WESCO’s second quarter saw strong sales growth, led by surging demand in its data center solutions and continued momentum in core electrical distribution. Management emphasized that organic growth was driven by large-scale project activity, particularly with hyperscale customers, and sequential improvement in operating leverage. However, the market responded negatively to the results, reflecting caution about gross margin pressures and ongoing utility market softness. CEO John Engel noted, “Our sales momentum accelerated in the second quarter, with data center sales eclipsing $1 billion, up 65% versus the prior year.”

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While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.

Our Top 5 Analyst Questions From WESCO’s Q2 Earnings Call

• Nigel Edward Coe (Wolfe Research) pressed for clarity on whether gross margin gains from future tariff-related price increases were included in guidance. CFO Dave Schulz confirmed, “None of the tariff impact, whether on sales or gross margin, is included in our second half outlook.”
• Thomas Allen Moll (Stephens) asked about visibility into data center project pipelines and metrics tracked by management. CEO John Engel explained that WESCO’s direct end-user relationships and customer build schedules provide strong forecasting ability.
• Deane Michael Dray (RBC Capital Markets) questioned the relative growth in gray space versus white space in data centers. Engel highlighted that gray space sales grew 90% year-over-year, outpacing white space and expanding WESCO’s addressable market.
• David John Manthey (Baird) sought details on pricing benefits and segment exposure to commodity-driven price changes. Schulz clarified that price benefits were relatively uniform across segments and that commodity exposure, like copper, represented a mid-single-digit share of revenue.
• Patrick Michael Baumann (JPMorgan) inquired about drivers behind double-digit growth in the security solutions market. Engel cited strong supplier relationships and increased adoption of advanced digital security products, both within and outside data center projects.

Catalysts in Upcoming Quarters

In upcoming quarters, the StockStory team will be watching (1) whether WESCO can sustain rapid data center sales growth and expand its role in AI-driven infrastructure, (2) the timing and strength of utility market recovery, especially among public power customers, and (3) how effectively the company manages gross margin amid supplier price increases and tariff changes. Execution on digital transformation and strategic acquisitions will also be critical signposts.

WESCO currently trades at $211.20, in line with $212.24 just before the earnings. Is the company at an inflection point that warrants a buy or sell? See for yourself in our full research report (it’s free).

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