DXP Enterprises reports solid fourth-quarter performance, highlighting full-year revenue growth, improved margins, and continued operational momentum across key business segments.
DXP Enterprises, Inc. delivered a strong financial performance for both the fourth quarter and full fiscal year ended December 31, 2025, reflecting steady execution of its growth strategy, disciplined cost management, and continued diversification across end markets. The company reported solid revenue growth, improved profitability, and enhanced balance sheet strength, positioning it for further momentum in 2026.
Fourth Quarter 2025 Performance
For the fourth quarter of 2025, DXP reported sales of $527.4 million, representing a 12.0 percent increase compared to $470.9 million in the same period of 2024. The double-digit growth underscores broad-based demand across the company’s operating segments and highlights management’s ability to convert market opportunities into tangible revenue gains.
Net income for the quarter rose 6.9 percent to $22.8 million, up from $21.4 million in the fourth quarter of 2024. Diluted earnings per share (EPS) reached $1.39 based on 16.4 million diluted shares outstanding, compared to $1.29 per share in the prior-year quarter based on 16.5 million diluted shares. Adjusted diluted earnings per share came in at $1.39, slightly above the $1.38 recorded a year earlier.
Profitability metrics also strengthened during the quarter. Adjusted earnings before interest, taxes, depreciation, amortization, and other non-cash charges (Adjusted EBITDA) totaled $59.0 million, up from $50.3 million in the fourth quarter of 2024. Adjusted EBITDA as a percentage of sales improved to 11.2 percent from 10.7 percent, reflecting operational leverage and effective expense management.
Cash generation remained robust. Free cash flow, defined as cash flow from operating activities less capital expenditures, amounted to $34.5 million in the fourth quarter, representing 59.9 percent of EBITDA. This strong cash conversion rate provided additional financial flexibility and supported balance sheet improvements.
Fiscal Year 2025 Results
For the full fiscal year 2025, DXP achieved total sales of $2.0 billion, marking an 11.9 percent increase compared to $1.8 billion in fiscal 2024. The near-12 percent revenue growth reflects continued success in expanding both organically and through acquisitions, as well as ongoing diversification into resilient end markets.
Net income for fiscal 2025 rose 25.8 percent to $88.7 million, up from $70.5 million in 2024. The substantial increase in profitability outpaced revenue growth, demonstrating improved margin performance and operating efficiency.
Diluted earnings per share for the year reached $5.37, based on 16.5 million diluted shares, compared to $4.22 per share in 2024, which was calculated on 16.7 million basic shares. Adjusted diluted EPS was $5.42 per share, compared to $4.51 per share in the prior year. The significant year-over-year EPS expansion reflects a combination of higher sales, margin improvement, and disciplined capital management.
Adjusted EBITDA for fiscal 2025 totaled $225.3 million, an increase of 17.8 percent compared to $191.3 million in fiscal 2024. Adjusted EBITDA as a percentage of sales improved to 11.2 percent from 10.6 percent, underscoring the company’s ability to scale operations while maintaining cost discipline.
Free cash flow for the full year was $54.0 million, equivalent to 24.7 percent of EBITDA. While lower as a percentage of EBITDA compared to the fourth quarter, full-year cash flow remained solid and supported investments in growth initiatives and balance sheet strengthening.
Segment Performance
DXP’s diversified operating model continues to serve as a cornerstone of its performance, with contributions from all three primary business segments.
Service Centers
Service Centers, the company’s largest segment, generated $1.4 billion in revenue for fiscal 2025, representing an 11.0 percent increase year-over-year. The segment achieved a robust operating income margin of 14.4 percent. This performance reflects strong demand for maintenance, repair, operating, and production (MROP) products and services, as well as effective customer engagement across industrial markets.
Innovative Pumping Solutions
Innovative Pumping Solutions (IPS) delivered the strongest growth among the segments. Revenue increased 26.4 percent year-over-year to $390.3 million. The segment achieved an operating income margin of 18.0 percent, highlighting its attractive profitability profile.
The strong IPS performance was driven by favorable market conditions, project execution, and growing demand in water and wastewater infrastructure. Management expressed optimism about continued opportunities in these markets heading into 2026.
Supply Chain Services
Supply Chain Services reported revenue of $252.9 million, a slight decrease of 1.4 percent compared to the prior year. Despite the modest revenue decline, the segment maintained an operating margin of 8.7 percent. The performance reflects stable operations amid selective softness in certain customer verticals, while maintaining profitability discipline.
Management Commentary and Strategic Outlook
Chairman and Chief Executive Officer David R. Little credited DXP’s employees—referred to internally as “DXPeople”—for driving the company’s performance throughout 2025. He emphasized that the company remained focused on managing growth, improving culture, controlling expenses, optimizing working capital, and simplifying the ease of doing business across segments and product divisions.
According to Mr. Little, the fourth quarter concluded above expectations, supported by broad-based business strength. The nearly 12 percent annual revenue growth has created healthy momentum entering 2026. He highlighted the 26.4 percent sales growth in Innovative Pumping Solutions, the 11.0 percent increase in Service Centers revenue, and the relatively stable performance of Supply Chain Services as key contributors.
Looking ahead, management expressed confidence in continued growth. The company sees positive trends in water and wastewater markets and anticipates improving conditions in traditional energy markets during the second half of 2026. Leadership believes that DXP’s balanced exposure across end markets, combined with its acquisition strategy and focus on margin expansion, will continue to drive shareholder value.
Balance Sheet and Capital Structure
During the fourth quarter, DXP strengthened its balance sheet by raising an incremental $205 million under its Term Loan B facility. This strategic financing move enhances liquidity and positions the company to pursue acquisition opportunities and organic growth initiatives in 2026.
Chief Financial Officer Kent Yee noted that fiscal 2025 results reflect successful execution of end market diversification and operational efficiency programs. Total sales and adjusted EBITDA increased 11.9 percent and 17.8 percent, respectively, delivering operating leverage of approximately 1.5 times.
At year-end, DXP held $303.8 million in cash and reported net debt of $543.0 million. The company’s secured leverage ratio, defined as net debt to EBITDA, stood at 2.3:1.0, based on covenant EBITDA of $241.4 million. This ratio remains well below the company’s covenant limit of 5.75:1.0, providing ample financial flexibility.
Management emphasized that the balance sheet remains strong and capable of supporting both organic and acquisition-driven growth strategies in the coming year.
Conference Call and Investor Information
Management hosted a conference call on February 26, 2026, to discuss financial results and strategic outlook. Investors were able to access the live webcast and presentation materials through the Investor Relations section of the company’s website. An online replay of the call is also available for those unable to attend the live event.
Use of Non-GAAP Financial Measures
DXP supplements its GAAP reporting with certain non-GAAP financial measures, including EBITDA, Adjusted EBITDA, free cash flow, Adjusted Net Income attributable to DXP Enterprises, Inc., and net debt. The company believes these measures provide additional insight into operating performance by excluding non-cash expenses and items not directly related to core operations.
Management uses EBITDA and related metrics to evaluate operational effectiveness, assess performance against financial covenants, and support strategic decision-making. By presenting reconciliations to GAAP measures, the company aims to enhance transparency and investor understanding.
Company Overview
DXP Enterprises, Inc. is a leading distributor of products and services that deliver value-added and total cost savings solutions to industrial customers across the United States, Canada, Mexico, and the United Arab Emirates. The company provides innovative pumping solutions, supply chain services, and comprehensive MROP offerings.
Its broad product portfolio includes rotating equipment, bearings, power transmission components, metalworking tools, industrial supplies, and safety products. Through deep technical expertise and a customer-centric approach, DXP seeks to create competitive advantages for its customers by delivering flexible, responsive, and reliable service solutions.
