Xylem Announces Strategic Divestitures and Rapid Growth in Data Center Water Solutions
During its third-quarter 2026 earnings call, Xylem (XYL) announced a strategic pivot to streamline operations by divesting non-core, lower-margin businesses. The company plans to sell Applied Water International and Specialty Flow Control, transitioning from four business segments to three by 2027 to focus on higher-profit industrial markets. While macroeconomic pressures and high interest rates have caused municipal water utilities to defer some discretionary metering purchases, Xylem is seeing explosive demand in the technology sector. Specifically, orders for Applied Water related to data center cooling and AI infrastructure grew over 200% in the third quarter. Despite slower conversion paces in the utility segment, the company's total backlog has grown to $5.5 billion.
Tickers: $XYL
Topics: divestiture earnings report segment reorganization water technology