Capital spending increased with $295 million toward the Blue Ridge rebuild; free cash flow was lower year-to-date due to higher CapEx and lower net earnings.
Earnings per share decreased by 10% year-over-year but grew by 29% quarter-over-quarter.
Expenses increased by 2% year-over-year, including network disruption costs, inflation, and higher depreciation, partly offset by lower fuel prices.
Fuel costs decreased by $32 million year-over-year due to lower prices despite higher consumption from reroutes.
Labor and fringe expenses rose due to inflation and trucking business headcount increases, while rail headcount decreased year-over-year and sequentially.
Operating income increased $242 million from Q1, with margins improving by 550 basis points, ahead of normal seasonality.
Reported operating margin declined by 320 basis points year-over-year but increased by 550 basis points sequentially.
Total revenue was $3.6 billion for the quarter, down 3% year-over-year, largely due to lower coal and fuel prices.
Total volume was flat compared to last year, with a 4% sequential increase driven by merchandise and coal shipments.
Adjusted EBITDA margin reached a quarterly record of 21.8%, up 100 basis points year-over-year.
Adjusted EPS grew mid-teens, with Q2 EPS at $1.26, $0.12 above the midpoint of guidance and up 16% versus prior year.
Net debt to adjusted EBITDA stands at 0.4x, reflecting a strong balance sheet and capacity for continued investment.
Revenue growth was 6% in the quarter, driven primarily by outperformance in Measurement and Control Solutions (MCS) and contributions from all segments.
Segment highlights: MCS revenue up 10%, backlog at $1.7 billion; Water Infrastructure revenue up 4%, margin expanded 200 basis points; Applied Water revenue up 5%, margin expanded 420 basis points; Water Solutions & Services revenue up 5%, margin expanded 60 basis points.
Xylem delivered strong Q2 2025 results with broad-based organic revenue growth led by measurement and control solutions.
Year-to-date free cash flow was down $61 million year-over-year due to outsourced water projects and timing of tax payments, mostly offset by higher net income and improved net working capital.
Average technical full-time equivalent employees decreased 2% to 958 from the prior year.
Billable hours decreased 6% year-over-year to approximately 359,000 hours.
Capital expenditures were $2.3 million.
Compensation expense increased 2% after adjusting for deferred compensation gains, which were significantly higher this quarter.
EBITDA decreased 7% to $37 million, with a margin of 27.8% compared to 30.2% in Q2 2024, primarily due to decreased utilization, increased operating expenses, and loss of tenant income.
G&A expenses increased 2% to $6.1 million.
Interest income increased to $2.3 million due to higher cash balances.
Net income decreased to $26.6 million or $0.52 per diluted share from $29.2 million or $0.57 per diluted share in the prior year period.
Other operating expenses increased 8% to $12.1 million, driven by Phoenix lease renewal and loss of rental income at Menlo Park.
Realized rate increase was approximately 5%, reflecting premium market positioning and differentiated expertise.
Shareholder distributions included $15.2 million in dividends and $27.7 million in stock repurchases at an average price of $75.66.
Total revenues for Q2 2025 increased 1% to $142 million, with net revenues approximately flat at $132.9 million compared to Q2 2024.
Utilization declined to 72.1% from 75.1%, partly due to the July 4 holiday occurring in Q2 2025 versus Q3 2024.
Americas revenue increased 21% to $840 million, adjusted EBITDA increased 34% to $133 million driven by volume growth, category mix, and lower operating costs.
AMP reported 5% global shipments growth and 18% adjusted EBITDA growth in Q2 2025 versus prior year, ahead of guidance.
Europe revenue increased 9% to $615 million (4% constant currency), shipments grew 1%, but adjusted EBITDA decreased 3% to $77 million due to input cost headwinds.
Net leverage declined to 5.3x from prior year, liquidity position strong at $680 million with no near-term bond maturities.
North America shipments increased 8%, Brazil beverage can shipments increased 12%, outperforming the industry.
Dafinchi