Fastenal(FAST) - 2025 Q3 - Quarterly Results

Performance Summary Fastenal reported strong Q3 and nine-month 2025 financial results, showing significant growth across key metrics like sales, profit, and net income Q3 and Nine-Month Period Financial Performance (2025 vs. 2024) (in millions USD, except percentages and per share data) | Metric | 2025 (Nine-month) | 2024 (Nine-month) | Change (Nine-month) | 2025 (Three-month) | 2024 (Three-month) | Change (Three-month) | | :-------------------------------- | :------------------ | :------------------ | :------------------ | :------------------- | :------------------- | :------------------- | | Net sales | $6,173.1 | $5,721.5 | 7.9% | $2,133.3 | $1,910.2 | 11.7% | | Daily sales | $32.3 | $29.8 | 8.5% | $33.3 | $29.8 | 11.7% | | Gross profit | $2,792.5 | $2,583.7 | 8.1% | $965.8 | $858.6 | 12.5% | | Gross profit % of net sales | 45.2% | 45.2% | - | 45.3% | 44.9% | 0.4 pp | | SG&A expenses | $1,521.1 | $1,418.5 | 7.2% | $524.3 | $470.5 | 11.5% | | SG&A % of net sales | 24.6% | 24.8% | -0.2 pp | 24.6% | 24.6% | - | | Operating income | $1,271.4 | $1,165.2 | 9.1% | $441.5 | $388.1 | 13.7% | | Operating income % of net sales | 20.6% | 20.4% | 0.2 pp | 20.7% | 20.3% | 0.4 pp | | Net income | $964.4 | $888.5 | 8.5% | $335.5 | $298.1 | 12.6% | | Diluted net income per share | $0.84 | $0.77 | 8.4% | $0.29 | $0.26 | 12.3% | Quarterly Results of Operations Q3 2025 results showed broad growth from customer signings, pricing, and digital initiatives, improving profitability Sales Analysis Q3 2025 net sales grew significantly from higher unit sales and pricing, with broad growth across product categories, end markets, and digital channels Overall Sales Performance Q3 2025 net sales grew 11.7% to $2,133.3 million, driven by customer signings, FX, unit sales, and pricing - Net sales increased by $223.2 million, or 11.7%, in the third quarter of 2025 compared to the third quarter of 2024, reaching $2,133.3 million[4] - Foreign exchange rates positively affected sales in Q3 2025 by approximately 10 basis points[4] - Unit sales increased due to growth in customer sites spending $10k or more per month and, to a lesser degree, growth in average monthly sales per customer site across all customer spend categories[5] - Product pricing contributed an increase of 240 to 270 basis points to net sales in Q3 2025, in contrast to an immaterial impact in Q3 2024[5] Sales by Product Category Fastener product lines, especially OEM and MRO, showed improved growth in Q3 2025, outperforming non-fastener categories - The fastener product line outperformed non-fastener product lines, experiencing improved growth in Q3 2025 driven by easier comparisons, increased contribution from large customer signings, better product availability, and pricing actions[6] Q3 2025 Product Sales Daily Sales Rate (DSR) Change and % of Sales (YoY) (Daily Sales Rate Change and % of Sales are percentages) | Product Category | 2025 DSR Change | 2024 DSR Change | 2025 % of Sales | 2024 % of Sales | | :--------------- | :-------------- | :-------------- | :-------------- | :-------------- | | OEM fasteners | 15.9% | -3.1% | 19.8% | 19.0% | | MRO fasteners | 12.0% | -5.3% | 11.2% | 11.2% | | Total fasteners | 14.4% | -4.0% | 31.0% | 30.2% | | Safety supplies | 9.8% | 6.8% | 22.1% | 22.5% | | Other product lines | 10.7% | 3.7% | 46.9% | 47.3% | | Total non-fasteners | 10.4% | 4.7% | 69.0% | 69.8% | Sales by End Market and Customer Type Manufacturing end markets performed strongly, non-residential construction grew, and contract sales continued to outperform non-contract customers - Manufacturing end markets outperformed primarily due to the relative strength with key account customers with significant managed spend[7] - Non-residential construction end market experienced growth for the second time in twelve consecutive quarters[7] - Contract sales continued to outperform, growing 13.2% in Q3 2025, compared to 7.2% for non-contract sales[7] Q3 2025 End Market Sales Daily Sales Rate (DSR) Change and % of Sales (YoY) (Daily Sales Rate Change and % of Sales are percentages) | End Market Category | 2025 DSR Change | 2024 DSR Change | 2025 % of Sales | 2024 % of Sales | | :------------------ | :-------------- | :-------------- | :-------------- | :-------------- | | Heavy manufacturing | 12.4% | 0.7% | 43.1% | 42.7% | | Other manufacturing | 12.9% | 6.2% | 32.8% | 32.4% | | Total manufacturing | 12.7% | 3.0% | 75.9% | 75.1% | | Non-residential construction | 7.5% | -3.6% | 8.3% | 8.6% | | Other end markets | 8.9% | -0.3% | 15.8% | 16.3% | | Total non-manufacturing | 8.4% | -1.5% | 24.1% | 24.9% | Q3 2025 Customer Type Sales Daily Sales Rate (DSR) Change and % of Sales (YoY) (Daily Sales Rate Change and % of Sales are percentages) | Customer Type | 2025 DSR Change | 2024 DSR Change | 2025 % of Sales | 2024 % of Sales | | :-------------- | :-------------- | :-------------- | :-------------- | :-------------- | | Contract sales | 13.2% | 6.3% | 73.8% | 72.0% | | Non-contract sales | 7.2% | -8.1% | 26.2% | 28.0% | Supplemental Customer Site Data Fastenal increased customer sites with higher monthly spending, particularly in manufacturing, boosting average monthly sales per site - The number of $50k+/Mo. customer sites increased from 2,401 in Q3 2024 to 2,771 in Q3 2025, with corresponding sales growth[9] - Average monthly sales per customer site for all customers increased from $5,929 in Q3 2024 to $7,149 in Q3 2025[9] Q3 2025 Customer Sites and Sales per Site by Spend Category (in millions USD for Sales, in USD for Mo. Sales per Customer Site, where applicable) | Category | Customer Sites (2025) | Sales (2025) | Mo. Sales per Customer Site (2025) | Customer Sites (2024) | Sales (2024) | Mo. Sales per Customer Site (2024) | | :---------------- | :-------------------- | :----------- | :--------------------------------- | :-------------------- | :----------- | :--------------------------------- | | Manufacturing | | | | | | | | $50k+/Mo. | 2,304 | $971.8 | $140,596 | 2,025 | $827.9 | $136,280 | | $10k+/Mo. | 8,913 | 1,411.5 | 52,788 | 8,318 | 1,240.2 | 49,699 | | Non-manufacturing | | | | | | | | $50k+/Mo. | 467 | $170.1 | $121,413 | 376 | $122.9 | $108,954 | | $10k+/Mo. | 3,282 | 340.5 | 34,583 | 2,962 | 277.0 | 31,173 | | Total | | | | | | | | $50k+/Mo. | 2,771 | $1,141.9 | $137,363 | 2,401 | $950.8 | $132,001 | | $10k+/Mo. | 12,195 | 1,752.0 | 47,888 | 11,280 | 1,517.2 | 44,835 | | Total | 98,823 | $2,133.3 | $7,149 | 106,276 | $1,910.2 | $5,929 | FMI Technology and Digital Footprint Sales FMI Technology and Digital Footprint sales continued to grow, reflecting successful digital adoption and significant FASTBin/FASTVend sales growth - FMI sales increased by 17.7% in Q3 2025, reaching $978.4 million, and represented 45.3% of total sales (up from 43.0% in Q3 2024)[11] - FASTBin/FASTVend sales grew by 19.9% in Q3 2025 to $703.6 million, accounting for 32.6% of sales[11] - Digital Footprint sales increased by 12.0% in Q3 2025 to $1,323.8 million, representing 61.3% of total sales[11] Q3 2025 FMI and eBusiness Sales Performance (in millions USD for sales, MEUs for signings/installations, where applicable) | Metric | 2025 (3-month) | 2024 (3-month) | DSR Change (3-month) | | :-------------------------------- | :------------- | :------------- | :------------------- | | Weighted FASTBin/FASTVend signings (MEUs) | 7,050 | 7,281 | -3.2% | | Weighted FASTBin/FASTVend installations (MEUs; end of period) | 133,910 | 123,193 | 8.7% | | FASTStock sales | $274.8 | $244.7 | 12.3% | | FASTBin/FASTVend sales | $703.6 | $586.8 | 19.9% | | FMI sales | $978.4 | $831.5 | 17.7% | | eBusiness sales | $628.7 | $582.3 | 8.0% | | Digital Footprint sales | $1,323.8 | $1,181.9 | 12.0% | Gross Profit Gross profit as a percentage of net sales increased to 45.3% in Q3 2025, driven by fastener expansion, supplier initiatives, and improved incentives - Gross profit as a percentage of net sales increased to 45.3% in Q3 2025 from 44.9% in Q3 2024[12] - The increase was primarily due to the fastener expansion project, other supplier-focused initiatives, and improvements in customer and supplier incentives[12] - Offsetting factors included customer mix (stronger growth from large, lower gross profit percentage customers) and higher organizational/overhead costs[12] Selling, General, and Administrative (SG&A) Expenses SG&A expenses remained flat at 24.6% of net sales in Q3 2025, with employee-related costs rising due to higher FTE, wages, and bonuses - SG&A expenses as a percentage of net sales were unchanged at 24.6% in Q3 2025 compared to Q3 2024[13] - Employee-related expenses (70-75% of SG&A) increased 12.9% due to higher average FTE and wages, and increased bonuses and commissions[14] - Occupancy-related expenses (15-20% of SG&A) increased 5.3% due to general inflation in branch rental costs and higher depreciation from FMI hardware[15] - Other SG&A expenses (10-15% of SG&A) increased 10.9%, driven by higher selling-related transportation costs (lease costs partially offset by lower fuel expense)[16] Operating Income Operating income as a percentage of net sales improved to 20.7% in Q3 2025, reflecting efficient cost management relative to sales growth - Operating income as a percentage of net sales increased to 20.7% in Q3 2025 from 20.3% in Q3 2024[17] Net Interest Net interest expense increased to $0.9 million in Q3 2025, primarily due to lower interest income relative to interest expense - Net interest expense was $0.9 million in Q3 2025, compared to $0.5 million in Q3 2024, primarily due to lower interest income earned[18] Income Taxes Q3 2025 income tax expense was $105.1 million, with an effective tax rate of 23.9%, lower than expected due to tax benefits - Income tax expense was $105.1 million in Q3 2025, with an effective tax rate of 23.9% (vs. 23.1% in Q3 2024)[19] - The Q3 2025 tax rate was below the expected ongoing rate of approximately 24.5% due to a decrease in unrecognized tax benefits and tax benefits from stock option exercises[19] - The impact of the U.S. One Big Beautiful Bill Act (OBBBA) enacted on July 4, 2025, was immaterial to the Condensed Consolidated Financial Statements[20] Net Income Net income for Q3 2025 increased by 12.6% to $335.5 million, with diluted net income per share rising to $0.29 - Net income during Q3 2025 was $335.5 million, an increase of 12.6% compared to Q3 2024[21] - Diluted net income per share was $0.29 in Q3 2025, compared to $0.26 in Q3 2024[21] Cash Flow and Balance Sheet Fastenal demonstrated strong Q3 2025 operating cash flow, increased trade working capital, continued investment, reduced debt, and returned capital Cash Flow from Operating Activities Net cash from operating activities increased by 30.3% to $386.9 million in Q3 2025, driven by reduced tax payments and working capital - Net cash provided by operating activities was $386.9 million in Q3 2025, a 30.3% increase from Q3 2024, representing 115.3% of the period's net income[22] - The increase in Q3 operating cash flow primarily reflects a reduction in estimated income tax payments and working capital being a modest source of cash[22] - Net cash provided by operating activities was $927.8 million in the first nine months of 2025, an increase of 4.2% from the first nine months of 2024[23] Trade Working Capital and Balance Sheet Changes Accounts receivable, inventories, and accounts payable all increased year-over-year, reflecting sales growth, inventory build-up, and increased purchases, with net trade working capital up 10.9% - The increase in accounts receivable balance was primarily attributable to growth in sales with customers, including relative growth with larger customers that tend to carry longer payment terms[25] - The increase in inventory balance was primarily attributable to adding inventory to support projected business growth and, to a lesser extent, increased valuation from tariffs and general inflation[26] - The increase in accounts payable balance was primarily attributable to an increase in product purchases as reflected in the growth in inventories[26] Trade Working Capital Changes (September 30, 2025 vs. 2024) (in millions USD) | Metric | September 30, 2025 | September 30, 2024 | Twelve-month Dollar Change | Twelve-month Percentage Change | | :---------------------- | :------------------- | :------------------- | :------------------------- | :----------------------------- | | Accounts receivable, net | $1,347.3 | $1,200.6 | $146.6 | 12.2% | | Inventories | $1,722.8 | $1,559.5 | $163.3 | 10.5% | | Trade working capital | $3,070.1 | $2,760.1 | $309.9 | 11.2% | | Accounts payable | $344.8 | $301.7 | $43.1 | 14.3% | | Trade working capital, net | $2,725.3 | $2,458.4 | $266.8 | 10.9% | Capital Expenditures and Property & Equipment Investment in property and equipment, net of proceeds, was $54.7 million in Q3 2025, with full-year 2025 capital expenditures projected to increase to $235.0-$255.0 million - Investment in property and equipment, net of proceeds from sales, was $54.7 million in Q3 2025, a slight decrease from $55.8 million in Q3 2024[27] - For 2025, investment in property and equipment, net of proceeds from sales, is expected to be within a range of $235.0 to $255.0 million, an increase from $214.1 million in 2024[28] - The expected growth in capital expenditures is due to higher distribution center spending (Utah and Atlanta hub facilities), greater outlays for FMI hardware, and elevated IT spending[28] Shareholder Returns and Debt Fastenal returned $252.5 million to shareholders in Q3 2025 via dividends, while total debt decreased to $195.0 million, representing 4.8% of total capital - Fastenal returned $252.5 million to shareholders in Q3 2025 in the form of dividends, compared to $223.4 million in Q3 2024[29] - Total debt on the balance sheet was $195.0 million at the end of Q3 2025, or 4.8% of total capital, down from $240.0 million or 6.3% of total capital at the end of Q3 2024[30] - No common stock was repurchased in either Q3 2025 or Q3 2024[29] Additional Information This section provides key operational metrics, including employee headcount, customer site growth, and FMI device installations, highlighting strategic investments and investor communications Operational Metrics Total FTE employee headcount increased by 3.2%, with significant growth in selling personnel, $50k+ customer sites grew by 15.4%, and weighted FMI devices increased by 8.7% - Total FTE employee headcount increased by 674, or 3.2%, over the last twelve months to 21,568[32] - Selling and sales support FTE personnel increased by 379 to support growth and sales initiatives[32] - The number of $50k+ customer sites increased by 15.4% year-over-year to 2,771[32] - Weighted FMI devices (MEU installed count) grew by 8.7% year-over-year to 133,910[32] Key Operational Metrics (Q3 2025 vs. Q3 2024) (absolute counts, percentages for change) | Metric | Q3 2025 | Q3 2024 | Change Since Q3 2024 | | :---------------------------------- | :------ | :------ | :------------------- | | Selling personnel - absolute headcount | 17,196 | 16,620 | 3.5% | | Selling personnel - FTE headcount | 15,414 | 15,035 | 2.5% | | Total personnel - absolute headcount | 24,438 | 23,518 | 3.9% | | Total personnel - FTE headcount | 21,568 | 20,894 | 3.2% | | Number of branch locations | 1,590 | 1,597 | -0.4% | | Number of $50k+ customer sites | 2,771 | 2,401 | 15.4% | | Weighted FMI devices (MEU installed count) | 133,910 | 123,193 | 8.7% | Investor Communications Fastenal will host a conference call to discuss quarterly results and provides monthly sales information and quarterly presentations on its investor relations website - A conference call will be hosted to review quarterly results and current operations, broadcast live over the Internet at 9:00 a.m., central time, accessible via the Investor Relations Website[33] - Monthly consolidated net sales information and quarterly conference call presentations are published on the 'Investor Relations' page of www.fastenal.com[34](index=34&type=chunk) Forward-Looking Statements The document contains forward-looking statements regarding future expectations and projections, subject to known and unknown risks and uncertainties as per safe harbor provisions - The document contains 'forward-looking statements' that provide current expectations or forecasts of future events, identified by terms such as 'anticipate,' 'believe,' 'expect,' and 'will'[35] - Forward-looking statements involve a variety of known and unknown risks and uncertainties, and actual results may vary materially from those discussed[35] - Factors that could cause actual results to differ are detailed in the company's most recent annual and quarterly reports[35] Financial Statements This section presents Fastenal Company's unaudited condensed consolidated financial statements, including Balance Sheets, Statements of Income, and Statements of Cash Flows Condensed Consolidated Balance Sheets Total assets increased to $5,116.3 million as of September 30, 2025, driven by current assets and property, with total liabilities also rising and stockholders' equity growing to $3,894.5 million Condensed Consolidated Balance Sheets (September 30, 2025 vs. December 31, 2024) (in millions USD) | Metric | Sep 30, 2025 | Dec 31, 2024 | | :-------------------------------------------------------------------------------- | :----------- | :----------- | | Assets | | | | Cash and cash equivalents | $288.1 | $255.8 | | Trade accounts receivable, net | $1,347.3 | $1,108.6 | | Inventories | $1,722.8 | $1,645.0 | | Total current assets | $3,546.1 | $3,211.9 | | Property and equipment, net | $1,112.6 | $1,056.6 | | Total assets | $5,116.3 | $4,698.0 | | Liabilities and Stockholders' Equity | | | | Current portion of debt | $95.0 | $75.0 | | Accounts payable | $344.8 | $287.7 | | Total current liabilities | $832.7 | $687.1 | | Long-term debt | $100.0 | $125.0 | | Total liabilities | $1,211.8 | $1,081.6 | | Total stockholders' equity | $3,894.5 | $3,616.3 | | Total liabilities and stockholders' equity | $5,116.3 | $4,698.0 | Condensed Consolidated Statements of Income Q3 2025 net sales were $2,133.3 million (up 11.7%), gross profit $965.8 million, and net income $335.5 million (up 12.6%), with diluted EPS of $0.29 Condensed Consolidated Statements of Income (Q3 2025 vs. Q3 2024 and 9 Months 2025 vs. 2024) (in millions USD, except per share data) | Metric | 3 Months Ended Sep 30, 2025 | 3 Months Ended Sep 30, 2024 | 9 Months Ended Sep 30, 2025 | 9 Months Ended Sep 30, 2024 | | :-------------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Net sales | $2,133.3 | $1,910.2 | $6,173.1 | $5,721.5 | | Gross profit | $965.8 | $858.6 | $2,792.5 | $2,583.7 | | Selling, general, and administrative expenses | $524.3 | $470.5 | $1,521.1 | $1,418.5 | | Operating income | $441.5 | $388.1 | $1,271.4 | $1,165.2 | | Income before income taxes | $440.6 | $387.6 | $1,270.4 | $1,163.8 | | Net income | $335.5 | $298.1 | $964.4 | $888.5 | | Diluted net income per share | $0.29 | $0.26 | $0.84 | $0.77 | Condensed Consolidated Statements of Cash Flows Net cash from operating activities was $386.9 million in Q3 2025, investing activities used $54.8 million, and financing activities used $280.9 million for debt and dividends Condensed Consolidated Statements of Cash Flows (Q3 2025 vs. Q3 2024 and 9 Months 2025 vs. 2024) (in millions USD) | Metric | 3 Months Ended Sep 30, 2025 | 3 Months Ended Sep 30, 2024 | 9 Months Ended Sep 30, 2025 | 9 Months Ended Sep 30, 2024 | | :------------------------------------------ | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Net cash provided by operating activities | $386.9 | $296.9 | $927.8 | $890.5 | | Net cash used in investing activities | $(54.8) | $(55.9) | $(173.1) | $(157.0) | | Net cash used in financing activities | $(280.9) | $(210.7) | $(732.7) | $(663.6) | | Net increase in cash and cash equivalents | $50.3 | $36.7 | $32.3 | $70.9 | | Cash and cash equivalents at end of period | $288.1 | $292.2 | $288.1 | $292.2 | | Cash paid for interest | $1.5 | $1.8 | $5.7 | $6.0 | | Net cash paid for income taxes | $89.1 | $87.6 | $274.4 | $269.4 |