Q2 2025 Wesco International Inc Earnings Call Transcript
Key Points
- WESCO International Inc (WCC) reported a strong acceleration in sales momentum, with organic sales growing 7% in Q2, marking three consecutive quarters of growth.
- Data center sales surpassed $1 billion in the second quarter, up 65% year-over-year, driven by AI-driven data centers.
- Adjusted EBITDA margin improved by 90 basis points sequentially due to strong operating cost leverage and stable gross margin.
- The company completed the redemption of its preferred stock, strengthening the balance sheet and improving earnings and cash flow run rates.
- Backlog reached record levels, increasing both year-over-year and sequentially across all three business units, indicating strong future demand.
- Utility sales declined in the first half of the year, with UBS sales down 4% year-over-year in Q2, although there are signs of improvement.
- Gross margin was down 80 basis points year-over-year due to project and product mix in CSS and EES.
- Adjusted SG&A increased approximately 8% year-over-year, driven by higher employee and facility costs.
- The company faces potential impacts from recent tariff announcements, including supplier price increases and potential lower customer demand.
- Adjusted EBITDA margin for UBS was down 160 basis points year-over-year, reflecting challenges in the utility market.
Hello, and welcome to Wesco's 2025 second quarter earnings call. (Operator Instructions) Please note that this event is being recorded. I will now hand the call over to Scott Gaffner, SVP, Investor Relations, to begin. Please go ahead.
Thank you, and good morning. Before we begin, I want to remind you that certain statements made on this call contain forward-looking information. Forward-looking statements are not guarantees of performance and by their nature are subject to uncertainties. Actual results may differ materially. Please see our webcast slides and the company's SEC filings for additional risk factors and disclosures. Any forward-looking information speaks only as of this date, and the company undertakes no obligation to update the information to reflect changed circumstances.
Additionally, today, we will be using certain non-GAAP financial measures. Required information about these measures is available on our webcast slides and in our press release, both of
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