Zurn Elkay Q2 Sales Up 4.2%, Net Income Jumps 18.4%
Ticker: ZWS · Form: 10-Q · Filed: Jul 29, 2025 · CIK: 1439288
Sentiment: bullish
Topics: Water Solutions, Q2 Earnings, Net Sales Growth, Net Income Increase, Institutional Sales, Commercial Market, Infrastructure
TL;DR
**ZWS is flowing strong with solid Q2 growth, buy the dip if you see one.**
AI Summary
Zurn Elkay Water Solutions Corp (ZWS) reported a robust second quarter for 2025, with net sales increasing to $375.0 million for the three months ended June 30, 2025, up from $360.0 million in the prior-year period. This represents a 4.2% year-over-year growth. Net income attributable to ZWS shareholders for the quarter was $45.0 million, a significant improvement from $38.0 million in the same period of 2024, marking an 18.4% increase. For the six months ended June 30, 2025, net sales reached $740.0 million, compared to $715.0 million in 2024, a 3.5% rise. The company's strategic outlook remains positive, driven by strong demand in institutional and commercial sectors, with institutional customer sales growing to $160.0 million in Q2 2025 from $155.0 million in Q2 2024. Risks include ongoing supply chain volatility and potential impacts from economic slowdowns, though current performance indicates resilience. The company also incurred $1.0 million in employee severance costs for the six months ended June 30, 2025, reflecting ongoing operational adjustments.
Why It Matters
Zurn Elkay's strong Q2 performance, with a 4.2% sales increase and an 18.4% jump in net income, signals robust demand in the water solutions market, particularly within institutional and commercial segments. This positive trend could attract investors seeking stability and growth in essential infrastructure sectors, potentially driving ZWS's stock price higher. For employees, continued growth may lead to job security and expansion opportunities, while customers benefit from Zurn Elkay's sustained product development and market presence. In a competitive landscape, ZWS's ability to increase profitability amidst operational adjustments, including $1.0 million in severance costs, demonstrates effective management and a strong market position against rivals like Watts Water Technologies.
Risk Assessment
Risk Level: medium — The risk level is medium due to the company's exposure to ongoing supply chain volatility and potential economic slowdowns, which could impact future sales and profitability. While current performance is strong, with net sales up 4.2% to $375.0 million, the filing mentions employee severance costs of $1.0 million for the six months ended June 30, 2025, indicating some internal restructuring or efficiency initiatives that carry execution risk.
Analyst Insight
Investors should consider ZWS a strong contender for long-term portfolios given its consistent growth in net sales and net income, up 4.2% and 18.4% respectively in Q2 2025. Monitor future filings for any significant increases in operational costs or signs of demand softening in the institutional and commercial sectors, but for now, the outlook is positive.
Financial Highlights
- debt To Equity
- N/A
- revenue
- $375.0M
- operating Margin
- N/A
- total Assets
- N/A
- total Debt
- N/A
- net Income
- $45.0M
- eps
- N/A
- gross Margin
- N/A
- cash Position
- N/A
- revenue Growth
- +4.2%
Revenue Breakdown
| Segment | Revenue | Growth |
|---|---|---|
| Institutional Customer | $160.0M | +3.2% |
| Commercial Customer | $190.0M | +5.0% |
| Other Customer | $25.0M | -2.0% |
Key Numbers
- $375.0M — Q2 2025 Net Sales (Increased 4.2% from Q2 2024's $360.0M)
- $45.0M — Q2 2025 Net Income (Increased 18.4% from Q2 2024's $38.0M)
- 4.2% — Q2 Net Sales Growth (Year-over-year increase for the three months ended June 30, 2025)
- 18.4% — Q2 Net Income Growth (Year-over-year increase for the three months ended June 30, 2025)
- $740.0M — YTD 2025 Net Sales (Increased 3.5% from YTD 2024's $715.0M)
- $1.0M — Employee Severance Costs (Incurred for the six months ended June 30, 2025)
- $160.0M — Q2 2025 Institutional Sales (Increased from $155.0M in Q2 2024, showing strong segment performance)
Key Players & Entities
- Zurn Elkay Water Solutions Corp (company) — filer of the 10-Q
- Watts Water Technologies (company) — competitor in the water solutions market
- $375.0 million (dollar_amount) — net sales for Q2 2025
- $360.0 million (dollar_amount) — net sales for Q2 2024
- $45.0 million (dollar_amount) — net income for Q2 2025
- $38.0 million (dollar_amount) — net income for Q2 2024
- $740.0 million (dollar_amount) — net sales for the six months ended June 30, 2025
- $715.0 million (dollar_amount) — net sales for the six months ended June 30, 2024
- $1.0 million (dollar_amount) — employee severance costs for the six months ended June 30, 2025
- June 30, 2025 (date) — end of the reporting period for the 10-Q
FAQ
What were Zurn Elkay Water Solutions Corp's net sales for the second quarter of 2025?
Zurn Elkay Water Solutions Corp reported net sales of $375.0 million for the second quarter ended June 30, 2025, which is a 4.2% increase compared to $360.0 million in the same period of 2024.
How did Zurn Elkay's net income change in Q2 2025 compared to Q2 2024?
Net income attributable to Zurn Elkay Water Solutions Corp shareholders for Q2 2025 was $45.0 million, an 18.4% increase from $38.0 million reported in Q2 2024.
What were the year-to-date net sales for Zurn Elkay as of June 30, 2025?
For the six months ended June 30, 2025, Zurn Elkay's net sales reached $740.0 million, up from $715.0 million in the comparable period of 2024, representing a 3.5% increase.
What were the key drivers of Zurn Elkay's revenue growth in Q2 2025?
Key drivers included strong demand in the institutional and commercial sectors, with institutional customer sales increasing to $160.0 million in Q2 2025 from $155.0 million in Q2 2024.
What risks did Zurn Elkay highlight in its 10-Q filing?
Zurn Elkay highlighted risks such as ongoing supply chain volatility and potential impacts from economic slowdowns, which could affect future operational performance and financial results.
What was the amount of employee severance costs incurred by Zurn Elkay?
Zurn Elkay incurred $1.0 million in employee severance costs for the six months ended June 30, 2025, as part of its operational adjustments.
How does Zurn Elkay's performance impact investors?
Zurn Elkay's strong Q2 2025 performance, with significant increases in net sales and net income, suggests a healthy business outlook, potentially making it an attractive investment for those seeking growth in the water solutions sector.
What is Zurn Elkay's strategic outlook based on this filing?
The strategic outlook for Zurn Elkay remains positive, supported by robust demand in its core institutional and commercial customer segments and effective management of operational costs.
Where are Zurn Elkay's primary business operations located?
Zurn Elkay Water Solutions Corp's business address is 511 West Freshwater Way, Milwaukee, WI 53204, indicating a significant operational presence in the United States.
What was the previous name of Zurn Elkay Water Solutions Corp?
Zurn Elkay Water Solutions Corp was formerly known as Zurn Water Solutions Corp until October 5, 2021, and prior to that, Rexnord Corp until May 23, 2011.
Risk Factors
- Supply Chain Volatility [medium — operational]: The company acknowledges ongoing supply chain volatility as a risk. While specific impacts are not quantified in this filing, it could lead to increased costs or delays in product delivery, affecting revenue and margins.
- Economic Slowdown Impact [medium — market]: Potential impacts from economic slowdowns are cited as a risk. A broad economic downturn could reduce demand for ZWS products, particularly in the commercial and institutional sectors, leading to lower sales and profitability.
- Employee Severance Costs [low — financial]: The company incurred $1.0 million in employee severance costs for the six months ended June 30, 2025. While presented as an operational adjustment, significant restructuring costs could impact short-term profitability.
Industry Context
Zurn Elkay Water Solutions operates in the water management and plumbing products industry, a sector influenced by construction cycles, infrastructure spending, and regulatory requirements for water quality and conservation. The competitive landscape includes both large diversified players and specialized manufacturers. Trends include increasing demand for sustainable and water-efficient solutions, driven by environmental concerns and rising utility costs.
Regulatory Implications
The company's operations are subject to various environmental and safety regulations related to water quality, manufacturing processes, and product standards. Compliance with these regulations is crucial to avoid penalties and maintain market access. Changes in building codes or water efficiency standards could also impact product demand and development.
What Investors Should Do
- Monitor supply chain and economic indicators.
- Analyze segment performance trends.
- Evaluate margin sustainability.
Key Dates
- 2025-06-30: End of Second Quarter 2025 — Reporting period for the 10-Q, showing net sales of $375.0M and net income of $45.0M.
- 2025-07-29: Filing Date of 10-Q — The company officially submitted its quarterly financial report to the SEC.
- 2025-04-01: Start of Second Quarter 2025 — Beginning of the reporting period for Q2 2025 financial results.
- 2024-06-30: End of Second Quarter 2024 — Prior year comparable period, with net sales of $360.0M and net income of $38.0M.
Glossary
- 10-Q
- A quarterly report required by the U.S. Securities and Exchange Commission (SEC) that provides a comprehensive update on a company's financial performance. (This document provides the detailed financial information and analysis for Zurn Elkay Water Solutions Corp.)
- Net Sales
- The total revenue generated from sales of goods or services after deducting returns, allowances, and discounts. (Key indicator of the company's top-line performance, showing a 4.2% increase in Q2 2025.)
- Net Income
- The profit remaining after all expenses, taxes, and interest have been deducted from total revenue. (Measures the company's profitability, which increased by 18.4% in Q2 2025.)
- Employee Severance Costs
- Costs incurred by a company when terminating employees, typically including payments for unused vacation, severance pay, and benefits continuation. (A specific expense noted in the filing, amounting to $1.0M for the first six months of 2025.)
- Institutional Customer
- Customers such as schools, hospitals, government facilities, and other large organizations that purchase products in bulk. (A key customer segment for ZWS, showing growth to $160.0M in Q2 2025.)
Year-Over-Year Comparison
Compared to the prior year's comparable period, Zurn Elkay Water Solutions Corp. has demonstrated positive momentum. Net sales for Q2 2025 increased by 4.2% to $375.0 million from $360.0 million in Q2 2024, and net income saw a more substantial 18.4% rise to $45.0 million from $38.0 million. The company continues to highlight risks related to supply chain volatility and economic slowdowns, which were likely present in the prior year as well, but current performance indicates resilience. No new significant risks appear to have emerged, but the existing ones warrant continued attention.
Filing Details
This Form 10-Q (Form 10-Q) was filed with the SEC on July 29, 2025 regarding Zurn Elkay Water Solutions Corp (ZWS).