Wesco International Reports Fourth Quarter and Full Year 2025 Results

Mr. Engel continued, "In the fourth quarter, CSS and EES delivered excellent results. CSS delivered 16% sales growth while expanding adjusted EBITDA margin 90 basis points and EES delivered 9% sales growth with adjusted EBITDA margin up 50 basis points. UBS continued to face ongoing sales and margin challenges with public power customers, while sales to investor owned utilities accelerated in the fourth quarter. Utility backlog increased over 20% at year end, providing a strong set-up for 2026. Adjusted EPS in the quarter was below our expectations, as the continued operating strength in our CSS and EES businesses was more than offset by lower sales and margin in UBS. Additionally, adjusted EPS was impacted to a larger degree by non-operating items, including updated tax positions."

Mr. Engel continued, "Due to our strong fourth quarter sales, particularly when considering normal seasonality, we increased our investment in working capital which impacted our normal expectation of cash generation in the quarter. We expect to collect cash from our higher receivables balance during the first quarter. We expect much stronger cash generation in 2026 as we continue to make progress on our working capital management initiatives. In the near term, our capital allocation priorities remain focused on debt reduction and stock repurchases to offset annual equity award dilution. We also continue to invest in our tech enabled business transformation and manage an active M&A pipeline."

Mr. Engel added, "We made excellent progress on our enterprise-wide digitalization efforts in 2025. We advanced our technology and capabilities build and have deployed our new technology stack in pilot locations in each of our three business units. The centerpiece of our new tech stack is a world-class data lake where we're working to apply AI to improve the efficiency and effectiveness of our business. We were pleased to be recognized by Fortune in their inaugural AI ranking of Fortune 500 companies with a number 10 ranking. Once our digital transformation is completed, we will accelerate our earnings growth through even greater cross-sell, expand our margins through improved pricing and operating cost leverage, and increase our working capital turns by leveraging our single global IT instance." 

Mr. Engel concluded, "Looking ahead in 2026, we expect to continue to outperform the market and deliver mid- to high-single-digit organic sales growth, strong operating leverage and margin expansion, double-digit EPS growth, and improved free cash flow generation. I am pleased to announce that we plan to increase our common stock dividend 10% again this year to $2.00 per share. As the market leader, and with positive momentum building, I'm confident that Wesco will continue to outperform our markets and deliver exceptional value to our customers and shareholders in 2026 and beyond. Finally, I continue to be very proud of our talented and dedicated Wesco team, whose relentless focus on serving customers, advancing our digital transformation agenda, and driving superior execution across our businesses is producing notable results, as we realize our vision of becoming the best tech-enabled supply chain solutions provider in the world."

Key Financial Highlights

Net Sales

• On an organic basis, which removes the impact of the Ascent, LLC ("Ascent") acquisition and differences in foreign exchange rates, sales for the fourth quarter of 2025 grew by 9.2%. The increase in organic sales reflects volume growth in all three segments (CSS, EES and UBS), as well as a favorable impact from changes in price. Backlog at the end of the fourth quarter of 2025 increased by 19% compared to the end of the fourth quarter of 2024.
• For 2025, organic sales, which removes the impact of the Wesco Integrated Supply ("WIS") divestiture and Ascent acquisition, differences in foreign exchange rates, and the impact from the number of workdays, grew by 8.6%. The increase in organic sales reflects volume growth in the CSS and EES segments, as well as a favorable impact from changes in price.

Gross Profit and Gross Margin

• Gross margin for the fourth quarter of 2025 remained flat compared to the fourth quarter of 2024.
• The decrease in gross margin for the twelve months ended December 31, 2025 primarily reflects a decrease in gross margin across all three segments, most significantly in the UBS segment due to competitive pressures in the public power market, as well as in the EES and CSS segments driven by large project sales.

Selling, General, and Administrative ("SG&A") Expenses

• The increase in SG&A expenses for the fourth quarter of 2025 is driven by higher commissions and incentives, higher salaries, higher IT costs, higher transportation costs, and increased costs to operate our facilities. SG&A expenses for the fourth quarter of 2025 include $11.0 million of digital transformation costs, compared to $10.0 million of digital transformation and restructuring costs for the fourth quarter of 2024. Adjusted for these costs, SG&A expenses were 14.8% and 14.7% of net sales for the fourth quarter of 2025 and 2024, respectively.
• The increase in SG&A expenses for 2025 is driven by higher salaries, higher commissions and incentives, increased costs to operate our facilities, higher transportation costs, and higher IT costs, partially offset by the impact of the divestiture of the WIS business. SG&A expenses for 2025 include $35.2 million of digital transformation costs. SG&A expenses for 2024 include $37.0 million of digital transformation and restructuring costs, a $17.8 million loss on abandonment of assets and $4.9 million of excise taxes on excess pension plan assets. Adjusted for these costs, SG&A expenses were 14.9% of net sales for 2025 and 2024.

Adjusted EBITDA and Adjusted EBITDA Margin

• The increase in Adjusted EBITDA for the fourth quarter of 2025 primarily reflects an increase in net sales, partially offset by increases in cost of goods sold, related to large project sales with lower margins, and SG&A expenses as described above.
• The increase in Adjusted EBITDA for 2025 primarily reflects an increase in net sales, partially offset by increases in cost of goods sold, related to large project sales with lower margins, and SG&A expenses as described above.

Effective Tax Rate

• The provision for income taxes was $57.6 million for the fourth quarter of 2025 compared to $43.5 million for the fourth quarter of 2024, resulting in effective tax rates of 26.4% and 20.8%, respectively. The effective tax rate for the quarter ended December 31, 2025 was higher due to higher tax expense related to uncertain tax positions and an increase in valuation allowance against foreign tax credit deferred tax assets.
• The provision for income taxes was $213.4 million for 2025 compared to $231.6 million for the 2024, resulting in effective tax rates of 24.9% and 24.4%, respectively.

Adjusted Earnings Per Diluted Share

• The increase in adjusted earnings per diluted share in the fourth quarter of 2025 primarily reflects the favorable impact of the June 2025 redemption of the Company's 10.625% Series A Fixed-Rate Reset Cumulative Perpetual Preferred Stock (the "Series A Preferred Stock") and the corresponding decrease in preferred dividends, as well as higher adjusted EBITDA. The increase in adjusted earnings per diluted share was offset by a $23.5 million increase in interest expense primarily driven by the issuance of the 2033 Notes and an increase from adjustments for uncertain tax positions, partially offset by lower borrowings and lower interest rates on the Receivables Facility. There was also a positive impact from the reduction in outstanding common shares during the fourth quarter of 2025 as compared to the fourth quarter of 2024.
• The increase in adjusted earnings per diluted share in 2025 primarily reflects the favorable impact of the Series A Preferred Stock redemption and the corresponding decrease in preferred dividends. There was also a positive impact from the reduction in outstanding common shares during 2025 as compared to 2024.

Operating Cash Flow

• Net cash provided by operating activities for the fourth quarter of 2025 totaled $71.9 million compared to $276.6 million in the fourth quarter of 2024. The $204.7 million decrease is primarily driven by a $201.9 million impact from changes in accounts payable, due to the timing of payments to suppliers, as well as a $21.6 million impact from changes in trade accounts receivable, driven primarily by sales growth in all three segments.
• Net cash provided by operating activities for 2025 totaled $125.0 million, compared to $1,101.2 million for 2024. The $976.2 million decrease is primarily driven a $507.3 million impact from changes in trade accounts receivable and a $428.1 million impact from changes in inventories. The impact from trade accounts receivable was primarily due to sales growth in the CSS and EES segments, as well as the timing of receipts from customers as compared to the prior year. The impact from inventories was primarily due to an increase in volume related to growth in large projects as compared to the prior year. These decreases were partially offset by an increase in net income as adjusted for certain non-cash items.

Webcast and Teleconference Access

Wesco will conduct a webcast and teleconference to discuss the fourth quarter and full year 2025 earnings as described in this News Release on Tuesday, February 10, 2026, at 10:00 a.m. E.T. The call will be broadcast live over the internet and can be accessed from the Investor Relations page of the Company's website at https://investors.wesco.com. The call will be archived on this internet site for seven days.

Wesco International (NYSE: WCC) builds, connects, powers and protects the world. Headquartered in Pittsburgh, Pennsylvania, Wesco is a FORTUNE 500® company with approximately $24 billion in annual sales in 2025 and a leading provider of business-to-business distribution, logistics services and supply chain solutions. Wesco offers a best-in-class product and services portfolio of Electrical and Electronic Solutions, Communications and Security Solutions, and Utility and Broadband Solutions. The Company employs approximately 21,000 people, partners with the industry's premier suppliers, and serves thousands of customers around the world. With millions of products, end-to-end supply chain services, and significant digital capabilities, Wesco provides innovative solutions to meet customer needs across commercial and industrial businesses, technology companies, telecommunications providers, and utilities. Wesco operates more than 700 sites, including distribution centers, fulfillment centers, and sales offices in approximately 50 countries, providing a local presence for customers and a global network to serve multi-location businesses and global corporations.

Forward-Looking Statements

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 strategy, growth strategy, competitive strengths, productivity and profitability enhancement, competition, new product and service introductions, and liquidity and capital resources. Such statements can generally be identified by the use of words such as "anticipate," "plan," "believe," "estimate," "intend," "expect," "project," and similar words, phrases or expressions or future or conditional verbs such as "could," "may," "should," "will," and "would," although not all forward-looking statements contain such words. These forward-looking statements are based on current expectations and beliefs of Wesco's management, as well as assumptions made by, and information currently available to, Wesco's management, current market trends and market conditions and involve risks and uncertainties, many of which are outside of Wesco's and Wesco's management's control, and which may cause actual results to differ materially from those contained in forward-looking statements. Accordingly, you should not place undue reliance on such statements.

Important factors that could cause actual results or events to differ materially from those presented or implied in the forward-looking statements include, among others, the failure to achieve the anticipated benefits of, and other risks associated with, acquisitions, joint ventures, divestitures and other corporate transactions; the inability to successfully integrate acquired businesses; the impact of increased interest rates or borrowing costs; fluctuations in currency exchange rates; evolving impacts from tariffs or other trade tensions between the U.S. and other countries (including implementation of new tariffs and retaliatory measures);  failure to adequately protect Wesco's intellectual property or successfully defend against infringement claims; the inability to successfully deploy new technologies, digital products and information systems or to otherwise adapt to emerging technologies in the marketplace, such as those incorporating artificial intelligence (AI); risks relating to our use or reliance on AI; failure to execute on our efforts and programs related to environmental, social and governance (ESG) matters; unanticipated expenditures or other adverse developments related to compliance with new or stricter government policies, laws or regulations, including those relating to data privacy, cybersecurity, competition, sustainability and environmental protection; the inability to successfully develop, manage or implement new technology initiatives or business strategies, including with respect to the expansion of e-commerce or AI capabilities and other digital solutions and digitalization initiatives; disruption of information technology systems or operations; natural disasters (including as a result of climate change), health epidemics, pandemics and other outbreaks; supply chain disruptions; geopolitical conflicts and issues, such as the ongoing Middle East and Russia/Ukraine conflicts; the impact of changing and expanding export controls, sanctions, and data localization rules; the failure to manage the increased risks and impacts of cyber incidents or data breaches; and exacerbation of key materials shortages, inflationary cost pressures, material cost increases, demand volatility, and logistics and capacity constraints, any of which may have a material adverse effect on the Company's business, results of operations and financial condition. All such factors are difficult to predict and are beyond the Company's control. Additional factors that could cause results to differ materially from those described above can be found in Wesco's most recent Annual Report on Form 10-K and other periodic reports filed with the U.S. Securities and Exchange Commission.

Contact Information:

Investor Relations
Scott Gaffner
Senior Vice President, Investor Relations
InvestorRelations@Wescodist.com 

Corporate Communications
Jennifer Sniderman
Vice President, Corporate Communications
Jennifer.Sniderman@Wescodist.com

http://www.wesco.com

NON-GAAP FINANCIAL MEASURES

In addition to the results provided in accordance with U.S. Generally Accepted Accounting Principles ("U.S. GAAP") above, this earnings release includes certain non-GAAP financial measures. These financial measures include organic sales growth, gross profit, gross margin, earnings before interest, taxes, depreciation and amortization (EBITDA), adjusted EBITDA, adjusted EBITDA margin, financial leverage, free cash flow, adjusted selling, general and administrative expenses, adjusted income from operations, adjusted operating margin, adjusted other non-operating expense (income), adjusted provision for income taxes, adjusted income before income taxes, adjusted net income, adjusted net income attributable to WESCO International, Inc., adjusted net income attributable to common stockholders, and adjusted earnings per diluted share. The Company believes that these non-GAAP measures are useful to investors as they provide a better understanding of our financial condition and results of operations on a comparable basis. Additionally, certain non-GAAP measures either focus on or exclude items impacting comparability of results such as digital transformation costs, restructuring costs, cloud computing arrangement amortization, pension settlement cost and excise taxes on excess pension plan assets related to the settlement of the Anixter Inc. Pension Plan, loss on abandonment of assets, the gain recognized on the divestiture of the WIS business, the loss on termination of business arrangement, and the related income tax effects, as well as the gain on the redemption of the Series A Preferred Stock, allowing investors to more easily compare the Company's financial performance from period to period. Management does not use these non-GAAP financial measures for any purpose other than the reasons stated above.

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