Cash conversion remains inconsistent, highlighted by a $314 million working capital outflow in 2025Q1 and an aggressive $563 million share repurchase program in 2026Q1 that may pressure liquidity.
| Metric | TTM | Dec'25 | Dec'24 | Dec'23 | Dec'22 | Dec'21 | Dec'20 | Dec'19 | Dec'18 | Dec'17 | Dec'16 | Dec'15 | Dec'14 | Dec'13 | Dec'12 | Dec'11 | Dec'10 | Dec'09 |
|---|
| Cash from Operations | 1.32B | 1.24B | 1.26B | 837M | 596M | 538M | 824M | 839M | 586M | 686M | 497M | 464M | 416M | 324M | 396M | 449M | 395M | 370M |
| Operating CF Margin % | - | 13.74% | 14.75% | 11.37% | 10.79% | 10.36% | 16.9% | 15.98% | 11.25% | 14.57% | 13.18% | 12.7% | 10.62% | 8.44% | 10.45% | 11.81% | 12.34% | 12.99% |
| Operating CF Growth % | 243.37% | -1.74% | 50.9% | 40.44% | 10.78% | -34.71% | -1.79% | 43.17% | -14.58% | 38.03% | 7.11% | 11.54% | 28.4% | -18.18% | -11.8% | 13.67% | 6.76% | - |
| Net Income | 973M | 950M | 890M | 609M | 355M | 427M | 254M | 401M | 549M | 330M | 260M | 340M | 337M | 228M | 297M | 279M | 329M | 263M |
| Depreciation & Amortization | 570M | 575M | 562M | 436M | 236M | 245M | 251M | 257M | 261M | 234M | 151M | 133M | 142M | 150M | 142M | 137M | 92M | 70M |
| Stock-Based Compensation | 54M | 53M | 56M | 60M | 37M | 33M | 26M | 29M | 30M | 21M | 18M | 15M | 18M | 27M | 22M | 13M | 9M | 9M |
| Deferred Taxes | -35M | -35M | -36M | -79M | -64M | 10M | -31M | -77M | -47M | -33M | 14M | -9M | -29M | -14M | 1M | 8M | -31M | -36M |
| Other Non-Cash Items | -8M | 31M | -97M | 22M | 134M | -41M | 116M | 170M | -31M | -7M | -7M | -30M | -44M | -21M | -38M | 5M | -7M | -9M |
| Working Capital Changes | -235M | -333M | -112M | -211M | -102M | -136M | 208M | 59M | -176M | 141M | 61M | 15M | -8M | -46M | -28M | 7M | 3M | 73M |
| Change in Receivables | -65M | -55M | -107M | 0 | -192M | -72M | 230M | -21M | -109M | 53M | -6M | -38M | -9M | -9M | -43M | 48M | -55M | 31M |
| Change in Inventory | 14M | 23M | -41M | 41M | -147M | -167M | -5M | 47M | -97M | 27M | -15M | 23M | -49M | -39M | 5M | -18M | 7M | 62M |
| Change in Payables | -19M | -22M | 64M | 22M | 117M | 81M | -39M | 29M | 51M | 50M | 61M | 20M | 17M | 4M | -4M | -9M | 41M | -38M |
| Cash from Investing | -532M | -471M | -482M | -628M | -191M | -183M | -169M | -231M | -643M | -181M | -1.89B | -132M | -86M | -199M | -147M | -423M | -1.09B | -84M |
| Capital Expenditures | -350M | -331M | -321M | -271M | -208M | -208M | -183M | -226M | -237M | -170M | -124M | -117M | -119M | -126M | -112M | -126M | -94M | -62M |
| CapEx % of Revenue | 3.85% | 3.66% | 3.75% | 3.68% | 3.77% | 4% | 3.75% | 4.31% | 4.55% | 3.61% | 3.29% | 3.2% | 3.04% | 3.28% | 2.95% | 3.31% | 2.94% | 2.18% |
| Acquisitions | -240M | -200M | -188M | -370M | 1M | 10M | 183M | -18M | -411M | -17M | -1.78B | -17M | 30M | -81M | -41M | -309M | -1B | -33M |
| Investments | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - |
| Other Investing | 110M | 101M | 3M | 13M | 1M | -210M | -181M | 0 | 5M | 7M | 20M | 2M | 3M | 8M | 6M | 12M | 5M | 11M |
| Cash from Financing | -1.07B | -501M | -615M | -157M | -790M | -855M | 473M | -177M | -40M | -421M | 1.03B | -262M | -147M | -100M | -74M | 172M | 745M | -292M |
| Debt Issued (Net) | -82M | -81M | -284M | 118M | -527M | -600M | 704M | 27M | 164M | -282M | 1.13B | -3M | 52M | 37M | -1M | 1.2B | 0 | 0 |
| Equity Issued (Net) | -545M | 5M | -20M | -25M | -52M | -68M | -61M | -40M | -59M | -25M | -4M | -179M | -134M | -51M | 11M | 0 | 0 | 0 |
| Dividends Paid | -399M | -391M | -350M | -299M | -217M | -203M | -188M | -174M | -152M | -130M | -112M | -102M | -94M | -87M | -75M | -19M | 0 | 0 |
| Share Repurchases | -565M | -15M | -20M | -25M | -52M | -68M | -61M | -40M | -59M | -25M | -4M | -179M | -134M | -73M | -13M | 0 | 0 | 0 |
| Other Financing | -42M | -34M | 39M | 49M | 6M | 16M | 18M | 10M | 7M | 16M | 24M | 22M | 29M | 1M | -9M | -1B | 745M | -292M |
| Net Change in Cash | -251M | 358M | 102M | 75M | -405M | -526M | 1.15B | 428M | -118M | 106M | -372M | 17M | 130M | 29M | 186M | 187M | 50M | 0 |
| Free Cash Flow | 966M | 910M | 942M | 566M | 388M | 330M | 641M | 613M | 349M | 516M | 373M | 347M | 297M | 198M | 284M | 323M | 301M | 308M |
| FCF Margin % | 10.63% | 10.07% | 11% | 7.69% | 7.03% | 6.35% | 13.15% | 11.68% | 6.7% | 10.96% | 9.89% | 9.5% | 7.58% | 5.16% | 7.49% | 8.49% | 9.4% | 10.81% |
| FCF Growth % | 8.66% | -3.4% | 66.43% | 45.88% | 17.58% | -48.52% | 4.57% | 75.64% | -32.36% | 38.34% | 7.49% | 16.84% | 50% | -30.28% | -12.07% | 7.31% | -2.27% | - |
| FCF per Share | 3.97 | 3.73 | 3.87 | 2.59 | 2.14 | 1.82 | 3.54 | 3.38 | 1.93 | 2.85 | 2.07 | 1.91 | 1.61 | 1.06 | 1.53 | 1.74 | 1.63 | 1.67 |
| FCF Conversion (FCF/Net Income) | 0.99x | 1.30x | 1.42x | 1.37x | 1.68x | 1.26x | 3.24x | 2.09x | 1.07x | 2.07x | 1.91x | 1.36x | 1.23x | 1.42x | 1.33x | 1.61x | 1.20x | 1.41x |
| Interest Paid | 60M | 61M | 67M | 69M | 76M | 99M | 77M | 77M | 78M | 78M | 49M | 52M | 51M | 51M | 53M | 0 | 0 | 0 |
| Taxes Paid | 258M | 267M | 219M | 211M | 91M | 83M | 41M | 107M | 75M | 57M | 78M | 75M | 81M | 65M | 104M | 64M | 110M | 52M |
Municipal budget cycle sensitivity
According to the provided quarterly data, Xylem's OCF/NI ratio exhibits extreme volatility, ranging from a low of 0.20 in 2025Q1 to a high of 1.76 in 2024Q4, which suggests that reported net income is frequently decoupled from the actual cash-generating capacity of the underlying business operations.
The significant variance in the conversion ratio appears to be driven by the timing of large-scale municipal project milestones rather than fundamental shifts in profitability. Investors should monitor whether this disconnect reflects aggressive revenue recognition practices or simply the inherent lumpiness of long-cycle industrial contracts.
As reported in financial statements, Xylem's FCF margins have fluctuated wildly between -1.8% and 21.1% over the last ten quarters, indicating that the company's ability to generate surplus cash is highly sensitive to seasonal working capital requirements and the timing of major capital expenditures.
The recurring pattern of negative or near-zero FCF in the first quarter of each year suggests a structural reliance on year-end cash inflows. This trajectory warrants further investigation into whether the business can achieve consistent cash conversion as it pivots toward a more recurring, service-oriented revenue model.
Based on the reported figures, Xylem experienced a significant cash outflow of $314 million in 2025Q1 due to working capital changes, highlighting a recurring trend where seasonal inventory builds and project-related receivables frequently overwhelm the company's ability to generate positive operating cash flow during early fiscal periods.
The persistent negative working capital swings suggest that the company is effectively financing its municipal clients through extended payment terms or inventory pre-positioning. This dynamic may indicate that Xylem lacks the bargaining power to optimize its cash conversion cycle despite its dominant market position in water infrastructure.
Data from recent filings shows that Xylem utilized $563 million for share repurchases in 2026Q1 alone, a move that appears aggressive given the simultaneous compression in free cash flow and the ongoing integration requirements of the Evoqua acquisition, potentially signaling a prioritization of shareholder returns over liquidity preservation.
While the company maintains a fortress balance sheet, the scale of recent buybacks relative to quarterly FCF generation may limit the firm's flexibility to pursue further strategic acquisitions. Investors should monitor whether this capital deployment strategy is sustainable if municipal infrastructure spending slows in response to higher interest rates.
Quick answers to the most common questions about buying XYL stock.
Xylem Inc. (XYL) generated $1.24B in net cash from operating activities in 2025. This reflects the cash generated directly from core business operations.
Xylem Inc. (XYL) generated $910.0M in free cash flow in 2025. Free cash flow is the cash left over after capital expenditures, which can be used to pay dividends, repurchase shares, or pay down debt.
Xylem Inc. (XYL) spent $331.0M on capital expenditures in 2025. CapEx represents the cash invested in physical assets like property, plant, and equipment to maintain or grow the business.
In 2025, Xylem Inc. (XYL) returned $391.0M to shareholders via cash dividends and spent $15.0M on share repurchases. This shows the company's commitment to returning capital to its equity investors.