The quarter cleared a modest market bar. Available published estimates centered on roughly $553.9 million of revenue and $1.60 of diluted EPS; DXP delivered $576.5 million and $1.76, respectively—about 4% above the sales expectation and 10% above the EPS expectation.
| Metric | Q2 2026 | Q2 2025 | Market expectation / change |
|---|---|---|---|
| Sales | $576.5M | $498.7M | ~$553.9M consensus |
| Diluted EPS | $1.76 | $1.43 | ~$1.60 consensus |
| Adjusted EBITDA | $70.4M | $57.3M | +22.8% |
| Adjusted EBITDA margin | 12.2% | 11.5% | +70 bps |
| Organic sales | $526.6M | $474.1M | +11.1% |
| Free cash flow | $29.8M | $8.3M | +$21.5M |
The beat was operational, not just acquisition-driven. Total sales rose 15.6%, with acquisitions contributing $49.8 million, but organic sales still increased 11.1%; sales per business day rose 11.1% organically. Innovative Pumping Solutions was the standout segment, with sales up roughly 53% and operating income up roughly 43%, while Service Centers grew steadily and Supply Chain Services was essentially flat. (Organic Sales and Sales per Business Day; Segment results)
Profitability came in better than the headline growth alone suggests. Adjusted EBITDA increased 22.8%, outpacing sales growth, and the adjusted EBITDA margin expanded to 12.2% from 11.5%. GAAP operating margin also improved to 9.6% from 9.2%, indicating genuine operating leverage despite higher amortization and corporate costs. (EBITDA Reconciliation; Income Statement; Segment results)
Cash generation materially improved, although acquisitions continued to consume balance-sheet capacity. Free cash flow reached $29.8 million in the quarter and $56.0 million year to date, versus negative $8.6 million in the first half of 2025. Debt remained high at $842.5 million, but management reported a 2.30x secured/net leverage ratio; cash declined to $226.6 million from $303.8 million at year-end while goodwill and intangible assets increased, consistent with continued acquisition activity. (Free Cash Flow Reconciliation; Balance Sheet; Management commentary)
Net read: a broad positive surprise with no numerical guidance upgrade. The filing provides strong evidence of better-than-expected demand, margin execution, and cash conversion, and management says it expects to finish fiscal 2026 with momentum. However, that outlook is qualitative rather than a raised earnings or revenue target, so the main new information is the size and breadth of the Q2 beat—not a formal increase to the full-year expectation. (Management commentary; Forward-Looking Statements)
Read the original 8-K on SEC EDGAR ↗