Xylem Inc. stock research
FY2026 Q1
Xylem (XYL) Gross Margin — Quarter Ended Mar 31, 2026
Revenue and cost of revenue both decreased from the prior quarter, resulting in lower gross profit and a weakened gross margin. Compared to the same quarter last year, revenue was stable while cost of revenue increased slightly, but gross profit rose and gross margin improved.
Gross margin takeaway
Quarter ended Mar 31, 2026 · FY2026 Q1
Revenue and cost of revenue both decreased from the prior quarter, resulting in lower gross profit and a weakened gross margin. Compared to the same quarter last year, revenue was stable while cost of revenue increased slightly, but gross profit rose and gross margin improved.
- The year-over-year improvement in gross margin is the most notable observable driver, as gross profit increased while cost of revenue rose at a slower pace relative to revenue.
- Compared to the immediately preceding quarter, revenue, gross profit, and cost of revenue were all lower, and gross margin weakened. Compared to the same quarter one year earlier, revenue was similar, cost of revenue was slightly higher, gross profit was higher, and gross margin improved.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
37.8%
Gross profit
$803.0M
Revenue
$2.1B
Cost of revenue
$1.3B
Quarter-over-quarter change
-1.1 pts
Year-over-year change
+0.7 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 |
|---|---|---|---|---|
| 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% |
| Mar 31, 2026 | $2.1B | $803.0M | $1.3B | 37.8% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Dec 31, 2025
-1.1 pts
Year-over-year change
Mar 31, 2025
+0.7 pts
What the margin says
Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.
The year-over-year improvement in gross margin is the most notable observable driver, as gross profit increased while cost of revenue rose at a slower pace relative to revenue.
Compared to the immediately preceding quarter, revenue, gross profit, and cost of revenue were all lower, and gross margin weakened. Compared to the same quarter one year earlier, revenue was similar, cost of revenue was slightly higher, gross profit was higher, and gross margin improved.
Monitor the impact of increased working capital investment and higher restructuring payments on cost of revenue, as noted in the liquidity and capital resources discussion.
Peer context
Latest available gross margins for related public companies.
| Company | Gross margin |
|---|---|
| Xylem Inc. (XYL) | 37.8% |