Wesco Intl — Income Statement, Cash Flows & Balance Sheet
Is WESCO profitable?
WESCO grew revenue strongly in 2025, but higher costs meant net income actually fell year-over-year.
| Metric | 2024 | 2025 | Change |
|---|---|---|---|
| Net sales ($M) | $21,818.8 | $23,510.9 | +7.8% |
| Gross profit margin | 21.6% | 21.1% | −0.5 pp |
| SG&A as % of net sales | 15.2% | 15.1% | −0.1 pp |
| Operating income ($M) | $1,223.2 | $1,233.0 | +0.8% |
| Net income attributable to WESCO ($M) | $717.6 | $640.2 | −10.8% |
Revenue grew at a healthy clip, but product costs rose slightly faster than sales, squeezing the gross margin. Operating income barely moved as a result, and net income dropped meaningfully — largely because 2024 included a one-time $122.2 million gain from selling a business unit (the WIS divestiture) that inflated that year's bottom line; strip that out and the underlying comparison looks closer.
A key one-time item in 2025 was the redemption of preferred stock, which actually benefited common shareholders.
| Item | 2024 | 2025 | Change |
|---|---|---|---|
| Preferred dividends paid ($M) | $57.4 | $27.3 | −$30.1 |
| Gain on preferred stock redemption ($M) | — | $32.9 | +$32.9 |
| Net income attributable to common stockholders ($M) | $660.2 | $645.8 | −$14.4 |
In mid-2025, WESCO redeemed all of its high-cost preferred stock (which carried a 10.625% dividend rate) by issuing new bonds at 6.375%. That swap eliminated an expensive annual dividend obligation and generated an accounting gain, softening the decline in earnings available to common stockholders.
Where does WESCO's revenue come from?
CSS (data centres and networking) is now WESCO's largest and fastest-growing segment, while UBS (utilities) shrank.
| Segment | 2024 Net Sales ($M) | 2025 Net Sales ($M) | Change |
|---|---|---|---|
| Electrical & Electronic Solutions (EES) | $8,391.7 | $8,955.5 | +6.7% |
| Communications & Security Solutions (CSS) | $7,692.1 | $9,101.0 | +18.3% |
| Utility & Broadband Solutions (UBS) | $5,735.0 | $5,454.4 | −4.9% |
CSS's surge reflects strong demand for data centre infrastructure — a hot area right now. UBS declined as utility and broadband spending softened, and the comparison was also affected by the 2024 divestiture of the WIS business unit from that segment.
CSS added significant profit, but its margins are still below EES and well below UBS.
| Segment | 2024 Adj. EBITDA Margin | 2025 Adj. EBITDA Margin | Change |
|---|---|---|---|
| EES | 8.3% | 8.0% | −0.3 pp |
| CSS | 8.3% | 8.8% | +0.5 pp |
| UBS | 11.2% | 10.3% | −0.9 pp |
Note: Adjusted EBITDA is a non-GAAP measure that adds back interest, taxes, depreciation, amortization, and stock-based compensation. CSS is improving its profitability as it scales, but UBS remains the highest-margin business — making its revenue decline a meaningful headwind for overall profitability.
Does WESCO generate cash?
Operating cash flow dropped sharply in 2025 as growth consumed significant working capital.
| Item | 2024 ($M) | 2025 ($M) | Change |
|---|---|---|---|
| Net cash from operations | $1,101.2 | $125.0 | −$976.2 |
| Capital expenditures | ($94.7) | ($99.8) | −$5.1 |
| Free cash flow (GAAP operating CF minus capex) | $1,006.5 | $25.2 | −$981.3 |
The dramatic drop in operating cash flow is primarily a working capital story: rapid revenue growth required WESCO to build up receivables and inventory. This is common for a distributor in a growth phase but is worth watching — free cash flow of just $25 million on over $23 billion of revenue is thin.
How strong is WESCO's balance sheet?
WESCO carries substantial debt, which increased in 2025 partly to fund the preferred stock redemption.
| Item | 2024 ($M) | 2025 ($M) | Change |
|---|---|---|---|
| Total debt | $5,107.7 | $5,826.3 | +$718.6 |
| Cash and equivalents | $702.6 | $604.8 | −$97.8 |
| Net debt (total debt minus cash) | $4,405.1 | $5,221.5 | +$816.4 |
| Total stockholders' equity | $4,965.5 | $5,026.4 | +$60.9 |
WESCO issued $800 million in new senior notes in early 2025 to redeem its expensive preferred stock and fund operations. The debt maturity schedule has a significant lump in 2028 ($2.6 billion due), which will need to be refinanced. The company was in compliance with all debt covenants at year-end, and had over $1.1 billion available on its revolving credit line, providing a reasonable liquidity cushion.