DXP Enterprises (DXPE) Q1 2025 earnings summary

Executive summary

• Q1 2025 sales reached $476.6 million, up 15.5% year-over-year and 1.2% sequentially, with organic growth of 11.1% and $31.1 million from acquisitions; Arroyo Process Equipment was acquired in Q1.

• Net income was $20.6 million, up from $11.3 million in Q1 2024 and slightly down from $21.4 million in Q4 2024; diluted EPS was $1.25, or $1.26 adjusted.

• Adjusted EBITDA was $52.5 million (11.0% margin), up from $40.3 million (9.8%) in Q1 2024.

• The business remains resilient and diversified, with 77% of sales from industrial markets and 23% from oil and gas.

• No significant impact from tariffs or macro uncertainty has been observed on demand or project activity.

Financial highlights

• Gross profit was $150.3 million (31.5% margin), up from $123.9 million (30.0%) in Q1 2024.

• Operating income was $40.5 million (8.5% margin), up from $29.1 million (7.1%) in Q1 2024.

• Free cash flow was negative at $(16.9) million, reflecting higher capex and acquisition spend.

• Cash on hand at quarter-end was $114.3 million; total debt outstanding was $647.3 million.

• Working capital increased to $325.3 million, 17.4% of sales.

Outlook and guidance

• Management anticipates continued sales and profit improvement for the remainder of 2025, supported by a strong project backlog and diversified end markets.

• No meaningful margin difference is expected between Q1 and Q2.

• Plans to close two to three acquisitions by mid-year, with a robust acquisition pipeline.