DXP Enterprises (DXPE) Q1 2026 earnings summary

Executive summary

• Sales grew 9.5% year-over-year to $521.7 million for Q1 2026, driven by both organic growth and acquisitions, with organic sales up 8.0% and acquisitions contributing $40.7 million.

• Adjusted EBITDA reached $57.8 million (11.1% margin), up from $52.5 million, and operating income was $42.5 million (8.1% margin).

• Net income was $20.0 million, with diluted EPS of $1.22, both slightly down from Q1 2025.

• Three acquisitions were completed during the quarter, expanding the platform and contributing $40.7 million in sales.

• Gross profit margin improved to 32.3%, up from 31.5% year-over-year, driven by pricing discipline, favorable mix, and accretive acquisitions.

Financial highlights

• Free cash flow was $26.3 million, a significant improvement from negative $16.9 million in Q1 2025, with operating cash flow at $29.6 million.

• Cash on hand at quarter-end was $213.4 million, with total liquidity of $366.7 million.

• Total debt outstanding as of March 31, 2026, was $844.7 million.

• SG&A expenses increased due to unique, non-recurring items and higher payroll, but are expected to normalize.

• CapEx was $3.3 million, under 1% of sales, focused on maintenance and facility upgrades.

Outlook and guidance

• Management expects continued improvement in ROIC, margin leverage, and performance as sales grow and SG&A normalizes.

• Bookings and backlog are trending higher, with April daily sales up 15% year-over-year.

• No formal guidance provided, but confidence expressed for a strong 2026 based on current trends and strategic initiatives.

• Flexible capital deployment policy allows for opportunistic share repurchases and M&A.

• The company is monitoring inflation, tariffs, and global economic volatility, with strategies in place to mitigate adverse effects.