WCC 10-K & 10-Q changes, risk factors and insider trading

The economic, political and financial environment may also affect our business and financial condition in ways that we currently cannot predict. TheCertain Russia-Ukraine and Middle Eastgeopolitical conflicts, and resulting international responses, have contributed to further volatility and uncertainty in the global financial and commodities markets, resulting in fluctuations in oil and commodity prices. There can be no assurance that economic and political instability, both domestically and internationally (for example, resulting from the Russia-Ukraine or Middle Eastgeopolitical conflicts, changes in the creditworthiness of the U.S. or any government, changes to economic or trade policies, sanctions, tariffs or participation in trade agreements or economic and political unions) will not adversely affect our results of operations, cash flows or financial position in the future.

We operate a network of more than 700 sites, including distribution centers, fulfillment centers,centers and sales offices,offices with operations in approximately 50 countries. Approximately one-third of our employee population are non-U.S. employees. We derive approximately 26% of our revenues from sales outside of the U.S. As a result, we are subject to additional risks associated with owning and operating businesses in these foreign markets and jurisdictions.

•geopolitical and security issues, including armed conflict and civil or military unrest (such as the evolving Russia-Ukraine and Middle East conflicts),unrest, political instability, terrorist activity and human rights concerns;

•natural disasters (including as a result of climate change) and public health crises (including pandemics such as COVID-19 and its variants), and other catastrophic events;

•abrupt changes in government policies, laws, regulations, executive orders, spending allocations, or treaties, including imposition of export, import, or doing-business regulations, trade sanctions, embargoes or other trade restrictions (such as sanctions and other restrictions imposed against Russia in response to the Russia-Ukraine conflict, those against China to mitigate the potential U.S. national security concerns related to critical infrastructure and technology,restrictions, as well as tariffs and trade measures that may increase the cost of goods, limit the availability of key materials, or otherwise disrupt supply chains, pricing, and demand;

We are subject to a broad range of laws and regulations in the jurisdictions where we operate globally, including, among others, those relating to data privacy and protection, cyber security, import and export requirements, anti-bribery and corruption, product compliance, extended producer responsibility requirements, supplier regulations regarding the sources of supplies or products,products (such as the Uyghur Forced Labor Prevention Act or other forced labor, traceability and country of origin verification requirements), sustainability and environmental protection, health and safety requirements, intellectual property, foreign exchange controls and cash repatriation restrictions, labor and employment, human rights, e-commerce, advertising and marketing, anti-competition, artificial intelligence and tax. Compliance with these domestic and foreign laws, regulations and requirements may be burdensome, increasing our cost of compliance and doing business. In addition, as a supplier to federal, state, and local government agencies, we must comply with certain laws and regulations relating specifically to our governmental contracts. Although we have implemented policies and procedures designed to facilitate compliance with various laws, we cannot assure you that our employees, contractors, or agents will not violate such laws and regulations, or our policies and procedures. Any such violations could result in the imposition of fines and penalties, remediation costs, product restrictions or prohibitions, contractual claims, litigation, damage to our reputation, and, in the case of laws and regulations relating to governmental contracts, the loss of those contracts.

The results of certain of our foreign operations are reported in the local currency and then translated into U.S. dollars at the applicable exchange rates for inclusion in our consolidated financial statements. The exchange rates between some of these currencies and the U.S. dollar have fluctuated significantly in recent years (particularly the Argentine Peso and the Egyptian Pound),years, and may continue to do so in the future. Even small fluctuations in exchange rates in currencies where we significantly transact, such as the Canadian dollar, could have material impacts on our business and financial results. We may incur losses related to foreign currency fluctuations, and foreign exchange controls may prevent us from repatriating cash in countries outside the U.S. In addition, because our financial statements are stated in U.S. dollars, such fluctuations may also affect the comparability of our results between financial periods. Refer to Item 7A, “Quantitative and Qualitative Disclosures About Market Risks” for additional details on foreign currency risks.

We have invested significantly in expanding our digital solutions and digitalization initiatives, including but not limited to, our digital and data platform, e-commerce capabilities, enhancing the online customer experience, software as a service (SaaS), internet of things (IoT) technology, artificial intelligence capabilities, electrification, automation, grid modernization, security, design and engineering services, smart building technology and advisory services. If our efforts to transform and expand our digital and service capabilities are not successful, or are not developed and deployed on a timely basis, we may not realize the return on our investments as anticipated, or our operating results could be adversely affected by slower than expected sales growth or additional costs. Furthermore, engaging in or significantly expanding business activities in product sourcing, sales and services could subject the Company to unexpected costs and risks. Such activities could subject us to increased operating costs, product liability, regulatory requirements and reputational risks. Our expansion into new and existing markets, including manufacturing related or regulated businesses, may present competitive distribution and regulatory challenges that differ from current ones. We may be less familiar with the target customers and may face different or additional risks, as well as increased or unexpected costs, compared to existing operations. Growth into new markets may also bring us into direct competition with companies with whom we have little or no past experience as competitors. To the extent we are reliant upon expansion into new geographic, industry and product markets for growth and do not meet the new challenges posed by such expansion, our future sales growth could be negatively impacted, our operating costs could increase, and our business operations and financial results could be negatively affected.

We are engaged in a number of strategic and operational initiatives, including our digital transformation initiatives, designed to optimize costs and improve operational efficiency. Our ability to successfully execute these initiatives is subject to various risks and uncertainties and there can be no assurance regarding the timing of or extent to which we will realize the anticipated benefits, if at all. The design, development, and implementation of new systems and applications carries inherent risks, including potential technical failures, integration challenges, inadequacy of internal controls, and business disruptions. These risks could result in operational inefficiencies, system downtime, or other unforeseen complications that may adversely affect our business operations and customer relationships. Additionally, our initiatives may require significant capital investments and resource allocation, and any delays, cost overruns, or implementation difficulties could negatively impact our expected return on investment and overall business performance.

In 2020, we completed our merger with Anixter; in 2022, we completed the acquisition of Rahi Systems; and in 2024,2024 and 2025, we completed several acquisitions, including those of entroCIM, Independent Electric Supply, Ascent and Ascent.Industrial Software Solutions. We consider and may pursue other acquisitions on an on-going basis. The success of these and future acquisitions, including anticipated benefits and cost savings, depends on the successful combination and integration of the companies’ businesses. It is possible that the integration process of an acquired business could result in the loss of key employees, higher than expected costs, diversion of management attention, the disruption of either company’s ongoing legacy businesses or inconsistencies in standards, controls, procedures and policies that adversely affect the Company’s ability to maintain relationships with customers, suppliers and employees or to achieve the anticipated benefits and cost savings of the transaction.

We have incurred, and expect to continue to incur, a number of non-recurring costs associated with recent acquisitions and related integration activities. This includes transaction fees and expenses related to formulating and implementing integration plans, including facilities, systems consolidation and employment-related costs. We continue to assess the magnitude of these costs, and additional unanticipated costs may be incurred in the integration of the acquired companies’ businesses. Although we anticipate that the elimination of duplicative costs, as well as the realization of other efficiencies related to the integration of the businesses, should allow us to offset integration-related costs over time, this net benefit may not be achieved in the near term, or at all.

Any future acquisitions that we may undertake will involve a number of inherent risks, any of which could cause us not to realize the anticipated benefits.

We have expanded our operations through organic growth and selected acquisitions of businesses and assets, such as our acquisitions of Rahi Systems, entroCIMentroCIM, Independent Electric Supply, Ascent and Ascent,Industrial Software Solutions, and may seek to do so in the future. Acquisitions involve various inherent risks, including: problems that could arise from the integration of the acquired business; uncertainties in assessing the value, strengths, weaknesses, contingent and other liabilities and potential profitability of acquisition candidates; the potential loss of key employees of an acquired business; the ability to achieve identified operating and financial synergies anticipated to result from an acquisition or other transaction; unanticipated changes in business, industry or general economic conditions that affect the assumptions underlying the acquisition or other transaction rationale; and expansion into new countries or geographic markets where we may be less familiar with operating requirements, target customers and regulatory compliance. Additionally, elevated valuations and increasing acquisition multiples across various sectors, such as those related to data centers, artificial intelligence, and technology services, may impact our ability to execute acquisitions at acceptable prices or achieve expected returns on investment. Any one or more of these factors could increase our costs or cause us not to realize the benefits anticipated to result from the acquisition of a business or assets.

On February 23,In 2024 we announcedcompleted the divestiture of our Wesco Integrated Supply business,business. We may consider and undertake divestitures of other businesses in the transaction closed on April 1, 2024.future. Divestitures involve risks and uncertainties, such as the separation of assets that are being sold, employee distraction, potential disruptions to customer and vendor relationships, and tax obligations or loss of tax benefits. If we are unable to successfully transition divested businesses, our business and financial results could be negatively impacted. After we divest a business, we may retain exposure on financial or performance guarantees and other contractual, employment, or severance obligations, and potential liabilities that may arise under law because of the disposition or the subsequent failure of an acquirer. Purchase price adjustments could be unfavorable and other future proceeds owed to us as part of these transactions could be lower than we expect. In addition, the divestiture of any business could negatively impact our profitability, resulting in the loss of sales or income, or a decrease in cash flows.

We are executing our digital transformation strategy and seek to continually enhance existing and deploy new technology, digital products and information systems as a part of our technology-enablement strategy. Such changes could fail to realize anticipated benefits, create new liability or disrupt our existing information systems or other aspects of our operations. Conversions to new information technology systems may result in cost overruns, delays or business interruptions. Efforts to align portions of our business on common enterprise platforms, systems and processes could result in unforeseen interruptions, increased costs or liability, and other negative effects. Sales enablement initiatives that improve data analytics and automate, optimize, digitize or outsource tasks could result in unforeseen consequences, including our ability to process orders, receive and ship products, maintain inventories, collect accounts receivable and pay expenses, therefore impacting our results of operations. Additionally, exploring and deploying use cases for artificial intelligence, generative artificial intelligence and large language models to empower our employees and streamline our operations may introduce new risks such as biased output, inaccurate output, security vulnerabilities and increased stakeholder or regulatory scrutiny, which could impact the integrity of our business processes, expose us to litigation or fines, or erode the trust of our stakeholders. Our governance structures and control environment may not keep pace with the rapid adoption of these emerging technologies, potentially leading to inadequate oversight of their development and deployment. The dynamic and rapidly evolving nature of AIartificial intelligence technologies and their applications necessitates continuous monitoring and updating of systems, processes, and policies, which, if not adequately managed, could exacerbate the risks of obsolescence, unintended outcomes, or compliance failures. If our technology systems are disrupted, become obsolete or do not adequately support our strategic, operational or compliance needs, or if the controls placed over the use of new and existing technology prove inadequate, it could result in a competitive disadvantage or adversely affect our business operations, reputation or financial condition.

In addition, the legal and regulatory environment surrounding information security and privacy in the U.S. and international jurisdictions is constantly evolving and additional laws and regulations regarding artificial intelligenceAI are being considered and implemented. Violation or non-compliance with any of these laws or regulations, contractual requirements relating to data security and privacy, or our own privacy and security policies, either intentionally or unintentionally, or through the acts of intermediaries could have a material adverse effect on our brand, reputation, business, financial condition and results of operations, as well as subject us to significant fines, litigation losses, third-party damages and other liabilities.

Most of our agreements with suppliers are terminable by either party on 60 days’ notice or less for any reason. We currently source products from thousands of suppliers. However, our 10 largest suppliers in 20242025 accounted for approximately 30%32% of our purchases by dollar volume for the period. The loss of, or a substantial decrease in the availability of, products from any of these suppliers, a supplier’s change in sales strategy to reduce its reliance on distribution channels, the loss of key preferred supplier agreements, or disruptions in a key supplier’s operations could have a material adverse effect on our business. Although we believe our relationships with our key suppliers are good, they could change their strategies as a result of a change in control, expansion of their direct sales force, changes in the marketplace or other factors beyond our control, including a key supplier becoming financially distressed or experiencing operational or business disruptions which could materially affect our supply chain, increase our costs or disrupt our ability to deliver products to our customers in a timely and cost-effective manner. We derive a meaningful portion of profitability and cash flow from supplier rebates, volume discounts, co-op/marketing funds and other incentive arrangements with suppliers. These arrangements may be renegotiated, changed or terminated (sometimes on short notice), and typically depend on sales thresholds, product mix targets and other performance conditions. If suppliers modify the terms of these programs, or if we fail to satisfy specified conditions, our margins could decline.

We have beenbeen, and may continue to bebe, adversely affected by supply chain challenges, including product shortages, delays and price increases, which could decrease sales, profit margins and earnings.

Since the start of the COVID-19 pandemic, our industry and the broader economy experienced supply chain challenges, including shortages in raw materials and components, labor shortages and transportation constraints, leading to product delays, backlogged orders, increased transportation cost and longer lead times. In 2024,2024 and 2025, we saw continued improvements in supply chain resilience, with manufacturers further adjusting their production footprints through diversification, reshoring, nearshoring and other strategies designed at mitigating tariff and other supply chain risks, alongside continued volatility in the availability of certain raw materials, components and products. While we continue to aggressively and proactively manage supply chain developments, we have experienced, and may continue to experience, some delays in receiving products from our suppliers. We cannot be certain that particular products will be available to us, or available in quantities sufficient to meet customer demand. Any product shortages and delays could impair our ability to make scheduled deliveries to our customers in a timely manner and cause us to be at a competitive disadvantage.

Product shortages and delays in deliveries, along with other factors such as price inflation and higher transportation, import or export costs, including tariffs, could result in price increases from our suppliers. We may be unable to pass these price increases on to our customers, which could erode our profit margins. Supply chain constraints, increased product costs and inflationary pressures could continue or escalate in the future, for example if the Russia-Ukraine, Middle East andor other geopolitical conflicts escalate or are further prolonged, which would have an adverse impact on our business and results of operations. Trade policy dynamics, including reciprocal tariff frameworks, shifting tariff exclusions, country-of-origin rules, retaliatory duties and export controls affecting critical inputs, may exacerbate product shortages, extend supplier lead times and increase costs. Even where we can re-source, nearshore or redesign supply routes, such actions may require time and capital and may not fully offset lost availability, increased costs or customer deferrals, which could pressure our sales and margins.

WeWesco conductedconducts aregular climate risk assessment in 2022 aligned to the TCFDassessments to determine the materiality of climate-related risks to our business, andwith anthe updatemost of thisrecent assessment commenced in December 20242024. toWesco’s enhanceclimate-related ourrisk alignmentassessments withinclude otheranalysis sustainabilityof reportingmultiple frameworkstemperature includingscenarios, and incorporate recommendations from recognized standards such as the European Sustainability Reporting Standards (“ESRS”)TCFD and theIFRS International Sustainability Standards Board (“ISSB”)’s climate standard.S2. The effects of global climate change could increase the frequency and intensity of naturalacute disastersphysical orrisks extreme weather conditions, (such as tropical storms, severe winter weather, drought, flooding, heat waves,or wildfires), andchronic physical risks (such as rising sea levels,levels or shifting precipitation patterns) and transition risks (such as rising costs of regulatory compliance), which could cause or exacerbate supply chain interruptions. For example, some of our customers’, suppliers’ and our operations are in water-stressed regions or areas prone to flooding or wildfires, and our facilities depend on power grids that may be impacted by severe weather. With global climate change increasing the frequency and severity of such events, it is possible that we could face greater climate-related risks in the future, which could result in temporary or prolonged interruptions in operations, increase our operating costs and capital expenditures, and reduce revenue and profitability.

The awarding and timing of projects is unpredictable and depends on many factors outside of our control. Project awards often involve complex and lengthy negotiations and competitive bidding processes. These processes can be impacted by a wide range of factors including a customer’s decision to not proceed with a project or its inability to obtain necessary governmental approvals or financing, commodity prices, interest rates, and overall market and economic conditions. Slow macro-economic growth rates, difficult credit market conditions for our customers, weak demand for our customers’ products or other customer spending constraints can result in project delays or cancellations. In addition, some our competitors may also be more willing to take greater or unusual risks or include terms and conditions in a contract that we might not deem acceptable. Our involvement in large, complex projects and multi-site customer programs may also expose us to heightened execution, contractual, and working capital risk, as they often involve customer specific technical requirements, longer fulfillment timelines, milestone-based payment terms, tight delivery windows, liquidated damages, service level commitments, penalty provisions, or performance warranties.

Historically, we have experienced a small number of cases in which our vendors supplied us with products that did not conform to the agreed upon specifications. Additionally, we may inadvertently sell a product not suitable for a customer’s application. We address this risk through our quality control processes, by seeking to limit liability and our warranty in our customer contracts, and by seeking to obtain indemnification rights from vendors. However, there can be no assurance that we will be able to include protective provisions in all of our contracts or that vendors will adequately fulfill their obligations to us. In addition, we may be exposed to significant costs and reputational harm from product liability claims, recalls, or safety issues. Such events, regardless of merit, may lead to litigation, direct or third partythird-party claims, regulatory scrutiny, and reduced customer confidence, adversely impacting our financial condition and operating results.

Existing or future competitors may seek to gain or retain market share by reducing prices, and we may be required to lower our prices or may lose business, which could adversely affect our financial results. We may be subject to supplier price increases while not being able to increase prices to customers. Also, to the extent that we do not meet changing customer preferences or demands, or to the extent that one or more of our competitors becomes more successful with private label products, on-line offerings or otherwise, our ability to attract and retain customers could be materially adversely affected. Existing or future competitors also may seek to compete with us for acquisitions, which could have the effect of increasing the price and reducing the number of suitable acquisitions. These factors, in addition to competitive pressures resulting from the fragmented nature of our industry, could affect our sales, profit margins and earnings. Additionally, changes in customer procurement practices, such as increased direct sourcing, vendor consolidation, or adoption of digital procurement platforms, algorithmic or AI-enabled pricing, procurement or sales tools, could shift volume away from us, heighten price competition, and pressure margins.

Our continued success may depend on our ability to execute environmental, social and governance (“ESG”) programs as planned and may impact our reputation and operating costs.

Customers, suppliers, employees, community partners, shareholders and regulatory agencies in various jurisdictions globally are increasingly requestingrequest disclosure and action relating to ESG objectives and performance. We commit time and resources to ESG efforts, consistent with our corporate values and in ways designed to strengthen our business, including programs focused on sustainability. Our failure to execute our ESG programs and objectives as planned, or in accordance with the evolving expectations of various stakeholders or regulators in the United States,U.S., Europe and globally, including compliance with potentially inconsistent or competing requirements under standards and regulations such as the EU Corporate Sustainability Reporting Directive (CSRD)’s ESRS standards, ISSB standards incorporated into law by various countries globally, the Corporate Sustainability Due Diligence Directive (“CSDDD”), the Science Based Targets initiative, the EU Taxonomy,and California climate disclosure rules under Senate Bills 253 and 261, and the SEC climate-related disclosures rules (a number of which remain subject to ongoing developments or legal challenges), could adversely affect the Company’s reputation, business and financial performance. For example, an isolated incident of non-compliance, underperformance or inaccuracy in reporting, the aggregate effect of individually insignificant incidents or the failures of suppliers in our supply chain, can erode trust and confidence in the Company and our brand and adversely affect our business and financial performance, particularly if such events result in claims of misleading ESG-related statements or disclosures, adverse publicity, governmental investigations, enforcement actions, fines, or litigation. The continually evolving nature of ESG frameworks and climate disclosure regimes, particularly the CSRD and its ESRS standards, creates uncertainty regarding the timing, scope, applicability, and assurance requirements of disclosures, as well as the operational measures expected to support those disclosures, including climate transition plans and supply chain due diligence. These uncertainties complicate our compliance roadmap, may require systems and controls enhancements, data collection from numerous third parties, and may increase audit or assurance costs. Evolving and compartmentalized reporting requirements across jurisdictions could lead to inconsistent report interpretation, potential allegations of misstatement, and enforcement risk. To the extent we face delays or challenges in obtaining reliable data, implementing new processes, or securing necessary assurance, we may incur higher costs, experience reputational harm, or face regulatory or legal exposure.

Simultaneously, increased expectations and regulations around ESG reporting and performance may result in higher operating expenses, capital expenditures and costs of goods sold (including those related to deploying low-carbon technologies, expanding our electric vehicle fleet, strengthening ESG monitoring and reporting programs, calculating and disclosing different scopes of greenhouse gasGHG emissions in the manner and timeline expected by regulators and other stakeholders, enhancing supply chain transparency programs, securing assurance by third partythird-party auditors over ESG data, developing and implementing climate transition plans that may be requested by customers or required by regulations such as CSDDD,regulations, transitioning suppliers due to their ESG programs, other costs to pursue our ESG goals or supplier price increases as manufacturers and services providers accommodate their own ESG-related expenses), which could reduce our profitability and cash flow. Additionally, certain customers may set net-zero emissions targets, and we could face pressure from such customers to further reduce emissions to assist them in the achievement of such targets or risk the loss of their business, which could result in increased costs or decreased revenue and may adversely impact financial performance.

We are subject to taxes in jurisdictions in which we do business, includingincluding, but not limited toto, taxes imposed on our income, receipts, stockholders’ equity, property, sales, purchases and payroll. As a result, the tax expense we incur can be adversely affected by changes in tax law. We cannot always anticipate these changes in tax law, which can cause unexpected volatility in our results of operations. Changes in the tax law at the federal and state/provincial levels, in particularparticular, in the U.S. and Canada, jurisdictions which account for most of our income before taxes, can have a material adverse effect on our results of operations.

InWe have incurred significant indebtedness to finance mergers and acquisitions, including the merger with Anixter in 2020, to support working capital growth, investments in our digital platform and to fund investments in our operations. Additionally, in 2025, we incurred significant additional indebtedness to finance the mergerredemption withof Anixter.the Series A Preferred Stock. As a result, a substantial portion of our cash flow from operations must be dedicated to the payment of principal and interest on our indebtedness, thereby reducing the funds available to us for other purposes. As of December 31, 2024,2025, excluding debt discount and debt issuance costs, we had $5.1$5.8 billion of consolidated indebtedness. We and our subsidiaries may also undertake additional borrowings in the future, subject to certain limitations contained in the debt instruments governing our indebtedness.

Our debt service obligations impact our ability to operate and grow our business. Our payments of principal and interest on our indebtedness reduce the amount of funds available to us to invest in operations, future business opportunities, acquisitions, and other potentially beneficial activities. Our debt service obligations also reduce our flexibility to adjust to changing market conditions and may increase our vulnerability to adverse economic, political, financial market and industry conditions. A portion of our indebtedness, including amounts outstanding under our accounts receivable securitization and revolving credit facilities, bears interest at variable rates. In the future, we may also incur additional indebtedness that bears interest at variable rates. In a rising interest rate environment, or one in which interest rates may be affected by market disruptions, the interest expense on our variable rate borrowings will increase. Our ability to service and refinance our indebtedness, make scheduled payments on our operating and finance leases, fund capital expenditures, acquisitions or other business opportunities, repurchase shares, and pay dividends will depend in large part on both our future performance and the availability of additional financing in the future, as well as prevailing interest rates and other market conditions and other factors beyond our control. We cannot assure you that we will be able to obtain additional financing on terms acceptable to us or at all. Refer to Item 7A, “Quantitative and Qualitative Disclosures About Market Risks” for additional details on interest risks.

In addition, certain of these debt agreements contain financial covenants that may require us to maintain certain financial ratios and other requirements in certain circumstances. As a result of these covenants, our ability to respond to changes in business and economic conditions and to obtain additional financing, if needed, may be significantly restricted, and we may be prevented from engaging in transactions or taking advantage of new business opportunities that might otherwise be beneficial to us. Our ability to comply with these covenants and restrictions may be affected by economic, financial and industry conditions or regulatory changes beyond our control. Failure to comply with these covenants or restrictions could result in an event of default, under our revolving lines of credit or the indentures governing certain of our outstanding notes which, if not cured or waived, could accelerate our repayment obligations. See the Liquidity and Capital Resources section in Item 7, “Management’s Discussion and Analysis” for further details.

The global legal and regulatory environment is complex and exposes us to compliance costs and risks, as well as litigation and other legal proceedings, which could materially affect our operations and financial results. These laws and regulations may change, sometimes significantly, as a result of political or economic events, and some changes are anticipated to occur in the future. They include laws and regulations covering taxation, trade, import and export, labor and employment (including wage and hour), product safety, product labeling, occupational safety and health, data privacy, data protection, intellectual property, artificial intelligence,AI, and sustainability and environmental matters (including those relating to global climate change and its impact). We are also subject to securities and exchange laws and regulations and other laws applicable to publicly-traded companies such as the Foreign Corrupt Practices Act. Furthermore, as a government contractor selling to federal, state and local government entities, we are also subject to a wide variety of additional laws and regulations, including the Federal Acquisition Regulation (“FAR”) and Defense Federal Acquisitions Regulation Supplement (“DFARS”)., and additional compliance obligations, such as Cybersecurity Maturity Model Certification (CMMC) compliance, domestic preference and Buy America/Build America requirements. Proposed laws and regulations in these and other areas could affect the cost of our business operations.

From time to time we are involved in legal proceedings, audits or investigations which may relate to, for example, product liability, labor and employment (including wage and hour), tax, escheat, import and export compliance, government contracts, FAR and DFARS compliance, worker health and safety, intellectual property misappropriation or infringement, antitrust and business practices, and general commercial and securities matters. While we believe the outcome of any pending matter is unlikely to have a material adverse effect on our financial condition or liquidity, additional legal proceedings may arise in the future and the outcome of these as well as other contingencies could require us to take actions, which could adversely affect our operations, could diminish our intellectual property portfolio or could require us to pay substantial amounts of money. Even if we successfully defend against claims, we may incur significant costs that could adversely affect our results of operations, financial condition and cash flow.

We employ approximately 20,00021,000 people, maintain relationships with more than 35,000 suppliers, and serve nearly 140,000130,000 customers worldwide. With millions of products, end-to-end supply chain services, and leadingsignificant digital capabilities, weWesco provideprovides innovative solutions to meet customer needs across commercial and industrial businesses, contractors,technology government agencies, educational institutions,companies, telecommunications providers, utilities, and technology companies.utilities. Our innovative value-added solutions include supply chain management, logistics and transportation, procurement, warehousing and inventory management, as well as kitting and labeling, limited assembly of products and installation enhancement. We operate more than 700 sites, including distribution centers, fulfillment centers,centers and sales offices, in approximately 50 countries, providing a local presence for customers and a global network to serve multi-location businesses and global corporations.

We have operating segments comprising three strategic business units consisting of: Electrical & Electronic Solutions (“EES”), Communications & Security Solutions (“CSS”) and Utility & Broadband Solutions (“UBS”). These operating segments are equivalent to our reportable segments. See Item 1, “Business” in this Annual Report on Form 10-K for a description of each of our reportable segments and their business activities.

Our discussion and analysis of our financial condition and results of operations areis based upon our consolidated financial statements, which have been prepared in accordance with U.S. GAAP. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses and related disclosure of contingent assets and liabilities. On an ongoing basis, we evaluate our estimates that involve a significant level of estimation uncertainty and have had or are reasonably likely to have a material impact on the financial condition or results of operations, including those related to goodwill and indefinite-lived intangible assets, defined benefit pension plans,assets and income taxes. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates. If actual market conditions are less favorable than those projected by management, additional adjustments to reserve items may be required. We believe the following accounting estimates are the most critical to the understanding of our consolidated financial statements as they require subjective or complex judgments by management.

We will perform a quantitative impairment test if we bypass the qualitative assessment, or if based on the qualitative assessment, it is more likely than not that the fair value of each reporting unit or indefinite-lived intangible asset is less than the carrying amount. For the year ended December 31, 2024,2025, we elected to bypass the qualitative assessments and performed annual quantitative impairment tests of goodwill and indefinite-lived intangible assets during the fourth quarter of 20242025 by comparingassessing the fairabove-mentioned valuesqualitative of our reporting units and indefinite-lived intangible assets to their carrying values.factors. As a result of these assessments, we determined that it was more likely than not that the fair values of our reporting units and indefinite-lived intangible assets continuecontinued to exceed their respective carrying amounts.amounts and, therefore, a quantitative impairment test was not necessary.

TheAs it pertains to a quantitative impairment test, the determination of fair value involves significant management judgment, particularly as it relates to the underlying assumptions and factors around future expected revenues, operating margins and discount rate. WeThis performedinvolves performing sensitivity analyses around certain of these assumptions in order to assess the reasonableness of the assumptions and resulting estimated fair values. Management applies its best judgment when assessing the reasonableness of financial projections. Fair values are sensitive to changes in underlying assumptions and factors, and as a result there can be no assurance that the estimates and assumptions made for purposes of the annual goodwill and indefinite-lived intangible assets impairment tests will prove to be an accurate prediction of future results.

Note: Organic sales growth is a non-GAAP financial measure of sales performance. Organic sales growth is calculated by deducting the percentage impact from acquisitions and divestitures for one year following the respective transaction, fluctuations in foreign exchange rates and number of workdays from the reported percentage change in consolidated net sales. Workday impact represents the change in the number of operating days period-over-period after adjusting for weekends and public holidays in the United States; 20242025 had twoone moreless workdaysworkday compared to 2023.2024.

Cost of goods sold for 20242025 was $17.1$18.5 billion compared to $17.5$17.1 billion for 2023,2024, aan decreaseincrease of $0.4$1.4 billion. Cost of goods sold as a percentage of net sales was 78.9% and 78.4% for the current2025 and prior2024, year.respectively. The unfavorable increase of 50 basis points primarily reflects a decrease in gross margin across all three segments, most significantly in the UBS segment primarily due to competitive pressures in the public power market, as well as in the EES and CSS segments driven by large project sales.

Selling, General and Administrative (“SG&A”) Expenses

SG&A payroll and payroll-related expenses for 20242025 totaled $3.5 billion versus $3.3 billion for 2024, an increase of $2,049.5 million decreased by $2.9 million compared to 2023.7.1%.

Other (Income) Expense,Income, net

The provision for income taxes was $213.4 million for 2025 compared to $231.6 million for 2024 compared to $225.9 million for 2023,2024, resulting in effective tax rates of 24.4%24.9% and 22.8%,24.4%, respectively. The higher effective tax rate is primarily due to a valuation allowance being recorded against certain deferred tax assets in the current year.

The following is a discussion of the financial results of our operating segments comprising three strategic business units consisting of EES, CSS and UBS for the year ended December 31, 2024.2025. As further described below and in Note 16, “Business Segments” of our Notes to Consolidated Financial Statements, the Chief Operating Decision Maker (the “CODM”) allocates resources and evaluates the performance of ourthe operatingCompany’s reportable segments is based on net sales, adjusted EBITDA, andwhich adjustedis EBITDAthe marginCompany’s percentage.measure of segment profit or loss. Adjusted EBITDA and adjusted EBITDA margin percentage are non-GAAP financial measures. As discussed in Note 2, “Accounting Policies,” the reportable segment information for the year ended December 31, 2024 for the EES and CSS reportable segments has been recast to conform to the current year presentation.

EES reported net sales of $8.5$9.0 billion for 20242025 compared to $8.6$8.4 billion for 2023,2024, aan decreaseincrease of 0.7%.$563.8 Adjustingmillion, foror the unfavorable impact from fluctuations in foreign exchange rates of 0.5% and the favorable impact from the number of workdays of 0.8%,6.7%. EES organic sales for 20242025 declinedgrew 1.0%,by reflecting7.5%, driven primarily by volume declinesgrowth of approximately 2%,4%, primarily as a result of a declinegrowth in the originalOEM equipmentand manufacturerconstruction business.businesses, The decline in volume was partially offsetand by the impact of changes in price, which favorably impacted organic sales by approximately 1%.4%.

Our financial results reflect continued sales momentum in the first quartersix months of 2026, highlighted by a 13.8%13.4% year over yearyear-over-year increase in reported Net sales driven by volume growth across all three segments. For the first quartersix months of 2026 compared to the first quartersix months of 2025, organic sales increased by 12.3%,12.5%, which adjusts for fluctuations in foreign exchange rates. OurAll three of our segments contributed to growth, led by our CSS segmentsegment's data center solutions business is primarily driving this growth in sales.business. Our EES segment experienced continued growth and improved gross margin across its constructionOEM and OEMconstruction businesses, fueled in part by strong wire and cable demand, as well as continued demand for data center projects and increased infrastructure activity. Our UBS segment also delivered sales growth, driven by year-over-year increases in its utilityUnited business from investor-owned utility salesStates and continuedCanadian momentumbroadband in grid services,businesses, along with growth in the United States broadband business. Our UBS segment experienced lower gross margin primarily driven by public powerits utility customers.business and increased grid services activity. We also saw record year-over-year backlog growth driven by ourall CSS and EESthree segments.

During the first quarter of 2026, we issued 5.250% Senior Notes due 2031 (the “2031 Notes”) and 5.500% Senior Notes due 2034 (the “2034 Notes” and, together with the 2031 Notes, the “2031 and 2034 Notes”) in part to support the planned redemption of our 7.250% senior notes due 2028 (the “2028 Notes”) which occurred in the second quarter on June 15, 2026. Following the redemption of the 2028 Notes, we will have no significant debt maturities until 2029. We expect this redemption to create substantial net income, earnings per share, and cash flow benefit.

We are actively monitoring and evaluating the potential effects of the February 20, 2026 U.S. Supreme Court ruling that invalidated tariffs imposed under the International Emergency Economic Powers Act (“IEEPA”);. however,IEEPA duetariff refunds are not expected to uncertaintymaterially regardingimpact theour availabilityunaudited andCondensed timingConsolidated ofFinancial any potential refunds, we have not recorded any related amounts as of March 31, 2026.Statements.

WeDuring the second quarter of 2026, we continued to execute on our multi-year, phased development and implementation of a new Digital and Data Platform (“DDP”). The DDP is intended to be a unified, technology-enabled operating model that spans all business functions, maintains and enhances the flow of financial information, and improves resource efficiency.

FirstSecond Quarter of 2026 versus FirstSecond Quarter of 2025

Note: Organic sales growth is a non-GAAP financial measure of sales performance. Organic sales growth is calculated by deducting the percentage impact from acquisitions and divestitures for one year following the respective transaction, fluctuations in foreign exchange rates and number of workdays from the reported percentage change in consolidated Net sales. Workday impact represents the change in the number of operating days period-over-period after adjusting for weekends and public holidays in the United States; there was no change in the number of workdays in the firstsecond quarter of 2026 compared to the firstsecond quarter of 2025.

Net sales were $6.1$6.7 billion for the firstsecond quarter of 2026 compared to $5.3$5.9 billion for the firstsecond quarter of 2025, an increase of 13.8%.13.0%. Organic sales for the firstsecond quarter of 2026 grew by 12.3%.12.6%. This growth reflects an approximate 9%10% increase in volume driven by all three segments (CSS, EES and UBS), and an approximate 3% benefit from price.

Cost of goods sold for the firstsecond quarter of 2026 was $4.8$5.2 billion compared to $4.2$4.7 billion for the firstsecond quarter of 2025, an increase of 13.5%.11.9%. Cost of goods sold as a percentage of Net sales was 78.8%78.2% and 78.9% for the firstsecond quarter of 2026 and 2025, respectively. The favorable impact reflects improved gross marginmargins in the EES segmentand CSS segments, partially offset by a decline in the UBS segment and to a lesser extent, the CSS segment.

Selling, general and administrative (“SG&A”) expenses for the firstsecond quarter of 2026 totaled $947.6$1,022.7 million versus $836.3$872.2 million for the firstsecond quarter of 2025, an increase of $111.3$150.5 million, or 13.3%.17.3%.

SG&A payroll and payroll-related expenses for the firstsecond quarter of 2026 were $628.1 million, an increase of $584.9 million increased by $65.5$86.6 million compared to the same period in 2025.2025, The increase was drivenwhich primarily byreflects $26.4increases millionof in salaries and $22.3$33.4 million in commissions and incentives;incentives, the$25.3 million in salaries, $15.6 million in benefits, and $10.7 million in stock-based compensation expense. The higher commissions and incentives expense was duelargely todriven anby increaseincreased incommissions and management incentive plan accruals andaligned higherwith salesCompany compared to the prior year.performance.

SG&A expenses not related to payroll and payroll-related costs for the firstsecond quarter of 2026 were $362.7$394.6 million, an increase of $45.8$63.9 million compared to the same period in 2025, which primarily reflects increased transportation costs of $12.3 million, increased IT costs of $11.6 million, increased professional and consulting fees of $10.7$15.3 million, andincreased transportation costs of $11.8 million, increased costs to operate our facilities of $10.4$10.9 million, and increased bad debt expense of $10.7 million. Additionally, digital transformation costs increased by $11.3$15.6 million year over yearyear-over-year primarily due to increased costs associated with DDP deployment resources.

Income from operations was $293.5$382.2 million for the firstsecond quarter of 2026 compared to $240.9$322.2 million for the firstsecond quarter of 2025, an increase of $52.6$60.0 million, or 21.8%.18.6%. The increase primarily reflects higher Net sales,sales and lower Cost of goods sold as a percentage of salesNet assales, describedpartially above,offset andby lowerhigher SG&A expenses as a percentage of salesNet as described above.sales.

Net interest expense totaled $96.7$110.4 million for the firstsecond quarter of 2026 compared to $86.3$92.9 million for the firstsecond quarter of 2025. The increase of $10.4$17.5 million, or 12.1%,18.8%, was primarily driven by higher net term debt throughout the firstsecond quarter of 2026 compared to the firstsecond quarter of 2025, as well as a $10.0 million non-cash loss on extinguishment of the 2028 Notes. These increases were partially offset by lower borrowings and lower rates on our accounts receivable securitization facility (the “Receivables Facility”) and our revolving credit facility (the “Revolving Credit Facility”) throughout the firstsecond quarter of 2026 compared to the firstsecond quarter of 2025.

The provision for income taxes was $43.1$62.4 million for the firstsecond quarter of 2026 compared to $36.1$61.8 million for the corresponding quarter of the prior year, resulting in effective tax rates of 21.8%22.9% and 23.4%,26.1%, respectively. The lower effective tax rate for the firstsecond quarter of 2026 is largely driven by higher discrete income tax benefits relating to the exercise and vesting of stock-based awards.

Net income and Earnings per diluted share attributable to common stockholders were $153.8$209.0 million and $3.11,$4.23, respectively, for the firstsecond quarter of 2026 compared to $104.0$189.2 million and $2.10,$3.83, respectively, for the firstsecond quarter of 2025. Adjusted for the non-GAAP adjustments above and the related income tax effects, Net income and Earnings per diluted share attributable to common stockholders were $166.8$225.6 million and $3.37,$4.57, respectively, for the three months ended MarchJune 31,30, 2026, and $109.6$167.5 million and $2.21,$3.39, respectively, for the three months ended MarchJune 31,30, 2025.

The increase in Adjusted earnings per diluted share primarily reflects the increase in Net sales,sales and lower Cost of goods sold as a percentage of Net salessales, aspartially describedoffset above,by andhigher lowerAdjusted SG&A expenses as a percentage of Net sales as described above.expenses.

Adjusted EBITDA, a non-GAAP financial measure, was $388.8$487.2 million for the firstsecond quarter of 2026, compared to $310.7$394.2 million for the firstsecond quarter of 2025, an increase of $78.1$93.0 million, or 25.1%23.6% year-over-year. The increase primarily reflects higher Net sales, lower Cost of goods sold as a percentage of sales as described above, and lowergross SG&A expenses as a percentage of sales, as described above.margin.

The following is a discussion of the financial results of our operating segments comprising three strategic business units consisting of EES, CSS and UBS for the three months ended MarchJune 31,30, 2026. As further described below and in Note 13,12, “Business Segments” of our Notes to the unaudited Condensed Consolidated Financial Statements, the Chief Operating Decision Maker (the “CODM”) allocates resources and evaluates the performance of the Company’s reportable segments based on Adjusted EBITDA, which is the Company’s measure of segment profit or loss. Adjusted EBITDA and Adjusted EBITDA margin percentage are non-GAAP financial measures.

EES reported Net sales of $2.2$2.5 billion for the firstsecond quarter of 2026 compared to $2.1$2.3 billion for the firstsecond quarter of 2025, an increase of $178.9$252.9 million, or 8.7%.11.2%. EES organic sales for the firstsecond quarter of 2026 increased by 7.0%,10.9%, reflecting volume growth of approximately 6%, driven primarily by the construction and OEM businesses, and by the impact of changes in price, which favorably impacted organic sales by approximately 4%, and by volume growth of approximately 3%, driven primarily by the construction and OEM businesses.5%.

EES Adjusted EBITDA increased $42.4$48.4 million, or 29.7%26.5% year-over-year. The increase primarily reflects an increase in pricevolume and volume as discussed above,price, as well as improved gross margin and lower SG&A expenses as a percentage of Net sales.margin.

CSS reported Net sales of $2.5$2.7 billion for the firstsecond quarter of 2026 compared to $2.0$2.3 billion for the firstsecond quarter of 2025, an increase of $478.6$416.0 million, or 23.9%.18.4%. CSS organic sales for the firstsecond quarter of 2026 grew by 21.9%,17.5%, primarily reflecting volume growth of approximately 21%17%, asdriven aprimarily result of growth inby the data center solutions and security solutions businesses,business, as well as the impact of changes in price, which favorably impacted organic sales by approximately 1%.

CSS Adjusted EBITDA increased $64.7$74.0 million, or 40.8%37.2% year-over-year. The increase primarily reflects an increase in volume, specifically within the data center solutions business, as described above,business as well as improved gross margin and lower SG&A expenses as a percentage of Net sales.

UBS reported Net sales of $1,357.0$1,473.2 million for the firstsecond quarter of 2026 compared to $1,278.1$1,376.6 million for the firstsecond quarter of 2025, an increase of $78.9$96.6 million, or 6.2%. UBS organic sales for the first quarter of 2026 grew by 5.8%,7.0%, reflecting volume growth of approximately 3%4% driven by the utilitybroadband and broadbandutility businesses, as well as the impact of changes in price, which favorably impacted organic sales by approximately 3%.

The following tables reconcile Selling, general and administrative expenses, Income from operations, Other non-operating (income) expense, Provision for income taxes, Net income attributable to common stockholders and Earnings per diluted share to Adjusted selling, general and administrative expenses, Adjusted income from operations, Adjusted other non-operating (income) expense, Adjusted provision for income taxes, Adjusted net income attributable to common stockholders, and Adjusted earnings per diluted share, which are non-GAAP financial measures, for the periods presented: