Financial Data and Key Metrics Changes - The company reported record quarterly sales of $6.2 billion, marking an 18% organic growth in Communications and Security Solutions, 12% in Electrical and Electronic Solutions, and a return to growth in Utility and Broadband Solutions [7][36] - Adjusted EPS grew 9.5% year over year and 16% sequentially, with both gross margin and EBITDA margin improving sequentially [8][36] - Organic sales growth accelerated to 12% in Q3, following 6% in Q1 and 7% in Q2, indicating four consecutive quarters of accelerating momentum [6][36] Business Line Data and Key Metrics Changes - Electrical and Electronic Solutions (EES) saw organic sales up 12% year over year, driven by growth across all operating groups, particularly in construction and OEM [15][16] - Communications and Security Solutions (CSS) delivered organic sales growth of 18%, supported by strong demand in data center solutions [16][17] - Utility and Broadband Solutions (UBS) reported a 3% increase in organic sales, marking a return to growth after seven quarters of declines, driven by investor-owned utilities [23][36] Market Data and Key Metrics Changes - Total data center sales reached approximately $1.2 billion, up 60% year over year, representing 19% of total Q3 company sales on a trailing 12-month basis [7][19] - The broadband segment experienced over 20% year-over-year growth, indicating a significant improvement from previous quarters [23] - Backlog increased 11% year over year, reflecting stronger customer order rates across various segments [23] Company Strategy and Development Direction - The company is focused on accelerating cross-selling initiatives and driving enterprise-wide margin improvement through technology-driven business transformation [8][10] - The strategic outlook includes capitalizing on secular growth trends such as digitalization, electrification, and supply chain resiliency, with expectations for continued market-leading growth into 2026 [10][36] - The company raised its full-year outlook for organic sales growth and adjusted EBITDA based on increasing business momentum [8][32] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to outperform markets due to strong portfolio strength and ongoing secular growth trends [10][36] - The outlook for 2026 includes expectations for mid-single-digit organic sales growth and continued strength in electrical markets, with a return to full-year growth in utility services [37] - Management acknowledged challenges related to working capital investments but emphasized the high quality of cash flow issues due to significant sales growth [71] Other Important Information - The company redeemed $540 million in Series A preferred stock, marking a significant milestone in capital structure optimization [27] - Free cash flow was a use of $89 million in Q3, attributed to increased working capital needs due to significant growth [24][25] - The company is experiencing a dynamic tariff environment, with supplier price increase notifications up over 100% in count, but the impact on results was limited [28] Q&A Session Summary Question: How much did price contribute to growth by segment? - Overall pricing benefit in Q3 was just under 3%, with EES at about 4%, CSS at about 2%, and UBS at about 1% [39] Question: Can you discuss the strength in EES outside of data centers? - EES saw growth across construction, industrial, and OEM sectors, with construction up mid-teens driven by infrastructure projects [42][44] Question: Is there a crowd-out effect from AI and tech spending? - There is no observed crowd-out effect; EES growth is attributed to overall market outperformance [51] Question: What is the outlook for public power in the utility segment? - Public power is expected to return to growth in 2026, with current softness attributed to inventory build issues [108]

Third Quarter Performance - Record quarterly sales reached $6.2 billion, driven by organic growth across all three business units: CSS up 18%, EES up 12%, and UBS up 3%[7] - Total data center sales amounted to approximately $1.2 billion, a year-over-year increase of roughly 60%[7] - Adjusted EBITDA margin saw a sequential increase of 10 bps due to improved gross margin[7] - Backlog increased by 7% year-over-year[7] - Preliminary October sales per workday showed positive momentum, increasing by approximately 9%[7] Full Year Outlook & Strategic Sales Growth - The company raised its full-year outlook for organic sales growth to 8%-9%, with reported growth expected at 7%-8%[7, 40] - Data Center sales are expected to be up approximately 50%[41] - The company anticipates reported sales between $23.3 billion and $23.6 billion[42] - Adjusted diluted EPS is projected to be in the range of $13.10 to $13.60[42] - Free cash flow is expected to be between $400 million and $500 million[42] Financial Restructuring - The company redeemed $540 million of preferred stock with a 10.625% dividend rate[37] - This refinancing is expected to generate approximately $32 million in annualized benefit to net income and cash flow, and approximately $0.65 annualized benefit to EPS[37]

Core Insights - Wesco International (WCC) reported quarterly earnings of $3.92 per share, exceeding the Zacks Consensus Estimate of $3.75 per share, and up from $3.58 per share a year ago [1][2] - The company achieved revenues of $6.2 billion for the quarter ended September 2025, surpassing the Zacks Consensus Estimate by 5.17% and increasing from $5.49 billion year-over-year [3] - Wesco International's stock has increased approximately 26.2% since the beginning of the year, outperforming the S&P 500's gain of 17.2% [4] Earnings Performance - The earnings surprise for the recent quarter was +4.53%, following a previous surprise of +2.42% when actual earnings were $3.39 per share against an expectation of $3.31 [2] - Over the last four quarters, the company has exceeded consensus EPS estimates two times and topped consensus revenue estimates four times [2][3] Future Outlook - The current consensus EPS estimate for the upcoming quarter is $3.55 on revenues of $5.8 billion, and for the current fiscal year, it is $12.89 on revenues of $22.94 billion [8] - The estimate revisions trend for Wesco International was favorable ahead of the earnings release, resulting in a Zacks Rank 2 (Buy) for the stock, indicating expected outperformance in the near future [7] Industry Context - Wesco International operates within the Zacks Electronics - Parts Distribution industry, which is currently ranked in the top 9% of over 250 Zacks industries, suggesting a strong industry outlook [9]

Financial Performance - Record third quarter net sales of $6.2 billion, up 12.9% year-over-year, with organic sales growth of 12.1%[6] - Adjusted EPS for the third quarter was $3.92, reflecting a 9.5% increase year-over-year[6] - Net sales for Q3 2025 reached $6,199.1 million, a 12.9% increase from $5,489.4 million in Q3 2024[24] - For the nine months ended September 30, 2025, net sales totaled $17,442.4 million, an increase of 6.9% from $16,319.1 million in the same period of 2024[26] - Adjusted net income attributable to common stockholders for Q3 2025 was $193.9 million, compared to $178.1 million in Q3 2024, representing an increase of 10.2%[43] - Adjusted earnings per diluted share for Q3 2025 was $3.92, up from $3.58 in Q3 2024, reflecting a growth of 9.5%[45] Sales and Segment Performance - Data center sales reached $1.2 billion, representing a 60% increase compared to the prior year[4] - The EES segment reported organic sales growth of 11.9% for the three months ended September 30, 2025, with sales of $2,359.6 million, up from $2,110.4 million in 2024[34] - The CSS segment achieved a 20.8% increase in reported sales, reaching $2,410.9 million for the three months ended September 30, 2025, compared to $1,995.9 million in 2024[34] - The UBS segment experienced a decline of 7.3% in reported sales for the nine months ended September 30, 2025, totaling $4,083.3 million compared to $4,404.9 million in 2024[35] Profitability and Margins - Adjusted EBITDA margin for the third quarter was 6.8%, up 10 basis points sequentially[6] - Gross profit for the three months ended September 30, 2025, was $1,317.4 million, with a gross margin of 21.3%, down from 22.1% in the same period of 2024[38] - Adjusted income from operations for the three months ended September 30, 2025, was $354.2 million, with an adjusted income from operations margin of 5.7%[41] - Total EBITDA for Q3 2025 was $394.5 million, compared to $406.5 million in Q3 2024, indicating a decline of 2.5%[48] - Adjusted EBITDA margin for Q3 2025 was 6.8%, down from 7.3% in Q3 2024, showing a decrease of 0.5 percentage points[48] Expenses and Costs - SG&A expenses for the third quarter increased by 11% year-over-year, driven by higher salaries and operational costs[7] - Digital transformation costs for the three months ended September 30, 2025, amounted to $10.4 million, impacting the adjusted income from operations[41] - Digital transformation costs for Q3 2025 amounted to $10.4 million, compared to $5.4 million in Q3 2024, representing an increase of 92.6%[48] - Interest expense for Q3 2025 was $99.0 million, up from $86.5 million in Q3 2024, reflecting a rise of 14.4%[48] Cash Flow and Liquidity - Operating cash flow for the third quarter was negative $82.7 million, a decrease of 127.4% compared to the prior year[7] - Free cash flow for the three months ended September 30, 2025, was $(89.3) million, compared to $279.5 million for the same period in 2024[61] - Free cash flow for the nine months ended September 30, 2025, was $6.6 million, down from $776.8 million in 2024[61] - The company reported cash flow used in operations of $(82.7) million for the three months ended September 30, 2025, compared to $302.1 million in 2024[61] Balance Sheet and Debt - The total assets as of September 30, 2025, were $16,553.3 million, up from $15,061.4 million as of December 31, 2024[28] - Total liabilities increased to $11,711.6 million as of September 30, 2025, compared to $10,095.9 million at the end of 2024[28] - The company reported a total debt of $5,801.2 million as of September 30, 2025, up from $5,112.1 million as of December 31, 2024[56] - The financial leverage ratio increased to 3.5 as of September 30, 2025, compared to 2.9 as of December 31, 2024[57] Strategic Initiatives and Risks - The company is focused on executing cross-selling initiatives and enterprise-wide margin improvement programs[5] - The company highlighted ongoing risks including supply chain disruptions and geopolitical issues that could impact future performance[21] - The company incurred restructuring costs of $1.6 million in Q3 2025, compared to a gain of $0.5 million in Q3 2024, indicating a shift in financial strategy[43] - The company recognized a loss on abandonment of assets related to capitalized cloud computing arrangement implementation costs[59]

Core Insights - Wesco International reported strong third-quarter results, with organic sales growth accelerating to 12% compared to previous quarters [2][3] - The company achieved record sales of $6.2 billion, a 12.9% increase year-over-year, driven by significant growth in its CSS and EES segments [4][7] - Adjusted earnings per diluted share rose by 9.5% year-over-year, reflecting improved operational efficiency and margin expansion [4][7] Financial Performance - Total net sales for Q3 2025 were $6,199.1 million, up from $5,489.4 million in Q3 2024, marking a 12.9% increase [4] - Adjusted EBITDA for Q3 2025 was $423.0 million, a 6.3% increase from $398.1 million in Q3 2024 [4][17] - The adjusted EPS for Q3 2025 was $3.92, compared to $3.58 in Q3 2024, reflecting a 9.5% increase [4][17] Segment Performance - The CSS segment experienced an 18% organic growth, while the EES segment saw a 12% organic growth in Q3 2025 [2][8] - Data center sales reached $1.2 billion, representing a 60% increase year-over-year [2][7] - The Utility business returned to growth in Q3, indicating a positive trend in investor-owned utility sales [2][7] Outlook and Guidance - The company raised its full-year outlook for organic sales growth to 8% to 9%, up from the previous range of 5% to 7% [3][4] - Adjusted EPS guidance for the full year is now projected to be between $13.10 and $13.60 [3][4] - Wesco is focused on cross-selling initiatives and margin improvement programs to sustain growth momentum into 2026 [3][4]

Core Insights - Regency Capital Management disclosed a new position in WESCO International, acquiring 15,203 shares valued at approximately $3.22 million based on the average price in Q3 2025 [2][3] - This new stake represents 1.53% of Regency's total assets under management (AUM) [3] - WESCO International's stock price was $218.85 as of October 20, 2025, reflecting a 23.27% increase over the past year, outperforming the S&P 500 by 6.41 percentage points [3] Company Overview - WESCO International reported a total revenue of $22.23 billion and a net income of $662.60 million for the trailing twelve months (TTM) [5] - The company offers a range of products including electrical, electronic, network infrastructure, security solutions, and utility products across three business segments [6][7] - WESCO generates revenue through B2B distribution, logistics, and supply chain solutions, serving various sectors including contractors, manufacturers, and public power companies [6][7] Recent Performance and Outlook - WESCO's data center sales accounted for approximately 17% of total revenue, with a year-over-year surge of about 65% in Q2 2025, exceeding $1 billion [9] - The company has raised its full-year organic sales growth outlook to between 5% and 7% for 2025, driven by strong demand from hyperscalers [10]

Core Insights - Crude Value Insights provides an investment service and community focused on the oil and natural gas sector, emphasizing cash flow and the companies that generate it, which leads to value and growth prospects with real potential [1] Company Offerings - Subscribers gain access to a model account with over 50 stocks, in-depth cash flow analyses of exploration and production (E&P) firms, and live chat discussions about the sector [1] Promotional Offer - A two-week free trial is available for new subscribers, allowing them to explore the services related to oil and gas investments [2]

Core Insights - Crude Value Insights provides an investment service and community focused on the oil and natural gas sector, emphasizing cash flow and the companies that generate it, which leads to value and growth prospects with real potential [1] Group 1 - The service includes access to a 50+ stock model account, in-depth cash flow analyses of exploration and production (E&P) firms, and live chat discussions about the sector [1] - Subscribers are offered a two-week free trial to explore the services related to oil and gas investments [2]

Core Insights - Baupost Group LLC/MA, led by Seth Klarman, reported a portfolio valued at $4.13 billion, with the top five holdings constituting 46.93% of total assets [1] Group 1: Top Holdings Overview - **Alphabet Inc. (GOOG)**: The largest position, with 2.63 million shares valued at $467.24 million, representing 11.31% of the portfolio. The fund increased its stake by 556,000 shares (+26.76%), indicating growing confidence in the company's search franchise and AI opportunities [2] - **Wesco International Inc. (WCC)**: The second-largest position, holding 2.21 million shares worth $408.85 million (9.90% of assets). Baupost raised its stake by 202,000 shares (+10.07%), reflecting confidence in Wesco's industrial distribution leadership [3] - **Willis Towers Watson PLC (WTW)**: Holding 1.31 million shares valued at $402.79 million (9.75% of the portfolio). The fund reduced its position by 211,000 shares (-13.86%), likely for profit-taking after strong performance [4] - **CRH PLC (CRH)**: The fourth-largest holding, with 3.83 million shares valued at $351.17 million (8.50% of assets). Baupost added 1.13 million shares (+41.98%), showing increased conviction in the building materials sector [5] - **Fidelity National Information Services (FIS)**: Rounding out the top five with 3.78 million shares worth $308.52 million (7.47% portfolio weight). The fund increased its holdings by 296,764 shares (+8.50%), indicating confidence in the company's restructuring efforts [6] Group 2: Investment Philosophy - Baupost's portfolio reflects a disciplined value philosophy, selectively adding to undervalued positions while trimming gains in outperformers. The concentration in technology, industrials, and financials highlights a strategy focused on high-quality businesses with strong underlying assets [7]

Group 1 - Wesco International will hold its third quarter 2025 earnings conference call on October 30, 2025, at 10:00 a.m. ET [1] - The company provides dial-in details for live access and replay access for the earnings call [1] - A live audio webcast of the earnings presentation will be available on Wesco's investor relations website [1] Group 2 - Wesco International is a FORTUNE 500® company headquartered in Pittsburgh, Pennsylvania, with approximately $22 billion in annual sales in 2024 [2] - The company specializes in business-to-business distribution, logistics services, and supply chain solutions, offering a diverse portfolio of products and services [2] - Wesco employs around 20,000 people and operates over 700 sites in approximately 50 countries, providing a local presence and a global network for its customers [2]