Xylem Inc. stock research
FY2025 Q1
Xylem (XYL) Gross Margin — Quarter Ended Mar 31, 2025
Revenue decreased from the prior quarter but increased from the same quarter last year. Gross profit followed a similar pattern, while cost of revenue declined sequentially and rose year-over-year, resulting in a gross margin that weakened sequentially but improved slightly compared to the prior year.
Gross margin takeaway
Quarter ended Mar 31, 2025 · FY2025 Q1
Revenue decreased from the prior quarter but increased from the same quarter last year. Gross profit followed a similar pattern, while cost of revenue declined sequentially and rose year-over-year, resulting in a gross margin that weakened sequentially but improved slightly compared to the prior year.
- The sequential weakening of gross margin was primarily due to a higher ratio of cost of revenue to revenue compared to the prior quarter. Year-over-year, the ratio was slightly lower, supporting a modest improvement.
- Compared to the immediately preceding quarter, gross margin weakened as revenue and gross profit both declined, with cost of revenue declining less proportionally. Compared to the same quarter one year earlier, gross margin improved modestly as revenue and gross profit increased while cost of revenue rose at a slower pace.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
37.1%
Gross profit
$768.0M
Revenue
$2.1B
Cost of revenue
$1.3B
Quarter-over-quarter change
-0.9 pts
Year-over-year change
+0.1 pts
Quarterly gross margin trend
A four-quarter view of the revenue and direct-cost bridge behind gross margin.
| Period | Revenue | Gross profit | Cost of revenue | Gross margin |
|---|---|---|---|---|
| Jun 30, 2024 | $2.2B | $819.0M | $1.4B | 37.8% |
| Sep 30, 2024 | $2.1B | $784.0M | $1.3B | 37.3% |
| Dec 31, 2024 | $2.3B | $857.0M | $1.4B | 38.0% |
| Mar 31, 2025 | $2.1B | $768.0M | $1.3B | 37.1% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Dec 31, 2024
-0.9 pts
Year-over-year change
Mar 31, 2024
+0.1 pts
What the margin says
Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.
The sequential weakening of gross margin was primarily due to a higher ratio of cost of revenue to revenue compared to the prior quarter. Year-over-year, the ratio was slightly lower, supporting a modest improvement.
Compared to the immediately preceding quarter, gross margin weakened as revenue and gross profit both declined, with cost of revenue declining less proportionally. Compared to the same quarter one year earlier, gross margin improved modestly as revenue and gross profit increased while cost of revenue rose at a slower pace.
Monitor the trajectory of accounts receivable and inventory levels, as the company noted increased receivables due to volume and timing, and ongoing inventory management initiatives.