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Home » Distribution Industry News » Wesco Q2 Sales Climb on Data Center Demand, But Net Income Slips

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  • Published on: August 1, 2025

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Distribution Industry News

Wesco Q2 Sales Climb on Data Center Demand, But Net Income Slips

Wesco International reported strong second-quarter sales growth on Thursday, driven by surging demand from data centers and steady gains across its core business units. But despite the top-line momentum, profits declined as operating costs and margin pressure weighed on the bottom line.

Revenue for the quarter rose 7.7% year-over-year to $5.9 billion, up from $5.48 billion in the same period last year. First half sales reached $11.24 billion, an increase of 3.8% from a year ago.

Wesco’s data center business crossed the $1 billion mark for the first time in a single quarter—up 65% year-over-year—as artificial intelligence and digital infrastructure buildouts fueled growth. The company also reported double-digit organic growth in its Communications and Security Solutions (CSS) segment and mid-single-digit gains in Electrical and Electronic Solutions (EES). Sales to investor-owned utilities returned to growth after several quarters of softness.

“Sales growth is accelerating,” said chairman and CEO John Engel. “Organic sales were up 6% in the first quarter, 7% in the second, and preliminary July sales per workday rose about 10% over last year. Our backlog is at record levels and increasing across all three business segments.

Despite the strong top-line performance, Wesco’s second-quarter net income fell 13% to $189.2 million, down from $217.7 million a year earlier. For the first six months of 2025, net income totaled $293.2 million, an 8.1% decline from $319.2 million in the prior-year period.

The company pointed to lower gross margins and higher operating expenses as key factors behind the earnings dip. Gross profit rose to $1.24 billion in the second quarter, but the margin declined to 21.1%, down from 21.9% a year ago, reflecting a shift in the mix toward large-scale projects and data center sales. Adjusted EBITDA fell 1.5% to $394.2 million.

Cash flow improved sharply in the second quarter, with operating cash inflow of $107.8 million compared to an outflow of $223.8 million a year earlier. Free cash flow for the quarter reached $86.5 million.

In June, Wesco redeemed its outstanding preferred stock, a move Engel said will boost cash flow and earnings going forward. “We now have strong liquidity to support our capital allocation priorities,” he said.

The company raised its full-year organic sales growth outlook, citing solid results through July and continued strength in data centers, automation, electrification, and reshoring trends.

“We’re building momentum and expect to outperform the market for the rest of the year,” Engel said.

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