Skip to content
    WCC
    Earnings call· Jun 2026(Q2 FY26)

    WESCO INTERNATIONAL Q2 FY26 earnings call WCC

    Jul 30, 2026 Source

    Executive summary

    WESCO Q2 FY26 — Record Performance Driven by Data Center and Broad-Based Growth, Full-Year Outlook Raised

    WESCO delivered an exceptional second quarter, achieving record sales, profitability, and backlog, significantly raising its full-year outlook. The strong performance was fueled by continued momentum in data centers and broad-based mid-single-digit growth across its diversified portfolio. Strategic acquisitions and a major grid services award further strengthened its market position, positioning the company for sustained outperformance.

    Highlights

    5

    • Record sales of $6.7 billion, up 13% reported and organic.

    • Record adjusted EBITDA of $487 million, up 24%, with margin expanding 60 bps to 7.3%.

    • Record adjusted EPS of $4.57, up 35%.

    • Record backlog up 60% year-over-year, with all three business units posting double-digit growth.

    • CSS achieved a record 10.2% EBITDA margin, EES expanded to 9.2%, and UBS returned to 10%.

    Concerns

    2

    • Q3 FY26 adjusted EBITDA margin expected to be slightly lower sequentially due to anticipated mix of business.

    • Public power competitive dynamics remained a margin headwind in UBS in the near term.

    Guidance & targets

    11
    CategoryTargetConfidence
    Full-year 2026 organic sales growth
    9% to 11%
    high materiality
    High
    Full-year 2026 reported sales growth
    10% to 12%
    high materiality
    High
    Full-year 2026 adjusted EBITDA margin
    6.9% to 7.1%
    high materiality
    High
    Full-year 2026 adjusted diluted EPS
    $16 to $17.50
    high materiality
    High
    Full-year 2026 free cash flow
    $300 million to $600 million
    medium materiality
    Medium
    CSS reported sales growth
    mid- to high teens year-over-year
    medium materiality
    High
    CSS data center sales growth
    30-plus percent year-over-year
    medium materiality
    High
    EES sales growth
    high single-digit year-over-year
    medium materiality
    High
    UBS sales growth
    mid-single-digit year-over-year
    medium materiality
    High
    Q3 FY26 sales growth
    low double digits year-over-year
    medium materiality
    Medium
    Q3 FY26 adjusted EBITDA margin
    slightly lower sequentially
    medium materiality
    Medium

    Segment performance

    4
    SegmentRevenueYoYQoQMargin
    WESCO (Total Company)
    Record sales, adjusted EBITDA, and adjusted EPS. Growth was broad-based, with mid-single-digit sales growth excluding data centers.
    Adjusted EBITDA: $487 million (+24%)Adjusted EPS: $4.57 (+35%)
    		$6.7 billion13%—7.3% adjusted EBITDA margin
    CSS (Communications and Security Solutions)
    Outstanding quarter driven by data center momentum. Achieved first double-digit EBITDA margin in CSS history.
    Data center sales growth: ~45%Security and enterprise network infrastructure growth: low single digit (high single digit including data center projects)
    		—18%—10.2% adjusted EBITDA margin
    EES (Electrical and Electronic Solutions)
    Excellent quarter with diversified strength. Strong gross margin expansion.
    Volume growth: ~6%Price contribution: ~5% (1% from commodity inflation)Construction growth: high single digitIndustrial growth: low single digitOEM growth: strong double digitsData center sales growth: >70%Data center sales as % of EES: ~8%Gross margin: 24.4% (record)
    		—11%—9.2% adjusted EBITDA margin
    UBS (Utility and Broadband Solutions)
    Strengthening demand trends. Returned to 10% EBITDA margin. Grid services award is a significant milestone.
    Utility growth: mid-single digitBroadband growth: strong mid-teens
    		—7%—10% adjusted EBITDA margin

    Operational metrics

    9
    Working Capital Intensity
    20%
    Q2 FY26

    Despite double-digit top line growth over the past 4 quarters.

    Net Debt to Adjusted EBITDA
    3xvs 3.4x at year-end
    Q2 FY26

    Strength of operating performance drove another quarter of leverage improvement.

    Share Repurchase
    $25 milliontotal $50 million in H1 FY26
    Q2 FY26

    Largely to offset dilution from equity compensation.

    Data Center Sales
    $1.5 billionup ~45% YoY
    Q2 FY26

    WESCO's differentiated power to compute model positions it across the full data center life cycle.

    Sales per workday
    mid-teensup
    July MTD

    Favorable demand trends to start the third quarter.

    Price Benefit to Sales Growth
    3%
    Q2 FY26

    Contributed to reported and organic sales growth.

    Price Benefit to Sales Growth
    1%
    Q2 FY26

    Part of overall price benefit.

    Price Benefit to Sales Growth
    5%
    Q2 FY26

    Part of overall price benefit.

    Price Benefit to Sales Growth
    3%
    Q2 FY26

    Part of overall price benefit.

    Industry KPIs

    2
    MetricValueDetails
    Daily sales ratemid-teens%
    End market growth mix—

    Orderbook & backlog

    4
    Total Backlogrecord levelQ2 FY26

    up 60% versus prior year

    driven by strong double-digit growth across all 3 business units

    CSS Backlogrecord levelQ2 FY26

    up 95%

    essentially doubling, underscoring durability of demand in data center projects and providing meaningful revenue visibility

    EES Backlogrecord levelQ2 FY26

    up 30% versus prior year

    with double-digit backlog growth across industrial OEM and construction

    UBS Backlogrecord levelQ2 FY26

    up 80% year-over-year

    driven by a significant multiyear grid services award with a hyperscale data center customer

    Deals & partnerships

    1
    Newark Engineering GroupStrengthens capabilities in engineered cooling solutions and life cycle services for data centers.

    Singapore-based company, strengthens presence in Southeast Asia, adds mission-critical cooling and thermal management expertise, design engineering capabilities for HVAC, in-house fabrication, installation, after-sales servicing.

    Risks & headwinds

    2
    Public Power Competitive Dynamicsnear term

    remained a margin headwind

    Mitigation: strengthening demand trends, record backlog and accelerating momentum in grid services positions UBS well

    Power and Labor Constraints for Data Centers

    demand is outstripping supply across the value chain starts with power, followed by labor

    Mitigation: WESCO is not seeing this impacting its business directly, but it's an industry-wide phenomenon that could shift timing of other construction projects.

    What to watch in Q3 FY26

    5

    Working Capital Intensity

    next quarter
    Current20% of sales
    TargetImprovement in DSO and DIO

    Why it matters

    Management is implementing initiatives to improve working capital intensity and cash flow conversion, which is crucial for funding growth.

    Over the past few months, we've made several operational and organizational changes to drive more accountability around initiatives to improve working capital intensity and cash flow conversion. There are now a number of initiatives implied around improving day sales outstanding and days inventory outstanding.

    Q&A highlights

    6

    What are the drivers of WESCO's broad-based growth outside of data centers, what does it say about the macro, and what is the sustainability and visibility of this growth?

    John Engel highlighted that WESCO is not a "one-trick pony," benefiting from multiple secular trends like infrastructure build-out, increased electricity demand, reshoring, and an impending industrial super cycle. He noted non-data center sales were up mid-single digits, and record backlog across all SBUs provides strong visibility, setting the stage for a strong 2027.

    “We're not a one-trick pony. We're benefiting from multiple secular growth trends, and you're seeing that starting to contribute meaningfully to our results.”

    asked by Deane Dray · answered by John Engel

    2 min read6 chapters

    Detailed Narrative

    01

    Record Performance and Broad-Based Growth

    WESCO achieved record sales of $6.7 billion, adjusted EBITDA of $487 million, and adjusted EPS of $4.57 in Q2 FY26. Sales grew 13% organically and reported, driven by an estimated 3% price benefit and solid volume. While data centers were a key driver, non-data center sales grew mid-single digits for the company and high single digits for EES, highlighting the diversified portfolio benefiting from multiple secular trends.

    02

    Profitability Expansion Across Business Units

    Gross margins expanded by 70 basis points, contributing to a 60 basis point adjusted EBITDA margin expansion to 7.3% for WESCO. CSS achieved a record 10.2% EBITDA margin, EES expanded to 9.2%, and UBS returned to a 10% EBITDA margin, demonstrating significant profitability improvements across all three business units. This was attributed to favorable sales mix and margin improvement initiatives.

    03

    Record Backlog and Future Visibility

    The company reported a record backlog, up 60% year-over-year, marking the third consecutive quarter of record backlog. This growth was broad-based, with CSS backlog up 95%, EES up 30%, and UBS up 80%, providing strong revenue visibility and underscoring the effectiveness of the "One WESCO" cross-selling strategy and multiyear customer commitments.

    04

    Strategic Expansion in Data Center and Grid Services

    WESCO strengthened its data center offerings through the acquisition of Singapore-based Newark Engineering, adding mission-critical cooling solutions and expanding its presence in Southeast Asia. Additionally, UBS secured a significant multiyear grid services award from a hyperscale data center customer, diversifying its customer base and expanding its power solutions portfolio for data centers.

    05

    Working Capital and Capital Allocation Focus

    Despite double-digit top-line growth, working capital intensity remained at approximately 20% of sales. Management is implementing initiatives to improve day sales outstanding (DSO) and days inventory outstanding (DIO) to enhance free cash flow conversion. The company also repurchased $25 million of shares in Q2 and improved its net debt to adjusted EBITDA ratio to 3x.

    06

    Outlook and Momentum

    WESCO significantly raised its full-year 2026 outlook for sales, adjusted EBITDA, and adjusted EPS, reflecting exceptional first-half performance and continued momentum. Preliminary July sales per workday were up mid-teens, with Q3 sales expected to grow low double digits year-over-year, indicating strong demand trends continuing into the second half.

    AI-generated summary of the company’s earnings call. Not investment advice.