Xylem, a global leader in water technology, has reported robust financial results for the second quarter of 2024, significantly boosting its revenue and earnings forecasts for the full year. The company saw its revenue soar to $2.2 billion, marking a 26% increase on a reported basis and a 9% rise organically.
The company’s earnings per share (EPS) climbed to $0.80, a substantial 78% increase from the previous year, while the adjusted EPS saw an 11% rise to $1.09. This performance has prompted Xylem to raise its full-year revenue guidance to $8.55 billion, reflecting an approximate 16% increase. The organic revenue growth outlook has also been revised upwards to 5-6%, from the previous range of 4-6%.
Matthew Pine, Xylem’s President and CEO, said: "The team continued to build on Xylem’s momentum and outperformed expectations on all metrics in the second quarter. Healthy demand, combined with the team’s disciplined operational execution, delivered significant margin expansion in the quarter. Evoqua integration and synergies are also well on track."
Pine further expressed confidence in the company’s outlook despite potential macroeconomic challenges in the latter half of the year. "Our diversified portfolio of mission-critical solutions is ideally positioned to meet global demand from intensifying water challenges," he added.
Xylem reported a net income of $194 million, or $0.80 per share, with a net income margin of 8.9%, an increase of 360 basis points. Adjusted net income stood at $266 million, or $1.09 per share, excluding restructuring and realignment costs, amortization of acquired intangible assets, and other special items.
The company’s second-quarter adjusted earnings before interest, tax, depreciation, and amortization (EBITDA) margin reached 20.8%, up 170 basis points year-over-year. This improvement was driven by productivity savings, volume, and pricing, which outweighed the impacts of inflation, strategic investments, and mix.
Looking ahead, Xylem has raised its full-year 2024 revenue projection to $8.55 billion, up 16% on a reported basis and 5-6% organically. The adjusted EBITDA margin is now expected to be approximately 20.5%, an increase from the previous 20.0% guidance. The adjusted EPS forecast has been updated to a range of $4.18 to $4.28, up from the prior $4.10 to $4.25. Additionally, the company anticipates at least a 120% free cash flow conversion to net income for the year, up from the earlier guidance of 115%.
