DXP Enterprises (DXPE) Q2 2024 earnings summary

Executive summary

• Q2 2024 sales reached $445.6 million, up 4.1% year-over-year and 8% sequentially, driven by organic growth and acquisitions, with IPS leading segment growth.

• Net income for Q2 2024 was $16.7 million, down from $19.1 million in Q2 2023 but up from $11.3 million sequentially; adjusted diluted EPS was $1.02.

• Adjusted EBITDA was $48.2 million, with a margin of 10.8%, up from $45.3 million year-over-year.

• Four acquisitions completed through Q2, contributing $23.4 million in Q2 sales, with at least two more expected in the second half of 2024.

• Free cash flow for Q2 was $5.9 million, a significant improvement from -$4.2 million in Q2 2023.

Financial highlights

• Q2 2024 sales were $445.6 million; six-month sales ended June 30, 2024, were $858.2 million, up 0.7% year-over-year.

• Adjusted EBITDA for Q2 was $48.2 million, margin 10.8%; operating income was $37.4 million, nearly flat year-over-year.

• Net income for Q2 was $16.7 million; adjusted diluted EPS was $1.02; GAAP diluted EPS was $1.00.

• Gross profit margin for Q2 was 30.9%, up 90 bps sequentially and 12 bps year-over-year.

• Free cash flow for the six months was $30.0 million, up from $18.4 million in the prior year.

Outlook and guidance

• Confident in continued growth and profitability for the second half of 2024, supported by a strong balance sheet, robust acquisition pipeline, and constructive end markets.

• At least two additional acquisitions are expected to close in the second half of 2024.

• Supply Chain Services performance expected to be driven by new customer additions or increased spend from existing customers in early 2025.

• Management believes funding and liquidity are adequate for the next twelve months, with potential for additional debt or equity for acquisitions.