Xylem Inc. stock research
FY2025 Q3
Xylem (XYL) Gross Margin — Quarter Ended Sep 30, 2025
Revenue was unchanged from the prior quarter but higher than a year ago. Gross profit decreased slightly from the prior quarter but increased year-over-year, while cost of revenue remained stable sequentially and rose year-over-year, resulting in a gross margin that improved year-over-year and held steady sequentially.
Gross margin takeaway
Quarter ended Sep 30, 2025 · FY2025 Q3
Revenue was unchanged from the prior quarter but higher than a year ago. Gross profit decreased slightly from the prior quarter but increased year-over-year, while cost of revenue remained stable sequentially and rose year-over-year, resulting in a gross margin that improved year-over-year and held steady sequentially.
- The most notable change is the year-over-year improvement in gross margin, as revenue increased while cost of revenue increased at a slower pace. Sequentially, the margin was essentially stable despite a slight decline in gross profit.
- Compared to the prior quarter, revenue was flat, gross profit slightly lower, and gross margin marginally higher. Compared to the same quarter last year, revenue, gross profit, and gross margin all improved.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
38.9%
Gross profit
$883.0M
Revenue
$2.3B
Cost of revenue
$1.4B
Quarter-over-quarter change
+0.2 pts
Year-over-year change
+1.7 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 |
|---|---|---|---|---|
| Dec 31, 2024 | $2.3B | $857.0M | $1.4B | 38.0% |
| Mar 31, 2025 | $2.1B | $768.0M | $1.3B | 37.1% |
| Jun 30, 2025 | $2.3B | $892.0M | $1.4B | 38.8% |
| Sep 30, 2025 | $2.3B | $883.0M | $1.4B | 38.9% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Jun 30, 2025
+0.2 pts
Year-over-year change
Sep 30, 2024
+1.7 pts
What the margin says
Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.
The most notable change is the year-over-year improvement in gross margin, as revenue increased while cost of revenue increased at a slower pace. Sequentially, the margin was essentially stable despite a slight decline in gross profit.
Compared to the prior quarter, revenue was flat, gross profit slightly lower, and gross margin marginally higher. Compared to the same quarter last year, revenue, gross profit, and gross margin all improved.
Monitor the impact of inventory management initiatives on cost of revenue and gross margin, as noted in the liquidity discussion.