WESCO International (NYSE:WCC) reported fourth-quarter and full-year 2025 results highlighted by record quarterly revenue, continued share gains, and surging data center demand, while management also outlined leadership changes and a 2026 outlook calling for faster growth and materially higher free cash flow.
Leadership update and capital return plans
Chairman, President and CEO John Engel opened the call by announcing that CFO Dave Schulz will retire in May 2026 and serve as Executive Vice President, Special Advisor until then. Engel said Neil Dev has been appointed Executive Vice President and CFO, with Dev joining the company later in the month to support a transition.
Fourth-quarter results: record sales and expanding data center demand
For the fourth quarter, Schulz said revenue was a record $6.1 billion, up 10% year-over-year, including 9% organic growth. He attributed growth to roughly six points of volume and about three points of price (including one point from commodities). Gross margin was 21.2%, in line with the prior year, and SG&A as a percentage of sales was “essentially flat,” he said.
Adjusted EBITDA was $409 million, up 10% year-over-year, with an adjusted EBITDA margin of 6.7%. Adjusted diluted EPS rose 8% to $3.40. Schulz said the EPS increase was driven mainly by operational execution and the benefit from a preferred stock redemption, while interest expense was higher due to issuance of 2033 notes used to fund the preferred equity redemption and a one-time approximately $10 million adjustment to interest on taxes payable.
Engel also pointed to another record for data center sales in the quarter, with WESCO posting $1.2 billion in data center sales, up approximately 30% year-over-year.
Full-year 2025: strong organic growth, margin pressure tied to mix and public power
For the full year, Schulz said sales were $23.5 billion, up 8%, with organic sales up 9%. Volume contributed roughly seven points and price about two points (including about one point from commodities). Adjusted EBITDA increased 2% to $1.54 billion, or 6.5% of sales. Gross margin was 21.1%, down 50 basis points versus 2024, which Schulz said reflected project and product mix along with competitive pressure in public power. Adjusted EPS for the year increased 6% to $12.91.
WESCO ended 2025 with a record backlog, which Engel said was up 19% year-over-year. Management tied demand to secular trends including digitalization (including AI-driven data centers and automation), electrification (including power generation and reliability), and supply chain resiliency (including reshoring).
Business unit performance: CSS leads; UBS pressured by public power
- Communications and Security Solutions (CSS): In Q4, organic sales rose 14% and reported sales rose 16%, driven by Wesco Data Center Solutions (sales up over 30% in the quarter) and growth in security. CSS backlog increased nearly 40% to a record, and adjusted EBITDA margin expanded to 9.1%, up 90 basis points. For the full year, CSS reported sales increased 18% and organic sales rose 17%, with data center solutions up over 50% for the year, Schulz said.
- Electrical and Electronic Solutions (EES): Q4 reported and organic sales rose 9%, with construction up low double digits, industrial up low single digits (with strength in Canada), and OEM up mid-teens. EES backlog increased 6%, and adjusted EBITDA margin expanded 50 basis points to 8.5%. For the full year, organic sales were up 8% and reported sales up 7%, while full-year adjusted EBITDA margin declined 30 basis points, which management attributed to mix and project activity pressure primarily in the first half.
- Utility and Broadband Solutions (UBS): Q4 reported and organic sales increased 3%. Utility grew mid-single digits, driven by double-digit growth at investor-owned utilities (IOUs) and grid services, partially offset by continued softness in public power customers; broadband declined high single digits due to a difficult comparison, Schulz said. UBS backlog rose 23% year-over-year. Segment adjusted EBITDA margin fell about 120 basis points year-over-year, primarily due to lower gross margin tied to public power headwinds. For the full year, UBS reported sales declined 5% (organic down 1%), and full-year EBITDA margin declined 90 basis points, which management again tied to competitive pressure in public power.
On the call, Engel and Schulz emphasized that UBS pressures were concentrated in public power, citing inventory normalization and competitive bidding—particularly in transformers, with some impact in wire and cable. Engel said IOU momentum has improved for three consecutive quarters, and management expects public power customers to return to sales growth by the end of 2026. Schulz also highlighted grid services as a growing part of UBS, generating over $300 million of revenue in 2025 and growing at a mid-single-digit rate, with management expecting double-digit growth in 2026.
Cash flow and 2026 outlook: higher sales, stronger margins, and improved free cash flow expected
Schulz said WESCO generated $54 million of free cash flow in 2025, citing working capital investment tied to elevated activity and strong sales growth. He said the fourth quarter reflected higher accounts receivable and a “meaningful” inventory build, and noted net working capital as a percentage of sales was 20.1% versus 19.8% in 2024. For 2026, he said the company expects net working capital to grow at roughly half the rate of sales to support improved free cash flow conversion.
For 2026, management issued the following guidance:
- Reported sales growth: 5% to 8%
- Organic sales growth: 4% to 7%, with about a one-point benefit from FX and no impact from M&A or workdays assumed
- Adjusted EBITDA margin: 6.6% to 7.0%
- Adjusted diluted EPS: $14.50 to $16.50
- Free cash flow: $500 million to $800 million
Schulz said the outlook assumes roughly 2 to 5 points of volume and about two points of carryover pricing, but does not include the impact of future pricing actions, including tariffs, due to timing uncertainty. Management discussed an increase in supplier price increase notifications, noting the count of Q4 price increase notifications was up over 125% year-over-year, with average increases in the mid-single-digit range. However, Schulz cautioned that similar notifications in the prior year did not fully translate into realized pricing benefits.
On near-term trends, management said preliminary January sales per workday were up approximately 15% and that storm-related activity had an immaterial negative impact expected to recover later in the quarter. For the first quarter, WESCO expects reported sales to be up high single digits with growth across all three business units and expects adjusted EBITDA margin to rise year-over-year, driven by improved gross margin and operating leverage.
About WESCO International (NYSE:WCC)
WESCO International, Inc is a leading global distributor of electrical, industrial, communications and utility products, serving a diverse customer base across maintenance, repair and operations (MRO), original equipment manufacturing (OEM) and construction markets. The company offers a comprehensive portfolio of products ranging from power distribution and automation solutions to data communications, security systems and lighting controls. Through an extensive branch network, WESCO provides critical components and value‐added services that help organizations streamline operations and improve reliability in their facilities and infrastructure.
In addition to its broad product offering, WESCO delivers advanced supply chain management and logistics solutions designed to optimize inventory levels, reduce downtime and lower overall procurement costs.
