Why This Matters to Distributors: Wesco is combining products, technical services, and supply chain management to expand customer relationships beyond initial construction orders. Its strategy shows how distributors can capture more business throughout a project’s life while using data, artificial intelligence, and facility investments to improve operations.
Wesco is expanding services across data center construction and operations, preparing to begin a multiyear grid-services contract, and deploying artificial intelligence internally as it pursues more business from infrastructure customers.
Executives outlined the initiatives during the company’s third-quarter 2026 earnings call. CEO John Engel said customers are making longer-term commitments and increasingly relying on Wesco to coordinate products and services across communications, security, electrical and power infrastructure.
“Our customers continue to invest in major capital and infrastructure projects, and they’re increasingly relying on Wesco to manage their needs,” Engel said. “And this is all happening while we add more services to our portfolio and demonstrate the continued effectiveness of our One Wesco cross-selling strategy.”
Data center sales increased about 55% to a record $1.8 billion during the quarter. The business generated about $6 billion in sales over the preceding 12 months, representing about 23% of company sales, executives said.
Growth extended beyond data centers. Sales excluding that business increased 7%, while companywide organic sales grew 17%, according to Chief Financial Officer Neel Dev.
Engel said Wesco’s data center strategy centers on entering projects early, then supplying additional products and services as construction progresses and operations begin. Acquisitions have added capabilities that extend the company’s involvement beyond the initial build.
“It’s our conscious strategy of adding additional products once we’re in at the beginning through the life cycle of the build and increasing the services content while the project’s being built and post deployment of the project,” Engel said.
He attributed improving profitability in the business primarily to its expanding services rather than product price increases. Wesco supplies infrastructure surrounding computing systems, rather than the core computing equipment itself.
“Again, we’re not doing NVIDIA chips and the core compute solution,” Engel said. “We’re doing everything else wrapped around it.”
Wesco serves large cloud operators, multitenant data centers, emerging AI businesses, and enterprise customers. Engel said its longstanding enterprise relationships position the company to participate as AI investment spreads beyond the largest cloud providers.
“Enterprise AI investment is expanding well beyond the hyperscalers with the large enterprise customers building out hybrid and private AI infrastructure and deploying AI closer to the edge,” he said.
The opportunity includes electrical and power infrastructure, building systems supporting data center operations and the areas housing information technology equipment. Wesco plans to detail those capabilities during a virtual investor event Nov. 10.
Facility investments are supporting the expansion. Engel said Wesco has continued combining locations where appropriate since its merger with Anixter, while adding larger facilities equipped to provide more services.
“Our new facilities that we added to our footprint are materially larger, and they also have a kind of a different scope and expanded mix that supports more of our value-added services,” he said.
Engel cited a recently announced Texas facility with testing capabilities for fully assembled server racks. He said Wesco has invested in new capabilities while adjusting its existing network, helping the company accommodate higher sales volumes.
Customer commitments also are lengthening. Total backlog increased more than 80% from a year earlier, with each of Wesco’s three business units reporting a record level.
Backlog rose about 140% in Communications and Security Solutions, 40% in Electrical and Electronic Solutions, and 90% in Utility and Broadband Solutions. Executives attributed the increases to data center projects, utility investment, and grid-services demand.
Engel cautioned that backlog includes orders with different delivery schedules. Some can ship within days or weeks, while certain products tied to long-term projects can extend one to two years.
Current data center sales also reflect customer investments announced earlier, he said. Power infrastructure comes first, followed by other building systems and equipment areas as construction advances.
“So, what we’re benefiting from now is projects that are spending that was announced quite some time ago on behalf of our end-user customers,” Engel said.
Grid services represent another growth opportunity. The business generated more than $300 million in sales last year and grew at a double-digit rate in each of the first three quarters of 2026, Engel said.
A large multi-year contract disclosed in the previous quarter is expected to begin contributing meaningfully in the first half of 2027. Engel said the work involves managing a global supply chain with demanding requirements, although he did not identify the customer or disclose the contract’s value.
Wesco also reported improving utility demand. Sales to investor-owned utilities delivered a fourth consecutive quarter of double-digit growth, while public power sales increased for a second consecutive quarter.
Engel said rising electricity requirements extend beyond AI data centers to industrial projects and other infrastructure investment. He described Wesco’s opportunity as encompassing both utilities and independent power producers.
“All things power is what we’re focused on due to the increasing energy demand, and that bodes exceptionally well for us,” he said.
Inside its operations, Wesco is expanding a digital platform designed to connect its businesses and make better use of transaction, customer, and supplier data. Engel said all three business units are running initial versions of the platform in multiple locations.
During the first half of 2026, Wesco converted a more complex, end-to-end operation to the platform. Engel said that deployment strengthened management’s confidence in the broader implementation.
AI applications are operating alongside the rollout. Wesco has progressed from earlier AI tools to generative AI and agentic applications capable of carrying out tasks, with a centralized data repository providing the foundation.
“Now we have a combination of generative and true Agentic AI applications running inside our environment with our new tech stack and against our big data set that’s in our data lake,” Engel said.
The company initially focused those applications on internal operations. Engel said AI is improving analytics and productivity and beginning to help control operating costs, although Wesco has not separately quantified its contribution.
Benefits do not depend on completing the platform rollout at every location, he said. The company also expects its data and analytics to help identify opportunities to increase sales.
Beyond infrastructure projects, Wesco reported improving demand for regularly purchased products supplied from inventory, particularly in Electrical and Electronic Solutions. Sales to original equipment manufacturers grew about 30%, construction sales increased at a mid-teens rate and industrial sales rose at a mid-single-digit rate.
Engel said formal 2027 guidance will accompany fourth-quarter results in February. His preliminary expectation for mid- to high-single-digit sales growth next year reflects current momentum rather than a detailed outlook.
Wesco plans to use its Nov. 10 event to explain how its businesses work together across data center construction and operations. Engel emphasized that the company’s role increasingly continues after a facility opens, extending customer relationships into ongoing operations.
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