PITTSBURGH – October 29, 2026 -- Wesco International reported record third-quarter net sales of $7.2 billion, up 17% year over year and 8% sequentially, and raised its full-year 2026 outlook as backlog grew about 80%.
Data center sales rise about 55% to $1.8 billion
Data center sales reached $1.8 billion, up roughly 55% from a year earlier. Non-data center sales rose 7%. Organic sales grew 16.6%, with volume gains in all three segments (CSS, EES and UBS) and a favorable price effect. Organic sales for the first nine months rose 13.9%.
Total company backlog hit a record, and each of the three business units set its own backlog record. CEO John Engel said the growth is fueled by multi-year customer commitments, and that the past five consecutive quarters of double-digit sales growth show a growth profile that extends beyond data centers.
Adjusted EBITDA margin expands 100 basis points to 7.8%
Operating margin was 6.2%, up 60 basis points. Adjusted EBITDA margin rose 100 basis points year over year and 50 basis points sequentially. Gross margin improved in the EES and CSS segments.
Adjusted SG&A fell to 14.4% of net sales from 14.7% a year earlier. Reported SG&A includes $24.8 million of digital transformation costs, against $8.8 million of digital transformation and restructuring costs in the prior-year quarter. Higher commissions and incentives tied to company performance, along with higher salaries and benefits, also lifted SG&A.
Diluted EPS was a record $5.43. Adjusted diluted EPS was a record $5.77, up 47%, even after a $32.8 million increase in the adjusted tax provision. The company attributed the higher quarterly tax rate to greater non-deductible compensation expense.
Operating cash flow swings to $193.9 million from a $82.7 million outflow
Operating cash flow was $193.9 million, a $276.6 million improvement on the third quarter of 2025. Free cash flow was $184 million. Accounts payable contributed $326.9 million, reflecting larger inventory purchases and payment timing. Other liabilities added $227.3 million, mainly deferred revenue from customer advance payments and milestone billings.
Inventory growth tied to large projects absorbed $169.3 million. Higher supplier prepayments absorbed $93.6 million, and receivables growth absorbed $90.0 million.
Nine-month operating cash flow totaled $469.0 million, against $53.1 million a year earlier. Nine-month interest expense rose $22.5 million, including a $10.0 million non-cash loss on debt extinguishment. The issuance of the 2031 and 2034 Notes at rates below those of the 2028 Notes partly offset the increase.
Financial leverage falls to 2.8x from 3.4x at year-end
Leverage fell to 2.8x from 3.4x at 2025 year-end. Engel said he is bullish that Wesco will keep outperforming its markets through the close of 2026 and into 2027, and the company is again significantly raising its full-year 2026 outlook.