WESCO International, Inc.

What they do

Wesco distributes electrical equipment and supplies, wire and cable, lighting, automation and IoT devices, security and network infrastructure, and utility and broadband products. It operates through three reportable segments: Electrical & Electronic Solutions (EES), Communications & Security Solutions (CSS) and Utility & Broadband Solutions (UBS). The company runs more than 700 sites in approximately 50 countries, maintains relationships with more than 35,000 suppliers, and serves nearly 130,000 customers. Its service offerings include supply chain management, logistics, procurement, warehousing, kitting and labeling, limited assembly and installation enhancement.

Revenue drivers

• Electrical & Electronic Solutions (EES) — Sells electrical equipment, wire and cable, lighting, safety and MRO products, plus automation and IoT devices, to construction, industrial and OEM customers. The segment is a North American leader and in 2025 saw continued growth in its OEM and construction businesses, helped by data center and infrastructure demand. Product portfolio spans security, lighting and wire and cable from third-party manufacturing partners.
• Communications & Security Solutions (CSS) — Provides data center, network infrastructure and security solutions, including cabling, connectivity, power systems, wireless, video surveillance, fire and intrusion detection and access control. It sells directly and through channel partners such as data communications contractors and integrators. Management identifies CSS data center business as the primary driver of 2025 organic sales growth and notes large project sales carry lower gross margins.
• Utility & Broadband Solutions (UBS) — Serves utility and broadband customers. In 2025 the Utility business declined year over year on reduced public power activity, while Broadband grew on continued network investments. The segment also supports data center offerings, and in Q2 2026 Wesco booked a multi-year Grid Services award from a hyperscale data center customer.
• Data center and cross-selling initiatives — Wesco combines CSS, UBS and EES capabilities to serve data center customers across design, development, operations and maintenance. Second quarter 2026 data center sales were $1.5 billion, up 45% year over year, and management attributes backlog growth to its One Wesco cross-selling strategy.

Recent performance

Second quarter 2026 reported net sales were a record $6.665 billion, up 13.0% year over year, with organic sales growth of 12.6%. Operating profit was $382.2 million and diluted EPS was $4.23, while adjusted diluted EPS reached a record $4.57, up 35% year over year. Adjusted EBITDA margin was 7.3%, up 60 basis points from the prior-year quarter. Data center sales were $1.5 billion, up 45% year over year, and total company backlog reached a record level, up approximately 60%. Operating cash flow was $53.7 million and free cash flow was $32 million for the quarter.

Strategy

Wesco is executing a multi-year Digital and Data Platform program to create a unified, technology-enabled operating model across business functions. After redeeming its Series A Preferred Stock in June 2025, management states it has no significant debt maturities until 2028 and strong liquidity to pursue debt reduction, stock buybacks and acquisitions. The company is expanding its data center offering beyond white space and gray space into power solutions, supported by the multi-year Grid Services award in UBS. In 2025 it continued to manage supplier price increases, in part related to tariffs, through pass-through pricing, local sourcing, reducing imports from high-tariff countries and supply chain re-engineering. The acquisition of Singapore-based Newark Engineering was cited as strengthening end-to-end capabilities and cooling solutions for data center customers.

Risks

• Data center concentration and margin mix — Growth is primarily driven by large CSS data center project sales, which management says carry lower gross margins than the prior year, so a slowdown in these projects could weigh on both sales and profitability.
• Tariffs and supplier pricing — Wesco is addressing supplier price increases related in part to global tariffs through pass-through pricing and supply chain changes, and management notes the long-term impact remains uncertain even though 2025 results were not materially affected.
• Macroeconomic and customer credit exposure — Results depend on customer business activity and global economic conditions, and although no single customer exceeds 5% of sales, a payment default by a larger customer could negatively affect short-term earnings or liquidity and receivables collectability.
• Utility public power softness — The UBS Utility business declined year over year in 2025 due to reduced public power activity, leaving that portion of the portfolio dependent on a recovery or offsetting growth from Broadband and new data center awards.

Outlook

Management raised its full-year 2026 outlook, citing exceptional first-half results and accelerating business momentum. It points to favorable secular growth trends, record backlog of approximately 60% year-over-year growth, and confidence in continued strong execution. Wesco expects to continue outperforming its markets and cites four consecutive quarters of double-digit sales growth fueled by data centers, while demand remained strong across the rest of its diversified portfolio.