Xylem (XYL) FY2025 10-K Risk Factors: 2 New, 6 Dropped

What the changes say

Xylem faces increasing operational risks from complex global supply chains and geopolitical tensions in regions like China, Taiwan, and Mexico.
Sustainability and climate targets introduce new compliance, reporting, and financial hurdles.
The company continues to prioritize large project execution, R&D, and cost-restructuring initiatives.

What changed since the prior 10-K

New

NewRisks Related to Our Business and Operations
and improving our competitive position requires successful management of these factors in a volatile business environment marked by rapid change and disruption
Maintaining competitive positioning requires managing rapid technological changes like AI, entering new markets against tech giants, and executing large contracts.
NewRisks Related to Our Business and Operations
Sustainability-related laws, regulations, targets and objectives, and stakeholder expectations expose us to numerous risks
Pursuing sustainability targets and reporting goals exposes the company to operational, financial, and reputational risks dependent on grid renewable energy and supplier standards.

Dropped

DroppedRisks Related to Our Business and Operations
We may not realize some or all the expected benefits and synergies from our acquisition of Evoqua
DroppedRisks Related to Our Business and Operations
longer to realize, may not be fully realized, or may cost more than expected, which could materially and adversely affect our business, results of operations or financial condition, as well as adversely impact our share price
DroppedRisks Related to Our Business and Operations
or inefficiencies during transitional periods. Transforming, realigning and restructuring our company require a significant amount of management and other employees' time and focus, which may divert attention from operating and growing our business
DroppedRisks Related to Our Business and Operations
Our sustainability commitments, goals, targets, objectives and initiatives, and our public statements and disclosures regarding them or in response to mandatory reporting standards, expose us to numerous risks
DroppedRisks Related to Our Business and Operations
stakeholders have increasingly expressed or pursued opposing views, legal and investment expectations around sustainability initiatives, including the enactment or proposal of “anti-ESG” legislation, executive orders or policies and adverse social media campaigns
DroppedRisks Related to Financial and Tax
Our pension and other defined benefit plans are subject to regulatory and financial market risks

Reworded

92% rewrittenRisks Related to Our Business and Operations
We may be unable to successfully execute large projects or meet customer timelines, budget, performance, or safety requirements
Added supply chain disruptions and weather events as specific risks impacting complex multi-year project execution and timelines.
Was: We may be unable to successfully execute large projects or meet customers’ timelines, budget, performance and safety requirements
91% rewrittenRisks Related to Legal and Regulatory
Infringement or expiration of our intellectual property rights, or allegations that we have infringed on the intellectual property rights of third parties could adversely affect us
Added risks that law changes or rapid technological shifts could reduce the value of intellectual property assets.
Was: Infringement or expiration of our intellectual property rights, or allegations that we have infringed upon the intellectual property rights of third parties could negatively affect us
90% rewrittenRisks Related to Our Business and Operations
We may be unable to compete successfully in our markets or develop and commercialize innovative and disruptive solutions and technologies
Condensed introductory phrasing regarding competitive points and market environment volatility.
89% rewrittenRisks Related to Our Business and Operations
A material disruption to any of our facilities or operations, or those of third parties upon which we rely, may adversely affect our business and financial performance
Expanded supply chain dependencies to include indirect and multi-tiered suppliers, plus commercial services outsourcing.
Was: A material disruption to any of our facilities or operations, or that of third parties upon which we rely, may adversely affect our business and financial performance
80% rewrittenRisks Related to Geopolitical, Macroeconomic and Industry Factors
Inflation, tariffs, customs duties, and other manufacturing and operating cost increases or fluctuations have adversely affected, and may continue to adversely affect, our cash flows and results of operations
Added specific geopolitical conflicts in Ukraine, the Middle East, and tensions involving China and Taiwan as cost and delay drivers.
Was: Inflation, tariffs, customs duties and other increases or fluctuations in manufacturing and operating costs have, and could continue to, adversely affect our cash flows and results of operations
75% rewrittenRisks Related to Our Business and Operations
Lack of or delays in availability of products, parts, raw materials, transportation, or energy from our supply chain, or supplier failures to meet requirements, could adversely affect our business
Added specific supply chain reliance on entities located in China, Taiwan, Mexico, and Europe.
Was: Lack of or delay in availability of products, parts, raw materials and energy from our supply chain or the inability of suppliers to meet delivery and other requirements, could adversely affect our business
74% rewrittenRisks Related to Our Business and Operations
Defects, unanticipated or improper use, or inadequate disclosures about our products could adversely affect our business, reputation and financial condition
Expanded product defect risks to explicitly cover AI capabilities and product withdrawals.
Was: Defects, unanticipated or improper use or inadequate disclosures concerning our products could adversely affect our business, reputation and financial condition
71% rewrittenRisks Related to Our Business and Operations
We may not achieve the expected benefits of our simplification, productivity, restructuring, or realignment plans, or such initiatives and plans may adversely affect our business
Streamlined descriptions of ongoing margin-improvement and strategic pricing initiatives launched in 2024.
Was: We may not achieve some of the expected benefits of our simplification and productivity initiatives or restructuring and realignment plans, or such initiatives and plans may adversely affect our business
70% rewrittenRisks Related to Our Business and Operations
Cybersecurity incidents, data breaches, or other disruptions, and software and system implementations involving our enterprise or operational information technology, connected products and services, or information technology on which we or our customers rely, could materially and adversely affect our business
Was: Cybersecurity incidents and related data breaches or other disruptions involving our enterprise information technology and operations, our connected products and services, or information technology on which we or our customers rely, could materially and adversely affect our business
67% rewrittenRisks Related to Legal and Regulatory
Failure to comply with business conduct laws, regulations and policies, including anti-corruption, anti-trust, trade, and data privacy and security, could have a material adverse impact on us
Was: Failure to comply with laws, regulations and policies related to our business conduct, including the U.S. Foreign Corrupt Practices Act, other applicable anti-corruption laws, trade regulations, and data privacy and security laws, could have a material adverse impact on us
67% rewrittenRisks Related to Geopolitical, Macroeconomic and Industry Factors
Geopolitical, regulatory, economic, foreign exchange and other risks associated with our global sales, supply chain and operations may adversely affect our business
63% rewrittenRisks Related to Financial and Tax
Changes in our effective tax rates and tax expenses may adversely affect our financial results
61% rewrittenRisks Related to Our Business and Operations
We may be unable to retain key leadership, engineering, technology, sales, service and other talent or attract new qualified talent with diverse backgrounds, experiences and perspectives
Was: We may be unable to retain our existing leadership, engineering, technology, sales, services and other key talent or attract new qualified talent with diverse backgrounds, experiences and perspectives
61% rewrittenRisks Related to Our Business and Operations
Weather conditions, including the effects of changing climate patterns and related governmental or regulatory efforts to mitigate such effects, may cause volatility in our served markets and demand for our products
Was: Weather conditions, including the effects of climate change and associated efforts by governmental or regulatory authorities to mitigate such effects, may cause volatility in our served markets and demand for our products
58% rewrittenRisks Related to Financial and Tax
Our financial results may fluctuate from period to period and can be difficult to predict
57% rewrittenRisks Related to Legal and Regulatory
Failure to comply with, and the cost of complying with, laws, regulations, policies and taxes applicable to our operations, products and services, including those involving the environment and health and safety, could have a material adverse impact on us
Was: Failure to comply with, and the cost of complying with, laws, regulations, policies and taxes applicable to our operations, products and services, including those involving the environment, climate change, and health and safety, could have a material adverse impact on us
51% rewrittenRisks Related to Legal and Regulatory
We face risks related to legal and regulatory proceedings
51% rewrittenRisks Related to Financial and Tax
Our business is subject to foreign currency exchange rate fluctuations
48% rewrittenRisks Related to Financial and Tax
We may incur impairment charges for our goodwill and other indefinite-lived intangible assets
42% rewrittenRisks Related to Our Business and Operations
A significant portion of our products and offerings in our Measurement and Control Solutions segment are affected by the availability, regulation of and interference with radio spectrum that we use
39% rewrittenRisks Related to Our Business and Operations
Our strategy includes acquisitions and divestitures, which we may be unable to execute successfully
Was: The execution of our strategy includes acquisitions and divestitures, which we may be unable to successfully execute
35% rewrittenRisks Related to Geopolitical, Macroeconomic and Industry Factors
Industry and economic conditions may adversely affect our markets and our customers’ operating conditions and demand

All 24 risk factors

Headings as the filing states them, in filing order.

Risks Related to Geopolitical, Macroeconomic and Industry Factors

01Industry and economic conditions may adversely affect our markets and our customers’ operating conditions and demand35% rewritten
02Geopolitical, regulatory, economic, foreign exchange and other risks associated with our global sales, supply chain and operations may adversely affect our business67% rewritten
03Inflation, tariffs, customs duties, and other manufacturing and operating cost increases or fluctuations have adversely affected, and may continue to adversely affect, our cash flows and results of operations80% rewritten

Risks Related to Our Business and Operations

04We may be unable to compete successfully in our markets or develop and commercialize innovative and disruptive solutions and technologies90% rewritten
05and improving our competitive position requires successful management of these factors in a volatile business environment marked by rapid change and disruptionNew
06Cybersecurity incidents, data breaches, or other disruptions, and software and system implementations involving our enterprise or operational information technology, connected products and services, or information technology on which we or our customers rely, could materially and adversely affect our business70% rewritten
07Lack of or delays in availability of products, parts, raw materials, transportation, or energy from our supply chain, or supplier failures to meet requirements, could adversely affect our business75% rewritten
08A material disruption to any of our facilities or operations, or those of third parties upon which we rely, may adversely affect our business and financial performance89% rewritten
09We may be unable to successfully execute large projects or meet customer timelines, budget, performance, or safety requirements92% rewritten
10We may be unable to retain key leadership, engineering, technology, sales, service and other talent or attract new qualified talent with diverse backgrounds, experiences and perspectives61% rewritten
11Defects, unanticipated or improper use, or inadequate disclosures about our products could adversely affect our business, reputation and financial condition74% rewritten
12We may not achieve the expected benefits of our simplification, productivity, restructuring, or realignment plans, or such initiatives and plans may adversely affect our business71% rewritten
13Our strategy includes acquisitions and divestitures, which we may be unable to execute successfully39% rewritten
14A significant portion of our products and offerings in our Measurement and Control Solutions segment are affected by the availability, regulation of and interference with radio spectrum that we use42% rewritten
15Weather conditions, including the effects of changing climate patterns and related governmental or regulatory efforts to mitigate such effects, may cause volatility in our served markets and demand for our products61% rewritten
16Sustainability-related laws, regulations, targets and objectives, and stakeholder expectations expose us to numerous risksNew

Risks Related to Financial and Tax

17Our business is subject to foreign currency exchange rate fluctuations51% rewritten
18Our financial results may fluctuate from period to period and can be difficult to predict58% rewritten
19We may incur impairment charges for our goodwill and other indefinite-lived intangible assets48% rewritten
20Changes in our effective tax rates and tax expenses may adversely affect our financial results63% rewritten

Risks Related to Legal and Regulatory

21Failure to comply with business conduct laws, regulations and policies, including anti-corruption, anti-trust, trade, and data privacy and security, could have a material adverse impact on us67% rewritten
22Failure to comply with, and the cost of complying with, laws, regulations, policies and taxes applicable to our operations, products and services, including those involving the environment and health and safety, could have a material adverse impact on us57% rewritten
23We face risks related to legal and regulatory proceedings51% rewritten
24Infringement or expiration of our intellectual property rights, or allegations that we have infringed on the intellectual property rights of third parties could adversely affect us91% rewritten

Other Xylem 10-Ks

FY2024 10-K risk factors
28 risks
Xylem faces major risks from international operations, supply chain disruptions, and the integration of the Evoqua acquisition. Regulatory compliance, cyber threats, and large-scale project execution risks also dominate the profile.
Filed Mar 03, 2025

About this page

The headings are the filing's own. The one-line readings and the overview are automated and can be wrong: read Item 1A of the 10-K for the exact wording.