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Xylem’s $850 Million Dow Deal — Could It Reshape the Industrial Water Market?

Xylem Inc. reported modest revenue growth of 1 percent in the second quarter of 2026, aligning with expectations amid a mixed demand environment. The company highlighted robust demand in key markets, notably a 41 percent increase in orders that included its largest-ever contract—an $850 million, 23-year outsourced water services deal with Dow—contributing to a $5.3 billion backlog and a strong book-to-bill ratio above one. Earnings per share rose 16 percent year-over-year to a record $1.46, supported by a 150 basis point expansion in adjusted EBITDA margin to 23.3 percent, driven primarily by productivity improvements, price gains, and favorable mix offsetting inflation and volume pressures. Segment performance was mixed. Water Infrastructure delivered revenue growth of 3 percent with strong margin expansion of 480 basis points, benefiting from selective bidding under its 80/20 portfolio rationalization strategy, productivity gains, and a transport-focused sales mix.