Wesco Intl — Financial Results
Data Center Boom Drives 18% Revenue Surge in the CSS Segment
| Metric | 2025 | 2024 | Change |
|---|---|---|---|
| CSS Net Sales | $9.1B | $7.7B | +18.3% |
| CSS Adjusted EBITDA | $799.4M | $638.8M | +25.1% |
| CSS Adjusted EBITDA Margin | 8.8% | 8.3% | +0.5pp |
The Communications & Security Solutions (CSS) segment is the clear standout, powered almost entirely by explosive demand for data center infrastructure. Organic sales (stripping out acquisitions and currency effects) grew 16.7%, with roughly 15 percentage points of that coming from volume alone. Profitability improved too — the segment's adjusted EBITDA margin widened from 8.3% to 8.8%, meaning CSS is not just growing fast but also becoming more efficient.
Overall Revenue Hit $23.5 Billion, Up 7.8%, With Solid Organic Growth
| Metric | 2025 | 2024 | Change |
|---|---|---|---|
| Net Sales | $23.5B | $21.8B | +7.8% |
| Organic Sales Growth | — | — | +8.6% |
Total sales crossed $23.5 billion, and the 8.6% organic sales growth (which removes noise from acquisitions, currency moves, and one fewer working day) shows the core business is genuinely accelerating. About 6% of that growth came from higher volumes, and roughly 2% from price increases — a healthy mix.
Gross Margins Compressed Across All Three Segments
Cost of goods sold as a percentage of revenue rose from 78.4% to 78.9% — a 50 basis point (half a percentage point) squeeze. All three business units saw margin pressure: the Utility segment faced competitive pricing in the public power market, while the EES and CSS segments were impacted by the economics of large project sales, which tend to carry thinner margins. Growing fast while margins shrink is a trade-off worth watching.
Utility & Broadband Segment Stumbles on Weak Public Power Demand
| Metric | 2025 | 2024 | Change |
|---|---|---|---|
| UBS Net Sales | $5.5B | $5.7B | -4.9% |
| UBS Adjusted EBITDA | $562.8M | $643.4M | -12.5% |
| UBS Adjusted EBITDA Margin | 10.3% | 11.2% | -0.9pp |
The Utility & Broadband Solutions (UBS) segment is the weak spot. Organic sales fell 1%, driven by reduced public power activity, and profitability dropped sharply — adjusted EBITDA fell 12.5%. A divestiture (the sale of the WIS business) accounts for part of the reported revenue decline, but the underlying softness is real.
Free Cash Flow Dropped Sharply Due to Working Capital Build
Operating cash flow fell from $1.1 billion in 2024 to just $125 million in 2025. The culprit is working capital — the cash tied up in receivables (money owed by customers) and inventory ballooned as the business grew rapidly, particularly in large CSS and EES projects. This is not unusual for a fast-growing distributor, but it does mean the company is funding growth with its balance sheet rather than generating cash freely right now.
Leverage Rose After Preferred Stock Refinancing
Financial leverage (total net debt divided by adjusted EBITDA) increased from 2.9x to 3.4x in 2025. Wesco issued $800 million in new senior notes to redeem its Series A Preferred Stock — swapping expensive preferred dividends ($57.4M in 2024, dropping to $27.3M before elimination) for fixed-rate bond debt. The company has no major debt maturities until 2028, and total available liquidity stands at approximately $1.6 billion.