Q2 2026 Wesco International Inc Earnings Call Transcript
Key Points
- Record sales, adjusted EBITDA, and adjusted EPS in Q2 2026, with sales up 13% and EBITDA up 24%.
- Broad-based growth across all three business units (CSS, EES, UBS), with mid-single-digit sales growth excluding data centers.
- Record backlog up 60% year-over-year, driven by multi-year customer commitments and strong double-digit growth across all segments.
- Significant margin expansion: CSS achieved a record 10.2% EBITDA margin, EES expanded to 9.2%, and UBS returned to 10%.
- Major multiyear grid services award from a hyperscale data center customer, diversifying UBS customer base and expanding data center power solutions.
- Public power competitive dynamics remain a margin headwind for UBS, though stabilizing.
- Third-quarter EBITDA margin expected to be slightly lower sequentially due to anticipated project mix.
- Free cash flow guidance lowered to $300-$600 million due to working capital needs for double-digit sales growth.
- SG&A expense increased slightly as a percentage of sales due to higher incentive compensation.
- Data center growth may strain construction labor and power supply, potentially impacting project timing.
Hello, and welcome to WESCO's 2026 second-quarter earnings call. (Operator Instructions) Please note, this event is being recorded. I will now hand the call over to Scott Gaffner, SVP, Investor Relations, to begin.
Thank you, and good morning, everyone. Before we get started, 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 use certain non-GAAP financial measures. Required information about these measures is available on our webcast slides and in our press release, both of which you
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