WESCO 2025-26: Data Center +30%, FY26 EPS $14.50-$16.50 (+20%)

FY25 revenue $23.51B (+8%, 9% organic); op income $1.23B (+1%); NI $640M (-11%); EPS $13.05 (flat YoY). FCF $25M (capex-heavy + working capital). Q4 record sales $6.1B (+10%, 9% organic). Data center sales record $1.2B (+~30% YoY). Q4 segment performance — CSS (Communications + Security): organic sales +14%; reported +16%; adjusted EBITDA +30%; margin 9.1% (+90bp YoY). EES (Electrical + Electronic Solutions): organic +9%; backlog +6% YoY; adjusted EBITDA +16%; margin +50bp to 8.5%. UBS (Utility + Broadband): organic +3%; backlog +23% YoY; adjusted EBITDA margin -120bp (public power headwinds). FY: total sales $23.5B (+8%, 9% organic); CSS reported +18% / organic +17% / margin +50bp; EES reported +7% / organic +8% (OEM + construction); UBS reported -5% / organic -1% (public power competitive pressure). Backlog +19% YoY. David Schulz CFO retiring May 2026; Neil Deve appointed new CFO. Digital transformation: new tech stack in pilot locations; world-class data lake + AI application; Fortune AI ranking recognition. Plan to increase annual dividend by 10%+ to $2/share. Grid Services generated $300M+ FY25 revenue; mid-single-digit growth expected to accelerate to double digits in 2026 supporting grid modernization. Total debt $7.48B (+32%); buyback $615M (+45%). FY26 guide: reported sales growth 5-8% / organic 4-7%; adjusted EBITDA margin 6.6-7%; adjusted diluted EPS $14.50-$16.50 (+20% midpoint growth); FCF $500M-$800M; working capital growth ~half the rate of sales; Q1 reported sales up high single digits across all 3 BUs.

Key takeaways

• Data center sales $1.2B Q4 (+30% YoY) — multi-year AI infrastructure direct beneficiary. WESCO's data center sales reached a record $1.2B in Q4 FY25, +30% YoY. Combined with multi-billion dollar annual data center revenue and continued hyperscaler AI buildout, WESCO is structurally positioned as one of the leading distributors of electrical + power + cabling + cooling + connectivity products to data center construction. The data center business sits within both CSS (Communications + Security Solutions, +14% Q4 organic) and EES (Electrical + Electronic Solutions, +9% Q4 organic) segments. Multi-year AI capex tailwind continues.

• Backlog +19% FY YoY (UBS +23%; EES +6%) — multi-year revenue visibility. Total backlog grew +19% YoY at year-end FY25, with strongest growth in UBS (+23% YoY) reflecting utility + broadband infrastructure project pipeline + Grid Services momentum. EES backlog +6%. Multi-quarter revenue visibility strong heading into FY26 — supporting management's FY26 guide of +5-8% reported sales growth.

• FY26 guide: adj diluted EPS $14.50-$16.50 (+20% midpoint) + FCF $500-$800M — meaningful operating leverage. Adj diluted EPS $14.50-$16.50 reflects +20% growth at midpoint vs FY25. FCF $500-$800M (vs FY25 only $25M which was depressed by working capital + capex investment). Working capital growth ~half rate of sales = meaningful FCF inflection. Adj EBITDA margin 6.6-7% (continued expansion). The combination of organic growth + cost discipline + working capital normalization drives meaningful FCF + EPS recovery setup.

• Grid Services + utility infrastructure tailwind: $300M FY25 → double-digit growth FY26. Grid Services generated >$300M revenue in FY25 growing at mid-single digits; management expects acceleration to double-digit growth in 2026 supporting grid modernization + power infrastructure. The multi-year US grid modernization theme (transmission expansion + utility AI investments + EV charging buildout + data center power requirements) directly benefits UBS segment + Grid Services.

• Digital transformation: AI + data lake + Fortune AI ranking recognition — multi-year platform efficiency. WESCO deployed new tech stack in pilot locations across business units, with a world-class data lake + AI application supporting operations + customer interactions. Fortune AI ranking recognition validates the digital platform progress. The combination of digital transformation + AI integration + multi-year operational discipline supports continued margin expansion + working capital efficiency.

Business

WESCO International, Inc. is one of the largest distributors of electrical + communications + utility products + supply chain solutions globally, with three reporting segments:

• Electrical and Electronic Solutions (EES) (~50% of revenue): Industrial + construction + OEM electrical products + automation + power management. Q4 organic +9%; backlog +6%; adj EBITDA margin 8.5% (+50bp).
• Communications and Security Solutions (CSS) (~30%): Data center + network + security + AV products + cabling. Q4 organic +14%; reported +16%; adj EBITDA +30%; margin 9.1% (+90bp). Data center exposure within this segment.
• Utility and Broadband Solutions (UBS) (~20%): Utility infrastructure (transmission + distribution + EV charging) + broadband cabling + Grid Services. Q4 organic +3%; backlog +23%; margin -120bp.
• Grid Services (Embedded): Multi-year grid modernization. $300M+ FY25 revenue; double-digit growth FY26.

Strategic moves FY25:

• Q4 record sales $6.1B
• Data center record $1.2B (+30% YoY)
• CSS organic +14% Q4 / +17% FY
• EES organic +9% Q4 / +8% FY (OEM + construction)
• UBS organic +3% Q4 (challenged by public power)
• Total backlog +19% YoY
• David Schulz CFO retiring May 2026; Neil Deve appointed
• Digital transformation: new tech stack + AI + data lake
• Fortune AI ranking recognition
• Dividend planned +10%+ to $2/share
• Grid Services $300M+ FY25
• $615M buyback (+45% YoY)

FY25 financial performance

The earnings progression: revenue grew steadily $21.42B → $23.51B (FY22-25, +10% over 3 years). Op margin compressed from 6.7% (FY22) to 5.2% (FY25) reflecting (a) UBS public power competitive pressure, (b) M&A integration costs, (c) digital transformation investment, (d) cyclical mix dynamics.

EPS $13.05 flat YoY; FCF $25M (-98%, capex + working capital build for FY26 sales). Total debt $7.48B (+32% YoY) reflects M&A funding + working capital. Buyback $615M (+45%) — accelerating capital return. Dividend $88M (+8%, planned +10%+ to $2/share for FY26).

Capital allocation

• Capex: $-100M FY25 (+5% YoY).
• Dividends: $-88M FY25 (+8% YoY); FY26 plan +10%+ to $2/share.
• Buybacks: $-615M FY25 (+45% YoY).
• Total capital return FY25: ~$703M.
• Total debt: $7.48B (+32% YoY).
• FCF: $25M FY25 (-98% YoY, capex + WC investment year).
• FY26 FCF target: $500M-$800M (significant inflection).

FY26 outlook (per Q4 2025 call, 2026-02-10)

Management noted continued data center momentum + Grid Services acceleration + AI / digital transformation + multi-year capital return.

Key risks

Industrial / construction cycle dependency. EES + CSS exposure to industrial + construction + OEM capex cycles.

Data center hyperscaler capex cycle. Q4 data center +30% YoY depends on hyperscaler AI capex. Multi-year cycle dynamics matter.

Multi-region competitive landscape. Sonepar, Rexel, Graybar, Anixter (now WESCO subsidiary), MSC Industrial, Fastenal, others compete in subsets.

UBS public power competitive pressure. Multi-year public power market dynamics + Grid Services execution.

Inventory + working capital dynamics. Multi-year working capital normalization required for FCF inflection.

M&A integration. Multi-year M&A pipeline carries integration risk.

FX / currency. Multi-region operations create translation impact.

Steel + commodity costs. Electrical + power products sensitive to copper + steel + aluminum.

Customer concentration. Hyperscaler + utility + commercial construction customer concentration.

CFO transition (Neil Deve from May 2026). Multi-quarter leadership transition execution.

Digital transformation execution. Multi-year platform investment + AI deployment.

Pricing sustainability. Multi-year pricing power.

Tariffs + trade policy. Multi-region trade dynamics.

Backlog conversion timing. Multi-quarter backlog conversion to revenue.

Cybersecurity. Multi-region IT + connected products.

Bottom line

WESCO FY25 is the data center + AI infrastructure beneficiary + multi-segment growth + capital return acceleration year: revenue $23.51B (+8%, 9% organic); op income $1.23B (+1%); NI $640M (-11%); EPS $13.05 flat; FCF $25M (capex-heavy + WC investment). Q4 record sales $6.1B (+10%); data center record $1.2B (+30%). CSS organic +14% Q4 / +17% FY / margin +50bp. EES organic +9% Q4 / +8% FY. UBS organic +3% Q4. Backlog +19% FY YoY. David Schulz CFO retiring; Neil Deve appointed. Digital transformation: tech stack pilots + AI + data lake + Fortune ranking. Grid Services $300M+ FY25. Dividend planned +10%+ to $2/share. Buyback $615M (+45%).

FY26 guide: reported sales +5-8% / organic +4-7%; adj EBITDA margin 6.6-7%; adj diluted EPS $14.50-$16.50 (+20% midpoint); FCF $500-$800M; working capital growth ~half rate of sales; Q1 high single digit + EBITDA margin up; Grid Services double-digit growth.

The risks are real — industrial / construction cycle dependency, data center hyperscaler capex cycle, multi-region competitive landscape (Sonepar, Rexel, Graybar, MSC Industrial, Fastenal), UBS public power competitive pressure, inventory + working capital dynamics, M&A integration, FX, steel + commodity costs, customer concentration, CFO transition, digital transformation execution, pricing sustainability, tariffs + trade policy, backlog conversion timing, cybersecurity.

But the structural thesis (one of largest distributors of electrical + communications + utility products globally + EES + CSS + UBS multi-segment + data center sales record $1.2B Q4 (+30%) + AI infrastructure direct beneficiary + Total backlog +19% FY YoY + Grid Services $300M+ accelerating to double digits FY26 + new CFO transition + digital transformation + AI + dividend planned +10%+ + multi-year capital return + FCF $500-$800M FY26 + adj EPS +20% FY26) is intact and FY25 confirms.

Quality global electrical + communications + utility distribution compounder mid-cycle, with data center AI infrastructure direct beneficiary + Grid Services + multi-year backlog visibility + capital return + digital transformation + multi-segment platform + multi-year FCF inflection. The FY25 data center +30% Q4 + CSS +14% organic + backlog +19% + Q4 record sales + Grid Services $300M+ + dividend planned +10%+ + buyback +45% + FY26 +20% adj EPS + $500-$800M FCF + FY26 organic +4-7% creates one of the cleaner electrical / industrial distribution compounding setups for investors seeking exposure to AI data center + grid modernization + utility infrastructure + multi-year backlog visibility + capital return acceleration. The conservative FY26 framework + data center momentum + Grid Services acceleration + digital transformation + multi-year capital return + multi-year FCF inflection provides multiple paths to outperformance over a multi-year horizon. Industrial cycle + data center capex + competitive landscape + UBS public power + M&A integration remain ongoing risks, but the multi-segment diversification + data center positioning + grid modernization + capital return + FCF inflection support continued compounding through cycles.

Citations

• WESCO International, Inc. FY25 Form 10-K (filed February 2026, SEC EDGAR).
• WCC Q4 2025 earnings call, 2026-02-10 — Q4 record sales $6.1B (+10%, 9% organic). Data center sales record $1.2B (+~30% YoY). CSS (Communications + Security): organic +14%; reported +16%; adj EBITDA +30%; margin 9.1% (+90bp). EES (Electrical + Electronic): organic +9%; backlog +6% YoY; adj EBITDA +16%; margin +50bp to 8.5%. UBS (Utility + Broadband): organic +3%; backlog +23% YoY; adj EBITDA margin -120bp (public power headwinds). FY: total sales $23.5B (+8%, 9% organic); CSS reported +18% / organic +17% / margin +50bp; EES reported +7% / organic +8% (OEM + construction); UBS reported -5% / organic -1% (public power competitive pressure). Backlog +19% YoY. David Schulz CFO retiring May 2026; Neil Deve appointed new CFO. Digital transformation: new tech stack in pilot locations; world-class data lake + AI application; Fortune AI ranking recognition. Plan to increase annual dividend by over 10% to $2/share. Grid Services >$300M FY25 revenue; mid-single-digit growth → double digits in 2026 supporting grid modernization. FY26: reported sales +5-8% / organic +4-7%; adj EBITDA margin 6.6-7%; adj diluted EPS $14.50-$16.50 (+20% midpoint); FCF $500-$800M; working capital growth ~half rate of sales; Q1 high single digit across all 3 BUs.
• WCC Q3 / Q2 / Q1 2025 earnings calls — supporting CSS data center + EES industrial + UBS dynamics.
• Internal financial_statements view (consolidated annual + cash flow + capital structure).