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What is the revenue and EPS growth rate for Distribution year over year?

What does Distribution do and what are its main business segments?

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Did Distribution beat or miss consensus estimates last quarter?

What factors drove the changes in Distribution's revenue and profit?

- **Revenue Growth**: 9.8% YoY to $1.98 billion, driven by organic expansion and acquisitions.
- **Margin Challenges**: 2025 EBITDA margin of 8.9% due to cost increases and mix shifts; Q4 margin 7.4%.
- **2026 Outlook**: Q2/Q3 margins expected to exceed 2025 average, with focus on high-margin businesses and digital tools.
- **M&A Activity**: Small tuck-in acquisitions prioritized to enhance verticals; M&A pipeline expanded with new leadership.
- **Tariff Risks**: Ongoing costs and uncertain SCOTUS ruling impacts on sourcing and pricing.
- **Lawson Recovery**: New leadership and tools (e.g., route optimization) targeting 45% of revenue from smaller local accounts.


**【CEO Summary】**
- **Revenue Growth**: Total revenue for 2025 was $1.98 billion, up 9.8% YoY, driven by organic growth and acquisitions. Q4 revenue was $482 million, flat YoY due to macroeconomic headwinds.
- **Challenges in 2025**: Faced government shutdowns, shifting demand, and macroeconomic pressures. Adjusted EBITDA was $175 million (8.9% of sales), below expectations due to cost increases and margin compression.
- **Investments**: Accelerated talent recruitment, leadership transitions, and platform enhancements. Gexpro Services saw organic ADS growth of 12.3%, while TestEquity Group's margins were pressured by mix shifts and higher costs.
- **2026 Focus**: Execution on growth initiatives, margin improvement, and disciplined capital allocation. Emphasis on high-margin businesses, digital capabilities, and operational excellence.

**【CFO Financial Commentary】**
- **Full Year 2025**: GAAP net income of $0.18 per share vs. $0.16 loss in 2024. Non-GAAP EPS was $1.24, down from $1.44 YoY. Adjusted EBITDA was $175 million (8.9% of sales), with 80 bps margin compression due to employee costs, mix shifts, and one-time items.
- **Q4 2025**: Adjusted EBITDA of $35.4 million (7.4% of sales), impacted by 40 bps from healthcare costs, 25 bps from leadership investments, and 25 bps from mix shifts. Cash flow from operations was $84 million for the year.
- **Liquidity**: Ended 2025 with $469 million in liquidity, including a $700 million term loan and $400 million revolver. Free cash flow conversion was 85%.
- **Share Repurchases**: Returned $23.5 million to shareholders in 2025, with $33 million remaining in the $67.5 million buyback program.

**【Q&A Highlights】**
- **Sales Trends**: Q1 2026 saw low-single-digit revenue growth, driven by TestEquity Group's test and measurement end markets. Gexpro Services faces domestic renewables softness but growth in international markets.
- **Margins**: Q1 2026 margins expected to remain under pressure due to leadership investments and one-time costs. Q2 and Q3 margins有望 rebound to above 2025's 8.9% average.
- **Tariffs**: Impact on sourcing and pricing remains uncertain. DSG is evaluating SCOTUS rulings and potential refunds but expects ongoing costs.
- **M&A Pipeline**: Small tuck-in acquisitions prioritized to bolster verticals. Sean Dwyer's leadership has expanded the M&A funnel, with 3 accretive deals in early stages.
- **Lawson Challenges**: Smaller local accounts face service gaps due to sales force transformation. Route optimization tools and service reps are being deployed to improve coverage and retention.


Distribution Solutions Group, Inc.(DSGR)-20260305-2025 Q4 Earnings call transcript

- **Revenue Growth**: 10.7% YoY to $518 million, driven by 6% organic growth and acquisitions.
- **Segment Strength**: Gexpro Services up 11.4%, TestEquity 5.8%, Lawson 3%.
- **Profitability**: Adjusted EBITDA $48.5 million (9.4%), with sequential improvement in Gexpro and Canada.
- **Shareholder Returns**: $20 million in buybacks, enhancing EPS by 14.3% QoQ.
- **Q4 Outlook**: Cautious due to selling days, but Gexpro and TestEquity momentum expected.
- **Margins**: 9.4% EBITDA margin with 30bps investment drag, targeting 10%+ in Canada.

**【CEO Opening Remarks】**
- **Revenue Growth**: Q3 revenue of $518 million, up 10.7% YoY, driven by 6% organic daily sales growth and $23.3 million from 2024 acquisitions.
- **Segment Performance**: Gexpro Services led with 11.4% organic growth, TestEquity Group grew 5.8%, and Lawson reported 3% organic growth.
- **Strategic Initiatives**: Investments in TestEquity's go-to-market strategy, Gexpro's global supply chain expansion, and Lawson's sales force transformation.
- **Profitability**: Adjusted EBITDA of $48.5 million (9.4% margin), with sequential improvement in Gexpro and Canadian segments.
- **Shareholder Returns**: $20 million in share buybacks year-to-date, enhancing EPS.

**【CFO Financial Commentary】**
- **Financial Highlights**: GAAP net income $0.14, Non-GAAP EPS $0.40 (8.1% YoY increase). Cash flow from operations $38.4 million, total liquidity $335 million.
- **Segment Breakdown**: 
  - **Lawson**: $121.5 million revenue, 11.5% EBITDA margin, 930 sales reps.
  - **Gexpro**: $130.5 million revenue, record $17.8 million EBITDA.
  - **TestEquity**: $206.5 million revenue, 6% EBITDA margin, impacted by mix shifts and investments.
  - **Canada**: $60 million revenue, 9.6% EBITDA margin, 300bps sequential improvement.
- **Leverage**: Debt-to-EBITDA 3.5x, with $22-25 million CapEx guidance.

**【Q&A Highlights】**
- **Q4 Outlook**: Cautious due to 61 selling days vs. 64 in Q3, but Gexpro and TestEquity momentum expected to continue.
- **Margin Dynamics**: 9.4% EBITDA margin driven by investments (30bps) and mix shifts (80bps). Lawson and TestEquity facing near-term margin pressure from salesforce expansion.
- **Canada Sustainability**: Targeting 10%+ EBITDA margin for Source Atlantic, with 2 facility consolidations remaining.
- **Tariffs Impact**: Pricing actions offset 2/3 of tariff costs, with Gexpro Services benefiting from domestic manufacturing demand.
- **Share Repurchases**: $6 million remaining under $20 million program.

Distribution Solutions Group, Inc. (DSGR) Q3 2025 Earnings Call Transcript

- **Revenue Surge**: 14.3% YoY growth to $502 million, driven by acquisitions and 3.3% organic expansion.
- **Margin Recovery**: 9.7% EBITDA margin (vs. 9% Q1), with all segments improving sequentially.
- **Cash Strength**: $33M cash flow from ops, no debt, $314M total liquidity.
- **Strategic Leadership**: Barry Litwin leads TestEquity, targeting double-digit margins through specialty services.
- **Canada Integration**: 4 locations consolidated, 130bps margin expansion, Bolt Supply at 16% EBITDA.
- **Gexpro Momentum**: 18.2% YoY growth, 13.4% margin, Southeast Asia expansion driving pipeline.
- **Risk Mitigation**: Tariff impact minimal (6% China exposure), managed via customer collaboration.


**【CEO Opening Remarks】**
- **Revenue Growth**: Q2 revenue of $502 million, up 14.3% YoY, driven by 5 acquisitions in 2024 and 3.3% organic growth.
- **Margin Expansion**: Consolidated adjusted EBITDA margin improved to 9.7% (vs. 9% Q1), with all verticals showing sequential margin gains.
- **Cash Flow**: Generated $33 million in cash flow from operations, no outstanding debt under revolving credit facility.
- **Strategic Moves**: Announced Barry Litwin as TestEquity Group CEO, emphasizing leadership transformation and integration of Source Atlantic in Canada.

**【CFO Financial Commentary】**
- **Lawson**: Q2 sales $124.3 million (+2.6% YoY), EBITDA $15.7 million (12.6% margin), benefiting from sales force transformation investments.
- **Canada**: Q2 sales $55.9 million, EBITDA $3.6 million (6.5% margin), with Source Atlantic integration driving 130bps sequential margin expansion.
- **Gexpro Services**: Q2 sales $127.8 million (+18.2% YoY), EBITDA $17.1 million (13.4% margin), fueled by Southeast Asia expansion and cross-selling.
- **TestEquity**: Q2 sales $195 million (-1.2% YoY), EBITDA $13.5 million (6.9% margin), with ConRes acquisition adding $1.9 million in revenue.
- **Liquidity**: $314 million total liquidity, $62 million cash, and $491 million net working capital.

**【Q&A Highlights】**
- **Q3 Outlook**: July sales pacing consistent with Q2 trends, no major margin deviations expected. Gexpro faces tougher comps, while Lawson benefits from easier comps.
- **Canada Integration**: Consolidated 4 locations, targeting 6 total. Gross margin expansion and Bolt Supply's 16% EBITDA margin highlight progress.
- **Long-Term Margins**: TestEquity aims for double-digit EBITDA through specialty offerings (rental, calibration). Lawson targets mid-teen margins with sales force transformation.
- **Military Market**: Q2 organic growth excluding military up 0.5%, base business showing early recovery post-transformation.
- **Tariffs**: 6% of product purchases from China, managed through customer collaboration and sourcing alternatives, no margin compression expected.


Distribution Solutions Group, Inc. (DSGR) Q2 2025 Earnings Call Transcript

- **Revenue Growth**: Q1 2025 revenue up 14.9% YoY to $478M, driven by acquisitions and organic growth. EBITDA rose 18.6% to $42.8M, with margin expansion to 9%.
- **Margin Expansion**: Lawson (11.9%), Gexpro (12.6%), and TestEquity (6.8%) all saw margin improvements, reflecting disciplined execution and integration efforts.
- **Strategic Focus**: Share buybacks ($11.2M Q1), sales force expansion (targeting 1,000 reps), and CRM investments to drive long-term profitability.
- **Tariff Resilience**: <6% of procurement exposed to tariffs, with pricing adjustments to offset costs. Rental/used equipment demand rising amid tariff concerns.
- **ROIC Target**: 20%+ ROIC achievable through numerator growth (synergies, pricing, organic sales) and denominator efficiency (working capital management).


**【CEO Summary Section】**
- **Market Positioning**: DSG is well-positioned to benefit from reshaped global trade patterns and domestic manufacturing priorities, with trusted on-the-ground resources and a global vendor base. The company expects increased customer engagement and profitability from these shifts.
- **Revenue Performance**: Q1 2025 revenue was $478 million, up 14.9% YoY, driven by $51 million from 2024 acquisitions and 4.3% organic growth. EBITDA rose 18.6% to $42.8 million, with margin expansion to 9% of sales.
- **Business Unit Highlights**: 
  - **Lawson Products**: EBITDA margin improved to 11.9% (vs. 9.8% Q4 2024), supported by a 6% increase in ship-to locations and 910 sales reps (up 80 YoY). 
  - **Gexpro Services**: Margin expanded to 12.6% (vs. 11% YoY), with strong growth in aerospace, defense, and renewables. 
  - **TestEquity Group**: Margin improved to 6.8% (vs. 6.2% YoY), benefiting from rental equipment demand and U.S.-made test chambers.
- **Strategic Initiatives**: Continued investment in sales force transformation (targeting 1,000 reps by H2 2025), CRM tools, and cross-selling opportunities. Share buybacks totaled $11.2 million in Q1, with $15 million remaining under prior authorizations.

**【CFO Financial Commentary】**
- **Financial Results**: GAAP net income was $0.07 per share, up from a loss of $0.11 YoY. Adjusted EPS of $0.31 exceeded expectations, driven by cost control and margin expansion. 
- **Segment Performance**: 
  - **Lawson**: Organic ADS down 6.8% YoY due to military sales decline, but sequential improvement in Q1. 
  - **Canadian Division**: Margins compressed to 5.2% (vs. 13.1% stand-alone) due to Source Atlantic integration challenges, but sequential improvement in sales. 
  - **Gexpro Services**: Organic ADS up 23.3% YoY, with strong cross-selling and acquisition synergies. 
  - **TestEquity**: Core test and measurement revenues grew mid-single digits, with rental and used equipment demand offsetting softness in automotive.
- **Liquidity and Capital Allocation**: $305 million in total liquidity, with $455 million deployed in acquisitions since 2022. Free cash flow conversion was 90% trailing 12 months, targeting ROIC above 20% as assets mature.

**【Q&A Key Takeaways】**
- **M&A Pipeline**: Robust pipeline with disciplined approach, prioritizing share buybacks ($11.2M in Q1) amid uncertain valuations. 
- **Tariff Impact**: <6% of total procurement exposed to tariffs, with pricing adjustments to protect margins. Customers may shift to rental/used equipment due to tariff-related cost increases. 
- **Source Atlantic Progress**: Consolidation of 4 Western Canada facilities expected to drive margin improvement, but top-line pressure in Canada delays 10% EBITDA target to 2026. 
- **ROIC Path**: Leverage numerator growth (synergies, pricing, organic sales) and denominator efficiency (working capital management), targeting 20%+ ROIC as assets scale.


Distribution Solutions (DSGR)-1 May 25-2025 Q1 Earnings call transcript

- **Record Revenue Growth**: FY2024 revenue up 14.8% to $1.8 billion, driven by acquisitions and 3.5% organic growth.
- **Strategic Investments Paying Off**: Lawson salesforce rebuild (920 reps) and digital platform rollout position for 2026+ margin expansion. Gexpro Services margins +160bps YoY to 13.3%.
- **Key Risks Mitigated**: Military sales down 50% YoY but Q1 2025 shows tentative recovery. Canada Branch integration on track for double-digit margins by mid-2025.
- **Strong Cash Flow**: Adjusted free cash flow $175 million (+33% YoY). 2025 CapEx $20-25 million, targeting 3-4x leverage.

**【CEO Summary Section】**
- **Revenue Growth and Acquisitions**: FY2024 revenue reached $1.8 billion, up 14.8% YoY, driven by five strategic acquisitions and organic growth. Adjusted free cash flow was $175 million, up 33% YoY.
- **Strategic Initiatives**: Invested in salesforce transformation (920 reps as of Q4 vs. 830 low point), digital platform rollout, and M&A to expand market share in safety, calibration, and Southeast Asia.
- **End Market Challenges**: Military sales down 50% YoY due to procurement delays, but Q1 2025 shows early signs of recovery. C&I segment remains cautious, while aerospace/defense and tech end markets are resilient.

**【CFO Financial Commentary】**
- **Q4 2024 Results**: Revenue $480.5 million (+18.6% YoY), EBITDA $44.9 million (9.3% margin). Organic sales +3.5%, with $61 million from acquisitions.
- **Margin Dynamics**: Lawson margins compressed to 9.8% (vs. 11.3% YoY) due to salesforce rebuild and military weakness. Gexpro Services margins expanded 160bps YoY to 13.3%.
- **Cash Flow**: Operating cash flow $46 million (vs. $28 million YoY). Debt leverage 3.5x, targeting 3-4x. 2025 CapEx $20-25 million (~1% of revenue).

**【Q&A Key Takeaways】**
- **Q1 2025 Momentum**: Lawson sales up sequentially, Gexpro Services book-to-bill strong. TestEquity test/measurement utilization +20% QoQ.
- **Military Business**: Orders delayed by ~$50 million, but Q1 2025 shows tentative signs of release.
- **Canada Branch Integration**: Targeting double-digit margins for Source Atlantic by mid-2025 via facility consolidation and cost synergies.
- **Tariff Impact**: <10% of purchases exposed to tariffs. Proactive discussions with customers to mitigate cost impacts.

**【2025 Outlook】**
- **Revenue Growth**: Easier comps vs. 2024 organic weakness. Focus on accelerating cash flow conversion (ROIC ~11% vs. target 20%+).
- **Margin Expansion**: Lawson targeting high-single-digit margins in 2025, Gexpro Services leveraging fixed costs for further margin upside.
- **Acquisition Pipeline**: Actively evaluating accretive tuck-ins in Southeast Asia, calibration, and MRO services.

Actual											0.67	0.035	0.095	0.01	0.195	0.155	0.195	-0.045	0.48	-0.115	0.42	-0.05	0.14	0.07	-0.03	-0.35	-0.11	0.04	0.46	-0.55	0.07	0.11	0.14	-0.14
Forecast											0.2475	0.135	0.2775	0.2275	0.2625	0.2975	0.315	0.2275	0.37	0.335	0.18	0.225	0.19	0.265	0.23	0.1267	0.1667	0.1867	0.27	0.2	0.2233	0.21	0.2733	0.19
Surprise	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	+170.71%	-74.07%	-65.77%	-95.60%	-25.71%	-47.90%	-38.10%	-119.78%	+29.73%	-134.33%	+133.33%	-122.22%	-26.32%	-73.58%	-113.04%	-376.24%	-165.99%	-78.58%	+70.37%	-375.00%	-68.65%	-47.62%	-48.77%	-173.68%

DSGR

DSGR fundamentals

DSGR Q4 2025 Earnings

Earnings Call

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DSGR

DSGR fundamentals

DSGR Q4 2025 Earnings

Earnings Call

DSGR Earnings Call Summary for Q4/20259:00 AM on Mar 5, 2026

DSGR Earnings Call Summary for Q3/20259:00 AM on Oct 30, 2025

DSGR Earnings Call Summary for Q2/20259:00 AM on Jul 31, 2025

DSGR Earnings Call Summary for Q1/20259:00 AM on May 1, 2025

DSGR Earnings Call Summary for Q4/20249:00 AM on Mar 6, 2025

You can ask Aime