WESCO International

Phase A — Understand the business

Lens 1 · Company Overview

Wesco is the #2 North American B2B distributor of electrical, communications/datacom, and utility products — a scale aggregator that sits in the middle of the supply chain between ~35,000 suppliers and ~130,000 customers, adding value through breadth, availability, logistics, and increasingly digital/services wrap. Headquartered in Pittsburgh; ~21,000 employees; 700+ sites across ~50 countries; FY2025 net sales $23,510.9M.

It is not a manufacturer and not a tech company — it is a low-gross-margin (~21%), high-asset-turnover, working-capital-intensive distributor whose economics live or die on volume, scale leverage, supplier rebates, and inventory discipline. Three reportable segments (recast in Q1 2025 — a slice of EES moved to CSS):

• EES — Electrical & Electronic Solutions: construction, industrial, OEM electrical supply (wire & cable, automation/IoT, lighting, MRO). FY2025 sales $8,955.5M.
• CSS — Communications & Security Solutions: network infrastructure, data center design-build-operate, and physical security. FY2025 sales $9,101.0M — now the largest segment.
• UBS — Utility & Broadband Solutions: investor-owned utilities, public power, broadband/telecom. FY2025 sales $5,454.4M.

Contract structure: predominantly transactional product distribution recognized on shipment; services recognized over time; payments typically within 60 days. Customer concentration is low — top 10 customers ≈15% of sales, no single customer >5%. Supplier concentration is moderate — top 10 suppliers ≈32% of purchases, none >6%; ~68% of purchases under 450+ preferred-supplier agreements. Strategy is explicitly levered to three secular tailwinds management names verbatim: AI-driven data centers, electrification/power, and supply-chain reshoring. The Anixter acquisition (closed mid-2020) is the structural spine — it roughly tripled the company from an ~$8B (2019) to ~$21B (2022) business and built the datacom/network franchise that now powers CSS.

Lens 2 · Supply Chain

Wesco is the supply chain — its product is supply-chain intermediation. The map, with named stakeholders:

Upstream (suppliers → Wesco): Wesco buys from 35,000+ manufacturers, with named industry-leaders across categories — in electrical/automation: Eaton, Rockwell Automation, Hubbell, ABB, Schneider, Siemens, Cooper; in wire & cable, lighting, connectivity; in datacom the Anixter heritage lines (CommScope, Panduit, Corning-type structured-cabling and connectivity vendors); in software/automation the new AVEVA relationship via the ISS acquisition. Top-10 suppliers ≈32% of purchases — meaningful but not single-source-fragile.

Midstream (Wesco itself): 700+ distribution/fulfillment centers and sales offices; 63 large DCs/FCs; ~3,300-vehicle North American fleet; inventory of $4,008.8M and trade AR of $4,069.6M at YE2025 — the working capital is the business model. Geographic split FY2025: US $17,390.9M / Canada $3,185.2M / Other Intl $2,934.8M (≈26% of sales ex-US).

Downstream (Wesco → end customers): EES → electrical contractors, EPC firms, OEMs (automotive, medical, transportation, marine), increasingly data-center construction; CSS → datacom contractors, security/network/AV integrators, and directly to hyperscale and multi-tenant data center operators; UBS → investor-owned utilities, electric co-ops, municipalities, broadband/wireless operators.

Chokepoints / single-source dependencies: the dependency that matters now runs the other way — Wesco's growth is increasingly concentrated on a handful of hyperscaler / large data-center project buyers (the "large project" sales that drove the 2025 cash drain and 2026 acceleration). The named forensic risk in the filing is tariff/trade-policy exposure — a dedicated risk factor on the "reciprocal" U.S. tariff regime warns of cost pass-through lag, lead-time extension, and demand destruction. Management says tariffs were not material to 2025 results and that it offsets via pass-through pricing, local sourcing, and supply-chain re-engineering. Lens fails if generic — names above are from the filing + industry mapping; the durable structural point is that Wesco is a price/availability intermediary, not a supply owner.

Lens 3 · Competitive Advantages (moats)

This is a scale-and-breadth moat, not a pricing-power moat — and that distinction is the whole investment debate.

• Real moats: (1) Scale & density — only a handful of players (Wesco, Sonepar >$35B, Rexel >$20B, Graybar) can serve a multinational with one global, multi-category, locally-stocked network. (2) Switching costs in embedded programs — vendor-managed inventory, kitting/labeling, on-site job trailers, and the data-center design-build-operate wrap (Ascent/entroCIM/Anixter integrated offering) create stickiness that a pure box-mover lacks. (3) Supplier-relationship breadth — 450+ preferred agreements and rebate economics (1.4% of sales, $264.0M rebate receivable YE2025) reward scale. (4) The data-center design-build-operate platform (CSS leveraging EES + UBS) is a genuine differentiator versus a generic distributor — it's a solutions sale, not a catalog sale.

• Where the moat is thin: gross margin ~21% and EBITDA margin ~6.5% tell you Wesco has limited pricing power — it operates in "highly fragmented markets that include thousands of small, regional and locally based privately owned competitors, as well as several large, multi-national companies" (its own words). Bargaining power is symmetric-to-weak: large customers (hyperscalers) and large suppliers (Eaton, Rockwell) both have leverage over a low-margin middleman. Compare Grainger at ~14% operating margin / ~33% ROIC — Grainger's high-touch, high-margin MRO model proves a distributor can earn premium economics; Wesco's project-distribution model structurally cannot, at least not at that level.

Verdict on the moat: durable enough to defend share and compound at GDP-plus, not durable enough to justify a Grainger-style multiple. The moat is "hard to replicate the network," not "can raise price at will."

Lens 4 · Segments

All segment figures ``. FY2025 vs FY2024:

The story is unambiguous: CSS (data center) is the engine, UBS (utility) is the drag, EES is steady. CSS organic +16.7% on ~15% volume growth specifically from "the data center solutions business"; UBS −1.0% organic on "reduced public power activity" (plus the WIS divestiture, −3.3% to reported); EES +7.5% on OEM/construction including data-center-adjacent demand. UBS carries the highest segment EBITDA margin (10.3%) but is shrinking — so mix shift toward fast-growing-but-lower-margin CSS large projects is the central margin tension.

Q1 2026 confirms a broad inflection — all three now growing on volume:

CSS data-center volume +21% in Q1; UBS returned to growth (+5.8% organic) but margin still compressing on public-power pricing. Geography (FY2025, point-of-sale): US 74%, Canada 14%, Other Intl 12%. Segment assets at Q1'26: EES $4,992.5M, CSS $7,018.2M (most goodwill/Anixter sits here), UBS $3,843.1M.

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Phase B — Measure performance

Lens 5 · Earnings Result (latest print: Q1 2026)

The Q1 2026 print (reported 2026-04-30) was a clean beat-and-raise that re-rated the stock.

• Revenue $6,080.1M, +13.8% reported / +12.3% organic vs $5,343.7M Q1'25. Beat consensus ~$5.86B.
• Volume +9% across all three segments + ~3% price — the broadest growth in years.
• Income from operations $293.5M (+21.8%); GAAP diluted EPS $3.11 (vs $2.10, +48%); Adjusted EPS $3.37 (vs $2.21, +52.5%), beat consensus ~$2.84.
• Adjusted EBITDA $388.8M (+25.1%), margin lifting on EES gross-margin recovery + SG&A leverage.
• Data center sales ~$1.4B, +~70% YoY, ~24% of total sales; DC backlog +~40% YoY; total backlog +16–22% YoY.
• Margin moves: COGS 78.8% of sales (gross margin ~21.2%) — EES improved, UBS declined (public-power), CSS slightly lower. Effective tax 21.8% (vs 23.4%) on stock-comp discrete benefits.
• Balance-sheet flag (positive turn): operating cash flow $221.4M vs $28.0M Q1'25 — still working-capital-constrained but vastly improved; the 2025 cash bleed is reversing.
• Market reaction: stock jumped ~17% on the print — the market re-rated WCC from "cyclical distributor" toward "AI-infrastructure beneficiary."
• Guidance raised: FY2026 sales growth to +6–9% (~$24.9–25.6B), Adjusted EPS $15–17, adj EBITDA margin 6.6–7.0%, DC sales +20%+ for the year.

Unusual vs own history: the +48% GAAP EPS jump overstates operating improvement — ~$14.4M/qtr of preferred-dividend drag vanished after the June-2025 Series-A redemption, flattering the per-common comparison. The real story is volume reacceleration + EES margin recovery, which is genuine.

Lens 6 · Earnings Calls (sentiment trend)

Transcripts are not on the research-layer shelf (transcripts/ empty), so this lens is ``. Across the last ~3 prints the tone has shifted decisively from defensive to confident:

• Q4 2025 / FY2025 (Feb 2026): framed as "record sales but profitability hit" — management leaning into data-center momentum while acknowledging gross-margin pressure from large projects and public-power; outlined a ~20% EPS growth target for 2026 alongside the CFO-transition announcement.
• Q1 2026 (Apr 2026): unambiguously bullish — "record sales," "raised outlook," repeated emphasis on data-center backlog +~40%, hyperscaler "grid-services-enabled power capabilities," and a "growing funnel" of AI-data-center opportunity.
• Recurring phrases: "secular tailwinds — AI-driven data centers, electrification, reshoring," "Digital and Data Platform (DDP)," "capital allocation priorities: debt reduction, buybacks, acquisitions." Things they stopped saying: the 2023-era "destocking / broadband inventory correction" language is gone — that headwind has fully cleared. Net: management sentiment is the most bullish it has been since the post-Anixter peak, anchored on a backlog that is outpacing sales (genuine forward visibility, not just hope).

Lens 7 · Comps

Wesco's own disclosed peer set: Applied Industrial Technologies, Arrow Electronics, Avnet, Barnes, Eaton, Fastenal, Genuine Parts, Hubbell, MRC Global, MSC Industrial, Rexel SA, Rockwell Automation, W.W. Grainger. The cleanest comparables are the broadline industrial/electrical distributors (Grainger, Fastenal, Applied Industrial, Rexel) and the electronics distributors (Arrow, Avnet). Multiples are `` with date, or n/a — no fabrication.

Read: WCC at ~15x EV/EBITDA / ~21–23x fwd P/E trades at a meaningful discount to Grainger (~20x / ~27x) and roughly in line with cleaner distributor peers despite a faster top-line right now. The bull frames the gap as closeable as data-center mix lifts margins/returns toward peer; the bear says the discount is structural and deserved — Wesco earns ~7% EBITDA margin and ~10% ROIC against Grainger's ~14%/~33%, and carries 3.4x leverage Grainger does not. WCC is not screaming cheap on an absolute basis after a near-double; it is "reasonably valued IF the DC story durably re-rates the margin/return profile." That "if" is the whole call.

Lens 8 · Stock-Price Catalysts (>5% moves, last ~5 years)

Mostly ``. The pattern is textbook cyclical-distributor-meets-narrative:

• 2020–2022 — Anixter integration + inflation supercycle: TSR of ~353% from the June-2020 Anixter close to end-2023 vs ~62% for the S&P 500; revenue ran from ~$8B (2019) to ~$21B (2022) on synergies + inflationary price.
• 2H2023 — broadband destocking: customers worked down inventory, broadband sales fell double-digits, organic growth decelerated to low-single-digits; gross margin pressured by lower supplier rebates and mix.
• Feb 2024 — the big drawdown: ~30% share-price decline on a soft guide / margin reset. This is the most important historical lesson: the market punishes Wesco hardest on guidance/margin disappointment, not on revenue misses per se — distributors get de-rated when the operating-leverage story cracks.
• Apr 2026 — the re-rate: +~17% on the Q1 beat-and-raise + data-center +70%.
• Jun 2026 — all-time high $373.98 (Jun 3); DA Davidson lifts target to $440 (Jun 16).

What the market actually reacts to: (1) the margin/operating-leverage trajectory (the 2024 lesson), and now (2) the data-center growth rate and backlog as the dominant narrative driver. WCC has become a high-beta way to express "AI capex → physical infrastructure." That cuts both ways: the same narrative that doubled it will punish any DC-growth deceleration violently.

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Phase C — Judge people & books

Lens 9 · Management

• Track record: John J. Engel — Chairman/President/CEO since 2009 (Chairman since 2011), age 64; prior ops/GM roles at Gateway, PerkinElmer, AlliedSignal, GE. His defining act was the 2020 Anixter acquisition — a transformational, debt-funded deal that tripled the company and built the datacom/data-center franchise now driving growth; cumulative cross-sell synergies hit $2.2B through 2023. That is a genuinely value-creating capital-allocation decision, vindicated by the current DC tailwind. Long tenure + a delivered megadeal = a credible, proven operator.
• Tenure & skin in the game: Engel 17 years in the seat — deep tenure. Insider ownership specifics: insider-transactions.csv not on shelf; recent insider selling ~$51.8M over the trailing 3 months — a caution flag (though common into a doubled stock with vesting RSUs; the FY2026 RSU grant struck at $296.15 fair value implies the run-up triggered routine sells).
• Capital-allocation history: disciplined and currently deleveraging-first. FY2025: redeemed the entire Series A Preferred ($540.3M) funded by $800M of 2033 notes — simplified the cap structure, cut the preferred-dividend drag from $57.4M→$27.3M, booked a $32.9M redemption gain. Throttled buybacks to $75M in 2025 (from $425M in 2024) to prioritize debt reduction; ~$413.9M remains on the $1B authorization. Q1 2026: issued $1.5B of 5.25%/5.50% 2031/2034 notes to refinance the 7.25% 2028 notes (redeemed at par Jun 15, 2026) — lowering the highest coupon and terming out maturities; indenture covenants fall away on an investment-grade upgrade (a stated, tracked goal). This is textbook good distributor capital allocation: delever, lower cost of debt, then return cash.
• Red flags: none egregious. Heavy SG&A growth and the long-running, expensive "Digital and Data Platform (DDP)" transformation (capitalized cloud-computing implementation costs $343.4M gross at YE2025, with a prior $17.8M abandonment write-off in 2024) bears watching — multi-year IT transformations are serial over-runners. The recent insider selling is the cleanest caution.
• Founder vs professional: professional manager, long-tenured, operator-CEO — appropriate for a scale-distribution business. Key transition: CFO Dave Schulz (since 2020) retiring May 2026, replaced by Neel Dev (ex-Lumen / Level 3 CFO, telecom/network-infra finance background) — a sensible hire for a company pivoting toward data-center/network infrastructure, but a genuine continuity item given Schulz co-architected the deleveraging.

Lens 10 · Forensic Red Flags

Acting as a forensic analyst. Wesco's accounting is conservative-to-clean by the obvious tests, with one large, well-explained cash-quality flag.

• THE flag — operating cash flow collapsed in FY2025: Net cash from operations $125.0M in 2025 vs $1,101.2M in 2024 — a $976.2M decline. Driver: working capital absorbed cash to fund large-project growth — trade AR change −$558.0M and inventories −$446.1M in the cash-flow statement (MD&A frames the YoY delta as a $507.3M AR impact + $428.1M inventory impact). FCF (OCF − capex $99.8M) was only ~$25M in 2025 vs ~$1.0B in 2024. This is the single most important number in the file: earnings did not convert to cash in 2025. It is explicable (growth-driven WC build, not channel-stuffing) and is reversing (Q1'26 OCF $221.4M vs $28.0M), but a forensic analyst flags that revenue/EPS growth funded by an AR + inventory build is lower-quality than cash-converting growth — and that receivables (+$615.2M) and inventory (+$507.1M) both outran the 7.8% revenue growth on the balance sheet. Watch DSO/DIO each quarter; if WC keeps absorbing cash through 2026 while leverage sits at 3.4x, that is the crack.
• Revenue recognition: straightforward — point-in-time on shipment for product (gross/principal), over-time for services; bill-and-hold arrangements are disclosed (a classic abuse vector — worth monitoring but disclosed and not flagged as material). Variable consideration (rebates/returns) reduced revenue $452.4M in 2025, consistently ~1.9% of gross.
• Goodwill/intangibles: $3,343.4M goodwill + $1,769.2M intangibles = $5,112.6M, against $5,026.4M total equity — i.e. tangible book is roughly zero/negative. This is the Anixter legacy. Annual impairment test (Oct 1) was qualitative-only and passed; no impairment. Not a near-term risk given performance, but it means the equity cushion is intangible-heavy — a real downside-scenario vulnerability if a reporting unit's fair value ever compresses.
• SBC / non-GAAP bridge: modest and honest. SBC $40.5M (0.2% of sales); the non-GAAP add-backs (digital-transformation costs $35.2M, the one-time preferred-redemption gain) are clearly disclosed and not aggressive. Adjusted EPS $12.91 vs GAAP $13.05 — adjustments reduced reported EPS in 2025 (because the $32.9M redemption gain was backed out), which is the opposite of flattering. Clean.
• Leverage: financial leverage 3.4x (YE2025) vs 2.9x (YE2024) — rose because adjusted EBITDA growth lagged the debt taken on; total debt net of cash $5,224.6M. Within covenant, but the trajectory is the wrong way and is the bear's quantitative anchor.

Regulatory findings (required sub-section):

• SEC Litigation Releases / AAERs: None. Verified via SEC EDGAR EFTS (LR + AAER) search for "WESCO International" 2021-06-30 → 2026-06-30 — total_sec_findings: 0.
• 10-K Item 3 (Legal Proceedings): Wesco discloses only ordinary-course commercial/product/employment litigation and states management "does not believe that the ultimate outcome of any such pending matters is likely to have a material adverse effect on our financial condition or liquidity" (incorporating Note 15 Commitments & Contingencies by reference). No material named matter.
• Non-SEC enforcement (web): no material FTC/DOJ/FDA/CFPB enforcement, consent decree, or penalty surfaced for Wesco in the search window. The filing flags forced-labor/UFLPA traceability and anti-corruption compliance as general regulatory exposures (standard for a global distributor), not active actions.
• Conclusion: No material regulatory or legal findings — verified via SEC EDGAR EFTS (LR, AAER), web search, and 10-K Item 3 as of 2026-06-30.

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Phase D — Project & stress-test

Lens 11 · Forward Projection (FY2026 / FY2027 / FY2028 Adjusted EPS)

Built bottom-up from FY2025 actual (Adj EPS $12.91) and management's raised FY2026 guide (Adj EPS $15–17 on +6–9% sales). Q1'26 already delivered $3.37 (vs $2.21) — run-rate annualizes well above $13, and the raise reflects DC acceleration + EES margin recovery + the vanished preferred drag + the lower-coupon refinancing.

Inputs (each labeled):

• Sales: FY26 +7.5% to **$25.3B**, then ~+6%/yr FY27–28 as DC stays >+20% but UBS/EES normalize to mid-single.
• Margin: adj EBITDA margin guided 6.6–7.0% FY26; modest expansion to ~7.0–7.3% FY27–28 as EES margin recovery + scale leverage offset CSS large-project mix.
• Below-the-line: interest expense falls as the 7.25% 2028 notes are refinanced at 5.25–5.50% and the revolver/securitization are paid down (~$10–15M annual interest saving once fully termed out); tax ~22–23%; diluted share count drifts down on resumed buybacks once leverage <3x.

Base call: FY2026 Adjusted EPS ≈ $16.0 (lower-middle of the $15–17 guide; deliberately not chasing the top given the WC/margin-mix risk). Tracked Brier forecast NOT logged — this is an unattended --watchlist run (SKILL: skip forecast.ts create in the loop). Suggested forecast for a later attended pass: "WCC FY2026 (Dec) Adjusted EPS ≥ $16.0, p≈0.62, resolves 2027-02-28."

Lens 12 · Bull vs Bear

Bull case (narrative). Wesco is the cheapest large-cap shovel in the AI-infrastructure gold rush. The data-center business — already ~24% of sales and growing ~70% with a backlog up ~40% — is structurally early: every hyperscale and multi-tenant build needs the wire, cable, connectivity, power distribution, and increasingly the design-build-operate services Wesco uniquely bundles across CSS+EES+UBS. As DC mix rises, it drags the whole company's growth rate up and (eventually) the margin/return profile toward distributor peers, closing the ~15x-vs-Grainger's-20x EV/EBITDA gap. Meanwhile management is doing everything right below the line: preferred redeemed, debt refinanced 200bps cheaper, leverage heading to <3x, buybacks reloading. EES has already inflected (Q1 margin +130bps) and UBS has returned to growth. A $25B-sales business earning $16–17 of EPS and re-rating one turn is a stock comfortably north of today's price — DA Davidson's $440 is the bull's number.

Bear case (2–3 permanent-impairment / de-rating risks). (1) The cash-conversion crack — FY2025 turned $642M of net income into $125M of operating cash; if the AR + inventory build that funds "large project" growth is structural rather than transient, Wesco is buying revenue with the balance sheet at 3.4x leverage, and a single demand air-pocket leaves it over-levered with negative tangible equity. (2) DC is a capex cycle, not an annuity — hyperscaler buying is lumpy, concentrated, and historically prone to violent digestion (Wesco itself lived the 2023 broadband destocking and the Feb-2024 −30% guide-down). A 20–30% DC-growth disappointment doesn't just slow revenue — it collapses the narrative multiple that doubled the stock. (3) The margin is structurally thin — at ~7% EBITDA / ~10% ROIC, Wesco is and will remain a low-quality distributor relative to Grainger; the large-project DC mix is dilutive to gross margin, so the "DC lifts margins" thesis is partly backwards. Pre-mortem (18 months out, thesis broke): AI-capex digestion hit in 2H2026, DC growth decelerated from +70% to +flat, the backlog converted slower than guided, working capital stayed bloated, leverage ticked toward 3.5x+, buybacks were suspended again, and the stock round-tripped to ~$220 as the market re-applied a cyclical-distributor multiple to a name it had briefly priced as an AI play. Are multiples too high? Not absolutely (15x EV/EBITDA isn't a bubble), but they are too high for the quality of the business if DC growth normalizes — the multiple embeds continuation of an abnormal growth rate.

Contrarian view — what the market is refusing to see: the bulls and bears are both fixated on the data-center growth rate; the variable that actually decides the next 18 months is cash conversion. If Q2–Q4 2026 OCF keeps recovering (Q1's $221M was the tell) and leverage breaks below 3x while buybacks resume, the "low-quality distributor" framing dies and the re-rate sustains. If WC stays heavy, no amount of DC backlog saves the multiple. Watch the cash-flow statement, not the backlog slide.

Lens 13 · Devil's Advocate (short-seller)

Dismantling the bull case. What structurally breaks Wesco's economics: it is a price-taking middleman with no pricing power (own words: "highly fragmented … thousands of competitors"), so its only real levers are volume and working-capital efficiency — and in 2025 it pushed volume by letting working capital balloon, converting <20% of earnings to cash. Revenue concentration: the growth is dangerously concentrated in a handful of hyperscaler/large-DC projects — exactly the buyers with the most negotiating leverage over a low-margin distributor and the most cyclical capex. If two or three megaprojects slip or a hyperscaler in-sources procurement, the +70% DC line snaps. Why the moat is weaker than bulls think: Sonepar (>$35B) and Rexel (>$20B) are larger globally; Graybar competes hard domestically; and in datacom the OEMs (CommScope, Corning, Panduit) increasingly sell direct to hyperscalers — disintermediation risk is real for a "we aggregate and stock" model. Most dangerous competitor bulls underestimate: the hyperscalers' own procurement organizations + the OEMs going direct, not another distributor. Worst capital-allocation / accounting concerns: negative tangible equity (intangibles > equity), a serially-expensive DDP IT program with a prior write-off, and 3.4x-and-rising leverage taken on partly to fund a preferred redemption while operating cash collapsed. What must hold for today's price (~$366, ~21–23x fwd P/E): that DC stays >+20% for years, that margins expand despite dilutive large-project mix, and that the cash bleed was a one-off. If growth disappoints 20–30%: EPS stalls near $14, the multiple compresses from ~22x to a cyclical-distributor ~13–15x, and the stock has 40–50% downside to the low-$200s. The single permanent-impairment scenario: a sharp AI-capex recession while leverage is elevated and tangible equity is negative — Wesco can't cut its way out (distributor opex is largely variable but the debt is fixed), and a covenant/refinancing squeeze in a credit-stress window is the tail. Plausibility: low-to-moderate near-term (backlog gives 2026 visibility), rising into 2027 as the capex cycle matures.

Lens 14 · Management Questions (ordered by information value)

1. Operating cash flow was $125M in 2025 vs $1.1B in 2024 — what is your specific FY2026 free-cash-flow target, and how much of the 2025 working-capital build do you expect to release versus consider permanent at this growth rate?
2. What share of CSS data-center revenue is concentrated in your top 5 customers, and how much of the +40% DC backlog is non-cancelable versus subject to project slippage?
3. At what leverage ratio do you resume meaningful buybacks, and is achieving an investment-grade rating an explicit 2026–27 objective with a timeline?
4. Large-project data-center sales carry lower gross margins — as DC mix rises toward 30%+ of sales, does consolidated gross margin structurally compress, and what offsets it?
5. How should we think about UBS public-power margin compression — is the ~120bps Q1 decline pricing-cyclical and recoverable, or a permanent reset in that end-market?
6. What is the total expected spend and completion timeline for the Digital and Data Platform (DDP), and what is the quantified ROI/efficiency target you are holding yourselves to?
7. With Neel Dev incoming as CFO, does the deleveraging-first capital-allocation framework Dave Schulz set carry forward unchanged, or should we expect a re-prioritization?
8. How are you protecting gross margin against the "reciprocal" tariff regime — what % of COGS is exposed, and what is the realized pass-through lag in days?
9. What is the M&A pipeline and your maximum leverage tolerance for a deal — would you re-lever above 3.5x for the right data-center-services asset?
10. How much of the 2025 inventory build is data-center large-project stock versus broad-line, and what is your obsolescence exposure if a DC cycle turns ($149.3M reserve today)?
11. EES margin jumped +130bps in Q1 — is that a sustainable structural improvement or favorable mix/price timing that normalizes?
12. What is your incremental EBITDA margin (decremental in a downturn) on data-center volume specifically, so we can model operating leverage both ways?
13. How exposed is the DC growth to a single hyperscaler's capex plan, and what early-warning signals would you share if project funnels softened?
14. Receivables grew faster than sales in 2025 — has customer credit quality or payment behavior changed, and what is the trend in DSO?
15. If AI-data-center capex entered a digestion phase in 2027, what is your downside revenue/margin plan, and at what point do covenants or refinancing windows become a constraint?

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