Distribution Solutions Group, Inc.

Consolidated 2025 revenue was $1,980,000,000, up 9.8% versus 2024, with organic average daily sales up 3.6%. Adjusted EBITDA was $175,200,000, or 8.9% of sales, versus 9.7% in 2024, and non-GAAP adjusted EPS was $1.24 versus $1.44 a year ago. GAAP diluted EPS was $0.18 versus a GAAP loss of $0.16 last year. Fourth-quarter revenue was $482,000,000, up 0.2% year over year, and Q4 adjusted EBITDA was $35,400,000, or 7.4% of sales. Cash from operations was $84,000,000 for the year and $16,900,000 in Q4; ending liquidity was $469,000,000, cash totaled $75,300,000, and net debt leverage was 3.5x. For 2026, management said the first quarter should remain under margin pressure, with improved margin expansion expected around mid-year; they also said 2026 and 2025 each have 63 selling days, and CapEx is planned at $25,000,000 to $30,000,000.

Brian King framed 2025 as a year of internal reinvestment, retooling, and digesting acquisitions, while acknowledging the company “is not where we want to be” and that results fell short. He emphasized that management chose to keep investing in talent, systems, and commercial capabilities rather than smooth earnings, because those moves are intended to build a stronger long-term business. His tone was candid but constructive, with repeated confidence that the company enters 2026 with better leadership, better visibility into the business, and a path to structurally higher margins.

Ron Knutson highlighted full-year revenue of $1.98 billion, adjusted EBITDA of $175.2 million, and adjusted EBITDA margin of 8.9%, along with Q4 revenue of $482 million and Q4 adjusted EBITDA of $35.4 million. He explained the 80 bps full-year margin decline as about 20 bps from longer-term people investments and about 70 bps from timing and nonrecurring items including health care costs, bad debt reserves, and lower-margin customer wins. He also noted strong cash generation, $469 million of total available liquidity, $75.3 million of cash, net debt leverage of 3.5x, and planned 2026 CapEx of $25 million to $30 million; he said the company repurchased $23.5 million of stock in 2025 and has about $30 million remaining in authorization.

Analysts focused on early 2026 sales trends, Q1 margin expectations, Lawson’s small-account weakness, tariff exposure, TestEquity integration, and M&A capacity. Management said January and February sales were up in the low single digits versus a year ago, with some pressure still in the Canadian branch business but growth in the other three segments. On margins, Brian King said Q1 would likely be a little below the 2025 average before Q2 and Q3 improve, and he reiterated that Lawson’s small-account issues are being addressed through renewed sales focus, inside sales, ecommerce, service reps, and better territory coverage. On tariffs, management said it was too early to determine the direct impact of recent changes, but they are evaluating sourcing and pricing responses and believe many prior cost pressures were at least partially mitigated by actions taken in 2025.