WESCO Posts Record Sales of $7.2264 Billion and Raises 2026 Outlook
Key Facts
WESCO reported record net sales of $7.2264 billion for the third quarter ended September 30 on October 29, up 16.6% year over year. The company said organic sales grew at the same rate year over year, with higher volume across all three business units and a favorable impact from price changes. Sequentially, net sales rose 8.4% and organic sales increased 8.5% from the second quarter. Chief Executive John Engel said WESCO had recorded five consecutive quarters of double-digit sales growth, adding that sales outside data centers rose at a high-single-digit pace. The results reflect accelerating demand, alongside the company's higher annual sales and adjusted earnings outlook.
Data centers stood out among the growth drivers, with third-quarter sales of $1.8 billion, compared with $1.2 billion a year earlier, an increase of about 55%. Organic growth extended across all three business units, with sales up 21% in Communications and Security Solutions, 18% in Electrical and Electronic Solutions, and 7% in Utility and Broadband Solutions. The company said annual organic sales growth reflected higher volume across all three units as well as a favorable impact from price changes. All three units posted record backlogs, while total backlog rose about 80% year over year. Data center sales were $1.5 billion in the second quarter, up about 45%, while backlog was then up about 60% year over year.
Profitability improved faster than sales: adjusted EBITDA was $561.5 million, compared with $423.0 million a year earlier, an increase of 32.7%. Adjusted EBITDA margin widened to 7.8% from 6.8%, an increase of 100 basis points. The company attributed the improvement to higher sales, better gross profit margin and operating cost efficiencies. Gross profit margin rose to 21.7% from 21.3%, and WESCO said the improvement came from its Electrical and Electronic Solutions and Communications and Security Solutions units. Adjusted diluted earnings per share were $5.77, compared with $3.92 a year earlier, up 47.2%, while earnings per share under U.S. generally accepted accounting principles were $5.43.
Free cash flow turned positive, reaching $184.2 million in the third quarter, compared with an outflow of $89.3 million in the same period a year earlier. The leverage ratio fell to 2.8 times on September 30, from 3.4 times at the end of 2025. These indicators came alongside a record backlog and improving margins. WESCO closed its acquisition of New Age Engineering Group, a provider of engineered cooling solutions and data center lifecycle services in Singapore, on July 1. The base purchase price paid at closing was about $135 million.
The company raised its 2026 reported sales growth range to 14%-15%, from a previous estimate of 10%-12%. It increased its annual sales forecast range to $26.8-$27.0 billion, compared with the previous estimate of $25.9-$26.3 billion. It also raised its adjusted diluted earnings per share forecast to $18.00-$18.50, from $16.00-$17.50. For the fourth quarter, WESCO expects reported sales growth at a low- to mid-double-digit pace, with adjusted EBITDA margin up about 50 basis points year over year. The company is scheduled to host a virtual deep dive on data centers on November 10 at 10 a.m. Eastern time, following its third-quarter earnings call scheduled for October 29 at 10 a.m.
Ahead of the results announcement, WESCO shares closed at $318.02 on October 23, then at $329.50 on October 26 and $339.11 on October 27, before ending the October 28 session at $347.22. This came against a backdrop of ongoing sales growth: second-quarter sales were $6,665.1 million, up 13.0% year over year. In that quarter, data center sales were $1.5 billion, up about 45%, and backlog increased about 60%. In the third quarter, backlog growth accelerated to about 80%, with all three units posting new record levels. Engel said strong demand extended to the rest of the portfolio and end markets, with sales outside data centers growing at a high-single-digit pace.