Distribution Solutions Group (DSGR) Q4 2025 earnings summary

Executive summary

• Achieved 9.8% year-over-year revenue growth to $1.98 billion, with organic average daily sales up 3.6% and $121.5 million from five acquisitions; strong operating cash flow of $84 million.

• Adjusted EBITDA was $175.2 million (8.9% of sales), with margin compression from sales mix, employee costs, and non-recurring items; net income improved to $8.3 million from a prior year loss.

• Leadership remains confident in long-term growth, focusing on execution, talent, digital and AI investments, and high-margin businesses to drive profitability.

• Returned $23.5 million to shareholders via stock repurchases in 2025; board authorized an additional $30 million for repurchases.

• Significant operational progress included strategic leadership hires, expanded credit facility, and continued investment in automation and digital capabilities.

Financial highlights

• Full-year revenue reached $1.98 billion, up 9.8% from 2024, with organic ADS growth of 3.6% and $121.5 million from acquisitions.

• Adjusted EBITDA was $175.2 million (8.9% margin), down from 9.7% in 2024; GAAP EPS was $0.18, up from a loss of $0.16; non-GAAP adjusted EPS was $1.24, down from $1.44.

• Q4 revenue was $481.6 million, up 0.2% year-over-year; Q4 Adjusted EBITDA was $35.4 million (7.4% margin).

• Cash flow from operations was $84 million for the year, with free cash flow conversion at 85% and total liquidity of $469 million.

• Net working capital was $473.5 million at year-end, flat year-over-year.

Outlook and guidance

• Early 2026 sales are up low single digits year-over-year, with margin pressure expected in Q1 but improvement anticipated in Q2 and Q3.

• Leadership expects EBITDA margins to recover above 2025’s average in Q2 and Q3, consistent with historical seasonal patterns.

• Focus remains on high-margin businesses, digital and AI-enabled capabilities, and operational excellence to drive growth and profitability.

• Backlogs are building and weekly sales cadence is improving entering 2026.

• Acquisition pipeline remains active and building.