Group 1 - The analyst has over 14 years of experience in stock analysis and writing, with a focus on both long and short positions in an unbiased manner [1] - The primary focus of the analyst's coverage is on the energy sector, specifically the oilfield equipment services sector, for the past 7 years [1] - The analyst also covers the Industrial Supply industry and occasionally collaborates with another contributor [1]

Core Insights - Wesco International reported Q2 2025 earnings with GAAP revenue of $5.90 billion, surpassing consensus expectations of $5.82 billion, and adjusted EPS of $3.39, exceeding estimates of $3.36, indicating strong sales momentum particularly in high-growth markets like data centers [1][2] - The company experienced margin compression and a slow recovery in free cash flow, highlighting areas of concern despite strong sales and backlog growth across major business segments [1][5] Financial Performance - Adjusted EPS (Non-GAAP) increased by 5.6% year-over-year to $3.39 from $3.21 in Q2 2024 [2] - Revenue rose 7.7% year-over-year to $5.90 billion from $5.48 billion in Q2 2024 [2] - Adjusted EBITDA (Non-GAAP) decreased by 1.5% to $394.2 million, with a margin of 6.7%, down from 7.3% a year ago [2][8] - Gross margin fell to 21.1%, a decline of 0.8 percentage points compared to Q2 2024, primarily due to a higher mix of lower-margin projects [2][7] - Free cash flow (Non-GAAP) improved to $86.5 million from a negative $234.1 million in Q2 2024, but year-to-date free cash flow was significantly lower than historical norms [2][10] Business Segments and Growth Drivers - The Communications & Security Solutions (CSS) segment led growth with 17.3% organic sales growth, reaching $2.26 billion, driven by data center sales exceeding $1 billion, a 65% increase year-over-year [5][6] - The Electrical & Electronic Solutions (EES) segment saw organic sales growth of 6.0%, but faced margin pressure due to competitive pricing and a higher share of large project wins [6] - The Utility & Broadband Solutions (UBS) segment recorded a 4.4% decline in organic sales, although management noted signs of recovery in utility client sales [6] Strategic Focus and Future Outlook - Wesco is focusing on long-term trends such as data center growth, electrification, automation, and grid modernization, which are central to its strategic outlook [4] - Management raised the full-year organic sales growth outlook for 2025, citing strong demand in core areas, while maintaining adjusted EPS guidance midpoint unchanged [12] - The company plans to generate free cash flow of $600 million to $800 million for fiscal 2025, primarily for debt reduction, share buybacks, and selective acquisitions [13]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2025 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 001-14989 WESCO International, Inc. (Exact name of registrant as specified in its charter) | Delaware | 25-1723342 | | --- | --- | | ...

Financial Data and Key Metrics Changes - Organic sales grew 7% in Q2, following a 6% increase in Q1, with preliminary July sales per workday up approximately 10% year over year [5][12] - Adjusted EBITDA margin increased by 90 basis points sequentially, while adjusted EPS rose 6% compared to the prior year [6][14] - Total data center sales surpassed $1 billion in Q2, marking a 65% year-over-year increase [5][21] Business Line Data and Key Metrics Changes - Communications and Security Solutions (CSS) achieved 17% organic growth, driven by strong data center performance, while Electrical and Electronic Solutions (EES) grew 6% [5][18] - Utility and Broadband Solutions (UBS) experienced a 4% decline in sales, although investor-owned utilities showed signs of recovery [24][27] - CSS data center sales represented nearly 40% of CSS revenue in Q2, up from approximately 30% in the prior year [19][21] Market Data and Key Metrics Changes - The utility market faced headwinds but is expected to return to growth in the second half of the year, with preliminary July sales for UBS showing slight improvement [24][39] - Backlog increased across all business units, with CSS backlog up 36% year over year [40][41] - The overall demand for data centers remains strong, with no slowdown in customer demand reported [19][21] Company Strategy and Development Direction - The company is focused on executing cross-sell initiatives, managing margins, and delivering operational improvements through technology [10][42] - The outlook for organic sales growth has been revised upward to 5% to 7% for the year, driven by strong data center performance and broader electrical sales trends [37][39] - The company plans to prioritize deleveraging the balance sheet while remaining opportunistic regarding share repurchases and acquisitions [41][42] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term growth potential of the utility business, supported by trends in electrification and green energy [27][39] - The company acknowledged the uncertainty surrounding tariffs and the overall economy but remains optimistic about demand for data centers and improving electrical end markets [39][40] - Management highlighted the importance of strong customer relationships and visibility into future demand, particularly in the data center segment [65][68] Other Important Information - The company redeemed $540 million of Series A preferred stock, improving its capital structure and extending debt maturities [29][30] - Free cash flow for Q2 was $87 million, representing approximately 45% of adjusted net income, with a trailing twelve-month free cash flow of $644 million [27][28] Q&A Session Summary Question: Clarification on pricing and guidance - Management confirmed that no tariff impacts are included in the second half outlook, and July's strong start reflects genuine demand increase rather than just easier comparisons [49][50] Question: Insights on utility business trends - Management noted that investor-owned utilities returned to growth in Q2, with expectations for public power customers to follow suit in the second half [59][62] Question: Data center growth metrics - Management indicated strong visibility into data center demand, with significant growth in both white space and gray space, particularly driven by AI applications [65][68] Question: Net working capital intensity targets - Management aims to return to pre-COVID levels of around 19% for net working capital intensity, with ongoing improvements noted [79][80] Question: Pricing impacts and inventory gains - Management clarified that known price increases are factored into guidance, but future pricing actions related to tariffs are not included due to uncertainty [84][86]

Financial Data and Key Metrics Changes - Organic sales grew 7% in Q2 2025, following a 6% increase in Q1 2025, with preliminary July sales per workday up approximately 10% year over year [5][11][39] - Adjusted EBITDA margin increased by 90 basis points sequentially, driven by strong operating cost leverage and stable gross margin [6][12] - Adjusted EPS was $3.39, reflecting a 6% increase compared to the prior year [7][13] Business Line Data and Key Metrics Changes - CSS (Communications and Security Solutions) achieved 17% organic growth, while EES (Electrical and Electronic Solutions) grew by 6% [5][12] - Data center sales surpassed $1 billion in Q2, marking a 65% year-over-year increase, indicating strong demand driven by AI trends [5][19] - UBS (Utility and Broadband Solutions) experienced a 4% decline in sales, although investor-owned utility sales returned to growth in Q2 [22][24] Market Data and Key Metrics Changes - The utility market faced challenges but showed signs of recovery, with investor-owned utilities growing low single digits in Q2 [22][56] - Backlog increased across all business units, with CSS backlog up 36% year over year, reflecting strong demand in data center projects [36][65] - The overall data center sales represented approximately 18% of total sales in Q2, up from 10% in the previous year [19] Company Strategy and Development Direction - The company raised its full-year outlook for organic sales growth to 5% to 7%, up from a previous range of 2.5% to 6.5% [33][35] - Focus remains on executing cross-sell initiatives, managing margins, and delivering operational improvements through technology [9][38] - The company aims to prioritize deleveraging the balance sheet while remaining opportunistic regarding share repurchases and acquisitions [37][38] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term growth trajectory supported by trends in electrification, data center expansion, and infrastructure modernization [16][24] - The company acknowledged uncertainties related to tariffs and the overall economy but noted strong demand for data centers and improving electrical end markets [35][36] - Preliminary July sales indicate continued positive momentum, with expectations for mid to high single-digit growth in Q3 [39][41] Other Important Information - The company redeemed $540 million of Series A preferred stock, enhancing financial flexibility and stability [26][27] - Inventory management remains a focus, with a 60 basis point year-over-year improvement in networking capital intensity [25][37] - The company is actively managing tariff impacts and global trade uncertainties to protect margins [30][41] Q&A Session Summary Question: Clarification on pricing and demand trends - Management confirmed that no tariff impacts are included in the second half outlook, and July sales show genuine demand increase rather than just easier comparisons [45][46] Question: Insights on UBS margins - UBS margins were impacted by customer mix and increased SG&A costs, but management expects significant operating leverage as utility sales return to growth [48][50] Question: Utility business performance - Investor-owned utilities returned to growth in Q2, while public power customers are expected to follow suit in the second half of the year [56][58] Question: Data center growth metrics - Management highlighted strong visibility into data center demand, with significant growth in both white space and gray space projects [60][62] Question: Inventory gains and pricing impacts - Management indicated that inventory gains from price increases are temporary and will be reflected in future financials, but specific impacts are difficult to project [78][89]

Core Insights - Wesco International (WCC) reported $5.9 billion in revenue for the quarter ended June 2025, marking a year-over-year increase of 7.7% and exceeding the Zacks Consensus Estimate by 1.99% [1] - The company's EPS for the same period was $3.39, up from $3.21 a year ago, representing a surprise of 2.42% over the consensus estimate of $3.31 [1] Revenue Performance - Net Sales for Electrical & Electronic Solutions (EES) reached $2.26 billion, surpassing the average estimate of $2.2 billion, with a year-over-year change of +3.9% [4] - Net Sales for Utility & Broadband Solutions (UBS) were $1.38 billion, below the average estimate of $1.44 billion, reflecting a year-over-year decline of -4.5% [4] - Net Sales for Communications & Security Solutions (CSS) amounted to $2.27 billion, exceeding the estimated $2.14 billion, with a significant year-over-year increase of +21.4% [4] EBITDA Analysis - Adjusted EBITDA for Corporate was reported at -$131.3 million, better than the estimated -$145.92 million [4] - Adjusted EBITDA for UBS was $143.7 million, falling short of the average estimate of $171.71 million [4] - Adjusted EBITDA for CSS was $198.9 million, exceeding the average estimate of $186.85 million [4] - Adjusted EBITDA for EES was $182.9 million, slightly below the estimated $185.05 million [4] Stock Performance - Shares of Wesco International have returned +10% over the past month, outperforming the Zacks S&P 500 composite's +2.7% change [3] - The stock currently holds a Zacks Rank 4 (Sell), indicating potential underperformance relative to the broader market in the near term [3]

NYSE: WCC Second Quarter Webcast Presentation July 31, 2025 Forward-Looking Statements and Non-GAAP Measures All statements made herein that are not historical facts should be considered as "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements involve known and unknown risks, uncertainties and other factors that may cause actual results to differ materially. These statements include, but are not limited to, statements regarding business stra ...

Group 1: Earnings Performance - Wesco International reported quarterly earnings of $3.39 per share, exceeding the Zacks Consensus Estimate of $3.31 per share, and up from $3.21 per share a year ago [1] - The earnings surprise for the quarter was +2.42%, while the previous quarter saw a surprise of -0.9% with actual earnings of $2.21 per share against an expectation of $2.23 [2] - The company achieved revenues of $5.9 billion for the quarter, surpassing the Zacks Consensus Estimate by 1.99%, compared to $5.48 billion in the same quarter last year [3] Group 2: Stock Performance and Outlook - Wesco International's shares have increased approximately 17.6% since the beginning of the year, outperforming the S&P 500's gain of 8.2% [4] - The current consensus EPS estimate for the upcoming quarter is $3.83 on revenues of $5.73 billion, and for the current fiscal year, it is $12.96 on revenues of $22.53 billion [8] - The estimate revisions trend for Wesco International was unfavorable prior to the earnings release, resulting in a Zacks Rank 4 (Sell) for the stock, indicating expected underperformance in the near future [7] Group 3: Industry Context - The Electronics - Parts Distribution industry, to which Wesco International belongs, is currently ranked in the bottom 13% of over 250 Zacks industries, suggesting potential challenges ahead [9] - Another company in the same industry, Avnet, is expected to report a significant year-over-year earnings decline of -41% for the quarter ended June 2025, with revenues projected to decrease by 3.6% [10][11]

[Executive Summary & Highlights](index=1&type=section&id=Executive%20Summary%20%26%20Highlights) [Management Commentary](index=1&type=section&id=Management%20Commentary) Management highlights strong sales momentum in the first half of 2025, outperforming the market with accelerating organic sales growth, reaching 7% in Q2 - Organic sales growth accelerated from **6% in Q1 to 7% in Q2**, with preliminary July sales per workday up approximately **10% year-over-year**[4](index=4&type=chunk) - Total data center sales surpassed **$1 billion** in the quarter, marking a new record and a **65% increase** versus the prior year[4](index=4&type=chunk) - The company redeemed its preferred stock in June, which is expected to improve cash flow and EPS run rates, targeting over **75% of free cash flow** for debt reduction, stock buybacks, and acquisitions[5](index=5&type=chunk) - The full-year 2025 organic sales growth outlook has been raised, while the EPS mid-point is maintained, supported by secular trends in AI-driven data centers, electrification, and automation[5](index=5&type=chunk) [Second Quarter 2025 Highlights](index=1&type=section&id=Second%20Quarter%202025%20Highlights) Wesco reported a 7.7% year-over-year increase in net sales for Q2 2025, with organic sales up 7.2%, and adjusted diluted EPS grew 6% YoY to $3.39 Q2 2025 Key Metrics | Metric | Value | Change (YoY) | | :--- | :--- | :--- | | Reported Net Sales | - | Up 7.7% | | Organic Sales | - | Up 7.2% | | Data Center Sales | > $1 billion | Up ~65% | | Adjusted Diluted EPS | $3.39 | Up 6% | | Adjusted EBITDA Margin | 6.7% | Up 90 bps sequentially | - Backlog showed strength, increasing year-over-year and sequentially across all three business units[6](index=6&type=chunk) [Financial Performance Analysis](index=2&type=section&id=Financial%20Performance%20Analysis) [Key Financial Highlights (GAAP & Non-GAAP)](index=2&type=section&id=Key%20Financial%20Highlights%20%28GAAP%20%26%20Non-GAAP%29) For Q2 2025, net sales increased 7.7% YoY to $5.90 billion, while GAAP net income attributable to common stockholders decreased 13.1% to $189.2 million, with operating cash flow significantly improving to an inflow of $107.8 million Q2 & H1 2025 Financial Performance Summary (in millions, except per share data) | Metric | Q2 2025 | Q2 2024 | YoY Change | H1 2025 | H1 2024 | YoY Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | **GAAP Results** | | | | | | | | Net Sales | $5,899.6 | $5,479.7 | 7.7% | $11,243.3 | $10,829.7 | 3.8% | | Net Income (Common) | $189.2 | $217.7 | (13.1)% | $293.2 | $319.2 | (8.1)% | | Diluted EPS | $3.83 | $4.28 | (10.5)% | $5.92 | $6.22 | (4.8)% | | Operating Cash Flow | $107.8 | $(223.8) | 148.2% | $135.8 | $522.5 | (74.0)% | | **Non-GAAP Results** | | | | | | | | Organic Sales Growth | 7.2% | (0.8)% | N/A | 6.4% | (2.0)% | N/A | | Adjusted EBITDA | $394.2 | $400.1 | (1.5)% | $704.9 | $740.5 | (4.8)% | | Adjusted Diluted EPS | $3.39 | $3.21 | 5.6% | $5.60 | $5.51 | 1.6% | [Net Sales Analysis](index=2&type=section&id=Net%20Sales%20Analysis) Q2 2025 organic sales grew 7.2% YoY, driven by volume and price growth in the CSS and EES segments, which offset a volume decline in the UBS segment, with backlog increasing 11% YoY - Q2 organic sales growth of **7.2%** was driven by the CSS and EES segments, while the UBS segment experienced a volume decline[11](index=11&type=chunk) - Backlog at the end of Q2 2025 increased by **11% year-over-year** and approximately **5% sequentially**[11](index=11&type=chunk) [Profitability Analysis](index=2&type=section&id=Profitability%20Analysis) Gross margin decreased to 21.1% in Q2 2025 from 21.9% in Q2 2024 due to product mix, while SG&A expenses rose, yet Adjusted EBITDA margin improved 90 basis points sequentially to 6.7% - Gross margin for Q2 and H1 2025 was **21.1%**, down from **21.9%** and **21.6%** in the respective prior-year periods, driven by product mix in the EES and CSS segments[9](index=9&type=chunk) - Q2 SG&A expenses increased due to higher salaries, benefits, and operational costs, with Adjusted SG&A as a percentage of sales at **14.6%**, slightly down from **14.7% in Q2 2024**, showing operating leverage[10](index=10&type=chunk) - Q2 Adjusted EBITDA decreased slightly YoY but increased **90 basis points sequentially**, reflecting lower gross margin offset by operating leverage on higher sales[16](index=16&type=chunk) [Cash Flow and EPS Analysis](index=3&type=section&id=Cash%20Flow%20and%20EPS%20Analysis) Adjusted EPS for Q2 2025 increased to $3.39, benefiting from lower interest expense and favorable foreign currency fluctuations, while operating cash flow was a net inflow of $107.8 million, a significant turnaround from the prior year - The increase in Q2 adjusted EPS was primarily driven by lower interest expense from debt refinancing, favorable foreign currency exchange impacts, and a reduction in outstanding shares[14](index=14&type=chunk) - Q2 operating cash inflow of **$107.8 million** was driven by net income and an increase in accounts payable, which offset cash used for increased trade accounts receivable and inventories[15](index=15&type=chunk) [Consolidated Financial Statements](index=6&type=section&id=Consolidated%20Financial%20Statements) [Condensed Consolidated Statements of Income](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income) For the three months ended June 30, 2025, Wesco reported net sales of $5.90 billion and net income attributable to common stockholders of $189.2 million, or $3.83 per diluted share, with both periods showing a YoY decline in net income and EPS Q2 2025 Income Statement Highlights (in millions) | Line Item | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Net sales | $5,899.6 | $5,479.7 | | Income from operations | $322.2 | $323.5 | | Net income attributable to common stockholders | $189.2 | $217.7 | H1 2025 Income Statement Highlights (in millions) | Line Item | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Net sales | $11,243.3 | $10,829.7 | | Income from operations | $563.1 | $586.5 | | Net income attributable to common stockholders | $293.2 | $319.2 | [Condensed Consolidated Balance Sheets](index=8&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 30, 2025, Wesco's total assets stood at $16.20 billion, up from $15.06 billion at year-end 2024, driven by higher trade accounts receivable, inventories, and accounts payable, with total debt increasing to $5.67 billion Balance Sheet Summary (in millions) | Account | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Total current assets | $9,243.6 | $8,351.4 | | Total assets | $16,202.5 | $15,061.4 | | Total current liabilities | $4,431.2 | $3,804.0 | | Long-term debt, net | $5,641.2 | $5,045.5 | | Total liabilities | $11,447.5 | $10,095.9 | | Total stockholders' equity | $4,755.0 | $4,965.5 | [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the six months ended June 30, 2025, net cash provided by operating activities was $135.8 million, a significant decrease from $522.5 million in the prior year, primarily due to larger increases in trade receivables and inventories, with financing activities including debt borrowings, stock repurchases, and preferred stock redemption H1 2025 Cash Flow Summary (in millions) | Activity | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $135.8 | $522.5 | | Net cash (used in) provided by investing activities | $(76.9) | $269.1 | | Net cash used in financing activities | $(108.3) | $(581.4) | | Net change in cash and cash equivalents | $(35.6) | $192.4 | - Financing activities in H1 2025 included net debt borrowings of **$605.0 million**, redemption of preferred stock for **$540.3 million**, and repurchases of common stock for **$50.0 million**[31](index=31&type=chunk) [Non-GAAP Financial Measures & Reconciliations](index=10&type=section&id=Non-GAAP%20Financial%20Measures%20%26%20Reconciliations) [Organic Sales Growth Reconciliation](index=11&type=section&id=Organic%20Sales%20Growth%20Reconciliation) In Q2 2025, total organic sales grew 7.2% YoY, led by the Communications and Security Solutions (CSS) segment with 17.3% growth and the Electrical and Electronic Solutions (EES) segment with 6.0% growth, while the Utility and Broadband Solutions (UBS) segment saw a decline of 4.4% Q2 2025 Organic Sales Growth by Segment (YoY) | Segment | Reported Growth | Organic Growth | | :--- | :--- | :--- | | EES | 5.8% | 6.0% | | CSS | 19.0% | 17.3% | | UBS | (4.5)% | (4.4)% | | **Total** | **7.7%** | **7.2%** | Q2 2025 Organic Sales Growth by Segment (Sequential) | Segment | Reported Growth | Organic Growth | | :--- | :--- | :--- | | EES | 9.3% | 4.9% | | CSS | 13.2% | 8.9% | | UBS | 7.7% | 4.1% | | **Total** | **10.4%** | **6.2%** | [Adjusted EBITDA and EPS Reconciliation](index=13&type=section&id=Adjusted%20EBITDA%20and%20EPS%20Reconciliation) Adjusted EBITDA for Q2 2025 was $394.2 million (6.7% margin), a slight decrease from Q2 2024, with the CSS segment being the largest contributor, while adjusted diluted EPS rose to $3.39, up from $3.21 in the prior-year quarter Q2 2025 Adjusted EBITDA by Segment (in millions) | Segment | Adjusted EBITDA | Adjusted EBITDA Margin | | :--- | :--- | :--- | | EES | $182.9 | 8.1% | | CSS | $198.9 | 8.8% | | UBS | $143.7 | 10.4% | | **Total** | **$394.2** | **6.7%** | Reconciliation to Adjusted EPS (Q2 2025) | Metric | Amount (in millions) | | :--- | :--- | | Net income attributable to common stockholders (GAAP) | $189.2 | | Adjustments (net) | $(21.7) | | **Adjusted net income attributable to common stockholders** | **$167.5** | | Diluted shares | 49.4 | | **Adjusted earnings per diluted share** | **$3.39** | [Financial Leverage and Free Cash Flow Reconciliation](index=20&type=section&id=Financial%20Leverage%20and%20Free%20Cash%20Flow%20Reconciliation) The company's financial leverage ratio increased to 3.4x as of June 30, 2025, up from 2.9x at the end of 2024, reflecting an increase in net debt, while free cash flow for Q2 2025 was an inflow of $86.5 million, a substantial improvement from the prior year Financial Leverage Ratio | Metric | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Adjusted EBITDA (TTM) | $1,473.6M | $1,509.1M | | Total debt, net of cash | $5,056.0M | $4,409.5M | | **Financial leverage ratio** | **3.4x** | **2.9x** | Free Cash Flow (in millions) | Period | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | Cash flow from operations | $107.8 | $(223.8) | $135.8 | $522.5 | | **Free Cash Flow** | **$86.5** | **$(234.1)** | **$95.9** | **$497.3** | [Other Information](index=4&type=section&id=Other%20Information) [Company Overview and Forward-Looking Statements](index=4&type=section&id=Company%20Overview%20and%20Forward-Looking%20Statements) Wesco International is a Fortune 500 company with approximately $22 billion in annual sales in 2024, providing B2B distribution, logistics, and supply chain solutions, with the report containing forward-looking statements subject to various risks and uncertainties - Wesco is a FORTUNE 500® company with approximately **$22 billion in annual sales in 2024**, employing around **20,000 people** across **700 sites in 50 countries**[19](index=19&type=chunk) - The report includes forward-looking statements subject to risks such as failure to integrate acquisitions, interest rate fluctuations, supply chain disruptions, and geopolitical issues[20](index=20&type=chunk)[21](index=21&type=chunk) [Webcast Information](index=4&type=section&id=Webcast%20Information) Wesco will host a webcast and teleconference to discuss its second quarter 2025 earnings on Thursday, July 31, 2025, at 10:00 a.m. E.T., accessible via the Investor Relations section of the company's website - A webcast to discuss Q2 2025 earnings is scheduled for **Thursday, July 31, 2025, at 10:00 a.m. E.T.**[18](index=18&type=chunk)

Core Insights - Wesco International reported strong sales momentum in the first half of 2025, with organic sales growth accelerating to 7.2% in Q2 and preliminary July sales per workday up approximately 10% year-over-year [2][3][7] - The company achieved total data center sales exceeding $1 billion in Q2, marking a 65% increase compared to the previous year [2][7] - Wesco's adjusted EBITDA margin improved by 90 basis points sequentially to 6.7%, driven by strong operating leverage on higher sales [2][7] Financial Performance - Q2 2025 net sales reached $5,899.6 million, a 7.7% increase from $5,479.7 million in Q2 2024 [4][19] - For the first six months of 2025, net sales totaled $11,243.3 million, up 3.8% from $10,829.7 million in the same period of 2024 [4][20] - The company reported a net income attributable to common stockholders of $189.2 million in Q2 2025, down 13.1% from $217.7 million in Q2 2024 [4][19] Segment Performance - The CSS segment led the growth with 17% organic growth, while the EES segment saw a 6% organic growth in Q2 2025 [2][8] - Data center sales in Q2 2025 were a significant contributor, surpassing $1 billion and reflecting a 65% year-over-year increase [2][7] - The Utility business showed signs of recovery, with sales to investor-owned utilities returning to growth in Q2 [2][3] Cost and Margin Analysis - Gross profit for Q2 2025 was $1,242.7 million, with a gross margin of 21.1%, down from 21.9% in Q2 2024 [4][31] - Selling, general, and administrative (SG&A) expenses increased to $872.2 million in Q2 2025, a 5.3% rise from $828.4 million in Q2 2024 [4][19] - Adjusted EBITDA for Q2 2025 was $394.2 million, a decrease of 1.5% from $400.1 million in Q2 2024 [4][31] Cash Flow and Capital Management - Operating cash flow for Q2 2025 was $107.8 million, a significant recovery from a negative cash flow of $(223.8) million in Q2 2024 [4][19] - The company completed the redemption of its preferred stock in June 2025, enhancing cash flow and earnings per share [3][4] - Wesco's free cash flow for Q2 2025 was $86.5 million, compared to a negative free cash flow of $(234.1) million in Q2 2024 [4][19] Outlook and Strategic Initiatives - The company raised its full-year organic sales growth outlook based on positive momentum observed in the first seven months of 2025 [3][7] - Wesco is focused on executing cross-selling initiatives and improving enterprise-wide margins through technology-driven business transformation [3][7] - The company maintains a strong liquidity position with no significant debt maturities until 2028, allowing for strategic capital allocation [3][4]