Xylem Inc. stock research
FY2025 Q4
Xylem (XYL) Gross Margin — Quarter Ended Dec 31, 2025
Revenue and gross profit both increased compared to the prior quarter and the same quarter last year. Gross margin remained stable sequentially and improved year-over-year, reflecting a consistent relationship between revenue growth and cost of revenue.
Gross margin takeaway
Quarter ended Dec 31, 2025 · FY2025 Q4
Revenue and gross profit both increased compared to the prior quarter and the same quarter last year. Gross margin remained stable sequentially and improved year-over-year, reflecting a consistent relationship between revenue growth and cost of revenue.
- The gross margin was unchanged from the prior quarter at the same level, while year-over-year it strengthened. This indicates that cost of revenue grew at a similar pace to revenue sequentially, and at a slower pace compared to the prior year.
- Sequentially, revenue and gross profit were higher, cost of revenue was higher, and gross margin was stable. Year-over-year, all three metrics were higher, with gross margin improved.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
38.9%
Gross profit
$932.0M
Revenue
$2.4B
Cost of revenue
$1.5B
Quarter-over-quarter change
-0.1 pts
Year-over-year change
+0.9 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 |
|---|---|---|---|---|
| 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% |
| Dec 31, 2025 | $2.4B | $932.0M | $1.5B | 38.9% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Sep 30, 2025
-0.1 pts
Year-over-year change
Dec 31, 2024
+0.9 pts
What the margin says
Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.
The gross margin was unchanged from the prior quarter at the same level, while year-over-year it strengthened. This indicates that cost of revenue grew at a similar pace to revenue sequentially, and at a slower pace compared to the prior year.
Sequentially, revenue and gross profit were higher, cost of revenue was higher, and gross margin was stable. Year-over-year, all three metrics were higher, with gross margin improved.
Monitor the impact of increased spending on long-term outsourced water projects and inventory management initiatives on cost of revenue, as noted in the filing.