Did Wesco International beat or miss consensus estimates last quarter?

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What were the key takeaways from Wesco International's earnings call?

- **Revenue Surge**: Q3 organic sales up 12% YoY, with data center sales jumping 60% to $1.2 billion (19% of total revenue).
- **Profitability Boost**: Adjusted EPS rose 9.5% to $1.08, driven by 10 bps EBITDA margin expansion and gross margin improvements.
- **2025 Guidance Upped**: Organic growth raised to 8-9%, EBITDA up 10-15%, and EPS to $13.10-$13.60.
- **2026 Vision**: Mid-single-digit growth with data center sales leading, targeting 20-30 bps margin expansion.
- **Cash Flow Caution**: Free cash flow use of $89 million in Q3 due to AR growth, but long-term cash generation remains strong.

**【CEO Summary Section】**
- **Revenue Growth**: Organic sales rose 12% YoY in Q3, marking 4 consecutive quarters of accelerating momentum. Total sales reached $6.2 billion, an all-time record.
- **Data Center Dominance**: Data center sales hit $1.2 billion (19% of total Q3 revenue), up 60% YoY, with trailing 12-month sales nearing $4 billion.
- **Business Unit Performance**: All 3 SBUs (Communications & Security Solutions, Electrical & Electronic Solutions, Utility & Broadband Solutions) delivered growth for the first time since Q1 2023.
- **2025 Outlook Update**: Raised full-year organic sales growth to 8-9% (from 5-7%), adjusted EBITDA up 10-15%, and adjusted EPS to $13.10-$13.60.
- **2026 Vision**: Target mid-single-digit organic growth, with data center sales expected to remain a key driver.

**【CFO Financial Commentary】**
- **Profitability**: Adjusted EBITDA margin improved 10 bps Q/Q to 6.8%, driven by gross margin expansion (21.3%) and SG&A leverage. Adjusted EPS grew 9.5% YoY to $1.08.
- **Cash Flow**: Free cash flow use of $89 million in Q3 due to AR growth ($271 million YoY increase). Full-year free cash flow guidance lowered to $400-500 million.
- **Tariff Impact**: Price benefit of <3% in Q3, with 100%+ YoY increase in supplier price notifications. Marginal impact on Q3 results, but potential upside in 2026.
- **Balance Sheet**: redeemed $540 million Series A preferred stock, reducing annual interest expense by $32 million.

**【Q&A Highlights】**
- **EES Growth Drivers**: Construction (mid-teens growth), industrial (mid-single digits), and OEM (mid-teens) all contributed, with data center sales up 60% YoY.
- **Data Center Margins**: CSS gross margin improved 30 bps Q/Q, despite lower margins on large hyperscale projects. Long-term focus on expanding services across data center lifecycle.
- **2026 Margin Outlook**: Target 20-30 bps EBITDA margin expansion, driven by supplier volume rebates, operating leverage, and reduced incentive comp headwinds.
- **Utility Recovery**: Investor-owned utilities up high single digits YoY, while public power expected to return to growth in 2026.


WESCO International, Inc. (WCC) Q3 2025 Earnings Call Transcript

Revenue

Sales and Services Revenue

Financing Services Revenue

Other Revenue

Cost of Revenue

Cost of Goods and Services

Cost of Financing Services

Other Cost

Gross Profit

Other Operating Income

Operating Expenses

Selling, General and Administrative Expenses

Selling and Marketing Expenses

General and Administrative Expenses

Research and Development Expenses

Loss on Bad Debts

Loss on Impairment of Other Assets

Loss on Disposal of Assets

Other Operating Expenses

Operating Income

Non-Operating Income (Loss)

Income (Loss) from Affiliates

Income (Loss) from Associates

Income (Loss) from Joint ventures

Gain (Loss) on Other Investment

Gain (Loss) on Change in Fair Value

Gain (Loss) on Foreign Currency Exchange

Other Non-Operating Income (Loss)

Net Interest Expense

Interest Expense

Interest Income

Pretax Income From Continuing Operations

Income Tax Expense

Current Income Tax

Deferred Income Tax

Income Tax Adjustments

Net Income from Continuing Operations

Income from Discontinued Operations

Other Items Before Net Income

Net Income

Net Income Attributable to Minority Interests

Net Income Attributable to Owners of the Company

Preferred Stock Dividends

Other Adjustments

Net Income Attributable to Common Stockholders

Other Comprehensive Income

Total Comprehensive Income

Total Comprehensive Income Attributable to Minority Interests

Total Comprehensive Income Attributable to Owners of the Company

Basic EPS

Basic EPS from Continuing Operations

Basic EPS from Discontinued Operations

Diluted EPS

Diluted EPS from Continuing Operations

Diluted EPS from Discontinued Operations

WCC

WCC fundamentals

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