WESCO INTERNATIONAL INC Q1 FY2026 earnings call

• Delivered an exceptional start to 2026 with double-digit sales growth, margin expansion, and over 50% earnings per share growth. • Booming data center demand is a significant growth driver. • AI-driven data centers and related investments are key drivers of growth. • Generated strong cash flow and improved debt maturity profile. • Neil Dev joined as CFO and focuses on partnering to scale business, drive profitable growth, etc. • CSS, EES, and UBS have respective strong performances with margin improvements.

In the first quarter, CSS had organic sales up 22% year-over-year and reported sales up 24%. Adjusted EBITDA increased 41% to $223 million, and adjusted EBITDA margin expanded 110 basis points to 9%. EES had organic sales up 7% and reported sales up 9% year-over-year. Adjusted EBITDA increased 30% to $185 million, and adjusted EBITDA margin expanded 130 basis points to 8.2%. UBS had 6% organic sales growth in the first quarter. Adjusted EBITDA was $131 million, down 5% versus the prior year, and adjusted EBITDA margin decreased 120 basis points to 9.6%. Data center sales in the first quarter were $1.4 billion, up approximately 70% versus prior year and represented 24% of total company sales in the quarter.

• Raised full year 2026 outlook. • Expected reported sales growth of 6 to 9%, with organic sales growth of 5 to 8%. • Adjusted EBITDA margin in the range of 6.6 to 7%. • Raised adjusted diluted EPS outlook to $15 to $17 per share. • Expect free cash flow of 500 to 800 million.

• Volatility of the broader macroeconomic environment. • Secondary impacts on transportation costs from the Middle East, but manageable. • Tariff impact on Wesco is not material. • No material recoveries expected from the IEPA decision.

Q: David Manthe with Baird asked about lead times in EES and UBS and MNA process.

A: John and Neil responded discussing lead times being an intra - quarter project timing issue, EES industrial book - to - bills strong, and thoughts on Wesco MNA process being disciplined and focused on strategy, growth, and margin.

Q: Dean Dre with RBC Capital Markets asked about data center strength and growth rate step - down.

A: John responded on data center growth in white space, gray space, and services, and outlook explanation.

Q: Sam Darkatch with Raymond James asked about April trends and grid infrastructure impact.

A: John and Neil responded on April trends and grid infrastructure being supportive of secular growth trends.

Q: Guy Hardwick with Barclays asked about backlog growth vs sales and EES backlog driven by data center.

A: John responded on backlog trend and EES backlog growth not primarily driven by disclosed data center number.

Q: Christopher Glenn with Oppenheimer asked about ES margin trends and WDCS.

A: John and Neil responded on margin improvement focus in EES, operating leverage, and WDCS growth.

Q: Ken Newman with KeyBank Capital Markets asked about pricing and data center space.

A: Neil and John responded on pricing carryover benefit, data center space growth context.

Q: Patrick Allman with J.P. Morgan asked about digital transformation.

A: John responded on ERP rollout progress, deployment, and benefits phasing in.