WESCO International Posts Record $6.1B Q1 Sales; Raises Organic Growth Guidance
WCC•Record first-quarter sales of $6.1 billion drove adjusted EPS of $3.37, exceeding estimates by $0.53 and lifting operating margin to 4.8%. Data center demand surged 70% to $1.4 billion (24% of revenue) and backlog rose 22%, prompting full-year organic sales growth guidance raised to 5%–8%.
1. Strong Q1 Financial Performance
WESCO International reported record Q1 sales of $6.1 billion, a 14% year-over-year increase, and adjusted EPS of $3.37 beating estimates by $0.53. Operating margin expanded to 4.8% and adjusted EBITDA margin rose 60 basis points to 6.4% on gross margin improvement and strong operating leverage.
2. Data Center Demand and Backlog Growth
Data center-related revenue surged approximately 70% year-over-year to $1.4 billion, representing 24% of total revenue, driven by robust demand. Backlog reached a record level, up 22% from the prior year, reflecting effective cross-selling and high visibility into secular growth trends.
3. Cash Flow and Refinancing
Operating cash flow increased by $193 million to $221 million, while free cash flow stood at $213 million, equal to 128% of net income. A successful $1.5 billion bond refinancing is expected to save over $20 million annually in a higher-for-longer rate environment with unchanged interest expense assumptions.
4. Guidance and Digital Transformation
The company raised full-year 2026 organic sales growth guidance to 5%–8%, with the CSS segment targeting low double-digit growth backed by data center visibility. The CSS segment fully deployed its end-to-end digital platform P&L operation in Q1, marking a key milestone in its digital transformation. Second-quarter EBITDA margins are expected to remain flat year-over-year, facing a 25–30 basis point headwind from higher incentive compensation.
