10-Q · April 30, 2026
WESCO International reported robust Q1 2026 results with revenue of $6.08 billion, up 13.8% year-over-year, and adjusted EPS of $3.37, exceeding estimates. All segments contributed to growth, particularly Communications…
Earnings analysis · 10-Q
WCC earnings analysis
Filed October 29, 2026 · Our reading of the company's report
The latest report
WESCO delivered a strong Q3, with revenue up 16.6% year over year to $7,226.4 million, operating margin improving to approximately 6.2%, and GAAP diluted EPS rising to $5.43 from $3.79. CSS and EES drove the…
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WESCO delivered a strong Q3, with revenue up 16.6% year over year to $7,226.4 million, operating margin improving to approximately 6.2%, and GAAP diluted EPS rising to $5.43 from $3.79. CSS and EES drove the acceleration, particularly through data-center, OEM and construction demand, while UBS grew at a slower pace. Cash generation improved sharply, although receivables, inventory, digital transformation spending and debt remain important monitoring points.
Gross and operating margin
How much of each revenue dollar the business keeps.
One point per quarterly or annual filing. Both margins are shares of that report's revenue.
From revenue to operating profit
Where each $100 of revenue went in this report.
Cost of sales, operating expenses, and what remained. Figures are rounded to whole dollars.
Where revenue came from
The business segments reported by the company.
Shares of the segments disclosed in this filing, largest first.
How we read each report
Our analysis across the last few reports.
Our model's reading of each filing, not the share price or the market's reaction. Annual and quarterly reports each occupy one position.
Reported figures
- Earnings per share
- $5.43
What stood out
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Revenue accelerated 16.6% year over year
Q3 net sales were $7,226.4 million, up 16.6% from $6,199.1 million in the prior-year quarter. Management attributed growth to approximately 14% volume growth across all three segments and an approximately 3% price benefit.
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Margins and operating income expanded
Gross margin improved to approximately 21.7% from 21.3% year over year, while operating margin increased to approximately 6.2% from 5.6%. Income from operations rose 30.5% to $450.8 million from $345.4 million.
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EPS and EBITDA grew strongly
GAAP diluted EPS increased to $5.43 from $3.79, while adjusted diluted EPS rose to $5.77 from $3.92. Adjusted EBITDA increased 32.7% to $561.5 million from $423.0 million.
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CSS data-center demand led growth
CSS led segment performance with sales of $2,933.5 million, up 21.7%, and Adjusted EBITDA of $313.4 million, up 42.1%; management cited approximately 20% volume growth driven primarily by data center solutions.
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Cash generation improved materially
Operating cash flow for the first nine months was $469.0 million versus $53.1 million in the prior-year period. Using reported operating cash flow less capital expenditures of $80.7 million, free cash flow was approximately $388.3 million versus approximately negative $2.3 million in the prior-year period.
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Liquidity position strengthened
Cash and cash equivalents increased to $842.5 million from $604.8 million at December 31, 2025. Management reported approximately $2.1 billion of liquidity, including $433.1 million of available cash, $1,312.1 million of revolver capacity and $320.0 million of receivables-facility capacity.
What to watch
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Higher debt and interest exposure
Total debt increased to $6,058.2 million from $5,829.4 million at December 31, 2025, and nine-month interest expense increased 8.1% to $300.7 million. The company also stated that the Federal Reserve increased its benchmark rate by 25 basis points at the end of Q3, creating potential variable-rate cost pressure.
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Working capital remains cash intensive
Working capital remained a significant cash use: trade receivables increased to $5,050.2 million from $4,069.6 million and inventories rose to $4,687.1 million from $4,008.8 million. Nine-month cash flow included uses of $1,003.5 million from trade receivables and $704.9 million from inventories.
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Digital transformation costs rising
Digital transformation costs increased to $65.5 million for the first nine months from $24.1 million in the prior-year period, while Q3 digital transformation costs were $24.8 million versus $10.4 million. The DDP implementation may affect internal-control processes and requires continued effectiveness testing.
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Mexican tax litigation unresolved
The company disclosed a Mexican tax assessment of approximately $33.4 million as of December 31, 2025; a court decision received on April 23, 2026 was mostly favorable to the government, and both parties appealed. Management continues to expect to prevail, but the matter remains unresolved.
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Macro and execution uncertainty
Management identified tariffs, interest rates and inflation as sources of uncertainty and disclosed that future market disruptions could affect liquidity. The company also reported $293.5 million of deferred revenue in current liabilities and $151.7 million in noncurrent liabilities at September 30, 2026, increasing execution and delivery obligations.
Management's outlook
The 10-Q provides no explicit quantitative revenue or EPS guidance range. Management expects excess liquidity over the next several quarters to fund debt reduction, dividends, share repurchases, digital transformation and potential acquisitions, and believes operating cash flow and financing activities will cover business needs for at least the next 12 months.
Earlier filings 4
10-K · February 13, 2026
Wesco grew revenue to approximately $23.51 billion in 2025 (from $21.82 billion in 2024) while reporting roughly flat annual EPS (~$13.07 in 2024 vs ~$13.06 in 2025). Gross margin and operating margin showed modest…
10-Q · October 31, 2024
Wesco reported net sales of $5,489.4 million for the three months ended September 30, 2024, modestly below prior-year quarter sales of $5,644.4 million but roughly flat sequentially. Operating income declined to $335.6…
10-K · February 20, 2024
Wesco positions itself as a tech-enabled, scale-driven distributor and supply-chain solutions provider with three reporting segments (EES, CSS, UBS) and a global footprint of nearly 800 branches in ~50 countries. The…
This is our reading of a public filing, not the filing itself. Analysis can contain errors; check the source document for full context.