and create long-term value.
We continue to evolve our culture, where colleagues are inspired to innovate, empowered to lead and accountable to deliver. This high-impact culture is critical to attracting and retaining the talent needed to execute our strategy, drive innovation, remain competitive and create long-term value.
Cost fluctuations have been and may continue to be driven by a variety of factors, such as inflation, tight labor markets, prevailing price levels, exchange rates, changes in trade agreements, tariffs and other trade protection measures, and other economic and geopolitical factors.
These fluctuations have been, and may continue to be, driven by a variety of factors, such as inflation, tight labor markets, exchange rates, trade agreements, tariffs and other trade protection measures, and other macroeconomic, political or geopolitical factors.
Risks Related to Legal and Regulatory Failure to comply with laws, regulations and policies related to our business conduct, including the U.S. Foreign Corrupt Practices Act, other applicable anti-corruption laws, trade regulations, and data privacy and security laws, could have a material adverse impact on us.
Risks Related to Legal and Regulatory Failure to comply with business conduct laws, regulations and policies, including anti-corruption, anti-trust, trade, and data privacy and security, could have a material adverse impact on us.
Severe weather events and other effects of climate change have also caused, and may in the future cause, disruptions to our facilities and operations, and those of our customers and suppliers, as well as fluctuations in demand for our products and services, and could also increase competition.
Severe weather events and other effects of volatile weather patterns have caused, and may continue to cause, disruptions to our facilities and operations, and those of our customers and suppliers, as well as fluctuations in demand for our products and services, and increased competition.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeOur Cybersecurity Incident Response Plan (“IRP”), which generally aligns with NIST's guidance, provides management with a standardized framework for responding to an actual or potential cybersecurity threat or incident. The IRP sets out a coordinated approach to investigating, containing, documenting and mitigating incidents, including reporting findings and keeping senior management and other key stakeholders informed and involved as appropriate.
Biggest changeWe periodically review our policies to identify potential gaps or areas for improvement, considering changes in the Company and its connected products and services, as appropriate. Our Cybersecurity Incident Response Plan (“IRP”) generally aligns with NIST's guidance and provides management with a standardized framework for responding to an actual or potential cybersecurity threat or incident.
Material Cybersecurity Risks, Threats & Incidents Although we have experienced actual and attempted cybersecurity threats and incidents in the past, we do not believe that the risks from any of these events or incidents, individually or in the aggregate, have materially affected our business, operations or financial condition, or are reasonably likely to have such an effect.
Material Risks, Threats & Incidents Although we have experienced actual and attempted cybersecurity threats and incidents in the past, we do not believe that the risks from any of these threats or incidents, individually or in the aggregate, have materially affected our business, operations or financial condition, or are reasonably likely to have such an effect.
The CISO leads the Company’s Cybersecurity Team (“Team”), comprised of individuals with a broad range of cybersecurity skills, experiences and certifications. The Team is responsible for the implementation, monitoring and maintenance of the Company’s cybersecurity practices in coordination with its businesses, operations and functions, and oversees the Company’s cybersecurity program.
The CISO leads the Company’s Cybersecurity Team comprised of individuals with a broad range of cybersecurity skills, experiences and certifications. The Cybersecurity Team oversees the Company’s cybersecurity program and is responsible for the implementation, monitoring and maintenance of the Company’s cybersecurity practices in coordination with the business teams and functions.
Both the enterprise and connected products and services programs are designed to assess, identify and manage risks from cybersecurity threats in order to protect and preserve the security, resiliency, integrity and continued availability of the Company’s information technology systems and connected products and services, and also to protect the confidentiality and integrity of information owned by, or in the custody and care of, the Company.
Our program is designed to assess, identify and manage risks from cybersecurity threats in order to protect and preserve the security, resiliency, integrity and continued availability of the Company’s enterprise IT and operational technology systems and connected products and services, while also protecting the confidentiality and integrity of information owned by, or in the custody and care of, the Company.
We have protocols and processes by which certain cybersecurity incidents, as specified by our IRP, are escalated within the Company and, as appropriate, to the Audit Committee of the Board of Directors. Employees receive annual and ongoing education and training regarding relevant cybersecurity risks and practices, including how to protect information and systems from cyber threats.
As specified by our IRP, we have protocols and processes by which certain cybersecurity incidents are escalated within the Company and, as appropriate, to the Board of Directors (“Board”). 26 Employees receive ongoing education and training on relevant cybersecurity risks and practices, including periodic refreshers on how to protect information and systems from cyber threats, as well as monthly phishing simulations.
Key areas of responsibility include product security, software development, innovation management, threat analysis and incident response.
Key areas of responsibility include: governance, risk and compliance; threat analysis and incident response; security architecture and engineering; security operations; product security; software development; and innovation management.
However, due to evolving cybersecurity threats, it has and will continue to be difficult to prevent, detect, mitigate, and remediate cybersecurity incidents. For a more detailed discussion of the risks we face see the discussion set forth under “Item 1A. Risk Factors” in this Report. 30
However, due to the evolving nature of cybersecurity threats, it has and will continue to be difficult to prevent, detect, mitigate, and remediate cybersecurity incidents. For further discussion of our cybersecurity risks, see “Item 1A. Risk Factors” in this Report. 27
Reports include topics such as updates on the Company’s cybersecurity risk profile, assessments of the Company’s enterprise and product security programs, management’s strategy for managing risks, measures implemented to identify and mitigate cybersecurity risks, the status of projects to strengthen the Company’s cybersecurity posture, the emerging cybersecurity threat landscape and other relevant topics.
Reports may include updates on the Company’s cybersecurity risk profile, cyber program assessments, risk management strategy, measures implemented to identify and mitigate cybersecurity risks, the status of projects to strengthen the Company’s cybersecurity posture, the emerging threat landscape, and other relevant topics. The Board also reviews ERM Program findings, including those related to cybersecurity risk.
Our CISO, who has extensive cybersecurity knowledge and skills gained from over 25 years of relevant work experience, and is a Certified Information Systems Security Professional, is responsible for assessing, monitoring and advising the Company’s various business units, management and the Board on risks from cybersecurity threats; implementing cybersecurity strategy, programs and processes across our enterprise and connected products and services; reviewing the risk management measures implemented by the Company to identify and mitigate cybersecurity risks; and overseeing the maintenance and deployment of the Cybersecurity Incident Response Plan.
The CISO is responsible for assessing, monitoring and advising the Company and the Board on risks from cybersecurity threats; implementing cybersecurity strategy, programs and processes across our enterprise and connected products and services; reviewing risk management measures to identify and mitigate cybersecurity risks; and overseeing our IRP.
ITEM 1C. CYBER SECURITY. Cybersecurity Risk Management and Strategy Cybersecurity risk management is integrated into our Enterprise Risk Management (“ERM”) Program, which is our approach to identifying, assessing, prioritizing and mitigating risks to the Company, with mitigation efforts focused on the highest risks.
ITEM 1C. CYBERSECURITY. Risk Management and Strategy Cybersecurity is integrated into our Enterprise Risk Management (“ERM”) Program, which assesses and monitors risks across the Company, including cyber threats and related risk mitigation plans.
These policies specify roles and responsibilities, fundamental principles and proper controls required for Xylem’s protection, and also require the use of certain cyber risk management processes to onboard new suppliers and other third parties. We periodically review our policies to identify potential gaps or areas for improvement, considering changes in the Company, and its connected products and services, as appropriate.
We maintain cybersecurity policies that apply to all employees, as well as third-party vendors and contractors as required by applicable legal agreements. These policies specify roles and responsibilities, fundamental principles, and proper controls required for Xylem’s protection, and also require the use of certain risk management processes to onboard new suppliers and other third parties.
The Board also receives a report from management on the results of the Company’s annual ERM Program risk assessment, as well periodic updates on the ERM Program and ongoing monitoring of the Company’s risks, including cybersecurity risk, as appropriate. 29 The Company’s Cyber Risk Committee (“CRC”), comprised of a cross-functional group of senior executives, provides advice and governance regarding the Company’s strategic management of cybersecurity across the Company, including cybersecurity risk posture, projects, issues, threat intelligence and escalations.
The Company’s Cyber Risk Committee (“CRC”), comprised of a cross-functional group of senior executives, advises on cybersecurity governance and strategic matters, and receives periodic briefings from the CISO or external experts, including related to cybersecurity risk posture, projects, issues, threat intelligence and escalations.
Our enterprise cybersecurity program is guided by the National Institute of Standards and Technology’s (“NIST”) Cybersecurity Framework. Key areas of responsibility in the program include governance, risk and compliance, threat analysis and response, security architecture and engineering, security operations and secure manufacturing operations. Our connected products and services cybersecurity program is guided by the ISA/IEC 62443 standard.
We maintain a comprehensive cybersecurity program covering enterprise information technology (“IT”), operational technology, and third-party systems on which we rely, as well as our connected products and services. This program is guided by the National Institute of Standards and Technology’s (“NIST”) Cybersecurity Framework and the ISA/IEC 62443 standard, respectively.
The IRP also specifies the use of third-party experts for legal advice, consulting and incident response, as appropriate. The IRP undergoes at least annual tabletop exercises, the results of which are used to identify areas for improvement in our processes and technologies.
The IRP sets out procedures for investigating, containing, documenting and mitigating incidents, keeping management and other key stakeholders informed, reporting findings, and engaging third-party experts for advice and incident response, as appropriate. The IRP is tested at least annually for effectiveness and to identify areas for improvement in our processes and technologies.
To assist with oversight of cybersecurity, the Board has delegated to its Audit Committee responsibility to oversee certain aspects of cybersecurity, including controls and reporting. At least semi-annually, the Audit Committee or full Board receive reports from the Chief Information Officer (“CIO”) and Chief Information Security Officer (“CISO”).
We also maintain cyber insurance to mitigate potential financial exposure from certain incidents. Governance Our Board oversees cybersecurity, including strategy, risk and processes. At least semi-annually, the Board receives reports from the Chief Information Officer (“CIO”) or the Chief Information Security Officer (“CISO”).
Removed
Our ERM Program assesses risks, including those related to cybersecurity, annually, and monitors such risks on an ongoing basis. We maintain a comprehensive cybersecurity program that encompasses our enterprise information technology, including operational technology and technology of third parties on which we rely, and connected products and services.
Added
We employ policies, processes, tools, technology, training, incident response and regular testing – such as vulnerability scans and penetration tests of our enterprise and product security programs – to identify and mitigate cybersecurity risks. Third-party assessments of these programs are conducted periodically to assist with identifying, assessing, and managing cybersecurity risks.
Removed
Elements of the programs include policies, standards, architecture, processes, tools, technology, employee education and training, and incident response. Our enterprise and product security programs undergo regular testing, including periodic vulnerability scanning and penetration testing.
Added
The CRC also receives briefings from the CISO on cybersecurity incidents, including incident response, recovery, remediation, and actual or potential impacts. Our CISO has extensive cybersecurity knowledge and skills gained from over 25 years of relevant work experience, and is a Certified Information Systems Security Professional.
Removed
In addition, we also periodically engage third parties to assess our enterprise and product security programs and provide consultation and advice to assist with assessing, identifying and managing cybersecurity risks. We maintain cybersecurity policies that apply to all employees, businesses and functions, as well as third-party vendors and contractors as required by our legal agreements with them.
Removed
We also conduct monthly phishing simulations to increase employees’ ability to detect and prevent such threats. The Company maintains insurance as part of its cybersecurity risk mitigation strategy to provide protection against certain potential losses arising from certain cybersecurity incidents. Cybersecurity Governance In line with its broader strategic oversight, the Board oversees cybersecurity, including strategy and processes.
Removed
At its periodic meetings, the CRC receives reports and presentations from the CISO or third parties on internal and external cybersecurity matters, and, as appropriate, briefings from the CISO on cybersecurity incidents, the Company’s incident response, recovery and remediation and actual or potential impacts.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeSquare Feet Owned or Leased Water Infrastructure Emmaboda Sweden Administration and Manufacturing 1,197,000 Owned Shenyang China Manufacturing 271,000 Owned Vadodara India Manufacturing and Research & Development 240,000 Leased Stockholm Sweden Administration and Research & Development 182,000 Leased Applied Water Morton Grove IL Administration and Manufacturing 530,000 Owned Montecchio Italy Administration and Manufacturing 379,000 Owned Nanjing China Manufacturing 363,000 Owned Auburn NY Manufacturing 273,000 Owned Abony Hungary Manufacturing 250,000 Leased Stockerau Austria Sales & Service Office 234,000 Owned Strzelin Poland Manufacturing 185,000 Owned Cheektowaga NY Manufacturing 147,000 Owned Measurement and Control Solutions Ludwigshafen Germany Manufacturing 318,000 Owned Texarkana AR Manufacturing 254,000 Owned Uniontown PA Manufacturing 240,000 Leased DuBois PA Manufacturing 197,000 Owned Durham NC Administration and Research & Development 172,000 Leased Weilheim Germany Manufacturing 160,000 Leased Dubois PA Manufacturing 137,000 Leased Water Solutions and Services Thomasville GA Manufacturing 211,000 Owned Rockford IL Manufacturing 165,000 Owned Bridgeport NJ Administration and Manufacturing 136,000 Leased Holland MI Manufacturing 132,000 Owned Houston TX Service 107,000 Leased Regional Locations Dubai United Arab Emirates Manufacturing 144,000 Owned Nottinghamshire United Kingdom Administration 139,000 Leased Nanterre France Sales & Service Office 139,000 Leased Langenhagen Germany Sales & Service Office 134,000 Owned Schaffhausen Switzerland Administration 26,000 Leased Corporate Headquarters Washington DC Administration 18,000 Leased 31
Biggest changeSquare Feet Owned or Leased Water Infrastructure Emmaboda Sweden Administration and Manufacturing 1,197,000 Owned Shenyang China Manufacturing 271,000 Owned Thomasville GA Manufacturing 211,000 Owned Vadodara India Manufacturing and Research & Development 337,000 Leased Stockholm Sweden Administration and Research & Development 182,000 Leased Holland MI Manufacturing 132,000 Owned Applied Water Morton Grove IL Administration and Manufacturing 530,000 Owned Montecchio Italy Administration and Manufacturing 379,000 Owned Nanjing China Manufacturing 363,000 Owned Guadalupe Mexico Manufacturing 315,000 Leased Auburn NY Manufacturing 273,000 Owned Abony Hungary Manufacturing 250,000 Leased Strzelin Poland Manufacturing 185,000 Owned Cheektowaga NY Manufacturing 147,000 Owned Measurement and Control Solutions Ludwigshafen Germany Manufacturing 318,000 Owned Texarkana AR Manufacturing 254,000 Owned Uniontown PA Manufacturing 240,000 Leased DuBois PA Manufacturing 197,000 Owned Durham NC Administration and Research & Development 172,000 Leased Weilheim Germany Manufacturing 160,000 Leased Dubois PA Manufacturing 333,000 Owned Water Solutions and Services Rockford IL Manufacturing 165,000 Owned Bridgeport NJ Administration and Manufacturing 136,000 Leased Houston TX Service 107,000 Leased Regional Locations Dubai United Arab Emirates Manufacturing 144,000 Owned Nottinghamshire United Kingdom Administration 139,000 Leased Nanterre France Sales & Service Office 139,000 Leased Langenhagen Germany Sales & Service Office 134,000 Owned Schaffhausen Switzerland Administration 18,000 Leased Corporate Headquarters Washington DC Administration 18,000 Leased 28
ITEM 2. PROPERTIES We have approximately 500 locations in more than 50 countries. These properties total approximately 15 million square feet, of which more than 400 locations, or approximately 8 million square feet, are leased.
ITEM 2. PROPERTIES We have approximately 400 locations in more than 50 countries. These properties total approximately 15 million square feet, of which more than 300 locations, or approximately 9 million square feet, are leased.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

1 edited+0 added−2 removed2 unchanged
Biggest changeThe Agreement does not include a compliance monitorship, and Evoqua agreed to certain ongoing monitoring, reporting and compliance obligations for a period of two years. See Note 20, "Commitments and Contingencies", of the consolidated financial statements included in Item 8 of Part II of this 10-K for information regarding certain legal and regulatory proceedings we are involved in.
Biggest changeSee Note 20, "Commitments and Contingencies," of the consolidated financial statements included in Item 8 of Part II of this 10-K for information regarding certain legal and regulatory proceedings we are involved in.
Removed
Evoqua previously disclosed in its public filings that the United States Attorney’s Office for the District of Massachusetts was investigating whether financial misstatements were made in Evoqua’s public filings and earnings announcements from 2016 to 2018 and prior to Xylem’s purchase of Evoqua.
Removed
Xylem previously disclosed in our 2023 Annual Report that the investigation was moved to the United States Attorney’s Office for the District of Rhode Island (the “USAO”). On May 13, 2024, Evoqua and the USAO entered into a non-prosecution agreement (the “Agreement”) to resolve the matter. Under the Agreement, Evoqua paid a criminal monetary penalty of $8.5 million.

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeToussaint 61 Senior VP, Chief People and Sustainability Officer (2021) • Senior VP, General Counsel and Corporate Secretary (2014) Hayati Yarkadas 56 Senior VP and President, Europe, Water Infrastructure (2020) • Senior VP and President, Performance Materials, Trinseo S.A., a specialty material solutions provider (2015) Note: Date in parentheses indicates the year in which the position was assumed. 33 BOARD OF DIRECTORS The following information is provided regarding the Board of Directors of Xylem as of February 4, 2025: NAME TITLE Robert F.
Biggest changeToussaint 62 Executive VP, Chief People and Sustainability Officer (2021) • Senior VP, General Counsel and Corporate Secretary (2014) Hayati Yarkadas 57 Executive VP and President, Water Infrastructure (2020) Stacy Cozad 55 Executive VP, Chief Legal Officer (2025) • Senior VP, General Counsel and Corporate Secretary, Allegion plc, a provider of security products (2024) • Executive VP, General Counsel and Corporate Secretary, Ingevity Corporation, a manufacturer and distributor of specialty chemicals (2021) • Senior VP, General Counsel, Chief Compliance Officer and Secretary, Spirit AeroSystems, Inc., an aerospace company (2016) Note: Date in parentheses indicates the year in which the position was assumed. 30 BOARD OF DIRECTORS The following information is provided regarding the Board of Directors of Xylem as of February 4, 2026: NAME TITLE Robert F.
ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 32 INFORMATION ABOUT OUR EXECUTIVE OFFICERS The following information is provided regarding the executive officers of Xylem as of February 4, 2025: NAME AGE CURRENT TITLE OTHER BUSINESS EXPERIENCE DURING PAST 5 YEARS Matthew F.
ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 29 INFORMATION ABOUT OUR EXECUTIVE OFFICERS The following information is provided regarding the executive officers of Xylem as of February 10, 2026: NAME AGE CURRENT TITLE OTHER BUSINESS EXPERIENCE DURING PAST 5 YEARS Matthew F.
Grogan 46 Senior VP, Chief Financial Officer (2023) • Senior VP and Chief Financial Officer, IDEX Corporation, a diversified manufacturer of highly engineered products (2017) Rodney O. Aulick 57 Senior VP and President, Water Solutions and Services (2023) • Executive Vice President Water Solutions and Services, Evoqua Water Technologies Corp. (2018) Dorothy G.
Grogan 47 Executive VP, Chief Financial Officer (2023) • Senior VP and Chief Financial Officer, IDEX Corporation, a diversified manufacturer of highly engineered products (2017) Rodney O. Aulick 58 Executive VP and President, Water Solutions and Services (2023) • Executive Vice President Water Solutions and Services, Evoqua Water Technologies Corp.
McGann 54 Senior VP and President, Americas and Measurement and Control Solutions (2023) • VP, North America Utilities Commercial Team (2022) • VP, Sensus Americas, Global Engineering and Assessment Services (2017) Geri-Michelle McShane 51 VP, Controller and Chief Accounting Officer (2019) • Controller, Accounting and Reporting (2016) Claudia S.
McGann 55 Executive VP and President, Measurement and Control Solutions (2023) • VP, North America Utilities Commercial Team (2022) • VP, Sensus Americas, Global Engineering and Assessment Services (2017) Geri-Michelle McShane 52 Senior VP, Chief Accounting Officer (2025) • VP, Controller, and Chief Accounting Officer (2019) Claudia S.
Capers 63 Senior VP, General Counsel (2022) • Executive Vice President, Global General Counsel and Corporate Secretary, National Express Group, a leading transport provider (2015) Albert Cho 44 Senior VP, Chief Strategy and External Affairs Officer (2022) • Senior VP, Chief Strategy and Digital Officer (2020) • VP and General Manager, Advanced Infrastructure Analytics (2018) Meredith Emmerich 49 Senior VP and President, Applied Water Systems (2024) • VP and General Manager, Americas Commercial HVAC, Carrier Global Corporate, a climate and energy solutions provider (2020) Michael J.
(2018) Albert Cho 45 Executive VP, Chief Strategy and External Affairs Officer (2022) • Senior VP, Chief Strategy and Digital Officer (2020) • VP and General Manager, Advanced Infrastructure Analytics (2018) Meredith Emmerich 50 Executive VP and President, Applied Water Systems (2024) • VP and General Manager, Americas Commercial HVAC, Carrier Global Corporate, a climate and energy solutions provider (2020) Michael J.
Peribere Former President and Chief Executive Officer, Sealed Air Corporation Lila Tretikov Partner, Head of Artificial Intelligence Strategy, New Enterprise Associates, Inc. Uday Yadav Chief Executive Officer, TK Elevator 34 PART II
Harker Former Executive Vice President and Chief Financial Officer, TEGNA, Inc. Mark D. Morelli President and Chief Executive Officer, Vontier Corporation Jerome A. Peribere Former President and Chief Executive Officer, Sealed Air Corporation Lila Tretikov Partner, Head of Artificial Intelligence Strategy, New Enterprise Associates, Inc. Uday Yadav Chief Executive Officer, TK Elevator 31 PART II
Pine 53 President and Chief Executive Officer (2024) • Chief Operating Officer (2023) • Senior VP and President, Americas, Applied Water Systems and Measurement and Control Systems (2022) • Senior VP and President, Americas and Applied Water Systems (2020) • President, Carrier Residential, United Technologies Corporations (2018), a multinational industrial conglomerate William K.
Pine 54 President and Chief Executive Officer (2024) • Chief Operating Officer (2023) • Senior VP and President, Americas, Applied Water Systems and Measurement and Control Systems (2022) • Senior VP and President, Americas and Applied Water Systems (2020) William K.
Friel Board Chair, Xylem Inc., Former Chairman, President and CEO, PerkinElmer, Inc. Matthew F. Pine President and Chief Executive Officer, Xylem Inc. Jeanne Beliveau-Dunn Chief Executive Officer and President of Claridad, LLC Earl R.
Friel Board Chair, Xylem Inc., Former Chairman, President and CEO, PerkinElmer, Inc. Matthew F. Pine President and Chief Executive Officer, Xylem Inc. Earl R. Ellis Executive Vice President and Chief Financial Officer, Panera Bread Lisa Glatch Former President, LNG and Net-Zero Solutions and Chief Sustainability Officer, Sempra Infrastructure Victoria D.
Removed
Ellis Executive Vice President and Chief Financial Officer, ABM Industries Incorporated Lisa Glatch Former President, LNG and Net-Zero Solutions and Chief Sustainability Officer, Sempra Infrastructure Victoria D. Harker Former Executive Vice President and Chief Financial Officer, TEGNA, Inc. Mark D. Morelli President and Chief Executive Officer, Vontier Corporation Jerome A.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

8 edited+0 added−0 removed1 unchanged
Biggest changeXYL S&P 500 S&P 500 Industrials Index December 31, 2020 131 118 111 December 31, 2021 156 152 134 December 31, 2022 145 125 127 December 31, 2023 152 157 150 December 31, 2024 156 197 176 The graph is not, and is not intended to be, indicative of future performance of our common stock.
Biggest changeXYL S&P 500 S&P 500 Industrials Index December 31, 2021 $ 119 $ 129 $ 121 December 31, 2022 $ 111 $ 105 $ 114 December 31, 2023 $ 116 $ 133 $ 135 December 31, 2024 $ 119 $ 166 $ 158 December 31, 2025 $ 149 $ 196 $ 189 The graph is not, and is not intended to be, indicative of future performance of our common stock.
This performance graph shall not be deemed “filed” with the SEC or subject to the liabilities of Section 18 of the Securities Exchange Act of 1934, and should not be deemed incorporated by reference into any of our prior or subsequent filings under the Securities Act of 1933 or the Securities Exchange Act of 1934, except as shall be expressly set forth by specific reference in such filing. 36
This performance graph shall not be deemed “filed” with the SEC or subject to the liabilities of Section 18 of the Securities Exchange Act of 1934, and should not be deemed incorporated by reference into any of our prior or subsequent filings under the Securities Act of 1933 or the Securities Exchange Act of 1934, except as shall be expressly set forth by specific reference in such filing.
(b) On August 24, 2015, our Board authorized the repurchase of up to $500 million in shares with no expiration date. The program's objective is to deploy our capital in a manner that benefits our shareholders and maintains our focus on growth. There were no shares repurchased under this program during the three months ended December 31, 2024.
(b) On August 24, 2015, our Board authorized the repurchase of up to $500 million in shares with no expiration date. The program's objective is to deploy our capital in a manner that benefits our shareholders and maintains our focus on growth. There were no shares repurchased under this program during the three months ended December 31, 2025.
Fourth Quarter 2024 Share Repurchase Activity The following table summarizes our repurchases of our common stock for the quarter ended December 31, 2024: (in millions, except per share amounts) Period Total Number of Shares Purchased Average Price Paid per Share (a) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (b) Approximate Dollar Value of Shares That May Yet Be Purchased Under the Plans or Programs (b) 10/1/24 - 10/31/24 — — — $182 11/1/24 - 11/30/24 — — — $182 12/1/24 - 12/31/24 — — — $182 (a) Average price paid per share is calculated on a settlement basis.
Fourth Quarter 2025 Share Repurchase Activity The following table summarizes our repurchases of our common stock for the quarter ended December 31, 2025: (in millions, except per share amounts) Period Total Number of Shares Purchased Average Price Paid per Share (a) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (b) Approximate Dollar Value of Shares That May Yet Be Purchased Under the Plans or Programs (b) 10/1/25 - 10/31/25 — — — $182 11/1/25 - 11/30/25 — — — $182 12/1/25 - 12/31/25 — — — $182 (a) Average price paid per share is calculated on a settlement basis.
There are up to $182 million in shares that may still be purchased under this plan as of December 31, 2024. 35 PERFORMANCE GRAPH CUMULATIVE TOTAL RETURN The following graph compares the relative performance of our common stock, the S&P 500 Index and the S&P 500 Industrials Index.
There are up to $182 million in shares that may still be purchased under this plan as of December 31, 2025. 32 PERFORMANCE GRAPH CUMULATIVE TOTAL RETURN The following graph compares the relative performance of our common stock, the S&P 500 Index and the S&P 500 Industrials Index.
This graph covers the period from December 31, 2019 through December 31, 2024 and assumes that $100 was invested on December 31, 2019 in our common stock, the S&P 500 and the S&P 500 Industrials with the reinvestment of any dividends.
This graph covers the period from December 31, 2020 through December 31, 2025 and assumes that $100 was invested on December 31, 2020 in our common stock, the S&P 500 and the S&P 500 Industrials with the reinvestment of any dividends.
ITEM 5. MARKET FOR THE REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Price and Dividends Our common stock trades publicly on the New York Stock Exchange under the trading symbol “XYL”. As of January 31, 2025, there were 7,365 holders of record of our common stock.
ITEM 5. MARKET FOR THE REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Price and Dividends Our common stock trades publicly on the New York Stock Exchange under the trading symbol “XYL”. As of January 31, 2026, there were 6,919 holders of record of our common stock.
In the first quarter of 2025, we declared a dividend of $0.40 per share to be paid on March 19, 2025 to shareholders of record on February 18, 2025. There were no unregistered offerings of our common stock during 2024.
In the first quarter of 2026, we declared a dividend of $0.43 per share to be paid on March 24, 2026 to shareholders of record on February 24, 2026. There were no unregistered offerings of our common stock during 2025.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

102 edited+30 added−96 removed62 unchanged
Biggest changeThe increase in adjusted EBITDA margin was primarily due to the same factors impacting adjusted operating margin noted above; however, adjusted EBITDA was not negatively impacted by the relative impact of increased depreciation and software amortization expense. 45 The table below provides a reconciliation of total and each segment's operating income to adjusted operating income, and a calculation of the corresponding adjusted operating margin: (In millions) 2024 2023 Change Water Infrastructure Operating income $ 356 $ 275 29.5 % Operating margin 13.9 % 12.4 % 150 bp Restructuring and realignment costs 30 18 66.7 % Purchase accounting intangible amortization 59 47 25.5 % Special charges 10 28 (64.3) % Adjusted operating income $ 455 $ 368 23.6 % Adjusted operating margin 17.8 % 16.6 % 120 bp Applied Water Operating income $ 271 $ 310 (12.6) % Operating margin 15.1 % 16.7 % (160) bp Restructuring and realignment costs 15 14 7.1 % Purchase accounting intangible amortization — — NM % Special charges — — NM % Adjusted operating income $ 286 $ 324 (11.7) % Adjusted operating margin 16.0 % 17.5 % (150) bp Measurement and Control Solutions Operating income $ 247 $ 133 85.7 % Operating margin 13.2 % 8.3 % 490 bp Restructuring and realignment costs 10 19 (47.4) % Purchase accounting intangible amortization 58 57 1.8 % Special charges 12 4 200.0 % Adjusted operating income $ 327 $ 213 53.5 % Adjusted operating margin 17.5 % 13.2 % 430 bp Water Solutions and Services Operating income $ 219 $ 132 65.9 % Operating margin 9.3 % 7.8 % 150 bp Restructuring and realignment costs 35 20 75.0 % Purchase accounting intangible amortization 99 72 37.5 % Special charges 15 22 (31.8) % Adjusted operating income $ 368 $ 246 49.6 % Adjusted operating margin 15.7 % 14.6 % 110 bp Corporate and other Operating loss $ (84) $ (198) (57.6) % Restructuring and realignment costs 1 35 (97.1) % Special charges 20 84 (76.2) Adjusted operating loss $ (63) $ (79) (20.3) % Total Xylem Operating income $ 1,009 $ 652 54.8 % Operating margin 11.8 % 8.9 % 290 bp Restructuring and realignment costs 91 106 (14.2) % Purchase accounting intangible amortization 216 176 22.7 % Special charges 57 138 (58.7) % Adjusted operating income $ 1,373 $ 1,072 28.1 % Adjusted operating margin 16.0 % 14.6 % 140 bp NM Not Meaningful 46 The table below provides a reconciliation of net income to consolidated EBITDA and adjusted EBITDA: (in millions) Year Ended December 31, 2024 2023 Change Net Income $ 890 $ 609 46 % Net Income margin 10.4 % 8.3 % 210 bp Depreciation 258 193 34 % Amortization 304 243 25 % Interest expense, net 16 21 (24) % Income tax expense 197 26 658 % EBITDA $ 1,665 $ 1,092 52 % Share-based compensation 56 60 (7) % Restructuring and realignment 91 103 (12) % Special charges 57 136 (58) % Gain on remeasurement of previously held equity interest (152) — NM Loss from sale of business 46 1 4500 % Adjusted EBITDA $ 1,763 $ 1,392 27 % Adjusted EBITDA margin 20.6 % 18.9 % 170 bp The tables below provide a reconciliation of each segment's operating income (loss) to EBITDA and adjusted EBITDA: Year Ended December 31, 2024 (in millions) Water Infrastructure Applied Water Systems Measurement and Control Solutions Water Solutions and Services Operating Income $ 356 $ 271 $ 247 $ 219 Operating margin 13.9 % 15.1 % 13.2 % 9.3 % Gain on remeasurement of previously held equity interest — — 152 — Loss from sale of business (40) — — (6) Depreciation 46 25 26 159 Amortization 76 3 106 108 Other non-operating expense, excluding interest (1) (3) (10) 1 EBITDA $ 437 $ 296 $ 521 $ 481 Share-based compensation 12 6 4 11 Restructuring and realignment 30 15 10 35 Special charges 10 — 12 15 Loss from sale of business 40 — — 6 Adjusted EBITDA $ 529 $ 317 $ 395 $ 548 Adjusted EBITDA margin 20.7 % 17.7 % 21.1 % 23.4 % 47 Year Ended December 31, 2023 (in millions) Water Infrastructure Applied Water Systems Measurement and Control Solutions Water Solutions Services Operating Income $ 275 $ 310 $ 133 $ 132 Operating margin 12.4 % 16.7 % 8.3 % 7.8 % Loss from sale of business — — (1) — Depreciation 34 25 27 105 Amortization 55 3 97 79 Other non-operating expense, excluding interest 3 (2) (4) 1 EBITDA $ 367 $ 336 $ 252 $ 317 Share-based compensation 13 3 7 10 Restructuring and realignment 18 13 17 20 Special charges 28 — 4 22 Loss from sale of business — — 1 — Adjusted EBITDA $ 426 $ 352 $ 281 $ 369 Adjusted EBITDA margin 19.2 % 19.0 % 17.4 % 21.9 % 2024 versus 2023 (in millions) Water Infrastructure Applied Water Systems Measurement and Control Solutions Water Solutions and Services Operating Income (Loss) $ 81 $ (39) $ 114 $ 87 Operating margin 150 bps (160) bps 490 bps 150 bps Gain on remeasurement of previously held equity interest — — 152 — Loss from sale of business (40) — 1 (6) Depreciation 12 — (1) 54 Amortization 21 — 9 29 Other non-operating expense, excluding interest (4) (1) (6) — EBITDA $ 70 $ (40) $ 269 $ 164 Share-based compensation (1) 3 (3) 1 Restructuring and realignment 12 2 (7) 15 Special charges (18) — 8 (7) Loss from sale of business 40 — (1) 6 Adjusted EBITDA $ 103 $ (35) $ 114 $ 179 Adjusted EBITDA margin 150 bps (130) bps 370 bps 150 bps 48 Water Infrastructure Operating income was $356 million for our Water Infrastructure segment (operating margin of 13.9%) during 2024, an increase of $81 million, or 29.5%, when compared to operating income of $275 million (operating margin of 12.4%) during the prior year, or a total increase of 150 basis points of operating margin.
Biggest changeThe increase in adjusted EBITDA margin was primarily due to the same factors impacting adjusted operating margin noted above. 41 The table below provides a reconciliation of total and each segment's operating income to adjusted operating income, and a calculation of the corresponding adjusted operating margin: (In millions) 2025 2024 Change Water Infrastructure Operating income $ 462 $ 356 29.8 % Operating margin 17.5 % 13.9 % 360 bp Restructuring and realignment costs 75 30 150.0 % Purchase accounting intangible amortization 42 59 (28.8) % Special charges 4 10 (60.0) % Adjusted operating income $ 583 $ 455 28.1 % Adjusted operating margin 22.1 % 17.8 % 430 bp Applied Water Operating income $ 312 $ 271 15.1 % Operating margin 16.9 % 15.1 % 180 bp Restructuring and realignment costs 28 15 86.7 % Adjusted operating income $ 340 $ 286 18.9 % Adjusted operating margin 18.4 % 16.0 % 240 bp Measurement and Control Solutions Operating income $ 244 $ 247 (1.2) % Operating margin 11.7 % 13.2 % (150) bp Restructuring and realignment costs 16 10 60.0 % Purchase accounting intangible amortization 77 58 32.8 % Special charges 16 12 33.3 % Adjusted operating income $ 353 $ 327 8.0 % Adjusted operating margin 16.9 % 17.5 % (60) bp Water Solutions and Services Operating income $ 302 $ 219 37.9 % Operating margin 12.3 % 9.3 % 300 bp Restructuring and realignment costs 14 35 (60.0) % Purchase accounting intangible amortization 100 99 1.0 % Special charges 6 15 (60.0) % Adjusted operating income $ 422 $ 368 14.7 % Adjusted operating margin 17.1 % 15.7 % 140 bp Corporate and other Operating loss $ (97) $ (84) 15.5 % Restructuring and realignment costs — 1 (100.0) % Purchase accounting intangible amortization 1 — NM Special charges 10 20 (50.0) % Adjusted operating loss $ (86) $ (63) 36.5 % Total Xylem Operating income $ 1,223 $ 1,009 21.2 % Operating margin 13.5 % 11.8 % 170 bp Restructuring and realignment costs 133 91 46.2 % Purchase accounting intangible amortization 220 216 1.9 % Special charges 36 57 (36.8) % Adjusted operating income $ 1,612 $ 1,373 17.4 % Adjusted operating margin 17.8 % 16.0 % 180 bp NM Not Meaningful 42 The table below provides a reconciliation of net income attributable to Xylem to consolidated EBITDA and adjusted EBITDA: (in millions) Year Ended December 31, 2025 2024 Change Net Income attributable to Xylem $ 957 $ 890 8 % Net Income margin 10.6 % 10.4 % 20 bp Depreciation 267 258 3 % Amortization 308 304 1 % Interest expense, net 2 16 (88) % Income tax expense 231 197 17 % EBITDA $ 1,765 $ 1,665 6 % Share-based compensation 53 56 (5) % Restructuring and realignment 131 91 44 % Special charges 36 57 (37) % Gain on remeasurement of previously held equity interest — (152) (100) % Loss from sale of businesses 31 46 (33) % Loss attributable to non-controlling interest (7) — NM Adjusted EBITDA $ 2,009 $ 1,763 14 % Adjusted EBITDA margin 22.2 % 20.6 % 160 bp NM Not Meaningful The tables below provide a reconciliation of each segment's operating income (loss) to EBITDA and adjusted EBITDA: Year Ended December 31, 2025 (in millions) Water Infrastructure Applied Water Systems Measurement and Control Solutions Water Solutions and Services Operating Income $ 462 $ 312 $ 244 $ 302 Operating margin 17.5 % 16.9 % 11.7 % 12.3 % Loss (gain) attributable to non-controlling interests — (1) 9 (1) Loss from sale of businesses (7) — (24) — Depreciation 44 29 33 159 Amortization 54 4 135 108 Other non-operating expense, excluding interest (6) — (2) (1) EBITDA $ 547 $ 344 $ 395 $ 567 Share-based compensation 10 5 8 7 Restructuring and realignment 73 28 16 14 Special charges 4 — 16 6 Loss from sale of businesses 7 — 24 — (Loss) gain attributable to non-controlling interests $ — $ 1 $ (9) $ 1 Adjusted EBITDA $ 641 $ 378 $ 450 $ 595 Adjusted EBITDA margin 24.3 % 20.4 % 21.6 % 24.1 % 43 Year Ended December 31, 2024 (in millions) Water Infrastructure Applied Water Systems Measurement and Control Solutions Water Solutions Services Operating Income $ 356 $ 271 $ 247 $ 219 Operating margin 13.9 % 15.1 % 13.2 % 9.3 % Gain on remeasurement of previously held equity interest — — 152 — Loss from sale of businesses (40) — — (6) Depreciation 46 25 26 159 Amortization 76 3 106 108 Other non-operating (expense) income, excluding interest (1) (3) (10) 1 EBITDA $ 437 $ 296 $ 521 $ 481 Share-based compensation 12 6 4 11 Restructuring and realignment 30 15 10 35 Special charges 10 — 12 15 Loss from sale of businesses 40 — — 6 Gain on remeasurement of previously held equity interest — — (152) — Adjusted EBITDA $ 529 $ 317 $ 395 $ 548 Adjusted EBITDA margin 20.7 % 17.7 % 21.1 % 23.4 % 2025 versus 2024 (in millions) Water Infrastructure Applied Water Systems Measurement and Control Solutions Water Solutions and Services Operating Income (Loss) $ 106 $ 41 $ (3) $ 83 Operating margin 360 bp 180 bp (150) bp 300 bp Loss (gain) attributable to non-controlling interests — (1) 9 (1) Gain on remeasurement of previously held equity interest — — (152) — Loss from sale of businesses 33 — (24) 6 Depreciation (2) 4 7 — Amortization (22) 1 29 — Other non-operating expense (income), excluding interest (5) 3 8 (2) EBITDA $ 110 $ 48 $ (126) $ 86 Share-based compensation (2) (1) 4 (4) Restructuring and realignment 43 13 6 (21) Special charges (6) — 4 (9) Loss from sale of businesses (33) — 24 (6) Gain on remeasurement of previously held equity interest — — 152 — (Loss) gain attributable to non-controlling interests — 1 (9) 1 Adjusted EBITDA $ 112 $ 61 $ 55 $ 47 Adjusted EBITDA margin 360 bp 270 bp 50 bp 70 bp 44 Water Infrastructure Operating income was $462 million for our Water Infrastructure segment (operating margin of 17.5%) during 2025, an increase of $106 million, or 29.8%, when compared to operating income of $356 million (operating margin of 13.9%) during the prior year, or a total increase of 360 basis points of operating margin.
The period-over-period change resulting from foreign currency translation impacts is determined by translating current period and prior period activity using the same currency conversion rate. • "constant currency" defined as financial results adjusted for foreign currency translation impacts by translating current period and prior period activity using the same currency conversion rate.
The period-over-period change resulting from foreign currency translation impacts is determined by translating current period and prior period activity using the prior period currency conversion rate. • "constant currency" defined as financial results adjusted for foreign currency translation impacts by translating current period and prior period activity using the same currency conversion rate.
For the year ended December 31, 2024, the charges incurred primarily related to actions taken to further streamline our organization in order to strengthen our competitive positioning and the ability to better serve our customers. The charges incurred were across all of our segments, with the majority of the charges impacting the Water Solutions and Services and Water Infrastructure segments.
For the year ended December 31, 2024, the charges incurred primarily related to actions taken to further streamline our organization in order to strengthen our competitive positioning and ability to better serve our customers. The charges incurred were across all of our segments, with the majority of the charges impacting the Water Solutions and Services and Water Infrastructure segments.
In the Measurement and Control Solutions segment, we generate our sales through a combination of long-standing relationships with leading distributors and dedicated channel partners, as well as direct sales depending on the regional availability of distribution channels and the type of product. 38 • Water Solutions and Services provides tailored services and solutions, in collaboration with customers, including on‑demand water, outsourced water, recycle/reuse, pipeline assessment services, specialty dewatering and emergency response service alternatives to improve operational reliability, performance and environmental compliance.
In the Measurement and Control Solutions segment, we generate our sales through a combination of long-standing relationships with leading distributors and dedicated channel partners, as well as direct sales depending on the regional availability of distribution channels and the type of product. • Water Solutions and Services provides tailored services and solutions, in collaboration with customers, including on‑demand water, outsourced water, recycle/reuse, pipeline assessment services, specialty dewatering and emergency response service alternatives to improve operational reliability, performance and environmental compliance.
In these instances, the customer consumes the benefit of the service as Xylem performs. Certain businesses also enter into long-term construction-type sales contracts where revenue is recognized over time. In these instances, revenue is recognized using a measure of progress that applies the input method based on costs incurred in relation to total estimated costs.
In these instances, the customer consumes the benefit of the service as Xylem performs. Certain businesses also enter into long-term construction-type sales contracts where revenue is recognized over time. In these instances, revenue is recognized using a measure of progress that applies an input method based on costs incurred in relation to total estimated costs.
For discussion of these arrangements, see Note 20, “Commitments and Contingencies” of the consolidated financial statements. Critical Accounting Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses and the disclosure of contingent liabilities.
For discussion of these arrangements, see Note 20, “Commitments and Contingencies” of our consolidated financial statements. Critical Accounting Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses and the disclosure of contingent liabilities.
If the estimated fair value of the reporting unit exceeds its carrying value, goodwill is not impaired. If 62 the carrying value of the reporting unit exceeds its estimated fair value, then an impairment charge is recognized for that excess up to the amount of recorded goodwill.
If the estimated fair value of the reporting unit exceeds its carrying value, goodwill is not impaired. If the carrying value of the reporting unit exceeds its estimated fair value, then an impairment charge is recognized for that excess up to the amount of recorded goodwill.
Currently, we have available liquidity of approximately $2.1 billion, consisting of $1.1 billion of cash and $1 billion of available credit facilities as disclosed in Note 15, "Credit Facilities and Debt", of our consolidated financial statements.
Currently, we have available liquidity of approximately $2.5 billion, consisting of $1.5 billion of cash and $1 billion of available credit facilities as disclosed in Note 15, "Credit Facilities and Debt", of our consolidated financial statements.
Significant accounting policies used in the preparation of the consolidated financial statements are discussed in Note 1, “Summary of Significant Accounting Policies,” of the consolidated financial statements.
Significant accounting policies used in the preparation of the consolidated financial statements are discussed in Note 1, “Summary of Significant Accounting Policies,” of our consolidated financial statements.
Funded Status Funded status is derived by subtracting the respective year-end values of the projected benefit obligations from the fair value of plan assets. We estimate that every 25 basis point change in the discount rate impacts the funded status by approximately $11 million.
Funded Status Funded status is derived by subtracting the respective year-end values of the projected benefit obligations from the fair value of plan assets. We estimate that every 25 basis point change in the discount rate impacts the funded status by approximately $12 million.
Our outlook reflects our current visibility and expectations based on the current market environment and other factors. Our ability to meet our expectations is subject to a number of risks, including, but not limited to, those described in "Item 1A.
Our outlook reflects our current visibility and expectations based on the current market environment and other factors. Our ability to meet our expectations is subject to a number of risks, including, but not limited to, those described in "Item 1A. Risk Factors." 52
In addition, our pumps, heat exchangers and controls provide cooling to power plants and manufacturing facilities, circulation for food and beverage processing, as well as boosting systems for agricultural irrigation.
In addition, our pumps, heat exchangers and controls provide cooling to power plants and manufacturing facilities, circulation for food and beverage processing, and boosting systems for agricultural irrigation.
Operating margin included favorable impacts of 150 basis points from a net decrease in special charges, restructuring and realignment costs, and acquired intangible asset amortization as compared to the prior year.
The increase in operating margin included favorable impacts of 160 basis points from a net decrease in restructuring and realignment costs, special charges and acquired intangible asset amortization, as compared to the prior year.
The adjustment recorded at December 31, 2024 and 2023 for these assets represented less than 1% of total plan assets in each respective 64 year. Asset values for other positions were generally measured using market observable prices. We estimate that a 5.00% change in asset values will impact funded status by approximately $11 million.
The adjustment recorded at December 31, 2025 and 2024 for these assets represented less than 1% of total plan assets in each respective year. Asset values for other positions were generally measured using market observable prices. We estimate that a 5.00% change in asset values will impact funded status by approximately $12 million.
New Accounting Pronouncements See Note 2, “Recently Issued Accounting Pronouncements,” of the consolidated financial statements for a complete discussion of recent accounting pronouncements. 2025 Business Outlook We anticipate total revenue growth of up to 2% in 2025, with organic revenue growth anticipated to be in the range of 3% to 4%.
New Accounting Pronouncements See Note 2, “Recently Issued Accounting Pronouncements,” of the consolidated financial statements for a complete discussion of recent accounting pronouncements. 2026 Business Outlook We anticipate total revenue growth of 1% to 3% in 2026, with organic revenue growth anticipated to be in the range of 2% to 4%.
The table below provides the weighted average assumptions used to estimate our defined benefit pension obligations and costs as of and for the years ended 2024 and 2023. 63 2024 2023 U.S. Int’l U.S.
The table below provides the weighted average assumptions used to estimate our defined benefit pension obligations and costs as of and for the years ended 2025 and 2024. 2025 2024 U.S. Int’l U.S.
The use of fair value, rather than a calculated value, could materially affect net periodic pension cost. The weighted average expected long-term rate of return for all of our plan assets to be used in determining net periodic benefit costs for 2025 is estimated at 5.70%.
The use of fair value, rather than a calculated value, could materially affect net periodic pension cost. The weighted average expected long-term rate of return for all of our plan assets to be used in determining net periodic benefit 51 costs for 2026 is estimated at 5.55%.
Restructuring and Asset Impairment Charges Restructuring From time to time, the Company will incur costs related to restructuring actions in order to optimize our cost base and more strategically position itself. Restructuring charges were $55 million in 2024 as compared to $72 million in 2023.
Restructuring and Asset Impairment Charges Restructuring From time to time, the Company will incur costs related to restructuring actions in order to optimize our cost base and more strategically position itself. Restructuring charges were $95 million in 2025 as compared to $55 million in 2024.
Our weighted average discount rate for all pension plans effective January 1, 2025, is 3.97%. We estimate that every 25 basis point change in the discount rate impacts the expense by less than $1 million. The rate of future compensation increase assumption reflects our long-term actual experience and future and near-term outlook.
Our weighted average discount rate for all pension plans effective January 1, 2026, is 4.19%. We estimate that every 25 basis point change in the discount rate impacts the expense by less than $1 million. The rate of future compensation increase assumption reflects our long-term actual experience and future and near-term outlook.
Effective January 1, 2025, our expected rate of future compensation increase is 2.99% for all pension plans. The estimated impact of a 25 basis point change in the expected rate of future compensation is less than $1 million.
Effective January 1, 2026, our expected rate of future compensation increase is 2.98% for all pension plans. The estimated impact of a 25 basis point change in the expected rate of future compensation is less than $1 million.
Typically, large projects require longer lead production cycles and deployment schedules and delays occur from time to time. Total backlog was $5,070 million at December 31, 2024 and $5,088 million at December 31, 2023, a decrease of 0.4%. We anticipate that more than 50% of our total backlog at December 31, 2024 will be recognized as revenue during 2025.
Typically, large projects require longer lead production cycles and deployment schedules and delays occur from time to time. Total backlog was $4,615 million at December 31, 2025 and $5,070 million at December 31, 2024, a decrease of 9.0%. We anticipate that more than 60% of our total backlog at December 31, 2025 will be recognized as revenue during 2026.
Int’l Benefit Obligation Assumptions Discount rate 5.65 % 3.62 % 5.00 % 3.55 % Rate of future compensation increase NM 2.85 % NM 2.87 % Net Periodic Benefit Cost Assumptions Discount rate 5.00 % 3.55 % 5.25 % 4.13 % Expected long-term return on plan assets 6.00 % 5.78 % 6.00 % 5.85 % Rate of future compensation increase NM 2.87 % NM 2.79 % NM Not meaningful.
Int’l Benefit Obligation Assumptions Discount rate 5.42 % 3.95 % 5.65 % 3.62 % Rate of future compensation increase NM 2.87 % NM 2.85 % Net Periodic Benefit Cost Assumptions Discount rate 5.65 % 3.62 % 5.00 % 3.55 % Expected long-term return on plan assets 6.00 % 5.58 % 6.00 % 5.78 % Rate of future compensation increase NM 2.85 % NM 2.87 % NM Not meaningful.
This approach is used for countries whose functional currency is not the U.S. dollar. • "adjusted net income" and "adjusted earnings per share" defined as net income and earnings per share, respectively, adjusted to exclude restructuring and realignment costs, amortization of acquired intangible assets, gain or loss from sale of businesses, gain on remeasurement of previously held equity interest, 39 special charges and tax-related special items, as applicable.
This approach is used for countries whose functional currency is not the U.S. dollar. • "adjusted net income" and "adjusted earnings per share" defined as net income attributable to Xylem and corresponding earnings per share, respectively, adjusted to exclude restructuring and realignment costs, amortization of acquired intangible assets, gain or loss from sale of businesses, special charges and tax-related special items, as applicable.
Excluding special charges, acquired intangible asset amortization, and restructuring and realignment costs, adjusted operating income was $1,373 million (adjusted operating margin of 16.0%) for 2024 as compared to adjusted operating income of $1,072 million (adjusted operating margin of 14.6%) during the prior year.
Excluding restructuring and realignment costs, acquired intangible asset amortization, and special charges, adjusted operating income was $1,612 million (adjusted operating margin of 17.8%) for 2025 as compared to adjusted operating income of $1,373 million (adjusted operating margin of 16.0%) during the prior year.
Except as otherwise indicated or unless the context otherwise requires, “Xylem,” “we,” “us,” “our” and “the Company” refer to Xylem Inc. and its subsidiaries. This section of this Form 10-K generally discusses 2024 and 2023 items and year-to-year comparisons between 2024 and 2023.
Except as otherwise indicated or unless the context otherwise requires, “Xylem,” “we,” “us,” “our” and “the Company” refer to Xylem Inc. and its subsidiaries. This section of this Form 10-K generally discusses 2025 and 2024 items and year-to-year comparisons between 2025 and 2024. Overview Xylem is a leading global water technology company.
Excluding acquired intangible asset amortization, special charges and restructuring and realignment costs, adjusted operating income was $455 million (adjusted operating margin of 17.8%) during 2024 as compared to adjusted operating income of $368 million (adjusted operating margin of 16.6%) during the prior year.
Excluding restructuring and realignment costs, acquired intangible asset amortization, and special charges, adjusted operating income was $583 million (adjusted operating margin of 22.1%) during 2025 as compared to adjusted operating income of $455 million (adjusted operating margin of 17.8%) during the prior year.
Excluding restructuring and realignment costs, acquired intangible asset amortization, and special charges, adjusted operating income was $327 million (adjusted operating margin of 17.5%) during 2024 as compared to adjusted operating income of $213 million (adjusted operating margin of 13.2%) during the prior year.
Excluding acquired intangible asset amortization, restructuring and realignment costs, and special charges, adjusted operating income was $353 million (adjusted operating margin of 16.9%) during 2025 as compared to adjusted operating income of $327 million (adjusted operating margin of 17.5%) during the prior year.
Operating margin increases included favorable impacts of 40 basis points from increases in revenue outpacing a net increase in acquired intangible asset amortization, restructuring and realignment costs, and special charges as compared to the prior year.
Operating margin expansion included unfavorable impacts of 10 basis points from a net increase in restructuring and realignment costs, acquired intangible asset amortization, and special charges as compared to the prior year.
Excluding acquired intangible asset amortization, restructuring and realignment costs, and special charges, adjusted operating income was $368 million (adjusted operating margin of 15.7%) during 2024 as compared to adjusted operating income of $246 million (adjusted operating margin of 14.6%) during the prior year.
Excluding restructuring and realignment costs, special charges, and acquired intangible asset amortization, adjusted operating income was $422 million (adjusted operating margin of 17.1%) during 2025 as compared to adjusted operating income of $368 million (adjusted operating margin of 15.7%) during the prior year.
We currently anticipate making contributions to our pension and post-retirement benefit plans in the range of $17 million to $23 million during 2025. Approximately $5 million of contributions are expected to be made in the first quarter.
We currently anticipate making contributions to our pension and post-retirement benefit plans in the range of $19 million to $25 million during 2026. Approximately $6 million of contributions are expected to be made in the first quarter.
See Note 15, "Credit Facilities and Debt", of our consolidated financial statements for a description of our credit facilities and long-term debt and related interest. Income Tax Expense The income tax provision for 2023 was $26 million at an effective tax rate of 4.1% as compared to $85 million at an effective tax rate of 19.2% in 2022.
See Note 15, "Credit Facilities and Debt", of our consolidated financial statements for a description of our credit facilities and long-term debt and related interest. Income Tax Expense The income tax provision for 2025 was $231 million at an effective tax rate of 19.5% as compared to $197 million at an effective tax rate of 18.1% in 2024.
(c) The tax-related special items in 2023 primarily relate to $70 million of tax benefits from tax exam impacts and $27 million of tax benefits relating to tax law changes. ▪ "adjusted operating expenses" defined as operating expenses adjusted to exclude amortization of acquired intangible assets, restructuring and realignment costs and special charges, as applicable. ▪ "adjusted operating income" defined as operating income, adjusted to exclude restructuring and realignment costs, amortization of acquired intangible assets, gain or loss from sale of businesses, gain on remeasurement of previously held equity interest, special charges and tax-related special items, as applicable, and "adjusted operating margin" defined as adjusted operating income divided by total revenue. ▪ “EBITDA” defined as earnings before interest, taxes, depreciation and amortization expense, "EBITDA margin" defined as EBITDA divided by total revenue, "adjusted EBITDA" reflects the adjustment to EBITDA to exclude share-based compensation charges, restructuring and realignment costs, gain or loss from sale of businesses, gain on remeasurement of previously held equity interest and special charges, and "adjusted EBITDA margin" defined as adjusted EBITDA divided by total revenue. ▪ “realignment costs” defined as costs not included in restructuring costs that are incurred as part of actions taken to reposition our business, including items such as professional fees, severance, relocation, travel, facility set-up and other costs. ▪ “special charges" defined as costs incurred by the Company, such as acquisition and integration related costs, non-cash impairment charges and both operating and non-operating adjustments for costs related to the U.K. pension plan buy-out. ▪ "tax-related special items" defined as tax items, such as tax return versus tax provision adjustments, tax exam impacts, tax law change impacts, excess tax benefits/losses and other discrete tax adjustments. ▪ "free cash flow" defined as net cash from operating activities, as reported in the Statement of Cash Flows, less capital expenditures.
(c) The tax effects of adjustments are calculated using the statutory tax rate, taking into consideration the nature of the item and the relevant taxing jurisdiction. ▪ "adjusted operating expenses" defined as operating expenses adjusted to exclude amortization of acquired intangible assets, restructuring and realignment costs and special charges, as applicable. 35 ▪ "adjusted operating income" defined as operating income, adjusted to exclude restructuring and realignment costs, amortization of acquired intangible assets, gain or loss from sale of businesses, gain on remeasurement of previously held equity interest, special charges and tax-related special items, as applicable, and "adjusted operating margin" defined as adjusted operating income divided by total revenue. ▪ “EBITDA” defined as earnings before interest, taxes, depreciation and amortization expense, "EBITDA margin" defined as EBITDA divided by total revenue, "adjusted EBITDA" reflects the adjustment to EBITDA to exclude share-based compensation charges, restructuring and realignment costs, gain or loss from sale of businesses, gain on remeasurement of previously held equity interest and special charges, and "adjusted EBITDA margin" defined as adjusted EBITDA divided by total revenue. ▪ “realignment costs” defined as costs not included in restructuring costs that are incurred as part of actions taken to reposition our business, including items such as professional fees, severance, relocation, travel, facility set-up and other costs. ▪ “special charges" defined as non-recurring costs incurred by the Company, such as those related to acquisitions and integrations, divestitures and non-cash impairment charges. ▪ "tax-related special items" defined as tax items, such as tax return versus tax provision adjustments, tax exam impacts, tax law change impacts, excess tax benefits/losses and other discrete tax adjustments. ▪ "free cash flow" defined as net cash from operating activities, as reported in the Statement of Cash Flows, less capital expenditures.
Excluding restructuring and realignment costs, adjusted operating income was $286 million (adjusted operating margin of 16.0%) during 2024 as compared to adjusted operating income of $324 million (adjusted operating margin of 17.5%) during the prior year.
Excluding restructuring and realignment costs, adjusted operating income was $340 million (adjusted operating margin of 18.4%) during 2025 as compared to adjusted operating income of $286 million (adjusted operating margin of 16.0%) during the prior year.
Business Combinations. We record acquisitions using the purchase method of accounting. All of the assets acquired, liabilities assumed, contractual contingencies and contingent consideration is recorded at fair value as of the acquisition date. The excess of the purchase price over the estimated fair values of the net tangible and intangible assets acquired is recorded as goodwill.
Business Combinations. We record acquisitions using the acquisition method of accounting. Under this method, we recognize the identifiable assets acquired, liabilities assumed, contractual contingencies, and any contingent consideration at their estimated fair values as of the acquisition date. The excess of the consideration transferred over the fair value of the identifiable net assets acquired is recorded as goodwill.
We recognize revenue on product sales to channel partners, including resellers, distributors or value-added solution providers, at the point in time when the risks and rewards, possession, and title have transferred to the customer, which usually occurs at the point of delivery. Revenue from performance obligations related to services is primarily recognized over time, as the performance obligations are satisfied.
We recognize revenue on product sales to channel partners, including resellers, distributors or value-added solution providers, at the point in time when control is transferred, which is determined based on when the risks and rewards, possession and title have transferred to the customer, which usually occurs at the point of delivery.
Excluding the impact of these items, adjusted operating income was $1,373 million, with an adjusted operating margin of 16.0% in 2024 as compared to adjusted operating income of $1,072 million with an adjusted operating margin of 14.6% in 2023, an increase of 140 basis points.
Excluding the impact of these items, adjusted operating income was $1,612 million, with an adjusted operating margin of 17.8% in 2025 as compared to adjusted operating income of $1,373 million with an adjusted operating margin of 16.0% in 2024, an increase of 180 basis points.
Dollar, the largest being the Canadian Dollar, Chinese Yuan, Chilean Peso, Brazilian Real and the Hungarian Forint, offset by the strengthening in the British Pound. Backlog Backlog includes orders on hand as well as contractual customer agreements at the end of the period. Delivery schedules vary from customer to customer based on their requirements.
Dollar, the largest being the Euro, British Pound and the Swedish Krona, offset by the weakening in the Canadian Dollar. Backlog Backlog includes orders on hand as well as contractual customer agreements at the end of the period. Delivery schedules vary from customer to customer based on their requirements.
We periodically assess the likelihood that we will be able to recover our deferred tax assets and reflect any changes to our estimate of the amount we are more likely than not to realize in the valuation allowance, with a corresponding adjustment to earnings or other comprehensive income, as appropriate.
We periodically assess the likelihood that we will be able to recover our deferred tax assets and reflect any changes to our estimate of the amount we are more likely than not to realize in the valuation allowance, with a corresponding adjustment to earnings or other comprehensive income, as appropriate. 49 In assessing the need for a valuation allowance, we look to the future reversal of existing taxable temporary differences, taxable income in carryback years and the feasibility of tax planning strategies and estimated future taxable income.
Adjusted EBITDA was $529 million (adjusted EBITDA margin of 20.7%) during 2024, an increase of $103 million, or 24.2%, when compared to adjusted EBITDA of $426 million (adjusted EBITDA margin of 19.2%) during the prior year.
Adjusted EBITDA was $641 million (adjusted EBITDA margin of 24.3%) during 2025, an increase of $112 million, or 21.2%, when compared to adjusted EBITDA of $529 million (adjusted EBITDA margin of 20.7%) during the prior year.
The risks around impairment of our assets are included in our risk factor disclosures referenced under “Item 1A. Risk Factors". During the fourth quarter of 2024, we performed our annual impairment assessment and determined that the estimated fair values of our goodwill reporting units were substantially in excess of each of their carrying values.
The risks around impairment of our assets are included in our risk factor disclosures referenced under “Item 1A. Risk Factors". During the fourth quarter of 2025, we performed our annual impairment assessment and determined that the estimated fair values of our goodwill reporting units and indefinite-lived intangible assets exceeded their respective carrying values. As a result, no impairments were recognized.
We constrain the amounts of variable consideration that are included in the transaction price, to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur or when uncertainties around the variable consideration are resolved. Income Taxes.
The method applied is typically based on historical experience and known trends. We limit the amounts of variable consideration that are included in the transaction price, to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur or when uncertainties around the variable consideration are resolved.
Determining the fair value of a reporting unit or an indefinite-lived intangible asset is judgmental in nature and involves the use of significant estimates and assumptions, particularly related to future operating results and cash flows.
Under the market approach, we calculate fair value based on recent sales and selling prices of similar assets. 50 Determining the fair value of a reporting unit or an indefinite-lived intangible asset is judgmental in nature and involves the use of significant estimates and assumptions, particularly related to future operating results and cash flows.
Operating margin declines included unfavorable impacts of 340 basis points from an increase in acquired intangible asset amortization, special charges and restructuring and realignment costs as compared to 2022.
Operating margin expansion included unfavorable impacts of 70 basis points from an increase in restructuring and realignment costs, offset by decreases in acquired intangible asset amortization and special charges as compared to the prior year.
Organic revenue growth was led by the U.S. due to higher volume in the dewatering business. 51 Orders/Backlog An order represents a legally enforceable, written document that includes the scope of work or services to be performed or equipment to be supplied to a customer, the corresponding price and the expected delivery date for the applicable products or services to be provided.
Orders/Backlog An order represents a legally enforceable, written document that includes the scope of work or services to be performed or equipment to be supplied to a customer, the corresponding price and the expected delivery date for the applicable products or services to be provided.
However, future goodwill impairment tests could result in a charge to earnings. We will continue to evaluate goodwill on an annual basis as of the beginning of our fourth quarter and whenever events and changes in circumstances require us to do so. We determined that no material impairment of the indefinite-lived intangibles existed as of the measurement date in 2024.
However, future goodwill or indefinite-lived intangible asset impairment tests could result in a charge to earnings. We will continue to evaluate goodwill and indefinite-lived intangible assets on an annual basis as of the beginning of our fourth quarter and whenever events and changes in circumstances require us to do so. Post-retirement Benefit Plans.
(in millions, except per share data) 2024 2023 Net income and Earnings per share $ 890 $ 3.65 $ 609 $ 2.79 Restructuring and realignment 91 0.37 106 0.49 Acquired intangible amortization 216 0.89 176 0.81 Special charges (a) 57 0.23 138 0.63 Gain on remeasurement of previously held equity interest (152) (0.62) — — Tax-related special items (19) (0.08) (115) (c) (0.53) Loss from sale of business 46 0.19 1 — Tax effects of adjustments (b) (88) (0.36) (90) (0.41) Adjusted net income and Adjusted earnings per share $ 1,041 $ 4.27 $ 825 $ 3.78 Weighted average number of shares - diluted 243.5 218.2 (a) The special charges in the years end December 31, 2024 and 2023 primarily relate to $50 million and $134 million of acquisition and integration related costs, respectively.
(in millions, except per share data) 2025 2024 Net income attributable to Xylem & Earnings per share $ 957 $ 3.92 $ 890 $ 3.65 Restructuring and realignment 133 0.54 91 0.37 Acquired intangible amortization 220 0.90 216 0.89 Special charges (a) 36 0.15 57 0.23 Gain on remeasurement of previously held equity interest — — (152) (0.62) Tax-related special items (b) (52) (0.21) (19) (0.08) Loss from sale of businesses 31 0.13 46 0.19 Tax effects of adjustments (c) (85) (0.35) (88) (0.36) Adjusted net income & Adjusted earnings per share $ 1,240 $ 5.08 $ 1,041 $ 4.27 Weighted average number of shares - diluted 244.0 243.5 (a) The special charges in the years end December 31, 2025 and 2024 primarily relate to $28 million and $50 million, respectively, of acquisition, divestiture and integration related costs.
The increase in adjusted EBITDA margin was primarily due to the same factors impacting the increase in adjusted operating margin; however, adjusted EBITDA was not negatively impacted by the relative impact of increased depreciation and software amortization expense.
The increase in adjusted EBITDA margin was due to the same factors as those impacting the increase in adjusted operating margin; however, adjusted EBITDA did not benefit from the impact of flat depreciation and software amortization expense relative to increased revenue.
Measurement and Control Solutions Operating income was $247 million for our Measurement and Control Solutions segment (operating margin of 13.2%) during 2024, an increase of $114 million, or 85.7%, when compared to operating income of $133 million (operating margin of 8.3%) during the prior year, or a total increase of 490 basis points of operating margin.
Measurement and Control Solutions Operating income was $244 million for our Measurement and Control Solutions segment (operating margin of 11.7%) during 2025, a decrease of $3 million, or 1.2%, when compared to operating income of $247 million (operating margin of 13.2%) during the prior year, or a total decrease of 150 basis points of operating margin.
The following is a roll-forward of employee position eliminations associated with restructuring activities for the years ended December 31, 2024 and 2023: 2024 2023 Planned reductions - January 1 113 102 Additional planned reductions 749 454 Actual reductions and reversals (480) (443) Planned reductions - December 31 382 113 44 As a result of the actions initiated in 2024, we achieved savings of approximately $8 million in 2024 and estimate annual future net savings beginning in 2025 of approximately $55 million, resulting in $47 million of incremental savings from 2024 actions.
The following is a roll-forward of employee position eliminations associated with restructuring activities for the years ended December 31, 2025 and 2024: 2025 2024 Planned reductions - January 1 382 113 Additional planned reductions 1,605 749 Actual reductions and reversals (1,463) (480) Planned reductions - December 31 524 382 As a result of the actions initiated in 2025, we achieved savings of approximately $29 million in 2025 and estimate annual future net savings beginning in 2026 of approximately $80 million to $120 million, the majority of which is expected to be realized in 2026.
The increase in adjusted EBITDA margin was due to the same factors as those impacting the increase in adjusted operating margin; however, adjusted EBITDA was not unfavorably impacted by the increase in depreciation and software amortization expense.
The increase in adjusted EBITDA margin was primarily due to the same factors impacting the increase in adjusted operating margin; however, adjusted EBITDA did not benefit from decreased depreciation and software amortization expense.
Under the income approach, we calculate fair value based on the present value of estimated future cash flows. Under the market approach, we calculate fair value based on recent sales and selling prices of similar assets.
Under the income approach, we calculate fair value based on the present value of estimated future cash flows.
In the Water Infrastructure segment, we provide the majority of our sales directly to customers along with strong applications expertise, while the remaining amount is through distribution partners. • Applied Water serves the water usage applications sector with water pressure boosting systems for heating, ventilation and air conditioning, and for fire protection systems to the residential and commercial building solutions markets.
In the Water Infrastructure segment we reach customers indirectly, through channel partners and distributors, directly and through our service capabilities. • Applied Water serves the water usage applications sector with water pressure boosting systems for heating, ventilation and air conditioning, and for fire protection systems to the residential and commercial building solutions markets.
Liquidity and Capital Resources The following table summarizes our sources and uses of cash: Year Ended December 31, (in millions) 2024 2023 Change Operating activities $ 1,263 $ 837 $ 426 Investing activities (482) (628) 146 Financing activities (615) (157) (458) Foreign exchange (a) (53) 23 (76) Total $ 113 $ 75 $ 38 (a) The impact of foreign exchange is primarily due to weakening of the Euro, Canadian Dollar and the Chilean Peso. 59 Sources and Uses of Liquidity Operating Activities During 2024, net cash provided by operating activities was $1,263 million, compared to $837 million in 2023.
Liquidity and Capital Resources The following table summarizes our sources and uses of cash: Year Ended December 31, (in millions) 2025 2024 Change Operating activities $ 1,241 $ 1,263 $ (22) Investing activities (471) (482) 11 Financing activities (501) (615) 114 Foreign exchange (a) 90 (53) 143 Total $ 359 $ 113 $ 246 (a) The impact of foreign exchange is primarily due to strengthening of the Euro, Canadian Dollar, Chinese Yuan and the Chilean Peso. 46 Sources and Uses of Liquidity Operating Activities During 2025, net cash provided by operating activities was $1,241 million, compared to $1,263 million in 2024.
Adjusted EBITDA was $395 million (adjusted EBITDA margin of 21.1%) during 2024, an increase of $114 million, or 40.6%, when compared to adjusted EBITDA of $281 million (adjusted EBITDA margin of 17.4%) during the prior year.
Adjusted EBITDA was $450 million (adjusted EBITDA margin of 21.6%) during 2025, an increase of $55 million, or 13.9%, when compared to adjusted EBITDA of $395 million (adjusted EBITDA margin of 21.1%) during the prior year.
Applied Water Operating income was $271 million for our Applied Water segment (operating margin of 15.1%) during 2024, a decrease of $39 million, or 12.6%, when compared to operating income of $310 million (operating margin of 16.7%) during the prior year, or a total decrease of 160 basis points of operating margin.
Applied Water Operating income was $312 million for our Applied Water segment (operating margin of 16.9%) during 2025, an increase of $41 million, or 15.1%, when compared to operating income of $271 million (operating margin of 15.1%) during the prior year, or a total increase of 180 basis points of operating margin.
Net income was $890 million (net income margin of 10.4%) during 2024, an increase of $281 million as compared to net income in the prior year of $609 million (net income margin of 8.3%).
Net income attributable to Xylem was $957 (net income margin of 10.6%) during 2025, an increase of $67 million as compared to net income attributable to Xylem in the prior year of $890 million (net income margin of 10.4%).
Margin expansion was offset by 350 basis points of unfavorable impacts driven by 210 basis points of inflation and 80 basis points of increased spending on strategic investments.
Operating margin expansion was partially offset by 450 basis points of unfavorable operating impacts, including of 290 basis points of inflation and 70 basis points of increased spending on strategic investments.
The increase in adjusted EBITDA margin was due to the same factors as those impacting the increase in adjusted operating margin; however, adjusted EBITDA margin was negatively impacted by increased non-operating expense and did not benefit from the relative impact of decreased share-based compensation expense. 49 Water Solutions and Services Operating income was $219 million for our Water Solutions and Services segment (operating margin of 9.3%) during 2024 an increase of $87 million, or 65.9%, when compared to operating income of $132 million (operating margin of 7.8%) during the prior year, or a total increase of 150 basis points of operating margin.
The increase in adjusted EBITDA margin was due to the same factors as those impacting the decrease in adjusted operating margin; however, adjusted EBITDA margin benefitted from a decrease non-operating expenses and was not negatively impacted by the relative impact of increases in depreciation and software amortization expense. 45 Water Solutions and Services Operating income was $302 million for our Water Solutions and Services segment (operating margin of 12.3%) during 2025 an increase of $83 million, or 37.9%, when compared to operating income of $219 million (operating margin of 9.3%) during the prior year, or a total increase of 300 basis points of operating margin.
Adjusted EBITDA was $317 million (adjusted EBITDA margin of 17.7%) during 2024, a decrease of $35 million, or (9.9)%, when compared to adjusted EBITDA of $352 million (adjusted EBITDA margin of 19.0%) during the prior year. The decrease in adjusted EBITDA margin was primarily due to the same factors impacting the decrease in adjusted operating margin.
Adjusted EBITDA was $378 million (adjusted EBITDA margin of 20.4%) during 2025, an increase of $61 million, or 19.2%, when compared to adjusted EBITDA of $317 million (adjusted EBITDA margin of 17.7%) during the prior year. The increase in adjusted EBITDA margin was primarily due to the same factors impacting the increase in adjusted operating margin.
Operating income for 2024 was $1,009 million, reflecting an increase of $357 million, or 54.8%, compared to $652 million in 2023. Operating margin was 11.8% in 2024, up 290 basis points from 8.9% in 2023.
Operating income for 2025 was $1,223 million, reflecting an increase of $214 million, or 21.2%, compared to $1,009 million in 2024. Operating margin was 13.5% in 2025, up 170 basis points from 11.8% in 2024.
(in millions) 2024 2023 Net cash provided by operating activities $ 1,263 $ 837 Capital expenditures (321) (271) Free cash flow $ 942 $ 566 Net cash used in investing activities $ (482) $ (628) Net cash used in financing activities $ (615) $ (157) 40 Executive Summary Xylem reported revenue of $8,562 million for 2024, an increase of $1,198 million, or 16.3%, from $7,364 million reported in 2023.
(in millions) 2025 2024 Net cash provided by operating activities $ 1,241 $ 1,263 Capital expenditures (331) (321) Free cash flow $ 910 $ 942 Net cash used in investing activities $ (471) $ (482) Net cash used in financing activities $ (501) $ (615) Executive Summary Xylem reported revenue of $9,035 million for 2025, an increase of $473 million, or 5.5%, from $8,562 million reported in 2024.
Additionally, the operating margin increase included 870 basis points from favorable operating impacts driven by 340 basis points from productivity savings, 260 basis points of price realization, and 240 basis points from favorable volume.
Additionally, the operating margin increase included 470 basis points from favorable operating impacts driven by 210 basis points of price realization, 100 basis points of productivity savings, 90 basis points of favorable volume, and 50 basis points of decreased spending on investments.
In addition, unanticipated events and circumstances may occur which may affect the accuracy or validity of such estimates. Goodwill and Intangible Assets. We review goodwill and indefinite-lived intangible assets for impairment annually and whenever events or changes in circumstances indicate the carrying value of an asset may not be recoverable.
As a result, actual results may differ materially from the estimates used in acquisition accounting. Goodwill and Intangible Assets. We review goodwill and indefinite-lived intangible assets for impairment annually and whenever events or changes in circumstances indicate the carrying value of an asset may not be recoverable.
Adjusted EBITDA was $548 million (adjusted EBITDA margin of 23.4%) during 2024, an increase of $179 million, or 49%, when compared to adjusted EBITDA of $369 million (adjusted EBITDA margin of 21.9%) during the prior year.
Adjusted EBITDA was $595 million (adjusted EBITDA margin of 24.1%) during 2025, an increase of $47 million, or 8.6%, when compared to adjusted EBITDA of $548 million (adjusted EBITDA margin of 23.4%) during the prior year.
Additionally, operating margin included 490 basis points of expansion from favorable operating impacts, driven by a 270 basis point increase from productivity savings, 130 basis points from price realization, and 80 basis points from favorable volume.
Additionally, operating margin included 540 basis points of expansion from favorable operating impacts, driven by a 330 basis point increase from productivity savings and 190 basis points from price realization. Margin expansion was offset by 360 basis points of unfavorable impacts driven by 240 basis points of inflation and 50 basis points of unfavorable mix.
Operating margin included unfavorable impacts of 350 basis points from increases in special charges, acquired intangible asset 53 amortization, and restructuring and realignment costs as compared to 2022.
The decrease in operating margin included unfavorable impacts of 90 basis points from increased acquired intangible asset amortization, restructuring and realignment costs, and special charges as compared to the prior year. Additionally, the operating margin decrease included 660 basis points from unfavorable operating impacts driven by 270 basis points unfavorable mix and 260 basis points of inflation.
Additionally, operating margin increases included 520 basis points from favorable operating impacts, driven by 270 basis points from productivity savings, 90 basis points of price realization, 60 basis points of favorable mix, and 40 basis points of favorable volume.
Additionally, operating margin increases included 830 basis points from favorable operating impacts, driven by 460 basis points from productivity savings, 230 basis points of price realization, and 70 basis points of favorable mix. Operating margin growth was partially offset by negative operating impacts of 400 basis points including 230 basis points of inflation and 90 basis points of unfavorable volume.
Judgment is required to determine the appropriate unit of account, and we separate out the performance obligations if they are capable of being distinct and are distinct within the context of the contract. The transaction price is adjusted for our estimate of variable consideration, 61 which may include a right of return, discounts, rebates, penalties and retainage.
Judgment is required to determine the appropriate unit of account, and we separate the performance obligations if they are capable of being distinct and are distinct within the context of the contract.
Adjusted EBITDA was $1,763 million (adjusted EBITDA margin of 20.6%) during 2024, an increase of $371 million, or 26.7%, when compared to adjusted EBITDA of $1,392 million (adjusted EBITDA margin of 18.9%) during the prior year.
Adjusted EBITDA was $2,009 million (adjusted EBITDA margin of 22.2%) for 2025, an increase of $246 million, or 14.0%, when compared to adjusted EBITDA of $1,763 million (adjusted EBITDA margin of 20.6%) for the prior year.
These assumptions primarily relate to discount rates, expected long-term rates of return on plan assets, rate of future compensation increases, mortality, years of service and other factors (some of which are disclosed in Note 16, “Post-retirement Benefit Plans,” of the consolidated financial statements).
Company employees around the world participate in numerous defined benefit plans. The determination of projected benefit obligations and the recognition of expenses related to these plans are dependent on various assumptions. These assumptions primarily relate to discount rates, expected long-term rates of return on plan assets, rate of future compensation increases, mortality, years of service and other factors.
Operating margin declines were offset by 840 basis points of favorable impacts, consisting of 440 basis points of price realization, 280 basis points from productivity savings and 120 basis points of favorable volume.
The decrease in operating margin was partially offset by 600 basis points of favorable impacts consisting of 330 basis points of productivity savings, 150 basis points of price realization and 120 basis points of increased volume.
The decrease in operating margin included unfavorable impacts of 10 basis points from a slight increase in restructuring and realignment costs as compared to the prior year. Operating margin also included negative operating impacts of 470 basis points, driven by 220 basis points of inflation, 110 basis points of unfavorable volume, and 80 basis points of unfavorable mix.
The increase in operating margin included unfavorable impacts of 60 basis points from increased restructuring and realignment costs as compared to the prior year. Operating margin also included favorable operating impacts of 690 basis points, driven by 540 basis points of productivity savings and 100 basis points of price realization.
Corporate and other Operating loss was $84 million for corporate and other during 2024, a decrease of $114 million, or 57.6% when comparing to operating loss of $198 million during the prior year. The decrease in operating loss for the year was primarily due to lower special charges and restructuring and realignment costs as compared to the prior year.
Corporate and other Operating loss was $97 million for corporate and other during 2025, an increase of $13 million, or 15.5% when comparing to operating loss of $84 million during the prior year. The increase in operating loss for the year was partially offset by lower special charges as compared to the prior year.
Dollar, the largest being the Canadian Dollar, Chinese Yuan, Chilean Peso, Brazilian Real and the Hungarian Forint, offset by the strengthening in the British Pound. Water Infrastructure Water Infrastructure revenue increased $340 million, or 15.3%, to $2,555 million in 2024 compared to 2023.
Dollar, the largest being the Euro, British Pound and the Swedish Krona, offset by the weakening in the Canadian Dollar. 37 Water Infrastructure Water Infrastructure revenue increased $81 million, or 3.2%, to $2,636 million in 2025 compared to 2024.
The following table illustrates the impact from organic growth, recent acquisitions and divestitures, and foreign currency translation in relation to orders during 2024: Water Infrastructure Applied Water Measurement and Control Solutions Water Solutions and Services Total Xylem (in millions) $ Change % Change $ Change % Change $ Change % Change $ Change % Change $ Change % Change 2023 Orders $ 2,313 $ 1,770 $ 1,670 $ 1,748 $ 7,501 Organic Impact 173 7.5 % 57 3.2 % (3) (0.2) % 122 7.0 % 349 4.7 % Acquisitions/(Divestitures) 243 10.5 % — — % 5 0.3 % 643 36.8 % 891 11.9 % Constant Currency 416 18.0 % 57 3.2 % 2 0.1 % 765 43.8 % 1,240 16.6 % Foreign currency translation (a) (2) (0.1) % (3) (0.2) % — — % (6) (0.3) % (11) (0.1) % Total change in orders 414 17.9 % 54 3.1 % 2 0.1 % 759 43.4 % 1,229 16.4 % 2024 Orders $ 2,727 $ 1,824 $ 1,672 $ 2,507 $ 8,730 (a) Foreign currency translation impact for the year primarily due to the weakening in value of various currencies against the U.S.
An order often takes the form of a customer purchase order or a signed quote from a Xylem business. 38 The following table illustrates the impact from organic growth, recent acquisitions and divestitures, and foreign currency translation in relation to orders during 2025: Water Infrastructure Applied Water Measurement and Control Solutions Water Solutions and Services Total Xylem (in millions) $ Change % Change $ Change % Change $ Change % Change $ Change % Change $ Change % Change 2024 Orders $ 2,727 $ 1,824 $ 1,672 $ 2,507 $ 8,730 Organic Impact (30) (1.1) % 54 3.0 % 157 9.4 % (42) (1.7) % 139 1.6 % Acquisitions/(Divestitures) (60) (2.2) % — — % 30 1.8 % — — % (30) (0.3) % Constant Currency (90) (3.3) % 54 3.0 % 187 11.2 % (42) (1.7) % 109 1.3 % Foreign currency translation (a) 35 1.3 % 15 0.8 % 14 0.8 % 1 0.1 % 65 0.7 % Total change in orders (55) (2.0) % 69 3.8 % 201 12.0 % (41) (1.6) % 174 2.0 % 2025 Orders $ 2,672 $ 1,893 $ 1,873 $ 2,466 $ 8,904 (a) Foreign currency translation impact for the year primarily due to the strengthening in value of various currencies against the U.S.
The calculation of our tax liabilities involves dealing with uncertainties in the application of complex tax laws in a multitude of jurisdictions across our global operations.
We have not recorded any deferred taxes on the amounts that the Company currently does not intend to repatriate. The determination of deferred taxes on this amount is not practicable. The calculation of our tax liabilities involves dealing with uncertainties in the application of complex tax laws in a multitude of jurisdictions across our global operations.
To estimate variable consideration, we apply the expected value method or the most likely amount method, based on whichever method most appropriately predicts the amount of consideration we expect to be entitled to. The method applied is typically based on historical experience and known trends.
The transaction price is adjusted for our estimate of variable consideration which may include a right of return, discounts, rebates, penalties, retainage, and warranties. To estimate variable consideration, we apply the expected value or the most likely amount method, based on whichever method most appropriately predicts the amount of consideration we expect to receive.
The increase at constant currency consists of revenue from acquisitions of $786 million and an increase in organic revenue of $424 million, reflecting organic growth across all major geographic regions, with organic growth in the Measurement and Control Solutions, Water Infrastructure, and Water Solutions and Services segments, more than offsetting organic declines in the Applied Water segment. 41 The following table illustrates the impact from organic growth, recent acquisitions and divestitures, and foreign currency translation in relation to revenue during 2024: Water Infrastructure Applied Water Measurement and Control Solutions Water Solutions and Services Total Xylem (in millions) $ Change % Change $ Change % Change $ Change % Change $ Change % Change $ Change % Change 2023 Revenue $ 2,215 $ 1,853 $ 1,612 $ 1,684 $ 7,364 Organic Growth 123 5.5 % (58) (3.2) % 255 15.9 % 104 6.2 % 424 5.8 % Acquisitions/(Divestitures) 221 10.0 % — — % 4 0.2 % 561 33.3 % 786 10.7 % Constant Currency 344 15.5 % (58) (3.2) % 259 16.1 % 665 39.5 % 1,210 16.5 % Foreign currency translation (a) (4) (0.2) % (2) (0.1) % — — % (6) (0.3) % (12) (0.2) % Total change in revenue 340 15.3 % (60) (3.3) % 259 16.1 % 659 39.2 % 1,198 16.3 % 2024 Revenue $ 2,555 $ 1,793 $ 1,871 $ 2,343 $ 8,562 (a) Foreign currency translation impact for the year primarily due to the weakening in value of various currencies against the U.S.
The following table illustrates the impact from organic growth, recent acquisitions and divestitures, and foreign currency translation in relation to revenue during 2025: Water Infrastructure Applied Water Measurement and Control Solutions Water Solutions and Services Total Xylem (in millions) $ Change % Change $ Change % Change $ Change % Change $ Change % Change $ Change % Change 2024 Revenue $ 2,555 $ 1,793 $ 1,871 $ 2,343 $ 8,562 Organic Growth 88 3.4 % 42 2.3 % 172 9.2 % 117 5.0 % 419 4.9 % Acquisitions/(Divestitures) (48) (1.8) % — — % 30 1.6 % 1 0.1 % (17) (0.2) % Constant Currency 40 1.6 % 42 2.3 % 202 10.8 % 118 5.1 % 402 4.7 % Foreign currency translation (a) 41 1.6 % 14 0.8 % 13 0.7 % 3 0.1 % 71 0.8 % Total change in revenue 81 3.2 % 56 3.1 % 215 11.5 % 121 5.2 % 473 5.5 % 2025 Revenue $ 2,636 $ 1,849 $ 2,086 $ 2,464 $ 9,035 (a) Foreign currency translation impact for the year primarily due to the strengthening in value of various currencies against the U.S.
Favorable impacts were partially offset by 380 basis points of unfavorable impacts driven by 150 basis points of inflation, and 150 basis points of increased spending on strategic investments.
These impacts were partially offset by 290 basis points of unfavorable operating impacts, driven by 190 basis points of inflation and 60 basis points of unfavorable mix.
Organic revenue for the treatment applications grew by $44 million, led by infrastructure projects in the U.S. and emerging markets. Applied Water Applied Water revenue decreased $60 million, or 3.3%, to $1,793 million in 2024 compared to 2023.
Organic revenue for the transport applications grew by $36 million, led by strong price realization in the U.S., which was partially offset by reduced volume and reduced backlog execution due to softness in the emerging markets. Applied Water Applied Water revenue increased $56 million, or 3.1%, to $1,849 million in 2025 compared to 2024.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeWe estimate that a 10% movement in interest rates would not have a material economic impact on our financial position and results of operations. Based on the current interest rate market we do not anticipate material risk associated with our debt refinancing within the target time frame of maturity.
Biggest changeBased on the current interest rate market we do not anticipate material risk associated with our debt refinancing within the target time frame of maturity. Commodity Price Exposures For a discussion of risks relating to commodity prices, refer to “Item 1A. Risk Factors.” 53
Our principal foreign currency transaction exposures primarily relate to the Euro, Swedish Krona, British Pound, Canadian Dollar, Australian Dollar, and Polish Zloty. We estimate that a hypothetical 10% movement in foreign currency exchange rates would not have a material economic impact to Xylem’s financial position and results of operations.
Our principal foreign currency transaction exposures primarily relate to the Euro, Swedish Krona, Canadian Dollar, Polish Zloty, British Pound and Australian Dollar. We estimate that a hypothetical 10% movement in foreign currency exchange rates would not have a material economic impact to Xylem’s financial position and results of operations.
Additionally, we are subject to foreign exchange translation risk due to changes in the value of foreign currencies in relation to our reporting currency, the U.S. Dollar. The translation risk is primarily concentrated in the exchange rate between the U.S. Dollar and the Euro, British Pound, Chinese Yuan, Canadian Dollar, Australian Dollar, Swedish Krona, and Indian Rupee. As the U.S.
Additionally, we are subject to foreign exchange translation risk due to changes in the value of foreign currencies in relation to our reporting currency, the U.S. Dollar. The translation risk is primarily concentrated in the exchange rate between the U.S. Dollar and the Euro, Canadian Dollar, British Pound, Chinese Yuan, Swedish Krona and Indian Rupee. As the U.S.
Interest Rate Risk As of December 31, 2024, our long-term debt portfolio is primarily comprised of four series of fixed-rate senior notes that total approximately $1.9 billion. The senior notes are not exposed to interest rate risk as the bonds are at a fixed rate until maturity.
Interest Rate Risk As of December 31, 2025, our long-term debt portfolio is primarily comprised of four series of fixed-rate senior notes that total approximately $1.9 billion. The senior notes are not exposed to interest rate risk as the bonds are at a fixed rate until maturity.
Foreign Currency Exchange Rate Risk Approximately 43% of our 2024 revenues were from customers in various locations outside the U.S. Our economic foreign currency risk primarily relates to receipts from customers, payments to suppliers and intercompany transactions denominated in foreign currencies.
Foreign Currency Exchange Rate Risk Approximately 42% of our 2025 revenues were from customers in various locations outside the U.S. Our economic foreign currency risk primarily relates to receipts from customers, payments to suppliers and intercompany transactions denominated in foreign currencies.
In addition to the senior notes, we also have $74 million in equipment financings with fixed interest rates. Our long-term debt portfolio also includes $32 million of variable rate debt, comprised entirely of the $32 million for equipment financings.
In addition to the senior notes, we also have $27 million in equipment financings with fixed interest rates. Our debt portfolio also includes $21 million in variable rate short-term loans, however, we estimate that a 1% movement in interest rates would not have a material economic impact on our financial position and results of operations.
Removed
Commodity Price Exposures For a discussion of risks relating to commodity prices, refer to “Item 1A. Risk Factors.” 66

Other XYL 10-K year-over-year comparisons