Core Insights - Regency Capital Management disclosed a new position in WESCO International, acquiring 15,203 shares valued at approximately $3.22 million based on the average price in Q3 2025 [2][3] - This new stake represents 1.53% of Regency's total assets under management (AUM) [3] - WESCO International's stock price was $218.85 as of October 20, 2025, reflecting a 23.27% increase over the past year, outperforming the S&P 500 by 6.41 percentage points [3] Company Overview - WESCO International reported a total revenue of $22.23 billion and a net income of $662.60 million for the trailing twelve months (TTM) [5] - The company offers a range of products including electrical, electronic, network infrastructure, security solutions, and utility products across three business segments [6][7] - WESCO generates revenue through B2B distribution, logistics, and supply chain solutions, serving various sectors including contractors, manufacturers, and public power companies [6][7] Recent Performance and Outlook - WESCO's data center sales accounted for approximately 17% of total revenue, with a year-over-year surge of about 65% in Q2 2025, exceeding $1 billion [9] - The company has raised its full-year organic sales growth outlook to between 5% and 7% for 2025, driven by strong demand from hyperscalers [10]

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Crude Value Insights offers you an investing service and community focused on oil and natural gas. We focus on cash flow and the companies that generate it, leading to value and growth prospects with real potential.Subscribers get to use a 50+ stock model account, in-depth cash flow analyses of E&P firms, and live chat discussion of the sector.Sign up today for your two-week free trial and get a new lease on oil & gas! ...

Core Insights - Baupost Group LLC/MA, led by Seth Klarman, reported a portfolio valued at $4.13 billion, with the top five holdings constituting 46.93% of total assets [1] Group 1: Top Holdings Overview - **Alphabet Inc. (GOOG)**: The largest position, with 2.63 million shares valued at $467.24 million, representing 11.31% of the portfolio. The fund increased its stake by 556,000 shares (+26.76%), indicating growing confidence in the company's search franchise and AI opportunities [2] - **Wesco International Inc. (WCC)**: The second-largest position, holding 2.21 million shares worth $408.85 million (9.90% of assets). Baupost raised its stake by 202,000 shares (+10.07%), reflecting confidence in Wesco's industrial distribution leadership [3] - **Willis Towers Watson PLC (WTW)**: Holding 1.31 million shares valued at $402.79 million (9.75% of the portfolio). The fund reduced its position by 211,000 shares (-13.86%), likely for profit-taking after strong performance [4] - **CRH PLC (CRH)**: The fourth-largest holding, with 3.83 million shares valued at $351.17 million (8.50% of assets). Baupost added 1.13 million shares (+41.98%), showing increased conviction in the building materials sector [5] - **Fidelity National Information Services (FIS)**: Rounding out the top five with 3.78 million shares worth $308.52 million (7.47% portfolio weight). The fund increased its holdings by 296,764 shares (+8.50%), indicating confidence in the company's restructuring efforts [6] Group 2: Investment Philosophy - Baupost's portfolio reflects a disciplined value philosophy, selectively adding to undervalued positions while trimming gains in outperformers. The concentration in technology, industrials, and financials highlights a strategy focused on high-quality businesses with strong underlying assets [7]

Group 1 - Wesco International will hold its third quarter 2025 earnings conference call on October 30, 2025, at 10:00 a.m. ET [1] - The company provides dial-in details for live access and replay access for the earnings call [1] - A live audio webcast of the earnings presentation will be available on Wesco's investor relations website [1] Group 2 - Wesco International is a FORTUNE 500® company headquartered in Pittsburgh, Pennsylvania, with approximately $22 billion in annual sales in 2024 [2] - The company specializes in business-to-business distribution, logistics services, and supply chain solutions, offering a diverse portfolio of products and services [2] - Wesco employs around 20,000 people and operates over 700 sites in approximately 50 countries, providing a local presence and a global network for its customers [2]

Core Insights - Genpact has partnered with Wesco to modernize its accounts payable operations, enhancing accuracy and efficiency through the Genpact AP Suite [1][2] - The implementation of agentic AI and process expertise has allowed Wesco to automate 40% of its annual invoices, significantly improving operational efficiency [3][4] - Wesco's transformation illustrates the evolving role of accounts payable as a critical function in enterprise AI, moving beyond traditional back-office operations [4] Company Overview - Wesco, headquartered in Pittsburgh, generated approximately $22 billion in annual sales in 2024 and operates over 700 sites across nearly 50 countries [4] - The company serves a diverse range of sectors, including commercial, industrial, education, government, technology, telecommunications, and utilities [4] Technology and Innovation - The Genpact AP Suite integrates specialized AI agents for various functions such as data extraction and exception handling, leading to reduced manual workloads and improved accuracy [3] - The solution provides real-time visibility into process health through advanced dashboards, supporting Wesco's goal of continuous innovation [3][4] Strategic Impact - The partnership with Genpact has enabled Wesco to standardize and automate its accounts payable workflows, strengthening supplier and customer relationships while lowering costs [2][3] - The shift towards a unified platform for accounts payable is seen as a foundational step for real-time visibility and agility across the finance enterprise [4]

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]

[PART I—FINANCIAL INFORMATION](index=3&type=section&id=PART%20I%E2%80%94FINANCIAL%20INFORMATION) [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements.) Unaudited condensed consolidated financial statements and notes for periods ended June 30, 2025 and 2024 are presented [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Condensed Consolidated Balance Sheets (In millions) | Item | June 30, 2025 | December 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 | | Total liabilities | $11,447.5 | $10,095.9 | | Total stockholders' equity | $4,755.0 | $4,965.5 | - Total assets increased by **$1,141.1 million** from December 31, 2024, to June 30, 2025, primarily driven by increases in trade accounts receivable and inventories[12](index=12&type=chunk) - Total liabilities increased by **$1,351.6 million**, mainly due to higher accounts payable and long-term debt[12](index=12&type=chunk) [Condensed Consolidated Statements of Income and Comprehensive Income](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income%20and%20Comprehensive%20Income) Condensed Consolidated Statements of Income (In millions, except per share data) | Item | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net sales | $5,899.6 | $5,479.7 | $11,243.3 | $10,829.7 | | Income from operations | $322.2 | $323.5 | $563.1 | $586.5 | | Net income attributable to WESCO International, Inc. | $174.5 | $232.1 | $292.9 | $347.9 | | Basic EPS | $3.88 | $4.34 | $6.01 | $6.32 | | Diluted EPS | $3.83 | $4.28 | $5.92 | $6.22 | - Net sales increased by **7.7%** for the three months ended June 30, 2025, and by **3.8%** for the six months ended June 30, 2025, compared to the prior year periods[13](index=13&type=chunk) - Net income attributable to WESCO International, Inc. decreased by **$57.6 million (24.8%)** for the three months and **$55.0 million (15.8%)** for the six months ended June 30, 2025, year-over-year[13](index=13&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Condensed Consolidated Statements of Cash Flows (In millions) | Item | Six Months Ended June 30, 2025 | Six Months Ended June 30, 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 | | Cash and cash equivalents at end of period | $667.0 | $716.5 | - Net cash provided by operating activities significantly decreased from **$522.5 million** in H1 2024 to **$135.8 million** in H1 2025, primarily due to changes in working capital, including increases in trade accounts receivable and inventories[16](index=16&type=chunk)[190](index=190&type=chunk)[191](index=191&type=chunk) - Investing activities shifted from providing **$269.1 million** in H1 2024 (due to divestiture proceeds) to using **$76.9 million** in H1 2025 (due to acquisitions and capital expenditures)[16](index=16&type=chunk)[195](index=195&type=chunk)[196](index=196&type=chunk) [Condensed Consolidated Statements of Stockholders' Equity](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Equity) Changes in Stockholders' Equity (In millions) | Item | Balance, Dec 31, 2024 | Balance, June 30, 2025 | | :--------------------------------- | :-------------------- | :-------------------- | | Total WESCO International, Inc. stockholders' equity | $4,970.7 | $4,762.2 | | Noncontrolling interests | $(5.2) | $(7.2) | | Total stockholders' equity | $4,965.5 | $4,755.0 | - Total stockholders' equity decreased by **$210.5 million** from December 31, 2024, to June 30, 2025, primarily influenced by the redemption of preferred stock and common stock repurchases, partially offset by net income and foreign currency translation adjustments[12](index=12&type=chunk)[18](index=18&type=chunk) - The company redeemed all **21,612** outstanding shares of its Series A Preferred Stock for **$540.3 million** in June 2025, resulting in a **$27.6 million** gain recognized as income attributable to common stockholders[18](index=18&type=chunk)[57](index=57&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) [1. Organization](index=10&type=section&id=1.%20ORGANIZATION) - WESCO International, Inc. is a leading provider of business-to-business distribution, logistics services, and supply chain solutions[23](index=23&type=chunk) - The Company operates through three strategic business units: Electrical & Electronic Solutions (EES), Communications & Security Solutions (CSS), and Utility & Broadband Solutions (UBS)[23](index=23&type=chunk) [2. Accounting Policies](index=10&type=section&id=2.%20ACCOUNTING%20POLICIES) - The unaudited Condensed Consolidated Financial Statements are prepared in accordance with Rule 10-01 of Regulation S-X and should be read with the Annual Report on Form 10-K for December 31, 2024[24](index=24&type=chunk) - A portion of the EES segment was moved to the CSS segment in Q1 2025 due to operational realignment, and prior period segment financial information has been recast[27](index=27&type=chunk) - The Company adopted ASU 2023-07 (Segment Reporting) in Q1 2025, resulting in additional disclosures of certain expenses at the reportable segment level[28](index=28&type=chunk) [3. Revenue](index=11&type=section&id=3.%20REVENUE) Net Sales by Geography (In millions) | Geography | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :---------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | United States | $4,386.9 | $4,050.5 | $8,361.5 | $8,048.1 | | Canada | $804.0 | $744.4 | $1,516.8 | $1,462.9 | | Other International | $708.7 | $684.8 | $1,365.0 | $1,318.7 | | Total by geography | $5,899.6 | $5,479.7 | $11,243.3 | $10,829.7 | - Deferred revenue decreased from **$141.8 million** at December 31, 2024, to **$108.7 million** at June 30, 2025[32](index=32&type=chunk) - Variable consideration, including customer volume rebates, returns, and discounts, reduced revenue by approximately **$109.4 million** for Q2 2025 and **$222.4 million** for YTD June 30, 2025[33](index=33&type=chunk) [4. Acquisitions and Divestitures](index=12&type=section&id=4.%20ACQUISITIONS%20AND%20DIVESTITURES) - On January 2, 2025, Wesco acquired Industrial Software Solutions (ISS) for **$36.3 million** cash, allocating **$20.1 million** to goodwill in the EES segment[35](index=35&type=chunk) - On December 5, 2024, Wesco acquired Ascent, LLC for **$179.2 million**, net of cash, assigning **$118.4 million** to goodwill in the CSS segment[36](index=36&type=chunk)[37](index=37&type=chunk) - On April 1, 2024, Wesco divested its Wesco Integrated Supply (WIS) business for **$354.9 million**, recognizing a gain of **$122.2 million**[42](index=42&type=chunk) [5. Goodwill and Intangible Assets](index=13&type=section&id=5.%20GOODWILL%20AND%20INTANGIBLE%20ASSETS) Goodwill by Reportable Segment (In millions) | Segment | January 1, 2025 | June 30, 2025 | | :------ | :-------------- | :------------ | | EES | $799.3 | $848.2 | | CSS | $1,347.0 | $1,355.8 | | UBS | $1,133.8 | $1,147.7 | | Total | $3,280.1 | $3,351.7 | - Goodwill increased by **$71.6 million** from January 1, 2025, to June 30, 2025, primarily due to adjustments for acquisitions (**$20.4 million**) and foreign currency exchange rate changes (**$51.2 million**)[43](index=43&type=chunk) Intangible Assets, Net (In millions) | Intangible Asset | June 30, 2025 | December 31, 2024 | | :----------------- | :------------ | :---------------- | | Trademarks (Indefinite) | $791.9 | $789.7 | | Customer relationships | $1,026.0 | $1,026.0 | | Distribution agreements | $1.5 | $1.5 | | Trademarks (Finite) | $2.6 | $3.8 | | Software | $14.9 | $14.9 | | Total Net Carrying Amount | $1,815.1 | $1,835.9 | [6. Stock-Based Compensation](index=14&type=section&id=6.%20STOCK-BASED%20COMPENSATION) - Stock-based compensation awards include stock options, stock-settled stock appreciation rights, restricted stock units, and performance-based awards, vesting typically over three years[45](index=45&type=chunk)[46](index=46&type=chunk) Stock-Based Awards Granted (Weighted-average fair value) | Award Type | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------ | :----------------------------- | :----------------------------- | | Stock options | $76.72 | $72.05 | | Restricted stock units | $179.33 | $157.19 | | Performance-based awards | $191.86 | $108.83 | - Total unrecognized compensation expense related to unvested stock-based awards was **$82.4 million** as of June 30, 2025, expected to be recognized through 2028[53](index=53&type=chunk) [7. Stockholders' Equity](index=17&type=section&id=7.%20STOCKHOLDERS'%20EQUITY) - The Company repurchased **300,528 shares** of common stock for **$50.6 million** (including excise taxes) during the six months ended June 30, 2025, compared to **2,022,323 shares** for **$353.5 million** in the same period of 2024[55](index=55&type=chunk) - All **21,612** outstanding shares of Series A Preferred Stock were redeemed on June 22, 2025, for **$540.3 million**, resulting in a **$27.6 million** gain[57](index=57&type=chunk) Cash Dividends Paid (In millions) | Stock Type | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----------------- | :----------------------------- | :----------------------------- | | Common stock | $44.2 | $41.2 | | Series A Preferred Stock | $27.3 | $28.7 | [8. Earnings Per Share](index=18&type=section&id=8.%20EARNINGS%20PER%20SHARE) Earnings Per Share Attributable to Common Stockholders | Item | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net income attributable to common stockholders (in millions) | $189.2 | $217.7 | $293.2 | $319.2 | | Basic EPS | $3.88 | $4.34 | $6.01 | $6.32 | | Diluted EPS | $3.83 | $4.28 | $5.92 | $6.22 | - Diluted EPS decreased by **$0.45 (10.5%)** for Q2 2025 and **$0.30 (4.8%)** for YTD June 30, 2025, compared to the prior year periods[62](index=62&type=chunk) [9. Debt](index=19&type=section&id=9.%20DEBT) Outstanding Indebtedness (In millions) | Debt Instrument | June 30, 2025 | December 31, 2024 | | :----------------------------------- | :------------ | :---------------- | | International lines of credit | $5.6 | $0.6 | | Accounts Receivable Securitization Facility | $1,300.0 | $1,450.0 | | Revolving Credit Facility | $475.0 | $525.0 | | 7.250% Senior Notes due 2028 | $1,321.3 | $1,320.6 | | 6.375% Senior Notes due 2029 | $900.0 | $900.0 | | 6.625% Senior Notes due 2032 | $850.0 | $850.0 | | 6.375% Senior Notes due 2033 | $800.0 | $— | | Finance lease obligations | $63.2 | $57.3 | | Total debt | $5,719.3 | $5,107.7 | | Total long-term debt | $5,641.2 | $5,045.5 | - Total debt increased by **$611.6 million** from December 31, 2024, to June 30, 2025, primarily due to the issuance of **$800 million** 6.375% Senior Notes due 2033[64](index=64&type=chunk)[67](index=67&type=chunk) - The net proceeds from the 2033 Notes were used to redeem all outstanding Series A Preferred Stock and repay a portion of the Revolving Credit Facility[69](index=69&type=chunk) [10. Pension Plan Settlement](index=20&type=section&id=10.%20PENSION%20PLAN%20SETTLEMENT) - The Anixter Inc. Pension Plan was terminated in 2022 and settled in 2024 through the purchase of single premium annuity contracts for **$138.8 million**[74](index=74&type=chunk) - A settlement cost of **$5.5 million** was recognized during the six months ended June 30, 2024, related to unrealized losses[75](index=75&type=chunk) [11. Fair Value of Financial Instruments](index=20&type=section&id=11.%20FAIR%20VALUE%20OF%20FINANCIAL%20INSTRUMENTS) - The fair value of fixed-rate debt was **$3,984.9 million** as of June 30, 2025, compared to its carrying value of **$3,875.5 million**[80](index=80&type=chunk) - Foreign currency forward contracts are used to reduce the effect of foreign currency fluctuations, with gross notional amounts of approximately **$414.8 million** at June 30, 2025[81](index=81&type=chunk)[82](index=82&type=chunk) [12. Commitments and Contingencies](index=21&type=section&id=12.%20COMMITMENTS%20AND%20CONTINGENCIES) - The Company is subject to various lawsuits and claims related to its business operations[83](index=83&type=chunk) - Management believes the ultimate outcome of these matters is not likely to have a material adverse effect on Wesco's financial condition or liquidity[83](index=83&type=chunk) [13. Income Taxes](index=21&type=section&id=13.%20INCOME%20TAXES) Effective Tax Rates | Period | 2025 | 2024 | | :--------------------- | :--- | :--- | | Three Months Ended June 30 | 26.1% | 27.4% | | Six Months Ended June 30 | 25.0% | 25.4% | - The effective tax rate for Q2 2025 was lower due to a higher provision for uncertain tax positions in the prior year[123](index=123&type=chunk) - The Company purchased **$54.4 million** of transferable clean energy tax credits in H1 2025, using **$53.3 million** for its 2024 U.S. federal income tax liability[86](index=86&type=chunk) [14. Business Segments](index=22&type=section&id=14.%20BUSINESS%20SEGMENTS) - The Company's reportable segments (EES, CSS, UBS) are evaluated based on adjusted EBITDA[90](index=90&type=chunk) Segment Net Sales and Adjusted EBITDA (Three Months Ended June 30, 2025, In millions) | Segment | Net Sales | Adjusted EBITDA | Adjusted EBITDA Margin % | | :------ | :-------- | :-------------- | :----------------------- | | EES | $2,257.8 | $182.9 | 8.1% | | CSS | $2,265.2 | $198.9 | 8.8% | | UBS | $1,376.6 | $143.7 | 10.4% | | Total | $5,899.6 | $525.5 | | Segment Net Sales and Adjusted EBITDA (Six Months Ended June 30, 2025, In millions) | Segment | Net Sales | Adjusted EBITDA | Adjusted EBITDA Margin % | | :------ | :-------- | :-------------- | :----------------------- | | EES | $4,323.1 | $325.5 | 7.5% | | CSS | $4,265.5 | $357.4 | 8.4% | | UBS | $2,654.7 | $282.0 | 10.6% | | Total | $11,243.3 | $964.9 | | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=28&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations.) Analysis of financial condition and results of operations for Q2 and H1 2025 versus 2024, including non-GAAP measures [Company Overview](index=28&type=section&id=Company%20Overview) - Wesco is a global provider of business-to-business distribution, logistics services, and supply chain solutions, serving approximately **140,000 customers** worldwide[101](index=101&type=chunk)[102](index=102&type=chunk) - The Company operates through three strategic business units: Electrical & Electronic Solutions (EES), Communications & Security Solutions (CSS), and Utility & Broadband Solutions (UBS)[103](index=103&type=chunk) - EES serves construction, industrial, and OEM customers; CSS is a global leader in data center, enterprise network, and security solutions; UBS serves utilities and broadband operators in North America[104](index=104&type=chunk)[105](index=105&type=chunk)[106](index=106&type=chunk) [Business Highlights](index=29&type=section&id=Business%20Highlights) - Reported sales increased by **3.8%** for the first six months of 2025, with organic sales growth of **6.4%**, primarily driven by the data center business[107](index=107&type=chunk) - The Company redeemed all outstanding Series A Preferred Stock for **$540.3 million**, resulting in a **$27.6 million** gain and reduced financing costs[108](index=108&type=chunk) - Wesco is executing a multi-year Digital and Data Platform (DDP) development to unify operations and improve efficiency, and is positioned to benefit from secular growth trends like AI-driven data centers and electrification[110](index=110&type=chunk)[111](index=111&type=chunk) [Results of Operations](index=30&type=section&id=Results%20of%20Operations) [Second Quarter of 2025 versus Second Quarter of 2024](index=30&type=section&id=Second%20Quarter%20of%202025%20versus%20Second%20Quarter%20of%202024) Q2 2025 vs. Q2 2024 Financial Performance (In millions, except EPS) | Item | Q2 2025 | Q2 2024 | Change ($) | Change (%) | | :----------------------------------- | :------ | :------ | :--------- | :--------- | | Net Sales | $5,899.6 | $5,479.7 | $419.9 | 7.7% | | Cost of Goods Sold | $4,656.9 | $4,281.7 | $375.2 | 8.8% | | SG&A Expenses | $872.2 | $828.4 | $43.8 | 5.3% | | Income from Operations | $322.2 | $323.5 | $(1.3) | (0.4)% | | Interest Expense, net | $92.9 | $98.8 | $(5.9) | (6.0)% | | Other Income, net | $(7.3) | $(95.9) | $88.6 | (92.4)% | | Provision for Income Taxes | $61.8 | $87.8 | $(26.0) | (29.6)% | | Net Income Attributable to Common Stockholders | $189.2 | $217.7 | $(28.5) | (13.1)% | | Diluted EPS | $3.83 | $4.28 | $(0.45) | (10.5)% | | Adjusted EBITDA | $394.2 | $400.1 | $(5.9) | (1.5)% | - Organic sales for Q2 2025 grew by **7.2%**, driven by approximately **6% volume increase** in CSS and EES, partially offset by UBS decline, and **1% price impact**[114](index=114&type=chunk) - Cost of goods sold as a percentage of net sales increased by **80 basis points** to **78.9%** in Q2 2025, reflecting lower gross margins across all segments[115](index=115&type=chunk) [Six Months Ended June 30, 2025 versus Six Months Ended June 30, 2024](index=37&type=section&id=Six%20Months%20Ended%20June%2030%2C%202025%20versus%20Six%20Months%20Ended%20June%2030%2C%202024) H1 2025 vs. H1 2024 Financial Performance (In millions, except EPS) | Item | H1 2025 | H1 2024 | Change ($) | Change (%) | | :----------------------------------- | :------ | :------ | :--------- | :--------- | | Net Sales | $11,243.3 | $10,829.7 | $413.6 | 3.8% | | Cost of Goods Sold | $8,875.0 | $8,493.8 | $381.2 | 4.5% | | SG&A Expenses | $1,708.5 | $1,657.8 | $50.7 | 3.1% | | Income from Operations | $563.1 | $586.5 | $(23.4) | (4.0)% | | Interest Expense, net | $179.2 | $193.2 | $(14.0) | (7.2)% | | Other Income, net | $(7.1) | $(74.3) | $67.2 | (90.4)% | | Provision for Income Taxes | $97.9 | $118.7 | $(20.8) | (17.5)% | | Net Income Attributable to Common Stockholders | $293.2 | $319.2 | $(26.0) | (8.1)% | | Diluted EPS | $5.92 | $6.22 | $(0.30) | (4.8)% | | Adjusted EBITDA | $704.9 | $740.5 | $(35.6) | (4.8)% | - Organic sales for H1 2025 grew by **6.4%**, driven by approximately **5% volume increase** in CSS and EES, partially offset by UBS decline, and **1% price impact**[145](index=145&type=chunk) - Cost of goods sold as a percentage of net sales increased by **50 basis points** to **78.9%** in H1 2025, reflecting lower gross margins across all segments[146](index=146&type=chunk) [Liquidity and Capital Resources](index=45&type=section&id=Liquidity%20and%20Capital%20Resources) - As of June 30, 2025, Wesco had approximately **$1.8 billion** in available liquidity, including **$1.2 billion** from its Revolving Credit Facility, **$250.0 million** from its Receivables Facility, and **$350.5 million** in available cash[175](index=175&type=chunk) - Approximately **68%** of the Company's debt portfolio consisted of fixed-rate debt as of June 30, 2025[178](index=178&type=chunk) Financial Leverage Ratio (Non-GAAP) | Period | June 30, 2025 | December 31, 2024 | | :----- | :------------ | :---------------- | | Financial leverage ratio | 3.4x | 2.9x | [Contractual Cash Obligations and Other Commercial Commitments](index=48&type=section&id=Contractual%20Cash%20Obligations%20and%20Other%20Commercial%20Commitments) - There were no material changes to contractual obligations and other commercial commitments since the Annual Report on Form 10-K for December 31, 2024[199](index=199&type=chunk) [Seasonality](index=48&type=section&id=Seasonality) - Operating results are not significantly affected by seasonal factors, though sales in Q1 and Q4 can be impacted by weather[200](index=200&type=chunk) [Critical Accounting Estimates](index=48&type=section&id=Critical%20Accounting%20Estimates) - No significant changes to critical accounting estimates were disclosed since the Annual Report on Form 10-K for December 31, 2024[201](index=201&type=chunk) [Recent Accounting Standards](index=48&type=section&id=Recent%20Accounting%20Standards) - Refer to Note 2, 'Accounting Policies,' for a description of recently adopted and issued accounting standards[202](index=202&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=49&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk.) This section refers to Item 2 and Item 1A for discussions on market risks - For changes to market risks, refer to Part I, Item 2, 'Management's Discussion and Analysis of Financial Condition and Results of Operations' and Part II, Item 1A, 'Risk Factors'[207](index=207&type=chunk) [Item 4. Controls and Procedures](index=49&type=section&id=Item%204.%20Controls%20and%20Procedures.) Management confirmed effective disclosure controls and internal control over financial reporting as of June 30, 2025 - Disclosure controls and procedures and internal control over financial reporting were effective as of June 30, 2025[208](index=208&type=chunk) - No material changes to internal control over financial reporting occurred during the quarter ended June 30, 2025[209](index=209&type=chunk) - The multi-year development and implementation of a new Digital and Data Platform (DDP) may affect internal control processes, but current quarter developments have not materially affected them[211](index=211&type=chunk)[212](index=212&type=chunk) [PART II—OTHER INFORMATION](index=51&type=section&id=PART%20II%E2%80%94OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=51&type=section&id=Item%201.%20Legal%20Proceedings.) The Company faces various lawsuits and claims, with no anticipated material adverse effect on financial condition or liquidity - The Company is subject to various lawsuits and claims related to its business[214](index=214&type=chunk) - Management does not believe the ultimate outcome of these pending matters is likely to have a material adverse effect on Wesco's financial condition or liquidity[214](index=214&type=chunk) [Item 1A. Risk Factors](index=51&type=section&id=Item%201A.%20Risk%20Factors.) No material changes to risk factors previously disclosed in the Annual Report on Form 10-K - No material changes to the risk factors previously disclosed in the Annual Report on Form 10-K for December 31, 2024[215](index=215&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=51&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds.) Details of common stock repurchases and Series A Preferred Stock redemption during the three months ended June 30, 2025 Issuer Purchases of Common Stock (Three Months Ended June 30, 2025) | Period | Total Number of Shares Purchased | Average Price Paid Per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | | :----------------------- | :----------------------------- | :--------------------------- | :----------------------------------------------------------------- | | April 1 - April 30, 2025 | 173 | $149.07 | — | | May 1 - May 31, 2025 | 66,213 | $171.00 | 65,000 | | June 1 - June 30, 2025 | 82,876 | $168.78 | 82,300 | | Total | 149,262 | $169.74 | 147,300 | - The Company repurchased **147,300 shares** of common stock for **$25.0 million** under its publicly announced plan during Q2 2025[216](index=216&type=chunk) - All **21,612** outstanding shares of Series A Preferred Stock were redeemed on June 22, 2025, at **$25,000 per share**, totaling **$540.3 million**[216](index=216&type=chunk) [Item 6. Exhibits](index=52&type=section&id=Item%206.%20Exhibits.) Lists all exhibits filed as part of the Form 10-Q, including organizational documents, certifications, and XBRL files - The exhibits include organizational documents (Certificate of Amendment, Restated Certificate of Incorporation, Amended and Restated By-Laws), certifications from the CEO and CFO, and XBRL interactive data files[217](index=217&type=chunk) [Signatures](index=53&type=section&id=Signatures) Signatures of authorized officers, including EVP and CFO, and SVP, Corporate Controller and Chief Accounting Officer, certifying the report - The report is signed by David S. Schulz, Executive Vice President and Chief Financial Officer, and Matthew S. Kulasa, Senior Vice President, Corporate Controller and Chief Accounting Officer, on July 31, 2025[221](index=221&type=chunk)

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]