WESCO International, Inc.
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Item 1. Business.
In this Annual Report on Form 10-K, “Wesco” refers to WESCO International, Inc., and its subsidiaries and its predecessors unless the context otherwise requires. References to “we,” “us,” “our” and the “Company” refer to Wesco and its subsidiaries.
The Company
WESCO International, Inc. (“Wesco International”) and its subsidiaries (collectively, “Wesco” or the “Company”), headquartered in Pittsburgh, Pennsylvania, is a leading provider of business-to-business distribution, logistics services and supply chain solutions.
We employ approximately 21,000 people, maintain relationships with more than 35,000 suppliers, and serve nearly 130,000 customers worldwide. With millions of products, end-to-end supply chain services and significant digital capabilities, Wesco provides innovative solutions to meet customer needs across commercial and industrial businesses, technology companies, telecommunications providers, and utilities. Our innovative solutions include supply chain management, logistics and transportation, procurement, warehousing and inventory management, as well as kitting and labeling, limited assembly of products and installation enhancement. Wesco operates more than 700 sites, including distribution centers, fulfillment centers and sales offices in approximately 50 countries, providing a local presence for customers and a global network to serve multi-location businesses and global corporations.
Business Segments and Industry Overview
Wesco has operating segments comprising three strategic business units consisting of Electrical & Electronic Solutions (“EES”), Communications & Security Solutions (“CSS”) and Utility & Broadband Solutions (“UBS”).
The following is a description of each of our business segments and the industries in which they operate.
Electrical & Electronic Solutions
The EES segment, serving customers in over 50 countries, is a North American leader, and supplies a broad range of products and solutions primarily to construction, industrial and original equipment manufacturer (“OEM”) customers. Construction and industrial customers include a wide array of diversified manufacturers and contractors, engineering, procurement and construction firms for industrial, infrastructure, electrical, commercial, and data and broadband communications projects. Specific applications include projects for data centers, hospitals, public transit, waste water treatment facilities, EV charging stations, and renewable and solar power plants. OEM customers require products used in the manufacturing of automotive, industrial, medical, transportation, marine, military and communications equipment. The EES product portfolio includes a broad range of electrical equipment and supplies, automation and connected devices (the “Internet of Things” or “IoT”), security, lighting, wire and cable, safety, and maintenance, repair and operating (“MRO”) products from industry-leading manufacturing partners. The EES service portfolio includes solutions to improve project execution, direct and indirect manufacturing supply chain optimization programs, lighting and renewables advisory services, and digital and automation solutions to improve safety and productivity. The EES segment operates in highly fragmented markets that include thousands of small, regional and locally based privately owned competitors, as well as several large, multi-national companies.
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Communications & Security Solutions
The CSS segment, serving customers in over 50 countries, is a global leader in data center, network infrastructure and security solutions. For data centers, the CSS business leverages the complementary expertise and resources of the UBS and EES business units to deliver an integrated offering, combining various Wesco products and services, with specialized capabilities across all stages of data center design, development, operations, maintenance, and support. Its network infrastructure portfolio includes cabling and connectivity, power systems, wireless technologies, connected devices (IoT), and related products to enable seamless connectivity and communications in commercial buildings, hyperscale data centers, multi-tenant data centers, and cloud-based platforms. In the security business, CSS offers on-premise, cloud or hybrid comprehensive solutions for video surveillance, fire and intrusion detection, access control, door locking, and other technologies that help create safe and intelligent environments for customers. The data center, network infrastructure, and security businesses are large and diverse, encompassing sectors such as technology, finance, telecommunications, transportation, education, government, healthcare, and retail. CSS sells directly to end-users or through an extensive network of channel partners, including data communications contractors, security and network integrators, professional audio/visual integrators, and systems integrators. CSS also provides a wide range of professional A/V, safety, facilities, and energy management solutions. The full CSS product portfolio is frequently coupled with services designed to enhance efficiency and productivity across all customer segments globally. These services include data center services, advisory, installation enhancement, project deployment, supply chain solutions, and management platforms.
Utility & Broadband Solutions
The UBS segment is a leader in North America, serving customers primarily in the U.S. and Canada, and provides products and services to investor owned utilities, electric power cooperatives and municipalities, as well as global service providers, wireless providers, broadband operators and the contractors that service these customers. Investor owned utility companies provide a combination of electric generation, transmission and/or distribution and are owned by investors or shareholders. Public power entities are generally non-profit entities owned by their members or governed by local, state, or municipal governments. These two businesses comprise the vast majority of our utility customers in the U.S. and Canada. The products sold include wire and cable, transformers, transmission and distribution hardware, switches, protective devices, connectors, lighting, conduit, fiber and power cable, connectivity products, pole line hardware, racks, cabinets, safety and MRO products, and point-to-point wireless devices. UBS also offers a complete set of service solutions including fiber project management, high and medium voltage project design and support, pre-wired meters and capacitor banks, meter testing and advanced metering infrastructure installation, personal protective equipment, dielectric testing, tool repair, emergency response management, storage yard management, materials management, and logistics management to improve customer supply chain efficiencies.
For information concerning the financial results of our business segments, as well as our domestic and foreign operations, see Note 16, “Business Segments” in the Notes to Consolidated Financial Statements.
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Business Strategy
Wesco’s vision is to be the best tech-enabled supply chain solutions provider in the world. We believe that accomplishing this vision depends on the successful execution of our strategy, which comprises three elements:
Extend Our Leading Scale and Value Proposition: Our long-term growth potential benefits from secular trends of digitalization, including AI-driven data centers and automation; electrification, including increased power generation and reliability; and supply chain resiliency, including reshoring. Our broad portfolio of product and service offerings, as well as our global footprint and capabilities, enable us to provide value to our customers.
Further Develop the Organization and Our Culture of Excellence: Wesco’s five core values are foundational to everything we do: Our people are our greatest asset, One team, Always strive to be the best, Innovation, and Winning with customers and suppliers. Safety remains a priority and a company-wide responsibility at Wesco. Our goal is to provide a safe work environment for our employees and all those who visit our facilities. Our education and awareness campaigns for employees include training for our fulfillment and distribution centers, enhanced reporting and investigative tools, and reinforced processes at the local site level. Additionally, our commitment to continuous improvement is a hallmark of our business, and we do so by deploying Lean business practices and Agile methodologies. Wesco continues to enhance its approach to Environmental, Social, and Governance (“ESG”) matters, including integrating sustainability into our corporate strategy and expanding our employee training and leadership development programming.
Digitalize and Transform the Business: Digitalization is a secular trend affecting the entire business-to-business distribution value chain. Wesco offers significant digital capabilities today and intends to lead the further digitalization of our industry in the years to come, making it easier to do business with Wesco, and increase the value of our data by providing unique insight into end-market and customer use of the products and services we offer. We are implementing digital tools to add value within the company and at both ends of the supply chain. We continue to make progress on our digital transformation journey. These digital capabilities are expected to improve efficiency and sales effectiveness of our business, and to enable us to create more value for our customers and supplier partners.
The three elements of our strategy touch every aspect of our business, from how we add value to our supplier partners and how we go-to-market within our three strategic business units to how we drive efficiency across the organization. We believe that the successful execution of these strategies, combined with our comprehensive product and service offerings, will provide cost-effective and innovative end-to-end supply chain solutions for a diverse set of customers across our end markets. Due to our leadership position, scale, global reach, complete portfolio of products, extensive services and insights from our data, we expect to grow our sales over the long term at a faster rate than the overall industry.
As a distribution and supply chain services company, our approach to sustainability is to reduce the environmental impacts of our own operations and assist our customers and suppliers with attaining their sustainability goals through the products and services we provide. We do this by designing and providing solutions to help them reduce greenhouse gas (“GHG”) emissions at their facilities and in their supply chains, improve productivity through automation and increase output more efficiently and effectively through digital tools and applications. We build on our own internal strategies for sustainability, while reinforcing our corporate responsibility. Our sustainability efforts are an integral part of our operations and core values.
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Customers
We have a large base of nearly 130,000 active customers across commercial and industrial businesses, technology companies, telecommunications providers and utilities. Our top ten customers accounted for approximately 15% of our sales in 2025. No single customer accounted for more than 5% of our sales in 2025.
Suppliers
Our global network of distribution centers, fulfillment centers and sales offices provide customers with access to millions of products. Specific locations tailor their inventories to meet the needs of their customers, providing a local presence and a global network to service multi-location businesses and global corporations.
We purchase products from a diverse group of more than 35,000 suppliers who are located predominantly in North America, but who manufacture products around the world. The main product categories we source are electrical distribution and controls, communications and security, wire, cable and conduit, lighting and sustainability, automation and motors, and general supplies. In 2025, our ten largest suppliers accounted for approximately 32% of our purchases. No single supplier accounted for more than 6% of our total purchases.
Our supplier relationships are important to us, providing access to a wide range of products, services, technical training, and sales and marketing support. We have commercial agreements with more than 450 preferred suppliers and approximately 68% of our purchases are made pursuant to these arrangements.
We offer a wide range of sustainable products from the world’s leading manufacturers and help our customers determine solutions to meet their sustainability goals. Key categories include energy-efficient products, energy-management solutions, renewable energy products, sustainable MRO products and workplace safety products.
Services
Our customers’ challenges are constantly evolving and require comprehensive yet practical solutions. As part of our overall offerings, we provide a comprehensive portfolio of differentiated solutions designed to address our customers’ business needs, help drive efficiency, improve productivity, increase profitability, and mitigate risk. These include, among others:
•Advisory services to help our partners and customers with advanced solutions that leverage the industry’s leading technologies, optimize supply chains, implement Lean practices, improve safety and digitally transform workplaces;
•Installation enhancement services to adapt products and packaging in order to streamline processes and reduce the total cost of installation;
•Project deployment services to help secure job site materials, prevent loss, improve efficiency, reduce job site waste, ensure day-to-day supplies are on hand and improve scalability across global deployments;
•Supply chain management programs to improve productivity, reduce operating costs and increase operational efficiencies;
•Digital products, services and e-business integrations to transform how our customers consume, deploy, and procure materials and technologies, supporting data-driven decisions and increased operational efficiency; and
•Data center services and solutions to ensure the efficiency and reliability of facilities throughout every phase of the data center lifecycle from construction to operation.
We seek to drive efficiency and profitability by providing innovative and customizable services that help our customers and partners work smarter. Positioned in the center of the value chain, we aggregate technologies and digital capabilities to help deliver deeper insights and new opportunities for our customers.
Business Strengths
Wesco’s mission is to help our customers build, connect, power and protect the world. We believe that our business possesses strengths that will enable us to achieve this mission. The environment in which we operate is highly fragmented and there is significant competition within each end market and geographic area that we serve. Customers look to product line breadth, product availability, service capabilities, geographic proximity and price. Our scale, broad portfolio of products, technical expertise, global reach with local relationships, smart, digital solutions, and comprehensive value-added services provide distinct advantages that benefit our customers.
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Broad Portfolio of Products from Top Brands. Our broad product portfolio enables us to offer comprehensive, end-to-end solutions in each of our three business units. We partner with the industries’ largest suppliers to deliver leading brands across every product category including automation/IoT, broadband, communications, electrical, electronics, energy, lighting, MRO, networking, renewables, safety, security, utility and wire and cable.
Customized Solutions. Our customers have unique business models, challenges and priorities. Our dedicated technical experts have extensive experience and product and services knowledge that enable them to provide solutions tailored to the various needs of our customers. With specialized industry knowledge and a focus on the leading technologies, we help design and deploy solutions that address critical business priorities.
Uniquely Positioned to Benefit from Secular Trends
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Financial statements
data from SEC XBRL filings. Values are as-reported; restatements supersede originals. Values reported in .
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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
The following discussion should be read in conjunction with the audited consolidated financial statements and notes thereto included in Item 8 of this Annual Report on Form 10-K. The matters discussed herein may contain forward-looking statements that are subject to certain risks and uncertainties that could cause actual results to differ materially from expectations. Certain of these risks are set forth in Item 1A of this Annual Report on Form 10-K. In this Item 7, “Wesco” refers to WESCO International, Inc., and its subsidiaries and its predecessors unless the context otherwise requires. References to “we,” “us,” “our” and the “Company” refer to Wesco and its subsidiaries.
In addition to the results provided in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”), our discussion and analysis of financial condition and results of operations includes certain non-GAAP financial measures, which are defined further below. These financial measures include organic sales growth, earnings before interest, taxes, depreciation and amortization (“EBITDA”), adjusted EBITDA, adjusted EBITDA margin, financial leverage, adjusted selling, general and administrative expenses, adjusted income from operations, adjusted other non-operating expense (income), adjusted provision for income taxes, adjusted income before income taxes, adjusted net income, adjusted net income attributable to WESCO International, Inc., adjusted net income attributable to common stockholders, and adjusted earnings per diluted share. We believe that these non-GAAP measures are helpful to users of our financial statements as they provide a better understanding of our financial condition and results of operations on a comparable basis. Additionally, certain non-GAAP measures either focus on or exclude items impacting comparability of results, allowing users to more easily compare our financial performance from period to period. Management uses certain non-GAAP financial measures in its evaluation of the performance of the Company’s operating segments and in the determination of incentive compensation. Management does not use these non-GAAP financial measures for any purpose other than the reasons stated above.
Company Overview
Wesco, headquartered in Pittsburgh, Pennsylvania, is a leading provider of business-to-business distribution, logistics services and supply chain solutions.
We employ approximately 21,000 people, maintain relationships with more than 35,000 suppliers, and serve nearly 130,000 customers worldwide. With millions of products, end-to-end supply chain services, and significant digital capabilities, Wesco provides innovative solutions to meet customer needs across commercial and industrial businesses, technology companies, telecommunications providers, and utilities. Our innovative solutions include supply chain management, logistics and transportation, procurement, warehousing and inventory management, as well as kitting and labeling, limited assembly of products and installation enhancement. We operate more than 700 sites, including distribution centers, fulfillment centers and sales offices, in approximately 50 countries, providing a local presence for customers and a global network to serve multi-location businesses and global corporations.
We have operating segments comprising three strategic business units: Electrical & Electronic Solutions (“EES”), Communications & Security Solutions (“CSS”) and Utility & Broadband Solutions (“UBS”). These operating segments are equivalent to our reportable segments. See Item 1, “Business” in this Annual Report on Form 10-K for a description of each of our reportable segments and their business activities.
Business Highlights
Our financial results reflect strong sales in 2025, highlighted by a 7.8% year-over-year increase in reported net sales. Organic sales increased by 8.6% year over year, which adjusts for the impact of acquisitions and divestitures, fluctuations in foreign exchange rates and number of workdays. Our CSS data center business is primarily driving this growth in sales, but also contributing to lower gross margins as compared to the prior year due to several large project sales. Our EES segment experienced continued growth across its Original Equipment Manufacturer (“OEM”) and construction businesses, fueled in part by rising demand for data center projects and increased infrastructure activity. Within the UBS segment, our Utility business experienced a year-over-year sales decline driven by reduced public power activity, while our Broadband business delivered year-over-year growth supported by continued network investments. We have also seen year-over-year backlog growth driven primarily by our CSS and UBS segments, with our EES segment contributing as well.
We continued to address supplier price increases in response, in part, to global tariffs, including but not limited to, passing through price increases, leveraging scale to provide locally sourced products, reducing imports from high tariff countries, optimizing supply chain logistics, and re-engineering our global supply chain. Although the long-term impact remains uncertain, tariffs did not have a material effect on our financial results for 2025.
After redeeming our Series A Preferred Stock in June 2025, we have no significant debt maturities until 2028 and have strong liquidity to execute our capital allocation priorities of debt reduction, stock buybacks and acquisitions.
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During 2025, we continued to execute on our multi-year, phased development and implementation of a new Digital and Data Platform (“DDP”). The DDP is intended to be a unified, technology-enabled operating model that spans all business functions, maintains and enhances the flow of financial information, and improves resource efficiency.
Taking the above highlights into consideration, we believe we are well positioned to benefit from enduring secular growth trends of AI-driven data centers, increased power generation, and supply chain re-shoring.
Critical Accounting Estimates
Our discussion and analysis of our financial condition and results of operations is based upon our consolidated financial statements, which have been prepared in accordance with U.S. GAAP. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses and related disclosure of contingent assets and liabilities. On an ongoing basis, we evaluate our estimates that involve a significant level of estimation uncertainty and have had or are reasonably likely to have a material impact on the financial condition or results of operations, including those related to goodwill and indefinite-lived intangible assets and income taxes. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates. If actual market conditions are less favorable than those projected by management, additional adjustments to reserve items may be required. We believe the following accounting estimates are the most critical to the understanding of our consolidated financial statements as they require subjective or complex judgments by management.
Goodwill and Indefinite-Lived Intangible Assets
Goodwill and indefinite-lived intangible assets are tested for impairment annually as of October 1, or more frequently if triggering events occur, indicating that their carrying values may not be recoverable. We test for goodwill impairment on a reporting unit level. We have the option to first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit or indefinite-lived intangible asset is less than its carrying value as a basis for determining whether it is necessary to perform quantitative impairment tests. When performing a qualitative assessment we consider several factors, including macroeconomic conditions, industry and market considerations, cost factors, overall financial performance, other relevant events such as changes in key personnel, changes in the composition or carrying amount of the net assets of a reporting unit, and changes in share price.
We will perform a quantitative impairment test if we bypass the qualitative assessment, or if based on the qualitative assessment, it is more likely than not that the fair value of each reporting unit or indefinite-lived intangible asset is less than the carrying amount. For the year ended December 31, 2025, we performed annual impairment tests of goodwill and indefinite-lived intangible assets during the fourth quarter of 2025 by assessing the above-mentioned qualitative factors. As a result of these assessments, we determined that it was more likely than not that the fair values of our reporting units and indefinite-lived intangible assets continued to exceed their respective carrying amounts and, therefore, a quantitative impairment test was not necessary.
As it pertains to a quantitative impairment test, the determination of fair value involves significant management judgment, particularly as it relates to the underlying assumptions and factors around future expected revenues, operating margins and discount rate. This involves performing sensitivity analyses around certain of these assumptions in order to assess the reasonableness of the assumptions and resulting estimated fair values. Management applies its best judgment when assessing the reasonableness of financial projections. Fair values are sensitive to changes in underlying assumptions and factors, and as a result there can be no assurance that the estimates and assumptions made for purposes of the annual goodwill and indefinite-lived intangible assets impairment tests will prove to be an accurate prediction of future results.
See Note 2, “Accounting Policies” and Note 6, “Goodwill and Intangible Assets” of our Notes to Consolidated Financial Statements for additional disclosure regarding goodwill and indefinite-lived intangible assets.
Income Taxes
We recognize deferred tax assets consistent with amounts expected to be realized. To make such determination, management evaluates all positive and negative evidence, including but not limited to, prior, current and future taxable income, tax planning strategies and future reversals of existing taxable temporary differences. A valuation allowance is recognized if it is “more-likely-than-not” that some or all of a deferred tax asset will not be realized. We regularly assess the realizability of deferred tax assets.
We account for uncertainty in income taxes using a “more-likely-than-not” recognition threshold. Due to the subjectivity inherent in the evaluation of uncertain tax positions, the tax benefit ultimately recognized may materially differ from the estimate recognized in the consolidated financial statements. We recognize interest and penalties related to uncertain tax benefits as part of interest expense and income tax expense, respectively.
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See Note 2, “Accounting Policies” and Note 11, “Income Taxes” of our Notes to Consolidated Financial Statements for additional disclosure regarding income taxes.
Results of Operations
2025 Compared to 2024
Net Sales
The following table sets forth net sales and organic sales growth for the periods presented:
Year Ended December 31, | Growth/(Decline) | |||||||||||||||||||||||||||||||||||||||
| 2025 | 2024 | Reported Sales | Acquisition/Divestiture | Foreign Exchange | Workday | Organic Sales | ||||||||||||||||||||||||||||||||||
| (In millions) | ||||||||||||||||||||||||||||||||||||||||
| Net sales | $ | 23,510.9 | $ | 21,818.8 | 7.8 | % | (0.2) | % | (0.2) | % | (0.4) | % | 8.6 | % | ||||||||||||||||||||||||||
Note: Organic sales growth is a non-GAAP financial measure of sales performance. Organic sales growth is calculated by deducting the percentage impact from acquisitions and divestitures for one year following the respective transaction, fluctuations in foreign exchange rates and number of workdays from the reported percentage change in consolidated net sales. Workday impact represents the change in the number of operating days period-over-period after adjusting for weekends and public holidays in the United States; 2025 had one less workday compared to 2024.
Net sales were $23.5 billion for 2025 compared to $21.8 billion for 2024, an increase of 7.8%. Organic sales for 2025 grew by 8.6%. This growth reflects an approximate 6% increase in volume driven by the CSS and EES segments, and an approximate 2% benefit from price.
Cost of Goods Sold
Cost of goods sold for 2025 was $18.5 billion compared to $17.1 billion for 2024, an increase of $1.4 billion. Cost of goods sold as a percentage of net sales was 78.9% and 78.4% for 2025 and 2024, respectively. The unfavorable increase of 50 basis points primarily reflects a decrease in gross margin across all three segments, most significantly in the UBS segment primarily due to competitive pressures in the public power market, as well as in the EES and CSS segments driven by large project sales.
Selling, General and Administrative (“SG&A”) Expenses
SG&A expenses for 2025 totaled $3.5 billion versus $3.3 billion for 2024, an increase of 7.1%.
The following table reconciles SG&A expenses to adjusted SG&A expenses, which is a non-GAAP financial measure, for the periods presented:
Year Ended December 31, | ||||||||||||||
| 2025 | % of net sales | 2024 | % of net sales | |||||||||||
| Adjusted SG&A Expenses: | (In millions) | |||||||||||||
SG&A expenses | $ | 3,541.4 | 15.1% | $ | 3,306.2 | 15.2% | ||||||||
Digital transformation costs(1) | (35.2) | (24.9) | ||||||||||||
Restructuring costs(2) | — | (12.1) | ||||||||||||
Loss on abandonment of assets(3) | — | (17.8) | ||||||||||||
Excise taxes on excess pension plan assets(4) | — | (4.9) | ||||||||||||
Adjusted SG&A expenses | $ | 3,506.2 | 14.9% | $ | 3,246.5 | 14.9% | ||||||||
(1) Digital transformation costs include costs associated with certain digital transformation initiatives.
(2) Restructuring costs include severance costs incurred pursuant to an ongoing restructuring plan.
(3) Loss on abandonment of assets represents the write-off of certain capitalized cloud computing arrangement implementation costs relating to a third-party developed operations management software product in favor of an application with functionality that better suits the Company’s operations.
(4) Excise taxes on excess pension plan assets represent the excise taxes applicable to the excess pension plan assets following the final settlement of the Company's U.S. pension plan.
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SG&A payroll and payroll-related expenses for 2025 of $2,193.7 million increased by $144.2 million compared to 2024, primarily as a result of increased salaries of $69.8 million due to wage inflation and increased commissions and incentives of $42.2 million, partially offset by the impact of the divestiture of the WIS business.
SG&A expenses not related to payroll and payroll-related costs for 2025 were $1,347.7 million, an increase of $91.0 million compared to 2024, which primarily reflects increased costs to operate our facilities of $32.8 million, increased transportation costs of $32.1 million, and higher IT costs of $24.8 million.
Depreciation and Amortization
Depreciation and amortization for 2025 was $197.6 million compared to $183.2 million for 2024, an increase of $14.4 million. The increase was primarily driven by depreciation related to IT asset additions placed into service during 2025.
Interest Expense, net
Net interest expense totaled $386.7 million for 2025 compared to $364.9 million for 2024. The increase of $21.8 million, or 6.0%, was primarily driven by the issuance of the 6.375% Senior Notes due 2033 (the “2033 Notes”) and an increase in expense from adjustments for uncertain tax positions, partially offset by lower borrowings and lower interest rates on the Revolving Credit Facility throughout 2025 compared to 2024.
Other Income, net
Other non-operating income totaled $9.6 million for 2025 compared to $92.7 million for 2024. The year ended December 31, 2024 included a $122.2 million gain on the sale of our WIS business. We recognized $4.5 million of income in 2025 from adjustments to the fair value of the contingent consideration liability related to a recent acquisition. Due to fluctuations in the U.S. dollar against certain foreign currencies, we recognized a net foreign currency exchange loss of $0.3 million for 2025 compared to a net loss of $25.5 million for 2024. We recognized net benefits of $3.3 million and net costs of $1.6 million associated with the non-service cost components of net periodic pension cost (benefit) for 2025 and 2024, respectively. The year-over-year decrease in net periodic pension cost was due to the settlement of the Anixter Inc. Pension Plan in the first quarter of 2024.
The following table reconciles other non-operating income to adjusted other non-operating (income) expense, which is a non-GAAP financial measure, for the periods presented:
| Year Ended December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
Adjusted Other (Income) Expense, net: | (In millions) | ||||||||||
Other income, net | $ | (9.6) | $ | (92.7) | |||||||
Loss on termination of business arrangement(1) | (0.3) | (3.6) | |||||||||
Pension settlement cost(2) | — | (2.5) | |||||||||
| Gain on divestiture | — | 122.2 | |||||||||
Adjusted other (income) expense, net | $ | (9.9) | $ | 23.4 | |||||||
(1) Loss on termination of business arrangement represents the loss recognized as a result of management's decision to terminate a business arrangement with a third party.
(2) Pension settlement cost represents expense related to the final settlement of the Company's U.S. pension plan.
Income Taxes
The provision for income taxes was $213.4 million for 2025 compared to $231.6 million for 2024, resulting in effective tax rates of 24.9% and 24.4%, respectively.
Net Income and Earnings per Share
Net income and earnings per diluted share attributable to common stockholders were $645.8 million and $13.05, respectively, for 2025 compared to $660.2 million and $13.05, respectively, for 2024. Adjusted for the non-GAAP adjustments above and the related income tax effects, and the $32.9 million gain recognized as a result of the Company's redemption of its outstanding Series A Preferred Stock, net income and earnings per diluted share attributable to common stockholders were $638.9 million and $12.91, respectively, for the year ended December 31, 2025 and $618.6 million and $12.23, respectively, for the year ended December 31, 2024.
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The increase in adjusted earnings per diluted share primarily reflects the favorable impact of the June 2025 Series A Preferred Stock redemption and the corresponding decrease in preferred dividends. Additionally, there was a positive impact from the reduction in outstanding common shares during the year ended December 31, 2025 as compared to the year ended December 31, 2024.
Adjusted EBITDA
Adjusted EBITDA, a non-GAAP financial measure, was $1,536.5 million for 2025 compared to $1,509.1 million for 2024, an increase of $27.4 million, or 1.8% year-over-year. The increase primarily reflects an increase in net sales, partially offset by an increase in cost of goods sold and an increase in SG&A expenses, as described above. The year ended December 31, 2024 included $17.8 million in SG&A expenses from loss on abandonment of assets and $4.9 million in excise taxes on excess pension plan assets. There was also a decrease in restructuring costs of $12.1 million in 2025, partially offset by a $10.3 million increase in digital transformation costs.
Segment Results
The following is a discussion of the financial results of our operating segments comprising three strategic business units consisting of EES, CSS and UBS for the year ended December 31, 2025. As further described below and in Note 16, “Business Segments” of our Notes to Consolidated Financial Statements, the Chief Operating Decision Maker (the “CODM”) allocates resources and evaluates the performance of the Company’s reportable segments based on adjusted EBITDA, which is the Company’s measure of segment profit or loss. Adjusted EBITDA and adjusted EBITDA margin percentage are non-GAAP financial measures. As discussed in Note 2, “Accounting Policies,” the reportable segment information for the year ended December 31, 2024 for the EES and CSS reportable segments has been recast to conform to the current year presentation.
Electrical & Electronic Solutions
| Year Ended December 31, | Growth/(Decline) | |||||||||||||||||||||||||||||||||||||||
| 2025 | 2024 | Reported Sales | Acquisition | Foreign Exchange | Workday | Organic Sales | ||||||||||||||||||||||||||||||||||
| (In millions) | ||||||||||||||||||||||||||||||||||||||||
| Net sales | $ | 8,955.5 | $ | 8,391.7 | 6.7 | % | — | % | (0.4) | % | (0.4) | % | 7.5 | % | ||||||||||||||||||||||||||
| Adjusted EBITDA | $ | 717.6 | $ | 699.8 | ||||||||||||||||||||||||||||||||||||
| Adjusted EBITDA margin % | 8.0 | % | 8.3 | % | ||||||||||||||||||||||||||||||||||||
EES reported net sales of $9.0 billion for 2025 compared to $8.4 billion for 2024, an increase of $563.8 million, or 6.7%. EES organic sales for 2025 grew by 7.5%, driven primarily by volume growth of approximately 4%, primarily as a result of growth in the OEM and construction businesses, and by the impact of changes in price, which favorably impacted organic sales by approximately 4%.
EES adjusted EBITDA increased $17.8 million, or 2.5% year-over-year. The increase primarily reflects an increase in volume and price, as described above. The decrease in adjusted EBITDA margin is attributable to an unfavorable change in product mix. Additionally, SG&A expenses increased $69.7 million as compared to the prior year, which was primarily attributed to increased salaries of $24.4 million, increased commissions and incentives of $15.0 million, increased transportation costs of $11.7 million, and increased operations expenses of $9.2 million.
Communications & Security Solutions
| Year Ended December 31, | Growth/(Decline) | |||||||||||||||||||||||||||||||||||||||
| 2025 | 2024 | Reported Sales | Acquisition | Foreign Exchange | Workday | Organic Sales | ||||||||||||||||||||||||||||||||||
| (In millions) | ||||||||||||||||||||||||||||||||||||||||
| Net sales | $ | 9,101.0 | $ | 7,692.1 | 18.3 | % | 1.9 | % | 0.1 | % | (0.4) | % | 16.7 | % | ||||||||||||||||||||||||||
| Adjusted EBITDA | $ | 799.4 | $ | 638.8 | ||||||||||||||||||||||||||||||||||||
| Adjusted EBITDA margin % | 8.8 | % | 8.3 | % | ||||||||||||||||||||||||||||||||||||
CSS reported net sales of $9.1 billion for 2025 compared to $7.7 billion for 2024, an increase of $1.4 billion, or 18.3%, which is inclusive of a favorable impact from the acquisition of Ascent of 1.9%. CSS organic sales for 2025 grew by 16.7%, driven primarily by volume growth of approximately 15% as a result of the data center solutions business, and to a lesser extent, growth in the security solutions business, and by the impact of changes in price, which favorably impacted organic sales by approximately 1%.
33
CSS adjusted EBITDA increased $160.6 million, or 25.1% year-over-year. The increase reflects an increase in volume, specifically within the data center solutions business and the security solutions business, as described above. Further, there was an increase in SG&A expenses of $97.2 million. The increase in SG&A expenses is primarily attributed to increased salaries of $28.7 million, increased transportation costs of $25.7 million consistent with higher sales, increased commissions and incentives of $17.8 million, increased operations expenses of $11.9 million, and increased benefits expense of $11.5 million.
Utility & Broadband Solutions
| Year Ended December 31, | Growth/(Decline) | |||||||||||||||||||||||||||||||||||||||
| 2025 | 2024 | Reported Sales | Divestiture | Foreign Exchange | Workday | Organic Sales | ||||||||||||||||||||||||||||||||||
| (In millions) | ||||||||||||||||||||||||||||||||||||||||
| Net sales | $ | 5,454.4 | $ | 5,735.0 | (4.9) | % | (3.3) | % | (0.2) | % | (0.4) | % | (1.0) | % | ||||||||||||||||||||||||||
| Adjusted EBITDA | $ | 562.8 | $ | 643.4 | ||||||||||||||||||||||||||||||||||||
| Adjusted EBITDA margin % | 10.3 | % | 11.2 | % | ||||||||||||||||||||||||||||||||||||
UBS reported net sales of $5.5 billion for 2025 compared to $5.7 billion for 2024, a decrease of $280.6 million or 4.9%, which is inclusive of an unfavorable impact from the divestiture of the WIS business of 3.3%. UBS organic sales for 2025 declined by 1.0%, reflecting volume declines in the Utility business primarily as a result of reduced public power activity. The decline was partially offset by growth in the Broadband business from continued network investments. Changes in price did not have a material impact on the year-over-year decline in UBS organic sales.
UBS adjusted EBITDA decreased $80.6 million, or 12.5% year-over-year. The decrease primarily reflects a decline in volume, as described above. The decrease in adjusted EBITDA was partially offset by a decrease in SG&A expenses of $8.3 million as compared to the prior year, which was primarily attributed to lower commissions and incentives of $9.3 million.
The following tables reconcile net income attributable to common stockholders to adjusted EBITDA and adjusted EBITDA margin % by segment, which are non-GAAP financial measures, for the periods presented:
| Year Ended December 31, 2025 | ||||||||||||||||||||||||||||||||
| (In millions) | EES | CSS | UBS | Corporate | Total | |||||||||||||||||||||||||||
| Net income attributable to common stockholders | $ | 646.5 | $ | 649.1 | $ | 531.0 | $ | (1,180.8) | $ | 645.8 | ||||||||||||||||||||||
| Net income (loss) income attributable to noncontrolling interests | 0.5 | 2.9 | — | (1.1) | 2.3 | |||||||||||||||||||||||||||
Gain on redemption of Series A Preferred Stock | — | — | — | (32.9) | (32.9) | |||||||||||||||||||||||||||
| Preferred stock dividends | — | — | — | 27.3 | 27.3 | |||||||||||||||||||||||||||
Provision for income taxes(1) | — | — | — | 213.4 | 213.4 | |||||||||||||||||||||||||||
Interest expense, net(1) | — | — | — | 386.7 | 386.7 | |||||||||||||||||||||||||||
| Depreciation and amortization | 50.5 | 77.7 | 32.6 | 36.8 | 197.6 | |||||||||||||||||||||||||||
| Other expense (income), net | 16.0 | 64.4 | (2.6) | (87.4) | (9.6) | |||||||||||||||||||||||||||
| Stock-based compensation expense | 4.1 | 5.3 | 1.8 | 29.3 | 40.5 | |||||||||||||||||||||||||||
Digital transformation costs(2) | — | — | — | 35.2 | 35.2 | |||||||||||||||||||||||||||
Cloud computing arrangement amortization(3) | — | — | — | 30.2 | 30.2 | |||||||||||||||||||||||||||
| Adjusted EBITDA | $ | 717.6 | $ | 799.4 | $ | 562.8 | $ | (543.3) | $ | 1,536.5 | ||||||||||||||||||||||
| Adjusted EBITDA margin % | 8.0 | % | 8.8 | % | 10.3 | % | ||||||||||||||||||||||||||
(1) The reportable segments do not incur income taxes and interest expense as these costs are centrally controlled through the Corporate tax and treasury functions. | ||||||||||||||||||||||||||||||||
(2) Digital transformation costs include costs associated with certain digital transformation initiatives. | ||||||||||||||||||||||||||||||||
(3) Cloud computing arrangement amortization consists of expense recognized in selling, general and administrative expenses for capitalized implementation costs for cloud computing arrangements to support our digital transformation initiatives. | ||||||||||||||||||||||||||||||||
34
| Year Ended December 31, 2024 | ||||||||||||||||||||||||||||||||
| (In millions) | EES(1) | CSS(1) | UBS | Corporate | Total | |||||||||||||||||||||||||||
| Net income attributable to common stockholders | $ | 641.0 | $ | 496.8 | $ | 733.0 | $ | (1,210.6) | $ | 660.2 | ||||||||||||||||||||||
| Net (loss) income attributable to noncontrolling interests | (1.1) | 2.3 | — | 0.6 | 1.8 | |||||||||||||||||||||||||||
| Preferred stock dividends | — | — | — | 57.4 | 57.4 | |||||||||||||||||||||||||||
Provision for income taxes(2) | — | — | — | 231.6 | 231.6 | |||||||||||||||||||||||||||
Interest expense, net(2) | — | — | — | 364.9 | 364.9 | |||||||||||||||||||||||||||
| Depreciation and amortization | 46.4 | 71.9 | 28.5 | 36.4 | 183.2 | |||||||||||||||||||||||||||
Other expense (income), net(3) | 9.1 | 61.2 | (121.2) | (41.8) | (92.7) | |||||||||||||||||||||||||||
Stock-based compensation expense | 4.4 | 6.6 | 3.1 | 14.8 | 28.9 | |||||||||||||||||||||||||||
Digital transformation costs(4) | — | — | — | 24.9 | 24.9 | |||||||||||||||||||||||||||
Loss on abandonment of assets(5) | — | — | — | 17.8 | 17.8 | |||||||||||||||||||||||||||
Cloud computing arrangement amortization(6) | — | — | — | 14.1 | 14.1 | |||||||||||||||||||||||||||
Restructuring costs(7) | — | — | — | 12.1 | 12.1 | |||||||||||||||||||||||||||
Excise taxes on excess pension plan assets(8) | — | — | — | 4.9 | 4.9 | |||||||||||||||||||||||||||
| Adjusted EBITDA | $ | 699.8 | $ | 638.8 | $ | 643.4 | $ | (472.9) | $ | 1,509.1 | ||||||||||||||||||||||
| Adjusted EBITDA margin % | 8.3 | % | 8.3 | % | 11.2 | % | ||||||||||||||||||||||||||
(1) As described in Note 2, “Accounting Policies,” the reportable segment information for the year ended December 31, 2024 for the EES and CSS reportable segments has been recast to conform to the current year presentation. | ||||||||||||||||||||||||||||||||
(2) The reportable segments do not incur income taxes and interest expense as these costs are centrally controlled through the Corporate tax and treasury functions. | ||||||||||||||||||||||||||||||||
(3) Other income for the UBS segment includes the gain on the divestiture of the WIS business as disclosed in Note 5, “Acquisitions and Divestitures”. | ||||||||||||||||||||||||||||||||
(4) Digital transformation costs include costs associated with certain digital transformation initiatives. | ||||||||||||||||||||||||||||||||
(5) Loss on abandonment of assets represents the write-off of certain capitalized cloud computing arrangement implementation costs relating to a third-party developed operations management software product in favor of an application with functionality that better suits the Company's operations. | ||||||||||||||||||||||||||||||||
(6) Cloud computing arrangement amortization consists of expense recognized in selling, general and administrative expenses for capitalized implementation costs for cloud computing arrangements to support our digital transformation initiatives. | ||||||||||||||||||||||||||||||||
(7) Restructuring costs include severance costs incurred pursuant to an ongoing restructuring plan. | ||||||||||||||||||||||||||||||||
(8) Excise taxes on excess pension plan assets represent the excise taxes applicable to the excess pension plan assets following the final settlement of the Company's U.S. pension plan. | ||||||||||||||||||||||||||||||||
Note: Adjusted EBITDA and Adjusted EBITDA margin % are non-GAAP financial measures that provide indicators of the Company’s performance and its ability to meet debt service requirements. Adjusted EBITDA margin % is calculated by dividing Adjusted EBITDA by net sales.
35
The following tables reconcile SG&A expenses, income from operations, other non-operating (income) expense, provision for income taxes, net income attributable to common stockholders, and earnings per diluted share to adjusted SG&A expenses, adjusted income from operations, adjusted other non-operating (income) expense, adjusted provision for income taxes, adjusted net income attributable to common stockholders, and adjusted earnings per diluted share, which are non-GAAP financial measures, for the periods presented:
| Year Ended December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| Adjusted SG&A Expenses: | (In millions) | ||||||||||
SG&A expenses | $ | 3,541.4 | $ | 3,306.2 | |||||||
Digital transformation costs(1) | (35.2) | (24.9) | |||||||||
Restructuring costs(2) | — | (12.1) | |||||||||
Loss on abandonment of assets(3) | — | (17.8) | |||||||||
Excise taxes on excess pension plan assets(4) | — | (4.9) | |||||||||
Adjusted SG&A expenses | $ | 3,506.2 | $ | 3,246.5 | |||||||
| Adjusted Income from Operations: | |||||||||||
| Income from operations | $ | 1,233.0 | $ | 1,223.2 | |||||||
Digital transformation costs(1) | 35.2 | 24.9 | |||||||||
Restructuring costs(2) | |||||||||||
Recent insider activity
| Date | Insider | Role | Action | Shares | Price | Value |
|---|---|---|---|---|---|---|
| 2026-05-11 | Porwal Hemant | EVP Supply Chain & Operations | Sell | -4,445 | $363.21 | -$1,614,468 |
| 2026-05-06 | Porwal Hemant | EVP Supply Chain & Operations | Sell | -2,770 | $360.64 | -$998,973 |
| 2026-05-06 | Lazzaris Diane | EVP and General Counsel | Sell | -9,910 ×3 | $359.48 | -$3,562,469 |
| 2026-05-06 | Khurana Akash | EVP, Chief Info & Digital Off. | Sell | -4,000 ×4 | $359.13 | -$1,436,533 |
| 2026-05-06 | Schulz David S. | EVP & Former CFO | Sell | -31,951 ×5 | $360.44 | -$11,516,432 |
| 2026-05-05 | Kulasa Matthew S | SVP, Corp. Controller & CAO | Sell | -1,030 | $351.86 | -$362,416 |
| 2026-05-05 | Singleton James Louis | Director | Sell | -2,000 | $353.37 | -$706,740 |
| 2026-05-06 | Wolf Christine Ann | EVP & CHRO | Sell | -2,549 | $355.25 | -$905,532 |
| 2026-05-05 | Wolf Christine Ann | EVP & CHRO | Sell | -2,438 | $351.16 | -$856,128 |
| 2026-05-06 | ENGEL JOHN | Chairman, President & CEO | Sell | -79,440 ×9 | $358.75 | -$28,499,177 |
| 2026-05-05 | Naylor Dirk Waugh | EVP & GM, Comm & Sec Solutions | Sell | -3,953 ×4 | $351.10 | -$1,387,879 |
| 2026-03-31 | Castillo Daniel J | EVP & GM, EES | Buy | +1,400 | $266.06 | $372,484 |
Source: SEC Form 4 filings.
Next expected filings
- ~2026-07-30 10-Q expected by 2026-08-07 (in 45 days)
- ~2026-10-29 10-Q expected by 2026-11-06 (in 136 days)
- ~2027-02-12 10-K expected by 2027-02-21 (in 242 days)
- ~2027-04-29 10-Q expected by 2027-05-07 (in 318 days)
Predicted from historical filing cadence; not an SEC commitment.
Recent SEC filings
- 2026-06-02 8-K Officer/Director Change; Shareholder Vote Results; Financial Statements and Exhibits
- 2026-04-30 8-K Earnings Release; Regulation FD Disclosure; Financial Statements and Exhibits
- 2026-04-30 10-Q Quarterly Report
- 2026-04-17 DEF 14A Proxy Statement
- 2026-02-27 8-K Material Agreement Entered; Material Financial Obligation; Financial Statements and Exhibits
- 2026-02-25 8-K Other Events; Financial Statements and Exhibits
- 2026-02-17 8-K Officer/Director Change
- 2026-02-13 10-K Annual Report
- 2026-02-10 8-K Officer/Director Change; Regulation FD Disclosure; Financial Statements and Exhibits
- 2026-02-10 8-K Earnings Release; Regulation FD Disclosure; Financial Statements and Exhibits
- 2025-12-08 8-K Officer/Director Change; Financial Statements and Exhibits
- 2025-10-30 10-Q Quarterly Report
- 2025-10-30 8-K Earnings Release; Regulation FD Disclosure; Financial Statements and Exhibits
- 2025-09-12 8-K Material Agreement Terminated; Officer/Director Change
- 2025-08-26 8-K Officer/Director Change; Regulation FD Disclosure; Financial Statements and Exhibits