Xylem Inc. Q3 2026 Earnings Recap

Xylem shares fell 14.2% after earnings, as revenue came in below management’s expectations and the near-term outlook was pressured by slower project timing and cautious utility spending. Strong orders and earnings in line with the company’s guide were not enough to offset the revenue shortfall.

Key Takeaways

• Organic revenue was roughly flat year over year; management said results fell short of expectations, citing lower MCS book-and-ship volume and delayed WSS capital projects.
• Orders rose 10%, driven by water and gas metering strength in MCS and data center orders in AW; ending backlog increased 13% to $5.5 billion, up about $200 million sequentially.
• Book-to-bill was above one, while earnings were in line with the company’s guide.
• Xylem announced plans to divest Applied Water International and Specialty Flow Control and move from four segments to three beginning in 2027, citing a focus on higher-growth, higher-margin markets.