William Grogan
Senior Vice President, Chief Financial Officer at Xylem
Thanks, Matthew. Please turn to slide five. Q2 was another great quarter and I want to thank our entire organization for their amazing work. We outperformed against our guide across revenue, margin, and earnings per share. We continue to see resilient demand and our backlog is at $5.2 billion, a modest decline from prior year as we execute on MCS past-due backlog. Book-to-bill was approximately one, supported by strength in Water Infrastructure, while organic orders were down 1% in the quarter, driven by project timing within MCS and WSS.
Total revenues grew 26% and organic revenue rose 9%, exceeding our guidance on a healthy combination of volume and price. Outperformance was led by MCS and WSS as we saw growth in all regions led by double-digit growth in the U.S. EBITDA margin was 20.8%, up 170 basis points from the prior year, with productivity savings, strong volume, and price more than offsetting inflation, investments, and mix. This reflects increments of 28% on a consolidated basis and 50% on a pro forma basis.
Our EPS in the quarter was $1.09, above the high-end of our guidance by $0.04 and up 11% over the prior year. Our balance sheet is strong with net-debt to adjusted EBITDA at 0.7 times. Year-to-date free cash flow was up 200% versus the prior year and conversion of 62% is strong given seasonality. This year-over-year improvement was driven by higher net income, offset slightly by increased capex, and we continue to benefit from improved working capital efficiency.
Please turn to slide six. Measurement and Control Solutions had another great quarter and again exceeded our expectations. MCS revenue was up 26%, driven by smart metering demand and backlog execution. However, due to project timing, orders were down 18% and book-to-bill came in under one. We worked down past-due backlog and total backlog for MCS now sits at roughly $2 billion, a 12% organic decrease from the prior year. We finished the quarter with impressive EBITDA margins of 23.4%, up 700 basis points versus the prior year and up 70 bps sequentially. Margin expansion was driven by volume, price, productivity, and favorable mix more than offsetting inflation. As a reminder, we continue to expect a margin headwind from a mix in the second half as energy meters account for a larger portion of our sales.
In Water Infrastructure, orders were up strong 8% in the quarter, led by robust treatment demand. Revenue exceeded our expectations with total growth of 22% and organic growth of 7%, driven by healthy demand across all regions and applications. Adjusted EBITDA margin for the segment was down 60 basis points with roughly 40% pro-forma incrementals. This decline was driven by inflation and acquisition but was offset partially by productivity, volume, and price. Without the impact of acquisitions, adjusted EBITDA margin improved 40 basis points for the quarter. In Applied Water, orders were up 5% and book-to-bill was greater than one, reflective of a few large project wins, which will ship next year. Revenues were down 4% in line with our expectations, lapping strong comps on 12% growth in the second quarter of last year. Decline was primarily driven by softness in developed markets. Segment EBITDA margins declined 200 basis points year-over-year, but increased 100 basis points sequentially. Higher inflation and unfavorable mix was partially offset by productivity savings.
Closing the segments with Water Solutions and Services, orders declined 1% organically, driven by timing of large capital projects offset by strength in Dewatering. Organic revenue was up 12% with healthy growth across most of the business. Adjusted EBITDA margin was strong at 23.8%, up 60 basis points and driven by volume, productivity, and price, offset in part by unfavorable mix and inflation. Two quarters in re-segmentation, we continue to see synergy momentum and benefits for our customers in combining our service-based offerings.
Now let's turn to slide seven for updated full-year and Q3 guidance. Given our first-half outperformance and both commercial and operational momentum, we are raising our full-year guide. We are increasing our revenue guide by approximately $50 million, up from $8.5 billion. This reflects an additional half-point of growth at the midpoint versus our prior guidance. That will put total revenue growth at approximately 16% and organic revenue growth at 5% to 6%. The integration is growing smoothly and we continue to expect $100 million of exit run-rate cost synergies in 2024 with the potential to accelerate by year-end. We are confident about driving further margin expansion with operational productivity and are raising our EBITDA margin guidance to about 20.5%, that represents 160 basis points of expansion versus the prior year, driven by higher-volume, productivity, including cost synergies and price offsetting inflation.
Our updated EPS guidance of $4.18 to $4.28 reflects an increase of $0.06 at the midpoint. Free cash flow conversion for the year is now expected to be over 120% of net income. The full-year outlook at the segment level remains largely unchanged with the exception of MCS, which we now expect to grow at high-teens due to our first-half performance versus our previous outlook of low-teens. For the quarter, we anticipate revenue growth will be 3% to 5% on a reported and organic basis. We expect third quarter EBITDA margin to be in the range of 20.5% to 21%, up 70 basis points to 120 basis points, driven by higher volumes, continued price realization, and productivity gains. This yield -- this yields third quarter EPS of $1.07 to $1.12.
Our diversified portfolio of mission-critical products and services positions us well to address our customers' evolving needs, and we anticipate healthy demand across most end markets and applications, and we talked about our driving profitability through simplification efforts and our 80/20 implementations at the Investor Day in May. We are progressing well on those initiatives and I want to reiterate our commitment to systematic margin improvement through operational excellence, supporting our long-term profitability framework, while we are closely monitoring the macro-environment, including geopolitical, election uncertainty, and tariffs, our overall outlook for the year remains positive.
With that, please turn to slide eight, and I'll turn the call back over to Matthew for closing comments.
