Good day, welcome to the Xylem Inc. Annual Meeting. I would now like to turn the conference call over to Mr. Robert Friel. Sir, please go ahead.
Morning, everyone. It is 8:00 A.M., and the shareholders meeting will now come to order. I am Robert Friel, and I am the Chair of the Board of Directors of Xylem Inc. On behalf of the Board and over 22,000 company employees, I wanna welcome you to the 2026 annual meeting. I would also like to acknowledge the Board members participating in the meeting this morning. Matthew Pine, Xylem's President and CEO. Earl Ellis, Executive Vice President and Chief Financial Officer for Panera Bread. Lisa Glatch, former President of LNG and Net Zero Solutions and Chief Sustainability Officer for Sempra Infrastructure. Victoria Harker, former Chief Financial Officer of TEGNA Inc. Mark Morelli, President and CEO of Vontier Corporation. Jerome Peribere, former President and CEO of Sealed Air Corporation. Lila Tretikov, Partner, Head of Artificial Intelligence, New Enterprise Associates, and Uday Yadav, Chief Executive Officer, TK Elevator.
It is a pleasure to serve as chair of this distinguished board of highly qualified and seasoned leaders. Each brings decades of experience and a unique business perspective to the oversight role at Xylem. I'd also like to recognize the members of Xylem's leadership team, in addition to Matthew Pine, who are participating in this morning: Stacy Cozad, Chief Legal Officer, and Kelly O'Shea, Corporate Secretary. The agenda for the meeting can be found in the Meetings Materials section of the meeting website under Meeting Materials. You'll also find the rules of conduct for this meeting. To conduct an orderly meeting, we ask that participants abide by these rules. All shareholders participating today will have an opportunity to submit questions by entering them in the question box on the meeting page denoted by the header Ask a Question and then clicking the Submit button.
After we have addressed the official business of the meeting, I will again introduce our CEO Matthew Pine, and he will provide remarks on how Xylem is well-positioned to respond to the world's most challenging water needs. Following Matthew's comments, we will answer as many pertinent questions as we have time to address. Kelly O'Shea, Xylem's Corporate Secretary, will now discuss the record date and quorum for the meeting. Kelly, could you please proceed?
Thank you. The Board of Directors has appointed Jim Raitt of American Election Services, LLC and Gary Ross as our Inspectors of Election to supervise the voting by proxy and ballot at this meeting. The inspectors are on the line. As noted in the notice and proxy statement provided to all shareholders, the record date for voting at this meeting was the close of business on March 19th, 2026. The list of registered shareholders as of the record date is available for review by shareholders that entered their control numbers prior to joining the meeting. This list can be accessed on the meeting website by clicking the link on the website to Registered Shareholders List and completing the attestation. The inspectors of election also have the affidavit of distribution from Broadridge Financial Solutions, Inc., which confirms the distribution of proxy materials for this meeting.
Approximately 88.1% of the shares outstanding and entitled to vote as of the record date are now present at the meeting, either virtually or by proxy. This represents a quorum.
We will now turn to the four official items of the business that have been properly brought before the meeting. Each item is described in Xylem's 2026 proxy statement. Please note that shareholders may vote at any time until the closing of the polls by clicking the blue Vote Here button on the meeting page. If you previously voted by proxy, you do not need to vote today unless you wish to change your vote. Following submission of all the proposals, we will welcome any pertinent questions shareholders may have about our director nominees or any of the other proposals.
Proposal 1, Election of Directors. The first item of business is the election of nine directors of the company. The following individuals are hereby nominated to serve as directors for Xylem Inc. for a 1-year term expiring in 2027 or until their earlier retirement or resignation. Earl R. Ellis, Robert F. Friel, Lisa Glatch, Victoria D. Harker, Mark D. Morelli, Jerome A. Peribere, Matthew F. Pine, Lila Tretikov, and Uday Yadav. Proposal 2, ratification of Deloitte & Touche LLP. The audit committee of the board has appointed Deloitte & Touche LLP as the company's independent registered public accounting firm for 2026. This appointment is subject to the ratification of Xylem shareholders. Deloitte representatives are participating in the meeting today. On behalf of the Board of Directors, I offer the following resolution. Resolved that the shareholders of Xylem Inc.
Hereby ratify the audit committee's appointment of Deloitte & Touche LLP as the company's independent registered public accounting firm for 2026. Proposal 3, advisory vote to approve named executive officers' compensation. On behalf of the Board of Directors, I offer the following resolution. Resolved that the compensation paid to the company's named Executive Officers, as disclosed in the 2026 proxy statement, including the compensation discussion and analysis, compensation tables and narrative discussion is hereby approved. Proposal 4, implementation of the Xylem Inc. 2026 employee stock purchase plan. On behalf of the board of directors, I offer the following resolution. Resolved, that the implementation of the Xylem Inc. 2026 employee stock purchase plan is hereby approved.
We now welcome any pertinent questions shareholders may have about our director nominees or any of the other proposals. If there are no questions about our director nominees or any other proposals. The polls remain open, and you may vote by clicking the blue Vote Here button on the meeting page. We will now pause to give shareholders time to vote. Again, if you have already voted by proxy, you do not need to vote again unless you would like to change your vote. I hereby declare the polls closed. Kelly, will you please report the results of the voting?
The Inspectors of Election have provided the following preliminary results. Proposal one, each of the nine director nominees has been elected as a director of Xylem Inc. for a one-year term. Proposal two, with approximately 97.1% of the votes cast in favor of this proposal, the appointment of Deloitte & Touche LLP as the company's independent registered public accounting firm for 2026 has been ratified by the shareholders of Xylem Inc. Proposal three, with approximately 87.8% of the votes cast in favor of this proposal, the shareholders of Xylem Inc. have approved, in a non-binding vote, the compensation of our named executive officers as set forth in our 2026 proxy statement. Proposal four, with approximately 99.8% of the votes cast in favor of this proposal, the shareholders of Xylem Inc. have approved the implementation of the Xylem Inc.
2026 Employee Stock Purchase Plan as described in our 2026 proxy statement.
As there is no further business to be addressed, I now declare Xylem Inc.'s 2026 annual meeting of shareholders formally adjourned in all matters before it closed. I would now like to invite our Chief Legal Officer, Stacy Cozad, to provide some introductory comments. Our CEO, Matthew Pine, will then provide a few remarks about Xylem and the company's progress, after which we will have a brief question and answer period.
We may make some forward-looking statements on today's webcast, including references to future events or developments that we anticipate will or may occur in the future. These statements are subject to future risks and uncertainties, such as those factors described in Xylem's most recent annual report on Form 10-K and in subsequent reports filed with the SEC, including in our Form 10-Q to report results for the period ending March 31, 2026. Please note that the company undertakes no obligation to update any forward-looking statements publicly to reflect subsequent events or circumstances. Actual events or results could differ materially from those anticipated.
Thanks, Stacy. Good morning, thank you for joining us. I appreciate your continued confidence in Xylem and your partnership as long-term owners. 2025 was a record year for Xylem. We delivered more than $9 billion in revenue, achieved our highest profitability, and exceeded all 2025 customer sustainability goals ahead of schedule. These results confirm that our multi-year operating model transformation is working as we build a stronger company with disciplined execution and operational rigor. Over the past two years, we've sharpened our purpose, simplified operations, and began modernizing our systems while embedding an 80/20 mindset across the business. This work has strengthened accountability and aligned the organization around what matters most to customers and shareholders. As we enter the next phase of our transformation, we're focused on building our growth engine.
We've taken meaningful ground in phase 1 and are now leveraging the simplicity we've created to accelerate performance. In the year ahead, we'll apply the same rigor and discipline across commercial excellence, product development, and innovation to deliver sustained above-market growth and margin expansion. Leadership and technology are core to how we execute this next phase of our strategy. With the launch of our Leadership Accelerator last year, we're developing leaders with the attributes most critical for the years ahead, a continuous learning mindset, strong talent builders, and the boldness and resilience required to lead at scale. Speaking of boldness and resilience, we are leaning into artificial intelligence, both internally to drive growth and productivity, and externally to enable smarter customer solutions. When utilities and industrial customers fully scale AI and digital solutions into core operations, they can deploy resources more efficiently to tackle water affordability, scarcity, and resilience.
At Xylem, we are leading that effort with our customers. More broadly, AI is increasing water's importance to the global economy. As compute-intensive industries scale from data centers to semiconductors to power generation, they require large volumes of reliable water to cool systems, support operations, and keep facilities running, making resilient water infrastructure essential to sustaining growth. Simply put, AI runs on water. Xylem is uniquely positioned to meet the water infrastructure requirements of an AI-driven economy. With a balanced customer footprint across municipal and industrial markets, combined with deep system expertise, we are well-positioned to address rising demand while strengthening resilience. This is where performance and purpose come together for us. Through disciplined execution, we are building durable value for shareholders while advancing water security for communities around the world. Thank you for your continued investment and partnership.
We now would be pleased to answer your questions.
We have one question for Matthew. Do increased state and federal regulations impact revenue growth? Specifically as to PFAS regulations, how many years does Xylem anticipate PFAS regulations to be a revenue opportunity?
Thank you for the question. First, state and federal regulations do not have a material impact on our business. With regards to PFAS, compliance federally has moved out to 2031 for capturing, sensing for, and destroying PFAS. Beyond what states do at a local level today, which is less than 1% of our revenue, the meaningful work ahead for utilities will not start in earnest till the end of the decade.
We have now concluded our question and answer session. Thank you for attending today's meeting, and thank you for your interest in our company.
The meeting has now concluded. We do thank you for attending today's presentation. You may now disconnect your lines.