XYL - Earnings call transcript Q2 2018

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Operator

Welcome to the Xylem Second Quarter 2018 Earnings Conference Call. At this time, all participants have been placed on a listen-only mode and the floor will be open for your questions following the presentation. I would now like to turn the call over to Matt Latino, Senior Director of Investor Relations. Please go ahead, sir.

Matthew Latino

Thank you, and good morning, everyone, and welcome to Xylem's Second Quarter 2018 Earnings Conference Call. Chief Rajkowski. Patrick are Financial and today Mark Officer, me Executive Decker; Officer, Chief With provide perspective will discuss They their the results quarter full and XXXX year outlook. on Xylem's second

related remarks, the will the prepared queue. I'll you and one that keep ask information then a our Following follow-up call. address questions and covered to we on to question please the return to

website call a Investors on reminder, the this available and www.xylem.com. our slide section XXXX-XXX. and XXX-XXX-XXXX available a are be by number confirmation our replay of As accompanied August replay code the presentation in of will note, today's is at A webcast is the XXth. call Please midnight until

of to under Please our Investor Events. Additionally, number slide heading, website playback call the be section available the turn will for X. Investors via the

Form company XX-K events to actual no those anticipated. or subsequent slide and any to the some reflect We X. update undertakes to statements described and will future. statements most to annual future results forward-looking subject call, future we including recent in publicly may to obligation differ or or today's note that circumstances, filed These occur materially references from SEC. subsequent with Please in on and on anticipate could those developments the report factors in events such the as reports that are or will events Xylem's make Please statements uncertainties forward-looking risks turn

performance including We have a metrics. non-GAAP provided GAAP and our you of metrics with summary key

included non-GAAP for an indicated, will presentation. section all today's basis adjusted unless you in financials call, of appendix been and of the have purposes on the reconciled references and are For otherwise be

the to And Decker. to I CEO, Now, will X. Patrick please call slide over turn our turn

Patrick K. Decker

top second Thanks, Matt. the for quarter results of discuss Good strong everyone. us results. at our joining both bottom Thanks and line. delivered to We quarter another today morning,

disciplined also in markets. with quite actions, pricing pleased their key in led leveraging share the Our gains positions approach our I'm very achieved. again were we've teams' strong and They in strong to traction end to execution marketplace, the already

contributed broadly one expanded factors and our to businesses full built strong margins The we've across these the Importantly, updated excellent which expectations operational continuing double-digit our in earnings and momentum supports year. is for we an growth. delivered performance,

read In single- Let broad-based growth. me few solid we making second consecutive orders delivered across orders in now quarter, second the third and all X% growth to revenue a major double-digit you our of details. this again of Orders the high of the increased the quarter markets. quarter,

regard a Infrastructure Water business, XX% with again, Our and in standout up in up transport mid-single-digits. was this quarter treatment the orders

up organically was X% Our project also with end the Revenue market in every double-digits and bidding treatment region. quarter strength the quarter. pipeline nearly across grew in

traction. of important our are helped to in the progress cost. good and rising quarter. the as of of significant we and are mentioned the made The realization continuing impact price I sustain well our earlier, gain positions end offset effort These efforts in strong pricing our an part us efforts input combination of As health the marketplace our in markets brands as and

in and we we delivered year-over-year the per addition, point our XX% share. increase This our XX-basis in continuous drive us in earnings In a EBITDA adjusted on quarter and initiatives. to second adjusted our continue helped improvement margin both operating deliver a our increase margin

a strong the board, fact the across of a first in very quarter, So, half very year. strong

our on over Mark, strategic want a Before I comments provide I few work. turn to to

a culture and and faster our progress advancing enterprise. highly long-term our our foster our company the targets purpose. to growing, quarter-after-quarter teams is building are performance to innovative consistent more our executing on really focus that provides have united a roadmap financial Our our strategic These which towards a profitable reflects priories, initiatives in helping us evolving

me review our Let quickly progress.

this past it to customers, First significant us. profitable by commercial excellence. We them to business We've over strides with easier driving years for with made our address improve three making first how work is growth. the accelerating we do

the on to success. change and tools business customer. customers' maintain how together These But synergies scale it's execute complicated the scale. full obvious marketplace size are advancing varied focus solve is harness shift should our to in and are of which teams is much and today, to teams in new success face, way where its more independent power ways solutions we in Furthermore, revenue progress collaborating of better While Xylem the the to it be, work previously and have synergies. this challenges. our on brands breeds our And on

beyond. to time already recognized Year-to-date, fruition, occurring in considerable due business. course in about are smart meters be $XX By others which and FlexNet the operating to deal utilities bring water consortium million way of a Midwestern along deals take Some platform won with we U.S. XXXX in while a largely synergy in for is of communications our will leveraging the example, of one network

larger which longstanding relationships will can is deployed be across more be Xylem's one Visenti utility drive projects in X,XXX than our demonstrations leveraged great customer to of how of financial These opportunities. the strength for of are Southeast additional technologies leak a Another deals kilometers detection deal and Asia pipe. in

deals stage late finalizing couple pursuit larger with we our a in medium-sized of are in addition, deals In sights. of

to early that our announced global bigger year results. this expected or collaboration by end teams happening across XXXX. business is the picture and yielding are the of is The be of it's type Some

we've Infrastructure in platform. We the collaborative and have Analytics expanded to effort already this Advanced our a of growing number projects pilot field

is half of priority increased In growth markets. to the second accelerating our profitable quarter, first XX%. growth second organic on emerging growth the component bringing capitalizing organic growth XX%, our The our in total

India and paying XX%. has the first India our in And is up each up dynamic and East strong in are to establish China, we unique it's us to high-teens helped enabling business of strategy Our in mid-single-digits. global targeted multiple Revenues in a our the impact are closer and investing a as is up the Year-to-date, foothold Middle a in approach dividends. meet Middle It's our market. localization environment. reduce East the needs, China product with trade helped able relationship customers their better is nearly

Index we growth have to to we for And across component quarter R&D. with not is strengthen of we proxy company. investment have the accelerating technology third order in a and the sequentially in approach increased order changed capitalize The and out results. speed our enormous our closed M&A innovation profitable just in second but our as significantly to focus increase to at this the area, in on expertise We We've providing company, both year-over-year. Vitality hesitated use not the another also

vectors that and transform wastewater of water happening science, culture. Our provided but focus will made new in as driving impact of improvement teams by continuous how technologies and create are is on have to real and immediate possible is the a fundamentally Many acquisitions to different solutions come our future. efforts the technology access our managed together these

initiatives. XXXX. We to we are have since on savings work late is business simplification exceeded and trend our our that in this targets each track XXXX, part of One in back announced continue year we them

level quality significantly implementation work. this our largely processes efficiency line placing have beyond. to in We're year execution, our margin phase, cycle and and resulting we significant and our of of the but time work. clear of sight still improving next global savings the dozens common will raise example, of expansion functions and in and office is back centralizing This dozens varied on drive business platforms For taking cost services this them and program and

we every global That investments businesses requires the investments specifically mention Finally, colleagues we day. all that There's our areas roughly is that longer-term our must not development opportunities. to passion strategic the importance have doing will from growth our company. XX,XXX in in ongoing to at focus well right united organization our as ambitious one on the of of why and leadership the area what and of want all teams in to understand increased that we're platform other all acquired referring just of newly in that company, is levels it something place as requires solutions I I'm support of collective communications the around and the purpose but it. right we're deliver Harnessing the doing the organization, our goals. across on a

expansion us from fully During now targets. affording on few first the very more will particularly what to clear these with capitalize strength around strong our customers. true new move that we've continuous particularly performance faster these they've to our to the us be in of network-as-a-service. to build-out to growth solutions as margin we bringing initiatives have the learned accelerate the make mover of receptivity They're and has It's gained opportunity intend area savings very months reinforced advantage over improvement businesses we Their from significant the pursue and in our This lot, opportunities as and to bigger The near- while we to first a deliver feedback that terms of owning a this need have us these view medium- businesses, operational we to our committed well software-enabled clearly profile our Xylem to and are that the solutions. margin-accretive of longer-term. remaining is along them that. of scaling think for looking long-term investments

updated outlook year. the our address quickly me let for Now,

the in half, combined to us On orders to our the from confidence growth our X% top to growth backlog X% with gives first raise strength, outlook revenue X% revenue growth. line, and to X%

increasing non-operational improvement results our which by of also our a in EPS are items offset EPS This $X.XX. operationally by midpoint. We couple guidance is maintaining

We later will in details through you presentation. take the these

turn more Mark to detail. in and review will results the please now, So, X, quarter slide

E. Mark Rajkowski

performance was growth, was and slightly deliveries very from geographies. market, the strongest Water nearly had which Solutions utilities our business dewatering. the industrial in above saw conditions Applied strong markets and large performance across our strength segments, X% industrial project in points with expectations. of From benefited year-over-year. acquisitions. and both from slightly perspective, in remained some in of X% XX% foreign treatment This the Water broadly. exchange in revenue solid an end above organic deliveries in points our as most end Measurement the also second we project as strength of our our markets quarter X in continued Control broad-based with I'm growth. XX%. as and represents the XX% X Overall, tailwind, driven Market Thanks, pleased well across market was all expectations Patrick. where the our up team's another pumps way from business organic well growth This utilities quarter. were was with we as of the key year-over-year. end & This the We revenues We and in the Infrastructure up in good The emerging growth And U.S. all led saw geographies. market of by timing was growth growth aftermarket

commercial to China. market, also performance in We up end see continued X% in and with U.S. solid strong the our growth

comparison when revenues in results reflecting Finally, were the grew X% XX%. residential, primarily year a to we down prior tough

Moving to operational performance.

Our to rapid XX points leverage from points June. and strong XX.X%, in in EBITDA driven teams infrastructure basis the to Adjusted to saw on realization primarily amortization by the accounting to includes Price unfavorable encouraged advanced very increase quarter. basis investments. was acquisitions cost by XX.X% delivered analytics was productivity which operating XX and we're for and price and we points points in that May platform. realization by organic our which adjusted purchase margin the improvement XX increased during related mix growth, of quarter, improved basis realization, of non-cash basis volume XX an acceleration increased price This partially our offset inflation, the savings,

slide This in Our quarter, teams offset programs, the on to continue improvement from to inflation programs. performance. X, in year-over-year, than fund of an segment Please enabled slightly which delivered our drove additional revenue million expectations. X% XX% $X.XX, during XXX-basis synergies higher $XX increase Strong productivity prior us per revenue and growth was execute on our turn the I'll performance year. other details of support investments provide to an earnings our share increase and cost and to to strategic savings continue execution point we and operational

reflecting utility segment, organically up quarter which were than segment. all and The performance for the lead exited within Infrastructure in the applications has with majority orders ship revenues of that Let's key $XXX demand of require quarter second upward organic strong all to and of double-digits X% not are the times in the Orders and Water million our of note which that total It $XXX and beyond. health XX% market. in of the strong across metrics. a projects our XX% results consecutive year-over-year XX%, year-over-year. segment an more overall organically this trajectory Water is Infrastructure reflect were million continued had the on to will longer also treatment orders to up XXXX expanded the the important strength growth, million, We Treatment backlog turn the until quarter for year-over-year the basis. $XXX up pipeline grew XX% prior versus orders year. speak continued of

very mid-single-digit exchange performance sales generated Foreign and in timing up XX% more strong growth business, America. driven the government markets growth of strong activity on increased market, million Emerging bid Middle markets in project quality in share also underlying tailwind. deliveries timing came emerging both by The Latin benefited all the continued China, segment demand municipal demand was U.S., benefit gains. treatment and growing including $XX largely saw of emerging up and majority and our Dewatering and XX%, driven by work. market aftermarket to grew bypass the from markets. growth from strong. the of than the growth gains. as was reflecting to to continue underlying In we see to mandates was transport outsized we several and deliveries drive the from U.S., general, businesses. also the were solid strong project We're In double-digit see Outside achieved segment which across end double-digit share the of performance this our continuing a spending the continue utility demand. Treatment across East, in from water XX%

treatment growth single-digit strategy. emerging also the In business, localization to product from in benefit continues our wastewater saw in high we addition robust which markets, to our transport growth

that region Western where consecutive of transport the X% noting largely business The oil see and UK. in growth continues up Infrastructure in Finally, the our was primarily which gas improving construction strong activity Europe we saw a also quarter driven worth our business, in Water markets. quarter. end grew industrial Nordic dewatering in market during second overall, mid-single-digits in the driven It also by is growth market our to and conditions by and was

increased of Operating by cost our benefited from we and large projects accelerated volumes, points year. the for this the last XXX through This inflation versus XX.X% greater industrial of projects quarter. basis programs, and Additionally, delivery mix America margin than several this to from from Europe. higher to productivity treatment realization, offset in which Please unfavorable driven segment Latin more price slide and treatment a higher savings turn X. year portion

segment $XXX organically. Water X% Orders very a had quarter. Applied of up Our were good also million

compared million, with ratio exited with organically to last book-to-bill our was We the XX% Our of in which performance. in line historical quarter, year. the X.XX is quarter $XXX is backlog up which

give for backlog was X% to ability for this the Revenue quarter. our growth organic confidence growth While outlook mid-single-digit cycle our the us the Water versus short Applied year. to up deliver continues still is $XXX a million, business, of predominantly prior organically our in

specialty we grew In grew was building industrial heavy realization, markets, continued and and which the margin, institutional strong food from markets. for beverage was inflation year. in prior commercial exchange which year-over-year strong the emerging last the by in to demand The nearly of XX%, lapped by accelerating XX.X% strength in driven in a growth large mix year-over-year. our new industrial offset and savings in verticals and which by growth In strength up unfavorable higher in slightly price and by segment's portion demand cost higher building X% X% flow an was marine basis continued increased reflecting to products. in expansion which recovery volumes programs, the increased respectively. was productivity the and Foreign industrial compared projects business growth $X as XXX year. was sector operating margin X% XX%, the of serves Industrial Revenues Segment well commercial, with the driven industrial our commercial U.S. and as Residential project as demand we down project from tailwind. more the were see mid-teens China, solid and lower quarter million business the points in driven market. than margin growth driven revenue up

Now, let's turn performance to Solutions. Measurement slide X of to discuss & the Control

year-over-year. saw of up quarter organically, Orders Measurement Our in were order an million the & basis Control organic were of segment X% momentum Segment $XXX well. markets its as on in XX% million, third the double-digit growth. consecutive revenues quarter up Solutions growing $XXX

acquisitions Foreign earlier saw revenues to announced primarily of year, and return in grew exchange water the an was in growth deployment to we U.S. XX% deal the $X U.S. and million. due Gas tailwind $XX we a the million added vertical Nicor this the

not continued to that pipeline segment's single-digit We for low which water businesses The see quarter. growth grew is over also year, their the A over orders and leverage increased new basis deliver the of expect momentum segment in were single-digits Southeast because only high XX% and shorter XX.X%. market North leveraging points European from encouraged growth, Analytics in XXX in these Xylem opportunities to to Asia, up American Patrick revenue and is points owned full to with of example this XXX sales Adjusted the to in margins we've our markets We're our which strength capabilities the to the continue noteworthy excitement and existing in enabled operating This the which margin – basis to orders, emerging we Adjusted this which the portfolio up the XX% Advanced quarter. relationships. mentioned last were with points year-over-year. of see solve each EBITDA in both increased win very and year. by problems. the its declined pipeline In the most basis win XXX significant seeing recent size accelerating quarter great of in solutions, in customers reflected Infrastructure platform, we're short is earlier. we time cycle decreased X.X% but critical also

reflects expected to we're mover capabilities the build our Advanced the making Analytics was capitalize up scale and commercial technologies first performance planned largely our to of in advantage. Infrastructure margin to and and Our on quarter platform investments

in to as We networking QX to impacted the software water international deployment enable wins mix at the the share also in is invest pipeline. continue business. the support of of two also underway our large due to margins than in us unfavorable lower pilots win resources electric gas as to verticals tools commercial business well our and deals least in our to project recent by and Sensus overall have large which primarily the fair

We turn which the flow flows. in year-over-year free reflects positions second well conversion to flow cash increase was delivered I quarter modestly of target million. software. the increase investments in up and cash us with Investment Year-over-year than in is $XXX in flow flows cash quarter quarter improvement operating by CapEx full the year-over-year of a cash let's closed to approximately points driven product as largely to we Now position. pleased XX% XXX%. company's more on the very in team's deliver the discuss cash our year cash in quarter basis performance X slide strong financial a XXX balance and of with

range in $XXX spend million year. $XXX million of capital the to expect to for continued the We

another We the opportunistically to repurchased through our also million We of in second repurchases. to share shareholders returned dilution. quarter million manage dividends and shares $XX $XX

on year-over-year with solid processes make and reduction focus I'm to point the continue very working XXX-basis with our as to we pleased and traction discipline. continued capital We progress improve a acquisition. We to the that on remain maintaining began committed we to metric. credit continues the the investment-grade to our Pure team short-term rating used repay debt and this make to fund

year. completely will Patrick XX, to turn expect the and this debt the end by Please to Pure updated down slide cover pay We outlook. our of

Patrick K. Decker

Mark. Thanks,

from earnings at strong a end with has call. year our end markets. we look for we first year, that certain full are industrial particularly Let into half end growth our outlook the changed view a in in of provided markets. me on And updating some We the momentum we're the the slightly last the while reflect of guidance half end had our moderate do expect market Overall, utility to we seeing and second we to the markets. get as our begin

our let projections. me So run through quickly

Our market to utility in U.S. and key the end continues emerging particularly strength, show markets.

now single-digit we the expect grow For overall. full range year in to XXXX, revenue high

businesses market industrial well end in Our year-to-date. performed the

we and we see with America North Looking the We growth Europe continued America. up conditions and the Latin in China continue stronger to to out be solid parts see of markets, and heavy the for continuing in somewhat full the year, strengthen. to conditions industrials In project U.S. industrials emerging mid-single-digits. in softer in India

We mid-single some expect commercial We see organic Europe. end the to growth in in range. strength digit growth U.S. moderation in from to the market the recent be XXXX low stable but and low in

Our markets spending. increased to government benefit continue should from emerging

have we half XXXX in full residential, we softer low anticipate where first now results of the the year, in range. growth single-digit in year the revenue Finally,

be continue to market in competitive where driven have We demand year to the compares. replacement prior tough tends dynamics we and U.S. see

as demand China Pacific solid anticipate to Europe. and well countries in other Asia Western also as We continue

and slide XX, address I'll to turn outlook. please Now our updated

are As while we year growth morning, our to continuing our we to initiatives. full on well-positioned this commitments invest in longer-term discussed deliver

of growth EBITDA XX.X% between revenue expansion. about revenue rate acquisitions. in for cost of points We excludes strong operating to Adjusted on X%. XX.X%. of expect to the purchase basis our fuel growth savings full we XX of about to remain basis to deliver the This between are $XX be of $X.XX to $XXX expansion XX we've on the will points adjusted to-date, XX%. realignment bottom and to margin XX, dilution full now share line, of is XX adjusted expansion full by X% XXX for improve EPS points, excludes which Given to full to range to and the which margin expected XX.X% organic earnings in At help from to range We integration, and to raising restructuring, expectations an growth about range year expand the XX% This per the will turn guidance. for narrowed to is operating Adjusted I'll year. year our year this million. bring $X.XX. deliver Please margin XXX year expected the cost to XX% pace projected to margin slide basis million accounting

As we've earnings and you see on our started year per laid slide, the year the can on range out the share the puts full a detail. and EPS in $X.XX with We $X.XX takes guidance midpoint. at

a I've operational in delivering the As half exceeded of the our already price we and addressed, year, expectations. that first realization growth, performance outperformed strong

momentum the operational $X.XX full expect continue for resulting increase a We this in year. to

this However, equivalent dollar an a and expect we by non-core be the by amount the improvement offset stronger to of business. divestiture

the we've of while midpoint. guidance, maintaining range the end and raised So our low the narrowed

will to please our Mark XX, slide seasonal and outlook. turn planning So review and assumptions

E. Mark Rajkowski

highlights our additional some assumptions planning third outlook. year provide I'll Patrick. and on other full quarter Thanks, for the

Given that which the number been There and I'll of have a been are in topic there. tariffs, a and popularity few start of the of have proposed implemented. interest tariffs

supply global of or completely be The had expected modest. sold localization regard to is the is have from have said, the on immune. China, these product product strategy. we in do chain, into China little we're region. fairly not the produce broader so China impact of Asia to But in or Xylem. a we That impact vast majority no Some benefit we With our

managing proactively both direct are in the indirect We impacts. the

continued actions. strategies recovery it. on They price are understand mitigation and execute developed impact teams thoroughly potential Our to the including and have

the half of and this our already the second underway, this to we updated our expect we not With in the measures contemplated to outlook. in do year results have material be impact have impact

seasonal our moving and other planning of our Now, to business. profile assumptions

As we've in for full see as can integration slide, on increased currency well assumptions updated costs. realignment and restructuring, growth the on you this year have and as expectations our

level. growth utility third in market the the growth we the at market expect with continue For to steady mid-single-digit the single-digit quarter, at high industrial

will third revenue in We We project the expect mid-single-digits quarter. to mix a growth the organic this in in commercial the will dynamics half, anticipate margin we've continue X%. to overall the quarter. the the be Consistent X% first grow we continue with flattish in seen of to residential to in with headwind low result anticipate range that to in

Now, over Patrick. I'll it turn to back

Patrick K. Decker

Mark. Thanks,

a So good very year. the first half we had

teams, execution higher-than-expected revenue coupled margin price expansion our growth Our realization. the will continuing our of accelerate will greater and growth margin future. which focus growth driving profile focus, in I'm expansion invest to with continuing proud to strong led our very is initiatives initiatives, we're to strategically productivity we that create With solid our and to for continue our on important maintain for shareholders. in value while

So with that, operator, we'd be happy to take questions.

Operator

Mike Halloran And your of from question is coming Baird. first

Michael Halloran

everyone. morning, good Hey,

Patrick K. Decker

Good morning.

E. Mark Rajkowski

Mike. morning, Good

Michael Halloran

to hit normalization sounds And starting the out that. are margins, it all cost the only really price on in is MCS onetime the things, with momentum like area core things some couple that demand out some One, a little internally, strip a seeing And context the be provide commentary healthy then you of and to side see sticks investments and side. So you can to the so if hope, those here, margin then line. also appreciated. to start we're the would would of you guys you through, that layer context the how those expect benefits how on bottom tracking give much when some how talking,

E. Mark Rajkowski

is me this Mike, Yeah, let Mark. –

Let that take one. me

particularly are profile. impacting quarter this taking There the place are things I a couple that essence. of captured think the margin in you've

as the And we're that our that Applied margins this platform is basis well The is dilutive Advanced the and inclusion first in investments, that. – XXX points. current our in little a of quarter, first year really making the around comes in over of a flavors, Infrastructure Analytics as being investments to couple

there, scale towards beyond. to the impact in to modest we expect up the end the get business fact, continue we dilution contributor grows, see this we is as grow of of and that margins. we year, XXXX that in margin that momentum business And a as as Now, and to be expansion and to it we that relatively in terms

some roughly of deals it around is both well very impact as that and in million, this we making for year, have attractive be investments going those both expect of that continue water and they're well win through the the international in see come electric drop attractive The and an and rate as it's resources win to beyond platforms commercial certainly the other deals. as revenues our piece we deals to that software certainly as do product we large quarter later a we're build XXXX end to number capability, And – to – our run expect as accretive spends we'd to but that out margins. gas. to of win and technology of also in and these continuing And $X

take the did other expect we half continue of of first point I to the think and to basis year. year, XX% EBITDA for the is trend And see away segment the EBITDA. the we grew expansion in that full points year-over-year just in through XX margin

EBITDA, We as year expansion XX%, and margin growth expect segment strong continued well. in full the for the

our of new of you platform. we now more a our have is businesses this confluence the So in have –

we we less and will have some bit faster. haven't fourth more the third do and the beyond hit be see as little We business but also that quarter scaled in issue mix that quarter an in quarter, grows water of to that in us the there, expect our in that revenues of a

Patrick K. Decker

little of one want touch Mike, people couple surprise to been not have Patrick. belabor that that are is I It it on us. primary (XX:XX:XX). points the don't a may a of just was to is this surprise I'll but realize it for here, bit some. so a focused Yeah, probably spot I

here large growth really from to on of and some the margin is of we're it customers the our getting which So we what scale to year, half we're funding new and us platform near guidance to in through the some deals. these do fantastic. EBITDA that still the doing back gets and of be pursuing that now receptivity MCS need of and offerings around this we've analytics new between international our is really outlook clients XX%, and And reflected these here really

going this revenue, turn order margin. to As growth really come accretive high to into we it's

win fact of year that, year, going win that international to so, larger some development down this And these revenue getting the than deal, than the through pursuing as we're as onetime other these next because on the if the are that deals, you hopefully so they well we as more see cost impact recur international deals margin get don't fall-through offset the other road. is won't to we we're

funding in well comfortable performing overall So we platform. while and look, for growth. of terms new we is Xylem our our felt we growth business And commitments in commitments margin the this deliver also that productivity felt like, our on could

that's And expect what And mover advantage so here. we We're to we're doing. first advantage continue. of taking

Michael Halloran

progression back and a Yeah, no, the in the a that as but you these quick lot makes year, margin the investments payback quick assets. there's getting what of you're this pretty is to scale mitigating momentum Essentially saying turnaround that and impact sense. are upfront

Patrick K. Decker

Yeah.

E. Mark Rajkowski

Good summary.

Michael Halloran

So is forward order you question on second patterns. about the visibility your then think as

you've starting how just been in expand, maybe build the certainly stretching orders you How you about forward is Could a to backlog towards to fill forward backlog pipeline? compare over you're the that next curve on normal look would two that basis one the a starting out. you out as years? that's to bringing getting with couple in talking seems It Over quarters, and of better. the pipeline visibility talk of the about like the last business

Patrick K. Decker

Sure. Mike. I'd that with first, start

orders high we I obviously, overall growth see think, double-digit single-digit, here. continue to

or Our treatment think indicated next the and order two to see rate. foreseeable continue here, not I the expect backlog the even months in year double-digit But continue double-digit over that the going next probably you to future here, we're growth any want or of again. was for would we do still I certainly see to certainly in expect funnel teens to order bidding we that to Look, for continue grow. several and as to the bidding up the pipeline pipeline

think, pretty clips – the of second high in at line And healthy to question, to the look the respect it's into We're at would get you're of really see to we and a would Public market those I see versus continuing. a commercial and be this for difficult industrial at be where say we share. follow-on market, when markets that talking the is year, right half. which to this be, are the a that to a next trend full with compares certainly QX we I that I take certainly are how there. as single-digit the growth healthy focusing, grow continuing that in those – are but market, both more mid-single-digit year continuing now. right going I utility, still would the obviously, We mean, look to little Mike, now, about the year. we going is get much

we're terms the fact single-digits there, out the feel terms level talk well, but do than the of I probably treatment year and high that to progress good in in we've think premature. when in get well. gaining very the next that's have new as fair made see and definition, more place we'll transport in we break side share market since taking that base, impact come a of growth mid- share our and transport of you about we're fix as healthy by and position and market-leading going But of about to activity installed product on development very the both we

Michael Halloran

always. Appreciate helpful. Very color the as

Patrick K. Decker

Yeah, thank you.

Operator

Thank you.

question Markets. Dray next with is Capital RBC from Deane Your

Deane Dray

Thank you. morning, everyone. Good

Patrick K. Decker

Good morning, Deane.

E. Mark Rajkowski

Good morning.

Deane Dray

it the go that you to maybe more where what's to did if just start power, which pricing quarter the quarter was have second have and pricing you you first in Hey, I'd the how about on exercise needed? talk this pricing sequentially is and there half a are like – actions nice client it, that to and receptivity improvement from the

E. Mark Rajkowski

do we said, we environment. just geographies certainly have felt strong a Yeah, be with leaders as – strong Yeah, And and and talked about our we it's this of some we and market call, sets, positions, positions in Patrick strong about aggressive. hey, bit time more number recognizing and talking should in a on with that we've product demand little very our business those for we last it Deane, been a Mark.

levels. Listen, to the service gets and value like been. proposition price increases. it never gets have They it, and customers also in We – understand it

almost positively we seen my And traction trending the so our across we've the in of all good remarks, throughout I saw mentioned quarter. really largely U.S. businesses. in And as that

the was XX XX we April went and So, then basis quarter, price May June. had in XX of in XX, realization. points in first and we

So of good it half with provides momentum us into really headed some the the year. second

Patrick K. Decker

And, this Patrick. is Deane,

So tariff – to while But it we're was our pretty Again, attuned it, obviously largely of customers broad-based on was it across and frankly, costs. the don't like what's rising input they're quite businesses. going the all with within focused discussion U.S.

is indirect and our QX were later them And a so couple whether first the our was Water this were they've the the XX criticality our few we direct Infrastructure, driving in helpful I that very healthy Water one, I on pickup we and would also of through through to in lastly, cycle pricing so healthy there XX leaning we're and and say channel this our example, actions. comments, that distribution and sell I saw bps not time staying be June saw of close part a what other Applied increases. gone easier. in to activity. or in They've obviously it is reason well partners. in it'd an it been bps May very very as in aggressive say would in so of little think following it the makes bit been then A we of And here like as the channel competitors

strengthens that that action simply already And so that – taken. we've now that the further they've done,

Deane Dray

to That's all hear. good

a that follow-up, up just China We us the of theme really a had numbers the this whole Just three in big government water really out impact. at ratcheting Singapore, the is year-to-date. of China jumps enforcement hit one trip having a is we and field laws China China of other pollution as cities. XX% and And up

and the Just maybe ones we the Wedeco UV, saw guys on that you – Wedeco saw these that because you were Ozone, interest just an you technologies. can plants western expand in didn't host had even

Patrick K. Decker

think feel very I bullish we're Yeah, we on China. well,

I you on you And take As and we others. like the to these some have and time, long China know, as India have do, been markets for view Deane.

our and as on on mandate a big the not plays it's dealing But analytics non-revenue also, I it's platform. prioritization, connected treatment mandate. well new a the So convergence think know, it's and of which just obviously issues water, government the quality you with into reducing obviously water

of localization to that big it the not for that fit market to proud. whole discussion trade economy a technologies, companies the and this much and the forever. forever. efforts investors of so that going one in to which don't we've almost upon deal, really in grow see going very a affecting trajectory et not in is, But XX% I space. now. We're tension for really businesses is We the clip really of we also take our know us. to there, there create purpose our now side does a is strongest very which that speeds utility You with revenue healthy China U.S. coupled overhang just China all two-thirds, have that a is XX% our which tariff But really in we're from kind mitigate helps many think realize in a cetera. questions And that we're that last on the we whole the I right are had as market good is western between importing delivery to opposed it's pleased, products relying very now

Deane Dray

them? of how follow-up – that any does that the my stole of the differ affecting in the public But maybe, at between customers just kind seeing utilities terms you is fallout. their not on industrial all mandate Yeah, versus

Patrick K. Decker

say to now. right hard It's

it. in through patch through seen that, said in the whole We not side. billing had industry the the years good that haven't rough part commercial Having all growth went – a ago We've we went the seen when segment. two the there, more than of you and whole industrial downturn

a off bottom. So of we're coming

still seeing there. we're growth So

be our could that certainly to be – would of small that a overhang, it. a business. not overall that would was part But there if that's relatively immune that So, be piece

Deane Dray

helpful. real Thank you. That's

Patrick K. Decker

Okay. you. Thank

Operator

you. Thank

is question Nathan with from Jones next Your Stifel.

Nathan Hardie Jones

everyone. morning, Good

E. Mark Rajkowski

Good morning, Nate.

Patrick K. Decker

Good morning, Nate.

Nathan Hardie Jones

us? you is revenue this first us for related of to orders more the time in in products the Can on medium-sized million the into and put XXXX, give I are $XX think actually synergies of numbers probably what some you've opportunity maybe size year about little of out synergies us. there the any later these for pilots? talked types color orders revenue that maybe around You larger or a taken that now they're

Patrick K. Decker

still felt felt in This my to bit remarks, of of had earlier some maybe year, is coming to of here, first generally time there. ourselves. the going we in timing talked reference about of very a through had half around so Southeast We That's to than large strong I a the great wanted Yeah, But have more one had originally one them things Singapore our leveraging the we Sure. of because them be for thinking and they've deals in and consistent done we're number mentioned that deals. the our with was larger it talking size kind work was relationships the Asia is a with to PV, we get utilities with longstanding back in this are obviously, we great with that obviously the prepared timing there as it, And types putting comfortable as Xylem something about, in XXXX. relationship The that struggled Visenti the of with anticipated. thinking that's those we pleased. it of little larger more and we were scale. the then

the believe, to be to a Again, $XX to leak upwards rise that. million detection related world. the largest deployment, that's going to right close deal that's now monitoring of around that's the So I

stages. But that. it's of early proud very still we're so And

to and the new and I the to one in of certainly to FlexNet of some certainly are, of building which leverage really to to to but effectively from we to going at that that to the in network. fixed predominantly own consortium utility be of the out able not to are of treatment one where guessing, opposed able the The only reconcile not be are their plant needs pinpoint now where that larger them before, spending money. after non-revenue it's biggest think they challenges making consumption with deployments water water companies these are able And and as their the estimates really there as to be we've should the entire out has in coming an best capability our its – utilities to talked U.S., boost their utilities the that we're roll being all to on utilities. larger as to data exciting we're end-to-end as and the draw work serve that a one in we right the and out might well margins those deals the of way kinds a built think value but is platform projects, them and Secondly, where price well, off actually winning. to see And network-as-a-service chances able really simply is only really to where how we're international lease margins be our looking we good of the we solution

this, lot excited here. on but a early So the work are do. to of We're stages have we we in the prospects by

E. Mark Rajkowski

is growing. the And pipeline

Patrick K. Decker

And yeah, the pipeline growing. is

Nathan Hardie Jones

on million. like hit track $XXX of synergies revenue for see to that, to target XXXX it, a had you anything think I Are upside that? you

Patrick K. Decker

I hit But say on that adjust we do number. wouldn't is now. than that that exceed we'll certainly ever update. our outlook a future I'd and I stronger my in of right certainly and confidence kind would that mean, look Yeah,

Nathan Hardie Jones

think negative margin there, the then lower I gas on And mix electric obviously there. and meters

doing frames the you for that some I think business. talk up Can improve there margins have of margins the on business? improve to to that about of that the you're side the side guys margins initiatives you in time things any and the getting

E. Mark Rajkowski

these our investment money in and to look continuing also international products. also those Mark. Advanced take for Yeah, hey, but Infrastructure of get point, out Nate, side, deals, pilots not electric gas Analytics, products of but part just and our not features we're our new to is it's just R&D to Yeah, to significantly only customers richer exactly that provide the not develop at on spend cost

well. So expansion drive can we as margin

Patrick K. Decker

is just after us I so note a we And Matt on hey, laid to remains I remind – laid the that $XXX to here, be $XXX just just synergies million had And back number would the clarify, what my The shot me all. before Nate, same. to we out think XXXX, out. is somewhere we think comment around doing between revenue actually million, by

that and confidence deliver our the increasing just to ability are We number. on

E. Mark Rajkowski

but opportunity. pipeline fast points with more is it certainly of board a growing the on the do and Yeah, to there's lot

Nathan Hardie Jones

pass in it Well, that's million better had on. I mind. Thank the my for much very than much the $XXX help. I'll you

Patrick K. Decker

No worries.

Operator

you. Thank

question next with Your Joe Cowen. from is Giordano

Joseph Giordano

guys, good Hey, morning.

Patrick K. Decker

Good Joe. morning,

E. Mark Rajkowski

Joe. morning, Good

Joseph Giordano

So, Patrick, doesn't what's is way of figured exist like in of you Because that. the unique to how like up following economically Have kind the guys out market solution sell – on said a it's these this today. you of kind solutions, best end-to-end kind it out? frame that to

most kind of a you closer So what it there? out bit recurring guys the upfront what sort Like have sale? sense makes Is does this look Is some of gotten it little a to like? figuring fee?

Patrick K. Decker

the network-as-a-service – teams opportunity many taking. that of here we're is as approaches some posted so of The are one the that really kind work pilots that that I these Yes, in that. That's the part midst we're our doing of testing of the around of well. idea just we

with are order the go that the to a just of by here. value level around, excited I models. very attractive creation some we're the these that part at of getting is need quite too standpoint. customers standpoint. at investments margin don't make frankly scale. can make way really to which still from from sure utilities basic of what's is revenue want that level of we're support the we we're And I'm is Plus, Either much here the a higher that receptivity competitive some here. fueling opportunities from in really perhaps some subscription into We're the in ways also to testing share Some to looking more doing

Joseph Giordano

businesses pretty like what's and that tariffs, about? margin kind a of into back have to fair costs Is going your on and price given generally, the with substantial standpoint. think year still half Yeah, of on ramp the a

Patrick K. Decker

as especially getting on the full year. third the that Joe, the mean, coming of we and tightened really midpoint I second in always so half operationally what multiple to ongoing procurement of and they half that that in in despite in And the growth second then the from from ramp And us that the line outlook, It coming confidence momentum the of you currency the divesture we've productivity bit the offset the is Yeah, said, the the of we'll really fronts, and outlook the just is year efforts on raised the on in price got. half – second headwinds some always gives traction is incremental impact is it our top impact. our be margins and side. a

Joseph Giordano

and me, you little then maybe push for last can here. I And Okay. a bit

On seeing How what are we've take in utility do seen number, but think around other where doing kind Do the do market side, is you looks a How you the share? around I faster This in growth you're mid-single-digit. on that X%. general the running business You of like taking again. terrible very at that's everything utility mentioned is feel impressive feel performance growing same Look, was you there? second as quarter great. not mean the industrial companies. industrial? the you probably share clearly you're

Patrick K. Decker

say, business go say, our is I what that the share I But question, industrial we're there, remind gaining across wouldn't I in board to industrial. just would today. I third maybe Yeah, suggest everyone no, would really again of before

we average, on industrial performance mind probably as there we're what – bit, industrial. market. call or may business little you growing play. to of given again comment pockets the the is with light the in some said, be up certainly I gain other I a think up that industrial share see relative bit maybe describe here Having there and where we I our lion's industrials, wouldn't picked share bear mean, about little your but a a

just them. not we depending And but point production and so output, are run these basically. replacement failure then a typically so People upon growth to the kind a a or that grows product kind to is cycle, of in of tied this GDP is replace are plus at they pumps where

our are And up so and running, sites they're long as as the using pumps.

kind of our to So, that see be in when industrial just down go of the couple like at as wouldn't this ago, recovery a the part when you of was well. growing years of down expect didn't market level us rate rest I a sector business

So that total we and heavy, that with X% our X% very that That as growth only which small in saw uptick of we've that's company. I'm is revenue business bit again pleased portion seen, a that. of that's really oil But is of and gas. mining our a that

the kind in us for So in way to of a industrial. big needle hard move

space. good That's of this space be. to So kind we're mid-single-digit a in

rates Now, in coming replacing. very we products growth as are well, attractive very to they're new product relative those at or margins is of rollouts do and know from attractive some that the businesses products and

Joseph Giordano

Great.

Patrick K. Decker

in in localization opportunity would the has lastly us in some Middle lastly win not done to industrial, say the East, particularly cost right times spot. opportunities are I lead markets, not the projects that been position I'd we've say, emerging the in the able larger was – the given Joe, too that And we to that also long or have because win some would

Operator

you. Thank

with from is question next Canaccord. Chip Your Moore

Chip Moore

going? morning. Hey, it good How's

Patrick K. Decker

Good morning, Chip.

E. Mark Rajkowski

(XX:XX:XX)

Chip Moore

to like as you're are look an you seeing investments to X%, mover on talked So how You all just and you pretty increased R&D given a certainly inching advantage, time? company first there's closer emphasis sounds nice over thinking about I it the the organic innovation evolve opportunities think. about

investment inorganic versus potential about opportunities? should we of how be So thinking Thanks. pace

Patrick K. Decker

would the would in basis increasing, points and say line. of in pipeline we're of spend, lot given a about R&D getting in it's to much to at that mean, for Middle Closer our we take also more doing the India, dollars we the you go more market, may it it bang R&D bigger that buck of spend. fact China, base larger – matter job we have cetera. longer-term on been a we've also done a kind people overall about our than between most. were focus for bang now emerging the in getting working spending product markets. R&D healthy the the to all the for good of of development lot the I we've still East, out might terms Two, proxy – leaning of where buck to by and really on rate of is feel up that et more things remain because increasing Chip, things investments, at new in XXXX, in a smaller, talked that of XXX before. We're or unchanged. much where that we're rid a not any that. more the Yeah, of out spending we're given looking that talked in R&D other that level looking That'll recall, terms about Especially, It same be what way the I may not the

just than we we productivity overall R&D more So had got before.

bolt-ons really other be make. would In I got just around we'd an It big be versus to the some inorganic, don't as lay it we've terms right now comment and to line will have that platform be organic utilities we here. think that would your play think you out There for all being now. rounding the move out tuck-ins you sight the about about as any do, of we but way would vertical, looking that be predominantly of that organic

water There's a industrial of tango. anything there, various inorganic talked of Not are of And takes would we (XX:XX:XX) of that on That's lot be as out going now. we've flashing opportunities broad areas market, as the been. two kind before, be we're fragmented. to right other think to banned have aspects I very in lights largely management. very a disciplined

organic. more would Just letting over of probably be a the that you than of business know would time that that play part inorganic the be

Chip Moore

Great. helpful. is That Thanks.

Patrick K. Decker

Okay.

Operator

Thank you.

is Global. Seaport with from Your Liptak next question Walter

Walter Scott Liptak

guys. Good thanks. Hi, morning,

Patrick K. Decker

morning. Good

E. Mark Rajkowski

Good morning.

Walter Scott Liptak

get were are and that circle prices you on the of project about you maybe pipeline understand versus raise Infrastructure. projects bit able during if of the And ship in in did back to circle help your specifically pricing Water back – and already Water could you quarter. on or were business to what I'm project your And kind to some funnel and to in if work more us wanted if able little customers in you and a I thinking book about Infrastructure? the

E. Mark Rajkowski

out largely and aftermarket bid it's Yeah, Walter, it. Mark. it's is book components, you and go mixers. Project It's it's got the work and business. ship It's pumps, service unique, to replacement

those that's and profile coming different. that projects, they're components. looking improve larger And margin all price from. the all doesn't our They're not but is these mostly But it's where book on So not ship to we're unique. mean

Walter Scott Liptak

And of of those margin? unable longer might they are raise about you time to Okay. projects year, prices were concerned half be were that the lead kind compress along the to or the there in need lines where back any that we

Patrick K. Decker

No.

Walter Scott Liptak

trends enough. that Thinking that about comp got, the rate? other that's any outside residential, talk you lowering Fair that of can Okay. growth you've about

E. Mark Rajkowski

largely It's year, mid-teens. was drove year, think last of in the a prepared was in some tough that I the channel which last that. lot talked compare disruption to There which we it remarks. about of

this rest low the year. grow competitive in business to of that we'd we expect and it's expect environment, single-digits this a the So through

Walter Scott Liptak

and one is, Fair for and into thought of product ahead right. overall, your last kind inventories be bit me some was little Okay. you'd bring enough. All opportunistic wonder And from I to U.S.? U.S. tariff more could you of sort the had back the be benefits cost like then maybe a to or tariff. reaction we of any half position threats up that going the product the And into any lower kind that get if any of that any I for of came

E. Mark Rajkowski

short trying smart relative get caught supply. components to we're make and Walt, Yeah, and to be don't we sure

(XX:XX:XX) of processes one on levels been of and some – that stock market our going would on certainly there's be more So hard our real-time that that we're working to are we've SNLP headwinds. (XX:XX:XX) time and also and But needs. the improving

has do, some work on year-over-year. those more reduced inventory there's of despite actually of well of to the while performed team the challenges overall, there days So, and fairly hand number

Patrick K. Decker

I mean, – (XX:XX:XX) I is Yeah, Patrick. think this

moves ago the general working comment overall years management is payout changed this working third structure year in revenue. I took working and working kind so embedded think you've in seen few people been it And probably on terms would of tied free It hold. capital year hundred that last really that two really of investment. top the of fuel for take our I conversion say capital the the has about ratio, percentage first is incentive and capital seen helped significant of here. of you've cash to year that better and really part capital a theme for has flow downward That to it we the

we would are areas, a a I opportunity it. So I think challenging certainly there's a and inventory, probably biggest to we say a it did go. now of We front better lot And is of years feel few it's of – the the long than lot way the all where has ago. in area of most still

Walter Scott Liptak

great. Okay. guys. you, That right. All sounds Thank

Patrick K. Decker

Thank you.

Operator

you. Thank

Scott Graham of from question Markets. is BMO next Your Capital

R. Scott Graham

Hi, good morning.

Patrick K. Decker

Scott. morning, Good

E. Mark Rajkowski

Scott. morning, Good

R. Scott Graham

the I reasons. taking each this of get Maybe it down better expecting the equal those segments. for of Because price know me. you're us, lot of impacting mix connect your three talked you're couple (XX:XX:XX). three maybe there? bridges. operating segments, But I the you mix the about guidance inflation about looks to other piece of Yet negative was for it all Are kind sign the what's the the in know you just I dots here? side year. from a pinching you're which of would than better margin increase in And in sort that quarter. waterfall therefore you've to underneath it somehow first these mix/price was like talking given a all want is suggest that pricing all

E. Mark Rajkowski

two Yeah, across the Probably was Measurement Control of the yeah, we so biggest segments. we impact did in in Solutions, a & our see piece enterprise. had but other bit the mix it little

So half point, backlogs. driving we in is some inflation price expect there have as offset continue to little of to see well, is to into setup it given But terms do second mix that's we done we're will the well of trying to continue tick up the other acceleration We get that to reality. of that But your bit how – what very in we're and it. do into going the to a and year. QX ahead a a see does reality

on your to more Mix year. quarter. to down. impact So We've nothing will we're up taken it. that. continue narrowed not the did second of half in And we've point last on in than an of in terms it's operational we fact, guidance, it $X.XX where really us – the basis, second it's the impact in us quarter, were the And

R. Scott Graham

enough. coming or because planned course, get that you. projects new what not to if couple half what quarters sensing run guess Fair I'm to here me through having a a to it that's of for Okay. seems that second trying is going products, mix lot – the of negative of in number of now, year. I'm have of I of get at with a the is as worse

get worse, seem a saying it inflation if you're would So will essentially the yes? as little

E. Mark Rajkowski

to higher said. I see demand. and the inflationary we ran or through second and price another from we But first half basis impact the there's it XX that basis probably what about of of curve. that – XXX in points supply is the we ahead half points that's the year, from why year. That general tariffs, got just of of expect We part Part the of XX XX, points impact basis

Patrick K. Decker

our the But again we're maintaining of (XX:XX:XX). midpoint

E. Mark Rajkowski

Absolutely.

R. Scott Graham

this including you've maybe on that industrial. something question be areas. of looking really also areas opportunity for now? Yeah, you're I okay, thank industrial does guess – right clarification I just radar though into seem of the more you is within you and perhaps to that maybe got some my commercial things that be in management, water wondering some said fair that implies would kind was enough. on there other And that M&A specificity your the unless

Patrick K. Decker

No, to staying working mean, that's team always M&A here I We've wouldn't close obviously, that. businesses a read. we very experienced pipeline M&A active healthy be the got very funnel. and I with a always keep to

here. – read contemplating it we're I near is but that end more wouldn't I anything that or looking there's that So wouldn't into at

broadly word and talked there. read in about as used anything treatment, services. the talked industrial to don't water water broad-based opposed management past, So word – we've we've the I change the to about

that just area we're of time And understand of the nomenclature line. around certainly some point so And on an making the things a these that sure think good we do fine is I that are. your amount mean is I spending what commercial, opportunities a to

words to use describe sometimes think we I things. different

going and in think we're market that out going we in. not where be the in. describing play parts adjacencies we're that have scenario not These necessarily we doubling down would already – we're be So and the of attractive be I'm a to right to may

R. Scott Graham

good. you. Very Thank

Patrick K. Decker

you. Thank Okay.

Operator

you. Thank

Your Lee final of Sachs. Goldman from question is coming Brian

Brian Lee

for me here. thanks squeezing guys, in Hey,

Patrick K. Decker

morning. Sure. Good

E. Mark Rajkowski

Brian. morning, Good

Brian Lee

in first the growth tracking can you you also end. utility about on in so even U.S., And you is is you're high higher A just sort when I the outlook on double-digit of the much morning. Good of growth, that how on you out what year, you're guess growth things a basis. can morning. what at view region you're talking share attribute from company-specific help and wondering couple of then that market share sort Good for the the to factors, market, parse namely parse gains? single-digit what if low your underlying then would growth the doing guess market I versus gain my think

Patrick K. Decker

hard got what but any and sensing and Yeah, even I'd I the single-digit globally, about on kind always normal come growth. hearing healthy data underway. the or precise look, we're itself now we're mid-single-digits, But you've that would quarter in year one I'll matter. you say of for is is to share growing world and from what market that that, say cycle where utilities typically a right within back cycle get say seeing overall a it's OpEx we're based the a CapEx rest when it high versus U.S. of the would moment, underway have is about is a market growth, mid-single-digit to I

base coming outgrowing growth or we're just a that from point of there gain because say two I would per or our there. probably se of definitely established the that's market is there's either So share

not markets say probably that like coming points I I from of now, there increase And single-digit are really is what's in their U.S. the phenomenon. just and own there's Europe great Secondly, integrated high for move Salesforce.com. bidding and more recall this growth the couple made the from incentivized in sharing the passing then, accordingly. we've the for track year, just been in getting done people and across pipeline. synergies last timeframe. to leads and the leads are and in commercial across Xylem And that again, more our would the aisle, attractive a that there. three And U.S., – think lot give so. We North having their a it's We emerging America. they of during commercial U.S. do through pains, the revenue generating here to the U.S. seen years appropriate It's And specific since colleagues teams a limited by be We seen growth really team, things We and a that we would recent here We've that one we We you'll market. of had they in number are went leads a the portfolio back. absolutely see while learned a across seeing that these credits growing compensated

actual it. so And of in bit to with behind more some makes a with portfolio. familiar And little products that then just that throw them getting And hungry. what's new the

have of moderate are the time. We we of little And definitely to seeing market maybe lot that. think the that bit stuff a in that over will portfolio to buffer does utility, sell the when I is the benefits relevant and a help

again, confidence. so, gain. gives share directionally, of And can't a But I you specific give what that's number us

Brian Lee

over second the question if Okay. quarterly A here skewing electric, and look past on No, several growth the sense. rate helpful. the has mix the know towards you increasing at been just Sensus quarters. It's makes MCS. just I that all gas

just you or quarter. mix that and at differently segment? thinking you to just Thank then I really growth speak a bit of to your longer-term a if little in So for that you margins, had you are the whether context had And in business that issues of that organic there very you there? in for market-specific is all know of implications this alluded of or terms wondering that the project-specific you. not end targets at high Can composition was about that guys the level are

Patrick K. Decker

let take, Yeah, level. me higher the Brian,

any As near of in is always, question. and/or towards from issue. gas the end no around handle worries and composition standpoint, electric that change Mark water. from either timing strategic This towards portfolio a mix purely the I'll let shifting a away But biased view a

of growth the utility the orders and up Our side again. were business on in water

E. Mark Rajkowski

in America, yeah. XX% North

Patrick K. Decker

I think XX%. XX%...

E. Mark Rajkowski

(XX:XX:XX)

Patrick K. Decker

standpoint. look, rate. there still little hope of because the business and deals been. gas At these accretive pipeline. it value will electric aggressively water size close the of water the XX%. electric same healthy our space of We've over a we'll really than they're we pursue while the be few That's less getting that where them mix skew – part that continue an we've very side, that on from That here to bit won, they back can a half the We're love historically that time, may latter we and the economic to our the attractive got deals has long-term we've more here a announce deals year in biggest supports in we growth bidding

take It's a the an seeing right So across XX-month issue is timing you're within what it board. just simply the we'll cycle. and now, maybe year within

E. Mark Rajkowski

in as in we'll those QX. of as – lesser in QX, what in moving Yeah. And the revenues see XXXX. translate saw into is a little continue it much some side, QX orders exactly on But water deployments but bit bit that out, to of more A into we I roll issue a – would and little QX. we'll that's those

Brian Lee

right. All guys. Great. Thanks,

E. Mark Rajkowski

Brian. Thanks,

Patrick K. Decker

you. Thank

Operator

the now back call any Thank Patrick turn closing you. will Decker remarks. to for or additional over I

Patrick K. Decker

you. Thank

everybody and I but patience a you. appreciate bit your your Safe thanks again, again know travels. and call. for the good earnings So Have end next talk today. time a you ran really the little we summer interest and of to Thank over your we'll I questions. in

Operator

does Earnings today's you. Second Thank Call. this at a your and lines XXXX time This conclude Xylem Please Quarter Conference disconnect have wonderful day.

Matthew Latino	Xylem, Inc.
Patrick K. Decker	Xylem, Inc.
E. Mark Rajkowski	Xylem, Inc.
Michael Halloran	Robert W. Baird & Co., Inc.
Deane Dray	RBC Capital Markets LLC
Nathan Hardie Jones	Stifel, Nicolaus & Co., Inc.
Joseph Giordano	Cowen & Co. LLC
Chip Moore	Canaccord Genuity, Inc.
Walter Scott Liptak	Seaport Global Securities LLC
R. Scott Graham	BMO Capital Markets (United States)
Brian Lee	Goldman Sachs & Co. LLC

Xylem (XYL) 31 Jul 182018 Q2 Earnings call transcript