Financial Data and Key Metrics Changes - Fastenal achieved net sales of $2.03 billion in Q4 2025, an increase of 11% year-over-year, with net income rising 12.2% to $294.1 million and earnings per share at $0.26 [8][18] - For the full year 2025, the company reported record annual sales of $8.2 billion, up nearly 9% from 2024, and net income of $1.26 billion, up 9.4% [8][27] - Operating cash flow was approximately $370 million, representing 125% of net income, indicating strong cash generation [24] Business Line Data and Key Metrics Changes - The number of Active 50K Plus Sites rose 14% year-over-year, with these sites now accounting for over half of total revenues [10] - Sales to manufacturing markets outperformed other segments, with double-digit growth in heavy manufacturing [11][19] - Fastener product line growth outpaced non-fastener categories, driven by successful signings of large customers and improved product availability [19] Market Data and Key Metrics Changes - The U.S. economy showed mixed signals in Q4, with PMI averaging in the low 48s and industrial production close to flat compared to last year [17] - Customer sentiment remained favorable despite trade and tariff uncertainties, contributing to the strong daily sales growth of over 11% [18] Company Strategy and Development Direction - Fastenal's strategy focuses on increasing sales effectiveness, enhancing services, and expanding market reach, particularly through key account growth and digital solutions [5][11] - The company aims to achieve double-digit market share gains and is exploring new growth drivers, including potential expansions in services [41] Management's Comments on Operating Environment and Future Outlook - Management noted ongoing challenges in industrial production but expressed confidence in achieving double-digit net sales growth in 2026, supported by FMI technology and digital solutions [35][39] - The company anticipates a normalization of sales activity following holiday shutdowns and expects to see continued momentum in January [58] Other Important Information - Fastenal returned over $1 billion in dividends for the full year 2025, reflecting confidence in cash generation and commitment to shareholder returns [26] - The company plans to increase capital expenditures to approximately 3.5% of net sales in 2026 to support growth expectations [24] Q&A Session Summary Question: Is the double-digit net sales growth in 2026 guidance? - Management clarified that it reflects momentum rather than formal guidance [42] Question: What are the broader economic assumptions underpinning the sales growth target? - Management refrained from providing specific pricing contributions but emphasized alignment with sales teams and market execution [43][45] Question: What was the impact of rebate timing factors in Q4? - Management explained that supplier rebates were lower than expected, affecting gross margins, but anticipated normalization going forward [47][50] Question: Are large heavy manufacturing markets stabilizing? - Management indicated that there were no significant declines, with manufacturing usage remaining flat year-over-year [54] Question: What are the expectations for pricing in 2026? - Management suggested that there would be incremental price increases, but specifics were not provided due to market uncertainties [62][63]

2025 Fourth Quarter Investor Teleconference January 20, 2026 1 Safe Harbor Statement All statements made herein that are not historical facts (e.g., future operating results, net sales growth, long-term share gains, and business activity, as well as expectations regarding operations, including gross and operating income margin, eBusiness DSR sales growth, weighted FMI technology signings, operating costs (including SG&A), capital expenditures, sales through our digital footprint, cash flow generation, our a ...

Data Privacy Concerns - The internet's capacity to copy, spread, and retain information without consent poses risks to personal data [16] - Online data never expires, fades, or forgets, potentially resurfacing years later [12] - Social media algorithms can reinforce existing beliefs, potentially distorting perceptions of truth and increasing safety risks [13] Risks to Children - Children are increasingly vulnerable online due to greater access and potential exposure to inappropriate content and targeted manipulation [7][8] - Even child-friendly games can contain inappropriate ads, highlighting the need for ad-free versions and parental awareness [6] - Children may be targeted with personalized ads based on observed behavior, leading to fear and discomfort [5] Personal Security Recommendations - Individuals should be mindful of the information they share online, as even seemingly harmless posts can reveal sensitive details [9][11] - Disabling unnecessary permissions on devices and using two-factor authentication can enhance online security [15] - Open communication with children about their online experiences is crucial for fostering trust and addressing potential issues [15]