Wesco International Reports Second Quarter 2025 Results

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]