TL;DR · 30-second read
The Short Version
Most people have never heard of Wesco, but the giant computer warehouses behind the internet and artificial intelligence need what it sells: electrical and communications gear.
Those warehouses brought Wesco $1.5 billion in sales in three months, about 45% more than a year earlier. They made up less than a quarter of its sales but about 60% of its growth.
A very large operator of these warehouses also signed a multi-year deal with the Wesco unit that serves power companies. The building boom is now reaching the company’s electric grid business.
Wesco International (NYSE: WCC), a Pittsburgh-based distributor of electrical, communications and utility products, reported record second-quarter net sales of $6.67 billion on July 30, 2026, up 13.0% from a year earlier. Data center sales reached $1.5 billion, up about 45%, and total company backlog hit a record, up about 60%.
The company also raised its full-year 2026 outlook and disclosed a significant multi-year Grid Services award from a hyperscale data center customer, meaning one of the very large operators of data center capacity.
Executive Summary
Wesco’s second quarter offers a useful test of how far data center spending travels beyond chips and servers. Distributors buy from manufacturers and supply the contractors, utilities and operators doing the building, so their results show demand for the less visible equipment that makes a facility work. At Wesco, that demand is now large: data centers accounted for more than a fifth of quarterly sales and, on rounded figures, about 60% of the year-over-year increase.
The most telling disclosure may be qualitative. CEO John Engel said the hyperscale award landed in the Utility and Broadband Solutions (UBS) segment and called it an important step in diversifying that segment’s customer base. That extends Wesco’s data center relationships from products used inside the facility toward power solutions.
The profit picture was strong, with adjusted EBITDA (earnings before interest, taxes, depreciation and amortization, excluding certain items) up 23.6% to $487.2 million. Second-quarter free cash flow, however, fell 62.7% to $32.3 million as receivables and supplier prepayments absorbed cash, a reminder that rapid growth has to be financed.
A Fifth of Sales, Most of the Growth
Wesco’s net sales rose by $765.5 million, from $5.90 billion to $6.67 billion. Its data center sales of $1.5 billion, up about 45%, imply a year-earlier figure of roughly $1.03 billion, or an increase of about $465 million. Working from those rounded numbers, data centers represented about 22% of quarterly sales but about 60% of the dollar growth.
The same arithmetic implies that everything else grew about 6%. That is consistent with Engel’s statement that demand remained strong across the rest of the portfolio, but it also shows how much of the headline 13% depends on one end market. Wesco’s four consecutive quarters of double-digit sales growth were, in Engel’s words, “fueled by data centers.” The calculation uses reported sales rather than organic sales, which exclude currency and workday effects, though the two growth rates were close at 13.0% and 12.6%.
For the industry, this is a concrete measure of data center demand reaching the distribution layer. For Wesco investors, it is also a concentration question: the stronger this one market becomes, the more the company’s growth rate depends on its continued spending.
The Grid Award Is the Quarter’s Clearest Signal
Wesco has described its data center offering in terms of white space, the rooms that hold servers and network equipment, and gray space, the support areas for electrical and mechanical systems. Engel said the new award expands that offering “to include power solutions.” The fact that it sits in UBS, rather than only in the segments more readily associated with data center fit-out, is what makes it notable. It places a hyperscale customer alongside the utility and broadband business, and Engel framed the win as “an important step in diversifying our UBS customer base.”
The mechanism matters more than the label. A distributor’s data center exposure no longer has to end at the building’s interior if a large operator will also contract for grid-related services. That widens Wesco’s potential share of each project and gives its utility-facing business a new type of customer. It also matters to rival distributors and electrical suppliers, because a customer buying across power, communications and security categories from one provider could reduce the number of separate supply relationships it needs.
The limits are equally clear. This is one award, at one company, with no public value or duration attached in Engel’s remarks, and it does not establish an industry-wide shift. UBS was also the one segment where Wesco reported lower gross margin, although the company did not connect that decline to the award. What can be said is narrower and well supported: at Wesco, hyperscale demand has now reached grid work, and management sees that as a strategic milestone.
Backlog Growing Faster Than Sales Changes the Question
Backlog, the value of orders not yet recognized as revenue, rose about 60% while sales rose 13%. Engel said the growth was “fueled by multi-year customer commitments.” That points to visibility extending further out, which is valuable to a distributor that has traditionally been judged quarter to quarter.
It also means the figure should not be read as near-term revenue. A multi-year commitment may convert over several periods, and a large project can move with construction schedules, equipment deliveries and power availability. The 60% figure is also company-wide, so it cannot by itself be read as a measure of data center demand, even though data centers are the most visible growth driver in the quarter.
Growth Is Absorbing Cash, at Least This Quarter
Operating cash flow fell to $53.7 million from $107.8 million. Wesco attributed the decline to a $182.8 million impact from trade receivables, reflecting sales growth and timing of customer payments, and a $155.3 million impact from other assets, primarily supplier prepayments. A $129.9 million offset came from other liabilities, driven by higher deferred revenue, which is money received before revenue is recognized.
Prepayments on one side and deferred revenue on the other suggest cash moving earlier through the chain, in both directions. That pattern would fit long-lead project work, though Wesco did not tie either item specifically to data centers. The single quarter should not be overread: first-half free cash flow more than doubled to $245.7 million from $95.9 million, helped by payables and deferred revenue.
Profitability moved the other way. Adjusted gross margin rose 70 basis points (0.7 percentage points) to 21.8%, and adjusted EBITDA margin rose 60 basis points to 7.3%. Those gains came even as adjusted selling, general and administrative costs rose to 15.0% of sales from 14.6%, driven largely by commissions, incentives, salaries and benefits. Whether margin and cash conversion improve together as backlog turns into revenue is a key test for the second half.
Background
Wesco International provides business-to-business distribution, logistics services and supply chain solutions through three segments: Electrical and Electronic Solutions (EES), Communications and Security Solutions (CSS), and Utility and Broadband Solutions (UBS). It serves commercial and industrial businesses, technology companies, telecommunications providers and utilities, with approximately $24 billion in 2025 sales, about 21,000 employees and more than 700 sites in roughly 50 countries.
Distributors sit between equipment manufacturers and the customers installing that equipment. They can hold inventory, coordinate logistics and bundle products and services across multiple sites. Wesco now describes itself as a leading infrastructure solutions provider, and its “One Wesco” cross-selling strategy aims to sell across its segments, an approach management credited as contributing to the record backlog. Source: Wesco International Reports Second Quarter 2026 Results, the company’s July 30, 2026 earnings release on PR Newswire covering sales, backlog, margins, cash flow and its raised outlook.Sources