WESCO International (WCC) Q1 2025 earnings summary

Executive summary

• Q1 2025 organic sales grew 6% year-over-year, led by a 70% surge in data center business and strong Broadband and OEM growth, while utility markets remained soft but are expected to recover in H2; reported sales were flat due to divestitures and FX.

• Gross margin was stable sequentially at 21.1%, down 20 bps year-over-year; adjusted EBITDA was $310.7 million (5.8% of sales), down 8.7% year-over-year due to higher costs.

• Net income attributable to common stockholders was $104 million, with diluted EPS of $2.10 and adjusted EPS of $2.21, down 4% from prior year.

• Issued $800 million in senior notes to redeem preferred stock and repay part of the revolving credit facility, strengthening the balance sheet and extending debt maturities.

• Capital allocation priorities include debt reduction, share repurchases, continued investment in business transformation, and M&A pipeline.

Financial highlights

• Net sales for Q1 2025 were $5,343.7 million, essentially flat year-over-year; organic sales up 6% after adjusting for divestitures, FX, and workdays.

• Adjusted EBITDA margin was 5.8%, down from 6.4% in Q1 2024; gross margin was 21.1%, down 20 bps year-over-year.

• Adjusted EPS was $2.21, down 4% from $2.30 in Q1 2024.

• Free cash flow was $9.4 million, exceeding expectations but sharply down from $731.4 million in Q1 2024.

• Financial leverage ratio increased to 3.1x from 2.9x at year-end 2024.

Outlook and guidance

• Full-year 2025 outlook reaffirmed, with organic sales growth expected at 2.5%–6.5% and reported sales growth flat to up 4%.

• Adjusted EBITDA margin guided at 6.7%–7.2%; adjusted EPS range $12.00–$14.50.

• Free cash flow guidance reaffirmed at $600–$800 million for FY25.

• Utility sales expected to recover in H2 2025; data center sales outlook raised to ~20% growth.

• No tariff-related price increases included in guidance; expect a two-quarter lag for price increases to impact revenue.