Zurn Elkay Water Solutions Corporation (ZWS): Business Model Canvas [Dec-2025 Updated]

You're looking to see how a major player in water management is actually making its money, especially after a strong showing. Well, Zurn Elkay just signaled real momentum, raising its full-year guidance after solid Q3 2025 results, projecting Adjusted EBITDA between $437 million to $440 million on core sales growth near 8%. Honestly, their model hinges on owning the specification process with iconic brands and pushing sustainable solutions, even while navigating about $50 million in expected 2025 tariff costs. Dive below to see the nine essential blocks-from their key partnerships to their cost structure-that power this performance.

Zurn Elkay Water Solutions Corporation (ZWS) - Canvas Business Model: Key Partnerships

You're looking at how Zurn Elkay Water Solutions Corporation connects its specification-driven products to the market, which heavily relies on a network of external partners. This isn't a direct-to-consumer play for most of their portfolio; it's about deep channel relationships.

Plumbing Wholesalers and Distributors for Market Reach

Zurn Elkay Water Solutions Corporation moves its professional-grade products through established channels. The reliance on these intermediaries is significant, meaning partner health directly impacts Zurn Elkay Water Solutions Corporation's top line. For instance, in fiscal 2024, the relationship with the distribution channel showed clear concentration risk, as the three largest independent distributors accounted for approximately 33% of consolidated net sales. This highlights the critical nature of maintaining strong, mutually beneficial terms with key wholesalers.

The company serves institutional, commercial, waterworks, and residential end markets using this structure. Here's a snapshot of the sales network supporting their market penetration:

It's a system built on speed and technical support, which is why they invest in keeping these channels well-supplied and informed.

Independent Sales Representatives Drive Specification-Driven Sales

The specification-driven nature of Zurn Elkay Water Solutions Corporation's portfolio-think complex flow systems and commercial plumbing-means independent sales representatives are essential partners. They are the boots on the ground driving product specification in architectural and engineering plans. The 1,100 independent sales representatives are the primary interface for many of their specification-driven water management solutions. This partnership model is reinforced by their commitment to local support; for example, a representative acknowledged the importance of investing in local reps as part of their winning strategy.

Influencer Partnerships for Elkay Liv Residential Product Line

While the search results heavily detail the commercial and institutional specification network, the residential side, like the Elkay Liv line, still leverages the broader distribution and sales rep structure for market access. The company emphasizes its 'Voice of the Customer' philosophy, which informs new product development, suggesting that feedback loops with all channel partners, including those influencing residential sales, are key to their 160 engineers and technical employees. The launch of the Elkay Liv EZ in late 2025 is an example of a product line that would rely on these established relationships for market penetration.

Strategic Suppliers for Global Supply Chain Optimization

Managing a global supply chain requires rigorous partnership standards, especially given Zurn Elkay Water Solutions Corporation's focus on sustainability and risk mitigation. They work diligently to develop strategic, mutually beneficial partnerships with their supply base, focusing on value creation, economic inclusion, and increased business opportunities. The company has set clear targets for supplier diversity; in 2024, 5.6% of domestic spending went to diverse suppliers, with a stated goal of reaching 8% by 2025. Furthermore, 100% of new suppliers were screened using environmental and social criteria.

Supply chain optimization is also a direct response to external pressures. Zurn Elkay Water Solutions Corporation anticipates a $35-45 million tariff cost impact in 2025, which they are offsetting with price increases. A key strategic move involves actively reducing their China direct material spend, targeting it to be under $30 million (representing 2-3% of Cost of Goods Sold) by the end of 2026. This demonstrates a clear, data-driven action to de-risk and reshape supplier geography.

Non-profit/School Districts for Fountains for Youth Program

Partnerships with non-profits and school districts are central to Zurn Elkay Water Solutions Corporation's social commitment, primarily through the Fountains for Youth program. This initiative focuses on donating filtered bottle filling stations where lead levels are high and resources are low. In 2024, the program donated 3,187 products (stations and filters) to four school systems, benefiting more than a million students. For example, the partnership with Milwaukee Public Schools includes a commitment from Zurn Elkay Water Solutions Corporation to donate up to 3,250 filters annually through the 2027-28 school year. This program aligns with their overall philanthropic giving, which totaled $1.3 million in 2024.

The company's dedication to this area is reflected in its overall product impact; in 2024, their products delivered 2.3 billion gallons of filtered drinking water.

Finance: draft 13-week cash view by Friday.

Zurn Elkay Water Solutions Corporation (ZWS) - Canvas Business Model: Key Activities

You're looking at the core engine room of Zurn Elkay Water Solutions Corporation-the things they must do well to make the whole model work. It's about making things, improving how they make them, and managing the global headaches that come with it.

Manufacturing and Procuring Water Management Solutions

Zurn Elkay Water Solutions Corporation's key activity centers on manufacturing and procuring its specification-driven water management solutions. This covers everything from professional-grade water safety and control products to flow systems and filtered drinking water solutions for commercial and institutional buildings. The scale of their operation is reflected in their recent financial performance, which shows strong execution in this area.

Here's a snapshot of the output and efficiency tied to their manufacturing and sales execution as of mid-2025:

They are definitely driving volume, evidenced by the 8% core sales growth in the second quarter, which management noted included volume increases across all product categories. Also, the company's commitment to sustainability is baked into their output, with 86% of revenue coming from eco-friendly products as of a recent report.

Deploying the Zurn Elkay Business System (ZEBS)

The Zurn Elkay Business System, or ZEBS, is their stated operating philosophy, which they use to enforce continuous improvement and world-class performance across the organization. This system is the mechanism for translating strategy into action for their workforce.

The deployment of ZEBS is a core activity that touches every associate:

• The system is applied by approximately 2,600 associates.
• It focuses on driving superior customer satisfaction and financial results.
• It creates a scalable, process-based framework for operations.
• It includes processes like Strategic Planning, Strategy Deployment, and the Budget Process to execute three-year strategic intent.

The results of this deployment are visible in their margin expansion; the adjusted EBITDA margin improved by 120 basis points year-over-year in Q2 2025.

R&D for Smart, Sustainable Product Innovation

Innovation is a required activity, heavily weighted toward smart and sustainable water solutions. This isn't just abstract; they had a specific financial commitment tied to this goal.

The historical R&D investment target was significant:

Zurn Elkay Water Solutions Corporation committed to invest a total of $90 million by 2025 in engineering and R&D specifically to enhance the sustainable aspects of their products.

The impact of these innovations is quantified by the water savings their products enable:

• In 2024, Zurn Elkay products saved 32.5 billion gallons of water.
• They also prevented the need for 19 billion single-use plastic water bottles in 2024.

This focus on sustainable attributes is a major driver, as management noted that roughly 0.5-percent to 1.5-percent of expected growth is directly related to climate change trends and new product development through R&D.

Supply Chain Transformation to Reduce China Exposure

Actively transforming the supply chain away from single-source dependency, particularly China, is a critical, ongoing activity. This is a direct response to global trade volatility.

The company has set aggressive targets for this transformation:

Zurn Elkay Water Solutions Corporation is aiming for its direct material spend from China to be under $30 million, representing only 2-3% of Cost of Goods Sold (COGS), by the end of 2026.

This is a massive shift from peers who may still have 20%+ reliance on Chinese manufacturing. The company is enhancing supply chain integrity through supplier screenings and audits as part of this effort.

Navigating Global Tariff Dynamics and Pricing Actions

Managing the financial impact of global tariffs is a necessary, reactive key activity that requires precise execution on the pricing front. They are actively mitigating these costs rather than absorbing them.

The financial exposure and mitigation strategy for 2025 look like this:

Management expected the tariff impact for 2025 to be between $35 million and $45 million as of the Q2 update, a reduction of $10 million from the guidance 90 days prior. To offset this, they executed selective pricing actions, including two rounds of increases in April and May 2025, which directly passed costs to customers. The success of this navigation is reflected in the Q2 2025 results, where the company achieved price realization and productivity savings that helped push the adjusted EBITDA margin to a record 26.5%.

The strong cash generation from these activities is clear:

• Free cash flow exceeded $100 million in the second quarter for the first time ever.
• Net debt leverage stood at a low 0.7x as of June 30, 2025.

Finance: draft 13-week cash view by Friday.

Zurn Elkay Water Solutions Corporation (ZWS) - Canvas Business Model: Key Resources

You're looking at the core assets Zurn Elkay Water Solutions Corporation holds right now, late in 2025, that lets them run their business. These aren't just things they own; they are the engine for their specification-driven water management solutions.

The foundation is definitely the collection of iconic, specified brands they manage. This portfolio is broad, covering everything from safety to hygiene. Here's a breakdown of the key names and product categories that make up this resource base:

This broad portfolio is designed to address water management across institutional, commercial, waterworks, and residential markets. A significant portion of their revenue is tied to products that actively conserve or protect water. For instance, in 2024, products that conserve water, reduce energy, and protect clean water sources accounted for more than 86% of Zurn Elkay Water Solutions Corporation's revenue.

Financially, the balance sheet is a major asset, giving you confidence in their stability. As of September 30, 2025, the company reported a net debt leverage ratio of 0.6x. That's a record low for them, down from 0.9x at the end of the first quarter of 2025. This strong position provides capital deployment optionality, including M&A cultivation and shareholder returns.

The physical infrastructure supporting this is the global manufacturing and distribution network. Zurn Elkay Water Solutions Corporation designs, procures, manufactures, and markets solutions across the United States, Canada, and internationally. They are actively optimizing this network, targeting a reduction of reliance on China for cost of goods sold (COGS) down to between 2% and 3% by the end of 2026.

Finally, the proprietary technology around hydration is a key differentiator. This is the intellectual property for filtered drinking water technology. In 2024 alone, their products delivered 2.3 billion gallons of filtered drinking water. Their commercial-grade WaterSentry® filters are central to this, certified to reduce contaminants like lead, PFOA/PFOS, and microplastics. Specifically, the 51600C HighCapacity Replacement Filter doubles filter life to 6,000 gallons and carries certifications including NSF/ANSI 42, 53 and 401.

Here are some recent capital allocation actions that demonstrate how they use this resource strength:

• Increased annual dividend by 22% to $0.44 per share (as of Q3 2025).
• Increased share repurchase authorization up to $500 million.
• Deployed $25 million to repurchase 0.6 million shares in the third quarter of 2025.

Finance: draft 13-week cash view by Friday.

Zurn Elkay Water Solutions Corporation (ZWS) - Canvas Business Model: Value Propositions

You're looking at the core promises Zurn Elkay Water Solutions Corporation makes to its customers, grounded in the numbers from their latest reports as of late 2025.

Broadest sustainable, specification-driven product portfolio

Zurn Elkay Water Solutions Corporation markets what it believes is the broadest sustainable product portfolio of specification-driven water management solutions. This portfolio includes professional grade water safety and control products, flow systems products, hygienic and environmental products, and filtered drinking water products. As of December 31, 2024, the company held approximately 230 active patents in the United States and approximately 90 foreign active patents. For the first three quarters of 2025, 86% of revenue was derived from products with sustainable attributes. This breadth is key to meeting specific project requirements across diverse construction markets.

The components of this portfolio are:

• Professional grade water safety and control products.
• Flow systems products.
• Hygienic and environmental products.
• Filtered drinking water products for public and private spaces.

Solutions for health, hydration, and human safety

The value proposition centers on delivering cleaner, safer drinking water and protecting human health. The company's innovation, such as the Elkay Pro Filtration line launched in 2025, focuses on reliable performance and certified total PFAS reduction. This directly addresses growing consumer concerns about water quality. The scale of their hydration impact is significant:

This focus on safety and hydration is central to their offering.

Water conservation and management for ESG goals

Water conservation is a measurable part of the Zurn Elkay Water Solutions Corporation value proposition, directly supporting customer and company ESG goals. The company has a stated goal to invest a total of $90 million by 2025 in engineering and R&D specifically to enhance the sustainable aspects of its products. The impact on water savings is substantial:

• 2024 Water Savings: Products saved 32.5 billion gallons of water.
• YTD 2025 Water Savings: Products saved 16.6 billion gallons of water through the second quarter.

These figures show the tangible environmental benefit embedded in their product use.

Professional-grade quality for non-residential markets

Zurn Elkay Water Solutions Corporation primarily serves the institutional and commercial building construction market, which demands professional-grade quality. The company's operational discipline, driven by the Zurn Elkay Business System (ZEBS), supports this quality delivery. For instance, in the third quarter of 2025, the company achieved an adjusted EBITDA margin of 26.8%, demonstrating strong execution against costs. Furthermore, management noted that end-markets across the vast majority of their non-residential segments were described as positive and stable in Q2 2025. The core sales growth in Q3 2025 reached 11% year-over-year, indicating strong demand for their specification-driven solutions in these critical sectors.

Immediate and cost-effective infrastructure solutions

The company's financial health and efficiency translate into cost-effective solutions for infrastructure projects. Strong free cash flow generation and balance sheet management support this. For the full year 2025, Zurn Elkay Water Solutions Corporation raised its free cash flow expectation to be greater than $300 million. As of July 2025, the net debt leverage ratio improved to 0.7x, showing a strong financial position to support operations and innovation. The company's heritage also emphasizes providing solutions that reduce product installation time, which directly contributes to the cost-effectiveness of infrastructure projects.

Zurn Elkay Water Solutions Corporation (ZWS) - Canvas Business Model: Customer Relationships

You're looking at how Zurn Elkay Water Solutions Corporation keeps its key customers engaged, which is crucial given their focus on specification-driven water management solutions. The relationship strategy leans heavily on direct engagement and proven longevity in the market.

Dedicated sales force for specifiers and engineers

The approach here is about deep technical engagement with the people who write the project requirements. Zurn Elkay Water Solutions supports this through its total workforce of approximately 2,600 associates, who apply the Zurn Elkay Business System (ZEBS) operating philosophy to deliver consistent performance. This system is designed to drive superior satisfaction for customers who rely on specification-driven products. The company's product portfolio is broad, covering professional-grade water safety and control, flow systems, and hygienic products, all requiring specialized knowledge for specification.

High-touch service for institutional/commercial clients

For your largest clients, the service model is clearly high-touch. Management has specifically highlighted confidence in the resilience of their two largest end markets: healthcare and education. The operational framework, ZEBS, is explicitly mentioned as a driver for strong results and margin expansion, which translates into reliable service delivery for these critical sectors. The Q2 2025 results showed a strong 8% core sales growth year-over-year, indicating solid execution within these client bases.

Digital tools for product selection and technical support

While specific adoption rates for Zurn Elkay Water Solutions' proprietary tools aren't public, innovation is a clear relationship driver. A significant milestone in 2025 was the launch of the Elkay Pro Filtration product line, positioned as a major refresh since the inception of the bottle filler category. This innovation aims to provide immediate and cost-effective solutions for aging infrastructure. For context on the broader digital environment they operate in, the Digital Water Solution Market size grew from $1.09 billion in 2024 to an estimated $1.24 billion in 2025.

Brand loyalty from long-standing market presence

Longevity is a core asset in building trust, especially in infrastructure. Zurn Elkay Water Solutions traces its founding back to 1900, celebrating its 125th anniversary in 2025. This history underpins a reputation for reliability. Furthermore, external validation reinforces this standing; the company was named one of America's Most Responsible Companies by Newsweek and Statista for the fifth consecutive year as of 2025. This consistent recognition helps solidify customer loyalty, as customers see a commitment beyond just the product sale.

Here's a quick look at the numbers grounding these customer-facing elements:

The company emphasizes its commitment to sustainability, with 86% of revenue being sustainable as of YTD 2025. This focus is a key part of the value proposition delivered through these relationships.

• Largest end markets cited as strong: healthcare and education.
• Operational philosophy driving consistency: Zurn Elkay Business System (ZEBS).
• Key 2025 product innovation: Elkay Pro Filtration launch.
• Net debt leverage as of June 30, 2025: 0.7x.

Zurn Elkay Water Solutions Corporation (ZWS) - Canvas Business Model: Channels

You're looking at how Zurn Elkay Water Solutions Corporation gets its products-from commercial plumbing fixtures to advanced drinking water systems-into the hands of the end-user. The scale of their operation, with trailing twelve months revenue ending September 30, 2025, hitting $1.66 Billion USD, means they need a multi-pronged approach to cover everything from massive construction projects to individual product replacements.

The core of Zurn Elkay Water Solutions Corporation's market reach relies heavily on established trade networks. This is the two-step distribution model via wholesalers/distributors. Wholesalers are the backbone for stocking and supplying contractors across the country for standard plumbing and water safety needs. This channel moves the bulk of their product volume, even if the final sale isn't directly tracked by Zurn Elkay Water Solutions Corporation.

Here's a look at the financial scale through which these channels operate, based on the latest reported figures:

For the big jobs, the direct sales effort is key. This involves direct sales to large institutional and commercial accounts, like major universities, hospitals, or large commercial real estate developers. These sales often involve specifying Zurn Elkay Water Solutions Corporation's full systems, including their newer innovations. For instance, the launch of the Elkay Pro Filtration system and the LIV EZ built-in home dispenser in late 2025 targets these high-value, specification-driven segments directly, ensuring the right technology is integrated from the start.

You can't specify a product without influencing the engineer or architect first. That's where independent sales representatives come in for specification influence. These specialized agents work to get Zurn Elkay Water Solutions Corporation products written into the blueprints for new construction or renovation projects. The company explicitly directs customers to contact their Zurn Elkay Sales Representative or Area Sales Manager for details on price adjustments, which confirms the active role of this direct-facing sales force in managing customer relationships and pricing strategy.

Finally, for certain product lines, especially replacement parts or specific consumer-facing items, Zurn Elkay Water Solutions Corporation uses e-commerce platforms. While the core business flows through traditional distribution, digital channels provide necessary reach for smaller, immediate needs. This is where you'd likely see specific components or accessories move quickly, complementing the larger project sales driven by the wholesale and direct teams. The company's focus on product innovation, like the new filtration lines, means they must support these products across all available sales avenues.

Zurn Elkay Water Solutions Corporation (ZWS) - Canvas Business Model: Customer Segments

You're looking at how Zurn Elkay Water Solutions Corporation segments its sales, which is heavily weighted toward large-scale, specification-driven projects. The company explicitly states its participation is primarily in the institutional and commercial buildings construction market, with a lesser extent in waterworks and residential construction markets.

For the three months ended March 31, 2025, the revenue split shows the dominance of the institutional sector. Total revenue for that quarter was $388.8 million. The company is clearly focused on large-scale, non-residential demand, which management noted remained positive and stable across the vast majority of its non-residential end markets as of mid-2025.

The latest reported quarterly sales, for the third quarter ended September 30, 2025, reached $455.4 million, showing an 11% year-over-year core sales increase. Management projected the full year 2025 core sales growth to be about 8%.

Here's a look at the revenue disaggregation by customer type for the first quarter of fiscal year 2025:

The segments you asked about-Institutional, Commercial, Waterworks, and Residential-are the core of Zurn Elkay Water Solutions Corporation's focus, though the public reporting groups Waterworks and Residential into the 'All other' category for revenue detail.

The company supports these segments with specific product lines and market strategies:

• Institutional (Education, Healthcare, Government) revenue for Q1 2025 was $191.4 million.
• Commercial revenue for Q1 2025 was $108.9 million.
• The Waterworks segment is served by products like backflow preventers and fire system valves under the Wilkins brand.
• The Residential market is a smaller piece of the business, though management noted a modestly weaker residential market in mid-2025.
• Zurn Elkay expanded its residential presence by introducing the Elkay Liv built-in filtered bottle fillers.

Zurn Elkay Water Solutions Corporation (ZWS) - Canvas Business Model: Cost Structure

You're looking at the core expenses that drive Zurn Elkay Water Solutions Corporation's operations as of late 2025. Honestly, for a manufacturer like Zurn Elkay Water Solutions Corporation, the cost structure is dominated by what it takes to make and move the product.

Manufacturing and procurement costs are primary drivers. For the twelve months ending June 30, 2025, Zurn Elkay Water Solutions Corporation's total operating expenses were reported at $1.354B. This figure encompasses all the costs associated with running the business, including the direct costs of production.

Significant material costs, subject to commodity volatility, are a constant factor in procurement. You see this play out in their margin management; for instance, in the third quarter of 2025, the Adjusted EBITDA margin hit 26.8% on net sales of $455 million. This margin performance shows how effectively they are managing input costs against pricing actions.

Tariff costs expected to be around $50 million in 2025 are a major, specific headwind management is actively tackling. Management updated its estimate for the full-year 2025 tariff cost impact to approximately $50 million. This was an upward revision from earlier guidance that ranged between $45-$55 million. That's a substantial, non-trivial expense to absorb.

Investment in R&D and supply chain transformation is a direct response to these external pressures and a long-term cost strategy. Zurn Elkay Water Solutions Corporation is aggressively repositioning its supply chain to mitigate future tariff exposure and gain agility. The goal is to slash direct material spend originating from China to under $30 million, representing only 2-3% of COGS, by the end of 2026. This shift requires upfront capital investment in new sourcing and capacity acceleration outside of China.

Selling, General, and Administrative (SG&A) expenses form the other major bucket of operating costs. While we don't have a clean 2025 SG&A number, we know how pension costs flow through the books: the service cost component of net periodic pension cost is allocated within both Cost of sales and Selling, General, and Administrative expenses. For context on operating leverage, in the second quarter of 2025, Income from operations was $77.6 million on net sales of $445 million.

Here's a quick look at some key operational and cost-related metrics from the recent reporting periods:

You should keep an eye on how the price realization initiatives are tracking against the tariff impact, as that's the key lever management is pulling to protect margins.

• Price increases were implemented in April and May 2025 to combat tariff costs.
• Further pricing adjustments, like a 10% increase on Wilkins products, were announced for September 15, 2025, citing tariffs and commodity volatility.
• The company completed the termination of its U.S. defined benefit pension plan in 2025, eliminating an approximately $200 million liability.
• The service cost component of net periodic pension cost is split between Cost of sales and SG&A.

Finance: draft 13-week cash view by Friday.

Zurn Elkay Water Solutions Corporation (ZWS) - Canvas Business Model: Revenue Streams

You're looking at the hard numbers driving Zurn Elkay Water Solutions Corporation's revenue engine as we head into the end of 2025. The streams are primarily product sales, supported by strong execution across their specification-driven portfolio.

The latest guidance reflects significant momentum. For the full year 2025, Zurn Elkay Water Solutions Corporation anticipates core sales growth of about 8% across the business. Profitability on that revenue base is projected to be strong, with the full-year 2025 Adjusted EBITDA projected at $437 million to $440 million.

To give you a snapshot of the recent performance underpinning this outlook, here's how the third quarter of 2025 stacked up:

Revenue generation relies heavily on the sales of water safety and control products, which are specification-driven and form the backbone of their nonresidential market presence. The strong Q3 performance showed organic growth of 11% year-over-year, indicating robust demand in these core areas. This growth was broad-based across product categories, which helps smooth out any single segment volatility.

A key growth vector is the sales of filtered drinking water and bottle filler products. Zurn Elkay Water Solutions Corporation has been actively expanding this area, for instance, by expanding the Elkay Liv product line with the introduction of the Elkay Liv built-in filtered bottle fillers for residential use, supported by a robust marketing campaign. This focus on hydration solutions contributes directly to the overall core sales growth figures.

Also critical to the revenue mix are aftermarket and replacement parts sales. These transactions often carry higher margins and represent recurring revenue from installed base products. The company's ability to navigate supply chain dynamics and maintain price-cost positivity has protected the profitability of these sales streams, contributing to the record Adjusted EBITDA margins seen in Q3 at 26.8%.

The company's financial discipline is evident in its cash generation, which supports shareholder returns. Free cash flow for the third quarter alone was $94 million, and the full-year free cash flow expectation is greater than $300 million.