DXP Enterprises (DXPE) Q3 2025 earnings summary

Executive summary

• Q3 2025 sales reached $513.7 million, up 8.6% year-over-year and 3% sequentially, with organic sales growth of 11.5% and acquisitions contributing $18.4 million.

• Net income for Q3 was $21.6 million, a 2.5% increase year-over-year; diluted EPS was $1.31, and adjusted EPS was $1.34.

• Adjusted EBITDA reached $56.5 million, with an 11.0% margin, up from $52.4 million a year ago.

• Growth was driven by both organic initiatives and acquisitions, with five acquisitions closed year-to-date and more expected.

• Continued focus on customer-driven solutions, operational efficiency, and expansion into new markets such as water and data centers.

Financial highlights

• Gross profit margin improved to 31.4% in Q3 2025, with gross profit at $161.3 million.

• Operating income for Q3 was $43.7 million, with an 8.5% margin.

• Free cash flow for Q3 was $28.2 million, up from $24.4 million in Q3 2024; cash flow from operating activities increased 23.1% to $34.9 million.

• Last 12-month sales were $1.6 billion, with adjusted EBITDA at $217.1 million and an 11.1% margin.

• Year-to-date sales up 11.8% and adjusted EBITDA up 17.6% through September 30, 2025.

Outlook and guidance

• Q4 is expected to be seasonally lighter due to fewer billing days, but the 11% adjusted EBITDA margin is sustainable.

• Management expects to finish fiscal year 2025 strong and maintain momentum into 2026, with continued growth from acquisitions and expansion in water and data center markets.

• Flexible capital deployment policy allows for opportunistic share repurchases and M&A.

• Stronger outlook anticipated for Q1 2026, especially in Supply Chain Services.