DXP Enterprises, Inc. Reports Third Quarter 2025 Results

HOUSTON--( BUSINESS WIRE)--DXP Enterprises, Inc. ("DXP" or the "Company") (NASDAQ: DXPE) today announced financial results for the third quarter ended September 30, 2025. The following are results for the three months ended September 30, 2025, compared to the three months ended September 30, 2024, and June 30, 2025, where appropriate. A reconciliation of the non-GAAP financial measures can be found in the back of this press release.

Excellent third quarter financial results, delivering solid sales, adjusted EBITDA, earnings per share and free cash flow

Third Quarter 2025 Financial Highlights:

Business segment financial highlights:

David R. Little, Chairman and Chief Executive Officer commented, "The Company posted excellent third quarter financial results, delivering solid sales, adjusted EBITDA, earnings per share and free cash flow. Third quarter results reflect the continued execution of our growth strategy. We continue to set new high watermarks as DXPeople. We are pleased with our sequential sales growth. This resulted in operating leverage that produced diluted earnings per share of $1.31. DXP’s fiscal year 2025 third quarter sales were $513.7 million, or an 8.6 percent growth over the same period in 2024. Adjusted EBITDA was $56.5 million in the quarter. During the third quarter of 2025, sales were $350.2 million for Service Centers, $100.6 million for Innovative Pumping Solutions, and $63.0 million for Supply Chain Services. Overall, we are very pleased with our performance and the progress DXP continues to make as a growth company."

Kent Yee, Chief Financial Officer and Senior Vice President, remarked, "DXP achieved yet another high watermark quarter with $513.7 million in sales. We have closed three acquisitions through the third quarter, and we have closed two acquisitions during the fourth quarter thus far with more to come. This quarters financial results reflect continued execution of our strategic goals and the impact of our diversification efforts, and a strong balance sheet to support our key initiatives. Total debt outstanding as of September 30, 2025, was $644.0 million. DXP’s secured leverage ratio or net debt to EBITDA ratio was 2.31:1.0 with a covenant EBITDA of $225.1 million for the last twelve months ending September 30, 2025. We expect to finish fiscal year 2025 strong with momentum going into fiscal year 2026."

Conference Call Information

DXP Enterprises, Inc. management will host a conference call, November 6, 2025, at 3:30 p.m. Central Time, to discuss the Company’s financial results. The conference call may be accessed by going to https://ir.dxpe.com.

Interested investors and other parties can listen to a webcast of the live conference call by logging onto the Investor Relations section of the Company's website at https://ir.dxpe.com. The online replay will be available on the same website immediately following the call. A slide presentation highlighting the Company’s results and key performance indicators will also be available on the Investor Relations section of the Company’s website.

To learn more about DXP Enterprises, Inc., please visit the Company's website at https://www.dxpe.com.

About DXP Enterprises, Inc.

DXP Enterprises, Inc. is a leading products and service distributor that adds value and total cost savings solutions to industrial customers throughout North America and Dubai. DXP provides innovative pumping solutions, supply chain services and maintenance, repair, operating and production ("MROP") services that emphasize and utilize DXP’s vast product knowledge and technical expertise in rotating equipment, bearings, power transmission, metal working, industrial supplies and safety products and services. DXP's breadth of MROP products and service solutions allows DXP to be flexible and customer-driven, creating competitive advantages for our customers. DXP’s business segments include Service Centers, Innovative Pumping Solutions and Supply Chain Services. For more information, go to www.dxpe.com.

Non-GAAP Financial Measures

DXP supplements reporting of net income with certain non-GAAP measurements, including EBITDA, Adjusted EBITDA, EBITDA Margin, Adjusted EBITDA Margin, Free Cash Flow, Adjusted Net Income, and Adjusted Diluted EPS. This supplemental information should not be considered in isolation or as a substitute for the unaudited GAAP measurements. Additional information regarding EBITDA, Adjusted EBITDA, EBITDA Margin, Adjusted EBITDA Margin, Free Cash Flow, Adjusted Net Income, Adjusted Diluted EPS, and net debt referred to in this press release are included below under "Unaudited Reconciliation of Non-GAAP Financial Information".

The Company believes EBITDA provides additional information about: (i) operating performance, because it assists in comparing the operating performance of the business, as it removes the impact of non-cash depreciation and amortization expense as well as items not directly resulting from core operations such as interest expense and income taxes and (ii) the performance and the effectiveness of operational strategies. Additionally, EBITDA performance is a component of a measure of the Company’s financial covenants under its credit facilities. Furthermore, some investors use EBITDA as a supplemental measure to evaluate the overall operating performance of companies in the industry. Management believes that some investors’ understanding of performance is enhanced by including this non-GAAP financial measure as a reasonable basis for comparing ongoing results of operations. By providing this non-GAAP financial measure, together with a reconciliation to its most directly comparable GAAP financial measure, the Company believes it is enhancing investors’ understanding of the business and results of operations, as well as assisting investors in evaluating how well the Company is executing strategic initiatives. Free Cash Flow reconciles to the most directly comparable GAAP financial measure of cash flows from operations as provided below. We believe Free Cash Flow is an important liquidity metric because it measures, during a given period, the amount of cash generated that is available to fund acquisitions, make investments, repay debt obligations, repurchase shares of the Company's common stock, and for certain other activities. Adjusted Net Income reconciles to the most directly comparable GAAP financial measure of Net Income as provided below. We believe Adjusted Net Income is important because it provides the investor with further clarity around Net Income excluding the impact of unique or one-time items during the respective period.

Information Related to Forward-Looking Statements

The Private Securities Litigation Reform Act of 1995 provides a “safe-harbor” for forward-looking statements. Certain information included in this press release (as well as information included in oral statements or other written statements made by or to be made by the Company) contains statements that are forward-looking. These forward-looking statements include, without limitation, those about the Company’s expectations regarding the Company's expectations regarding the filing of the Form 10-Q; the description of the anticipated changes in the Company's consolidated balance sheet and the results of operations and the Company's assessment of the impact of such anticipated changes; the Company’s business, the Company’s future profitability, cash flow, liquidity, and growth. Such forward-looking information involves important risks and uncertainties that could significantly affect anticipated results in the future; and accordingly, such results may differ from those expressed in any forward-looking statement made by or on behalf of the Company. These risks and uncertainties include, but are not limited to: the effectiveness of management’s strategies and decisions; our ability to implement our internal growth and acquisition growth strategies; general economic and business conditions specific to our primary customers; changes in government regulations; our ability to effectively integrate businesses we may acquire; new or modified statutory or regulatory requirements; availability of materials and labor; inability to obtain or delay in obtaining government or third-party approvals and permits; non-performance by third parties of their contractual obligations; unforeseen hazards such as weather conditions, acts of war or terrorist acts and the governmental or military response thereto; cyber-attacks adversely affecting our operations; other geological, operating and economic considerations and declining prices and market conditions, including supply or demand for maintenance, repair and operating products, equipment and service; inability of the Company or its independent auditors to complete the work necessary in order to file the Form 10-Q in the expected time frame; unanticipated changes to the Company's operating results in the Form 10-Q as filed or in relation to prior periods, including as compared to the anticipated changes stated here; unanticipated impact of such changes and its materiality; ability to obtain needed capital, dependence on existing management, leverage and debt service, domestic or global economic conditions, ability to manage changes and the continued health or availability of management personnel and changes in customer preferences and attitudes. In some cases, you can identify forward-looking statements by terminology such as, but not limited to, “may,” “will,” “should,” “intend,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” “goal,” or “continue” or the negative of such terms or other comparable terminology. More information on these risks and other potential factors that could affect the Company’s business and financial results is included in the Company’s filings with the Securities and Exchange Commission, including in the “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections of the Company’s most recently filed periodic reports on Form 10-K and Form 10-Q and subsequent filings. The Company assumes no obligation to update any forward-looking statements or information, which speak as of their respective dates.

DXP ENTERPRISES, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

($ thousands, except share amounts)

Three Months Ended September 30,

Nine Months Ended September 30,

2025

2024

2025

2024

Sales

513,724

472,935

1,488,975

1,331,126

Cost of sales

352,465

326,825

1,019,638

923,341

Gross profit

161,259

146,110

469,337

407,785

Selling, general and administrative expenses

117,561

106,502

339,138

301,694

Income from operations

43,698

39,608

130,199

106,091

Interest expense

14,894

15,716

44,298

46,644

Other (income) expense, net

(648

)

160

(2,320

)

(2,844

)

Income before income taxes

29,452

23,732

88,221

62,291

Provision for income taxes

7,821

2,631

22,389

13,165

Net income

21,631

21,101

65,832

49,126

Preferred stock dividend

Net income attributable to common shareholders

21,608

21,078

65,764

49,058

Net income

21,631

21,101

65,832

49,126

Foreign currency translation adjustments

(709

)

380

1,940

(141

)

Comprehensive income

20,922

21,481

67,772

48,985

Earnings per share:

Basic

1.38

1.34

4.19

3.08

Diluted

1.31

1.27

3.98

2.93

Weighted average common shares outstanding:

Basic

15,686

15,750

15,693

15,915

Diluted

16,526

16,590

16,533

16,755

DXP ENTERPRISES, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

($ thousands, except share amounts)

September 30, 2025

December 31, 2024

ASSETS

Current assets:

Cash

123,829

148,320

Restricted cash

—

Accounts receivable, net of allowance of $4,175 and $5,172, respectively

379,328

339,365

Inventories

109,055

103,113

Costs and estimated profits in excess of billings

57,696

50,735

Prepaid expenses and other current assets

57,020

20,250

Total current assets

726,928

661,874

Property and equipment, net

110,957

81,556

Goodwill

466,710

452,343

Other intangible assets, net

75,419

85,679

Operating lease right of use assets, net

59,936

46,569

Other long-term assets

4,504

21,473

Total assets

1,444,454

1,349,494

LIABILITIES AND EQUITY

Current liabilities:

Current maturities of debt

6,595

Trade accounts payable

115,216

103,728

Accrued wages and benefits

47,693

41,650

Customer advances

15,864

13,655

Billings in excess of costs and estimated profits

17,060

12,662

Short-term operating lease liabilities

17,163

14,921

Other current liabilities

42,697

50,773

Total current liabilities

262,288

243,984

Long-term debt, net of unamortized debt issuance costs and discounts

619,396

621,684

Long-term operating lease liabilities

44,535

33,159

Other long-term liabilities

29,896

27,879

Total long-term liabilities

693,827

682,722

Total liabilities

956,115

926,706

Commitments and Contingencies

Shareholders' equity:

Series A preferred stock, $1.00 par value; 1,000,000 shares authorized

Series B preferred stock, $1.00 par value; 1,000,000 shares authorized

Common stock, $0.01 par value, 100,000,000 shares authorized; 20,404,367 issued and

15,677,406 outstanding at September 30, 2025 and 20,402,861 issued and 15,695,088

outstanding at December 31, 2024

204

Additional paid-in capital

219,329

219,511

Retained earnings

455,434

389,670

Accumulated other comprehensive loss

(31,670

)

(33,610

)

Treasury stock, at cost 4,726,961 and 4,707,773 shares, respectively

(154,974

)

(153,003

)

Total DXP Enterprises, Inc. equity

488,339

422,788

Total liabilities and equity

1,444,454

1,349,494

SEGMENT DATA

($ thousands, unaudited)

Three Months Ended September 30,

Nine Months Ended September 30,

Sales

2025

2024

2025

2024

Service Centers

350,179

316,831

1,016,985

911,783

Innovative Pumping Solutions

100,551

89,825

280,273

225,417

Supply Chain Services

62,994

66,279

191,717

193,926

Total Sales

513,724

472,935

1,488,975

1,331,126

Three Months Ended September 30,

Nine Months Ended September 30,

Operating Income

2025

2024

2025

2024

Service Centers

51,346

46,155

148,561

130,330

Innovative Pumping Solutions

18,399

18,207

50,448

38,543

Supply Chain Services

5,304

5,568

16,096

16,653

Total Segments Operating Income

75,049

69,930

215,105

185,526

RECONCILIATION OF OPERATING INCOME FOR REPORTABLE SEGMENTS

($ thousands, unaudited)

Three Months Ended September 30,

Nine Months Ended September 30,

2025

2024

2025

2024

Income from operations for reportable segments

75,049

69,930

215,105

185,526

Adjustment for:

Amortization of intangibles

5,370

5,245

16,053

14,333

Corporate expenses

25,981

25,077

68,853

65,102

Income from operations

43,698

39,608

130,199

106,091

Interest expense

14,894

15,716

44,298

46,644

Other (income) expense, net

(648

)

160

(2,320

)

(2,844

)

Income before income taxes

29,452

23,732

88,221

62,291

RECONCILIATION OF NON-GAAP FINANCIAL INFORMATION

($ thousands, unaudited)

We define and calculate EBITDA as Net income attributable to DXP Enterprises, Inc., plus interest, taxes, depreciation, and amortization. We define and calculate Adjusted EBITDA as Net income attributable to DXP Enterprises, Inc., plus interest, taxes, depreciation, and amortization minus stock-based compensation expense and all other non-cash charges, adjustments, and non-recurring items. We identify the impact of all other non-cash charges, adjustments and non-recurring items because we believe these items do not directly reflect our underlying operations.

We define and calculate EBITDA Margin as EBITDA divided by sales. We define and calculate Adjusted EBITDA Margin as Adjusted EBITDA divided by sales.

The following table sets forth the reconciliation of EBITDA, EBITDA Margin, Adjusted EBITDA and Adjusted EBITDA Margin to the most comparable U.S. GAAP financial measure (in thousands):

Three Months Ended September 30,

Nine Months Ended September 30,

2025

2024

2025

2024

Income before income taxes

29,452

23,732

88,221

62,291

Plus: Interest expense

14,894

15,716

44,298

46,644

Plus: Depreciation and amortization

9,920

8,720

28,544

24,385

EBITDA

54,266

48,168

161,063

133,320

Plus: other non-recurring items (1)

757

2,950

992

4,292

Plus: stock compensation expense

1,478

1,322

4,278

3,398

Adjusted EBITDA

56,501

52,440

166,333

141,010

Operating Income Margin

8.5

8.4

8.7

8.0

Net Income Margin

4.2

4.5

4.4

3.7

EBITDA Margin

10.6

10.2

10.8

10.0

Adjusted EBITDA Margin

11.0

11.1

11.2

10.6

(1) Other non-recurring items includes unique acquisition integration costs and other non-cash, non-recurring costs not related to continuing business operations.

We define and calculate organic sales to include locations and acquisitions under our ownership for at least twelve months. "Acquisition Sales" are sales from acquisitions that have been under our ownership for less than twelve months and are excluded in our calculation of Organic Sales.

"Business Days" are days of the week, excluding Saturdays, Sundays, and holidays, that our locations are open during the year. Depending on the location and the season, our branches may be open on Saturdays and Sundays; however, for consistency, those days have been excluded from the calculation of Business Days.

We define and calculate Sales per Business Day as sales divided by the number of Business Days in the relevant reporting period.

We define and calculate Organic Sales per Business Day as Organic Sales divided by the number of Business Days in the relevant reporting period.

The following table sets forth the reconciliation of Acquisition Sales, Organic Sales and Organic Sales per Business Day to the most comparable U.S. GAAP financial measure (in thousands):

Three Months Ended September 30,

Nine Months Ended September 30,

2025

2024

2025

2024

Sales by Business Segment

Service Centers

350,179

316,831

1,016,985

911,783

Innovative Pumping Solutions

100,551

89,825

280,273

225,417

Supply Chain Services

62,994

66,279

191,717

193,926

Total DXP Sales

513,724

472,935

1,488,975

1,331,126

Acquisition Sales

18,403

28,535

74,120

63,713

Organic Sales

495,321

444,400

1,414,855

1,267,413

Business Days

190

191

Sales per Business Day

8,027

7,390

7,837

6,969

Organic Sales per Business Day

7,739

6,944

7,447

6,636

We define and calculate free cash flow as net cash (used in) provided by operating activities less purchases of property and equipment.

The following table sets forth the reconciliation of Free Cash Flow to the most comparable GAAP financial measure (in thousands):

Three Months Ended September 30,

Nine Months Ended September 30,

2025

2024

2025

2024

Net cash from operating activities

34,886

28,344

56,505

70,068

Less: purchases of property and equipment

(6,740

)

(3,954

)

(37,000

)

(15,673

)

Free Cash Flow

28,146

24,390

19,505

54,395

The following table is a reconciliation of adjusted net income attributable to DXP Enterprises, Inc., a non-GAAP financial measure, to net income, calculated and reported in accordance with U.S. GAAP (in thousands):

Three Months Ended September 30,

Nine Months Ended September 30,

2025

2024

2025

2024

Net Income

21,631

21,101

65,832

49,126

One-time non-recurring costs

757

2,950

992

4,292

Adjustment for taxes

(201

)

(327

)

(252

)

(907

)

Adjusted Net Income

22,187

23,724

66,572

52,511

Weighted average common shares outstanding

Diluted

16,526

16,590

16,533

16,755

Diluted Earnings per Share

1.31

1.27

3.98

2.93

Adjusted Diluted Earnings per Share

1.34

1.43

4.03

3.13