Electrical, data and security supplies distributor Wesco reported its 2025 third quarter financial results on Oct. 30, which reflected the company’s strongest top-line performance in more than a year, driven by rapid expansion in data center and electrification projects, as well as a rebound in utility activity.

Wesco posted record quarterly sales of $6.2 billion, up 13% year-over-year on a reported basis and 12% organically, marking the company’s fourth consecutive quarter of accelerating growth.

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Each of Wesco’s three operating segments grew organically:

• Communications & Security Solutions (CSS) — up 21% reported and 18% organic, propelled by continued data-center sales growth of ~60%, representing 19% of total company sales for the quarter.
• Electrical & Electronic Solutions (EES) — up 12% both reported and organic, reflecting double-digit gains in construction and OEM markets and mid-single-digit industrial improvement.
• Utility & Broadband Solutions (UBS) — up 3% both reported and organic, returning to growth after several quarters of decline, aided by investor-owned utilities and broadband spending.

Sequentially, company sales rose 5% from 2Q, outperforming typical seasonal trends. Wesco attributed the uptick to strong backlog momentum (up 7% YoY) and robust October daily sales tracking ~9% ahead of prior-year levels.

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Profitability and Margins

Wesco’s total 3Q gross profit increased 9% to $1.32 billion, while gross margin dipped 80 basis points YoY to 21.3% but improved 20 bps sequentially.

Adjusted EBITDA climbed to $423 million (up 6% YoY) with a 6.8% margin (-50 bps YoY), supported by disciplined cost control and operating leverage from higher sales. Segment margins varied:

• EES: 8.4% (-20 bps YoY)
• CSS: 9.1% (+10 bps YoY)
• UBS: 10.4% (-90 bps YoY)

Wesco cited improved gross margin, steady SG&A control and strong data-center volume as key contributors.

Market and Outlook

Company leadership said strong demand from hyperscale and multi-tenant data-center projects continues to fuel growth, alongside secular tailwinds from AI infrastructure, electrification, automation, and reshoring. Utility sector recovery and broadband build-outs are providing additional lift.

Reflecting the sustained momentum, Wesco raised its full-year 2025 guidance, now expecting:

• Organic sales growth: 8-9% (previous 5-7%)
• Reported sales growth: 7-8%
• Free cash flow: $400–$500 million

The company projects a high-single-digit sales increase in 4Q, with adjusted EBITDA margin expanding about 30 bps year-over-year.

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“We are building on our positive business momentum as we enter the fourth quarter and begin to prepare for continued market-leading growth in 2026,” Wesco Chairman, President and CEO John Engel said in the company’s 3Q earnings statement. “We remain firmly focused on executing our cross-selling initiatives and enterprise-wide margin improvement program while delivering operational improvements enabled by our technology-driven business transformation. As the market leader, the strength of our portfolio and the enduring secular trends of AI-driven data centers, increased power generation, electrification, automation, and reshoring fuel my confidence that Wesco will continue to outperform our markets and deliver exceptional value to our customers and shareholders in 2026 and beyond.”

Other Wesco Notes

On Oct. 3, Wesco announced that its former EES SVP and general manager, Dan Furrow, will assume responsibilities for the company’s Industrial business. He’s been with Wesco since 2005. On Sept. 1, former Brinks EVP and North America President Daniel Castillo now leads Wesco’s EES unit. And back in June, Wesco promoted former USA and Global Accounts SVP Dirk Naylor to lead the CSS unit.

MDM’s Take

Wesco’s quarter underscores the widening gap between distributors positioned for the data-center and electrification wave and those still reliant on legacy industrial demand. While gross margins remain pressured by project mix, consistent sequential improvement and rising order rates suggest the company’s hybrid project-plus-recurring model is gaining traction heading into 2026.