WESCO International (WCC) Q4 2024 earnings summary

Executive summary

• Achieved a return to sales growth in Q4 2024, with organic sales up 2.4% year-over-year, driven by over 70% growth in global data center business and 20% growth in broadband, offset by industrial and utility softness.

• Full-year organic sales were flat to down 0.6%, with stable gross margin and record free cash flow exceeding $1 billion, representing 154% of adjusted net income.

• Strategic portfolio actions included divesting a low-margin integrated supply business and acquiring three service-based businesses, notably Ascent, to enhance data center lifecycle services.

• Reduced net debt by $431 million, repurchased $425 million in shares, and increased the common dividend by 10%.

• Record operating cash flow of $1.1 billion for 2024, up from $493 million in 2023.

Financial highlights

• Q4 reported sales were flat to up 0.5% year-over-year; organic sales up 2%–2.4%, with price contributing 1.5% and volume just under 1%.

• Adjusted EPS for Q4 was $3.16, up 19% year-over-year; full-year adjusted EPS $12.23.

• Full-year reported sales down 2.5%–3%, organic sales down 0.5%–1%; gross margin flat at 21.6%.

• Q4 free cash flow was $268 million; full-year free cash flow exceeded $1 billion.

• Adjusted EBITDA margin for 2024: 6.9%, down 70 basis points year-over-year.

Outlook and guidance

• 2025 organic sales expected to grow 2.5%–6.5%; reported sales flat to up 4%.

• Adjusted EBITDA margin guidance: 6.7%–7.2%, with gross margin expansion anticipated.

• Adjusted diluted EPS outlook: $12–$14.50, reflecting 8% to mid-20s percent growth.

• Free cash flow guidance for 2025: $600–$800 million.

• Plan to increase common dividend by 10% to $1.82/share and continue share buybacks.

• Full redemption of outstanding preferred equity in June 2025 to improve cash flow and EPS.