DXP ENTERPRISES INC
For the period ended Mar 31, 2026. Filed May 7, 2026.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2026 · Filed May 7, 2026
DXPE$140.68+5.9%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-09-30; filed 2025-11-06.
0001628280-25-050322
ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-03-31; filed 2026-05-07.
0001628280-26-032353
ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 112 previous paragraphs and 100 current paragraphs.
74 unchanged; 26 reworded; 0 added; 7 removed; 5 previous and 0 current paragraphs rearranged.
Tables are not compared: 11 previous and 9 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Removed paragraphs (7)
Previous report
From time to time, typically based upon a leap year, our comparable business days may not equal each other. There were 190 business days during the nine months ended September 30, 2025 and 191 business days during the nine months ended September 30, 2024.
Previous report
Supply Chain Services segment. Sales for the SCS segment decreased by $3.3 million, or 5.0 percent, for the three months ended September 30, 2025, compared to the prior year's corresponding period primarily due to customer facility closures.
Previous report
Nine Months Ended September 30, 2025 compared to Nine Months Ended September 30, 2024
Previous report
SALES. Sales for the nine months ended September 30, 2025 increased $157.8 million, or 11.9 percent, to approximately $1.5 billion from $1.3 billion for the prior year's corresponding period, of which acquisitions contributed $74.1 million during the year. Additionally, the overall increase in sales was the result of an increase in sales within our SC and IPS segments of $105.2 million and $54.9 million, offset by decreases of $2.2 million in our SCS segment. The fluctuations in sales are further explained in our business segment discussions below.
Previous report
Service Centers segment. Sales for the SC segment increased by $105.2 million, or 11.5 percent for the nine months ended September 30, 2025, compared to the prior year's corresponding period. Sales from acquisitions for the SC segment contributed $45.2 million during the period as compared to $23.2 million during the nine months ended September 30, 2024. Total sales for the SC segment excluding acquisitions increased $83.2 million from the prior year's corresponding period. This sales increase was primarily the result of increased business activity within the majority of our regions, offset by a decrease in Canada compared to the prior year's corresponding period.
Previous report
Innovative Pumping Solutions segment. Sales for the IPS segment increased by $54.9 million, or 24.3 percent for the nine months ended September 30, 2025 compared to the prior year's corresponding period. Sales from acquisitions for the IPS segment contributed $29.0 million during the period compared to $40.5 million during the nine months ended September 30, 2024. Additionally, organic sales increased within our fabrication and global solutions division, and our water and wastewater end market, partially offset by a decrease due to the timing of projects compared to the prior year's corresponding period.
Previous report
INCOME TAXES. Our effective tax rate from continuing operations was a tax expense of 25.4 percent for the nine months ended September 30, 2025, compared to a tax expense of 21.1 percent for the nine months ended September 30, 2024, the effective tax rate increased primarily due to a lower tax benefit from research and development tax credits, lower tax benefit from stock compensation vested during the period, partially offset by a higher benefit for state income taxes.
Reworded paragraphs (26)
Previous wording
The following management discussion and analysis ("MD&A") of the financial condition and results of operations of DXP Enterprises, Inc. together with its subsidiaries (collectively "DXP," "Company," "us," "we," or "our") for the nine months ended September 30, 2025 should be read in conjunction with our previous Annual Report on Form 10-K and our Quarterly Reports on Form 10-Q, and the consolidated financial statements and notes thereto included in such reports. The Company's consolidated financial statements are prepared in accordance with U.S. GAAP.
Current wording
The following management discussion and analysis ("MD&A") of the financial condition and results of operations of DXP Enterprises, Inc. together with its subsidiaries (collectively "DXP," "Company," "us," "we," or "our") for the three months ended March 31, 2026 should be read in conjunction with our previous Annual Report on Form 10-K and our Quarterly Reports on Form 10-Q, and the consolidated financial statements and notes thereto included in such reports. The Company's consolidated financial statements are prepared in accordance with U.S. GAAP.
Previous wording
The replacement and mission-critical nature of our products and services within the Company's Service Centers and Innovative Pumping Solutions business segments and industrial and manufacturing environments and processes drives a demand and outlook that are correlated with global, national and regional industrial production, capacity utilization and long-term GDP growth. For the nine months ended September 30, 2025, we had approximately $1.3 billion in sales in our Service Centers and Innovative Pumping Solutions segments, an increase of approximately 14.1 percent compared to the nine months ended September 30, 2024. Our performance has been strengthened by our ability to maintain strong margins despite price increases from vendors and suppliers. During the nine months ended September 30, 2025, $45.1 million in sales in our Service Centers (SC) segment and $29.0 million in sales in our Innovative Pumping Solutions (IPS) segment were associated with acquisition sales.
Current wording
The replacement and mission-critical nature of our products and services within the Company's Service Centers and Innovative Pumping Solutions business segments and industrial and manufacturing environments and processes drives a demand and outlook that are correlated with global, national and regional industrial production, capacity utilization and long-term GDP growth. For the three months ended March 31, 2026, we had approximately $456.6 million in sales in our Service Centers and Innovative Pumping Solutions segments, an increase of approximately 10.5 percent compared to the three months ended March 31, 2025. Our performance has been strengthened by our ability to maintain strong margins despite price increases from vendors and suppliers. During the three months ended March 31, 2026, $5.7 million in sales in our Service Centers (SC) segment and $35.0 million in sales in our Innovative Pumping Solutions (IPS) segment were associated with acquisition sales.
Previous wording
For the nine months ended September 30, 2025, we had approximately $191.7 million in sales in our Supply Chain Services (SCS) segment, a decrease of approximately 1.1 percent compared to the nine months ended September 30, 2024.
Current wording
For the three months ended March 31, 2026, we had approximately $65.0 million in sales in our Supply Chain Services (SCS) segment, an increase of approximately 2.7 percent compared to the three months ended March 31, 2025.
Previous wording
Our results of operations are not directly comparable on a year-over-year basis due to various prior acquisitions and the varying size and number of acquisitions in any comparable period. Accordingly, the results of acquisitions are included subsequent to their respective acquisition dates and the Company provides detail around Organic and Acquisition Sales as defined in our Key Business Metrics. During the nine months ended September 30, 2025, acquisition sales were $74.1 million compared to $63.7 million for the nine months ended September 30, 2024.
Current wording
Our results of operations are not directly comparable on a year-over-year basis due to various prior acquisitions and the varying size and number of acquisitions in any comparable period. Accordingly, the results of acquisitions are included subsequent to their respective acquisition dates and the Company provides detail around Organic and Acquisition Sales as defined in our Key Business Metrics. During the three months ended March 31, 2026, acquisition sales were $40.7 million compared to $31.1 million for the three months ended March 31, 2025.
Previous wording
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.
Current wording
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 plus 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.
Previous wording
The following tables sets forth the disaggregation of revenue from sales associated with acquisitions for the three and nine months ended September 30, 2025 and 2024(in thousands) :
Current wording
The following tables sets forth the disaggregation of revenue from sales associated with acquisitions for the three months ended March 31, 2026 and 2025(in thousands) :
Previous wording
SALES. Sales for the three months ended September 30, 2025 increased $40.8 million, or 8.6 percent, to approximately $513.7 million from $472.9 million for the prior year's corresponding period, of which acquisitions contributed $18.4 million. Additionally, the overall increase in sales was the result of an increase in sales in our SC and IPS segments of $33.3 million and $10.7 million, slightly offset by a decrease in our SCS segment of $3.3 million. The fluctuations in sales are further explained in our business segment discussions below.
Current wording
SALES. Sales for the three months ended March 31, 2026 increased $45.1 million, or 9.5 percent, to approximately $521.7 million from $476.6 million for the prior year's corresponding period, of which recent acquisitions contributed $40.7 million. Additionally, the overall increase in sales was the result of an increase in sales in our SC, IPS, and SCS segments of $10.9 million, $32.5 million, and $1.7 million, respectively. The fluctuations in sales are further explained in our business segment discussions below.
Previous wording
Service Centers segment. Sales for the SC segment increased $33.3 million, or 10.5 percent, for the three months ended September 30, 2025, compared to the prior year's corresponding period. Organic sales grew $34.7 million, this sales increase was the result of increases within our Ohio River Valley, California, South Central, and Rockies regions totaling $24.3 million offset by decreases in sales within Canada of $5.0 million. Sales attributable to recent acquisitions was $11.7 million during the period as compared to $13.0 million in the three months ended September 30, 2024.
Current wording
Service Centers segment. Sales for the SC segment increased $10.9 million, or 3.3 percent, for the three months ended March 31, 2026, compared to the prior year's corresponding period. Excluding the impact of recent acquisitions, sales grew $23.1 million, this sales increase was the result of increases within our Ohio River Valley, California, South East, and Rockies regions as well as our metal working division totaling $24.7 million due to an increase in shipped product revenue during the period, offset by decreases in sales within our South West region of $4.1 million. Sales from recent acquisitions contributed $5.7 million during the period compared to $17.9 million for the three months ended March 31, 2025.
Previous wording
Innovative Pumping Solutions segment. Sales for the IPS segment increased $10.7 million, or 11.9 percent, for the three months ended September 30, 2025, compared to the prior year's corresponding period. This sales increase was the result of increases within our fabrication, global solutions division, and our water and wastewater division totaling $19.5 million. Sales attributable to recent acquisitions was $6.7 million during the period as compared to $15.6 million for the three months ended September 30, 2024.
Current wording
Innovative Pumping Solutions segment. Sales for the IPS segment increased $32.5 million, or 37.7 percent, for the three months ended March 31, 2026, compared to the prior year's corresponding period. This sales increase was the result of increases within our water and wastewater division and increased production contracts totaling $10.6 million. Sales from recent acquisitions contributed $35.0 million during the period as compared to $13.2 million for the three months ended March 31, 2025.
Previous wording
Supply Chain Services segment. Sales for the SCS segment decreased by $2.2 million, or 1.1 percent, for the nine months ended September 30, 2025, compared to the prior year's corresponding period.
Current wording
Supply Chain Services segment. Sales for the SCS segment increased by $1.7 million, or 2.7 percent, for the three months ended March 31, 2026, compared to the prior year's corresponding period. This was primarily due to the onboarding of new customers and their related facilities, partially offset by decreased activity with existing customers.
Previous wording
GROSS PROFIT. Gross profit margin for the three months ended September 30, 2025 was 31.4 percent compared to 30.9 percent for the prior year's corresponding period. The gross profit margin for the three months ended September 30, 2025 was positively impacted by 50 basis points due to recent acquisitions and continuing margin expansion efforts.
Current wording
GROSS PROFIT. Gross profit margin for the three months ended March 31, 2026 was 32.3 percent compared to 31.5 percent for the prior year's corresponding period. The gross profit margin for the three months ended March 31, 2026 was positively impacted by 79 basis points due to recent acquisitions and continuing margin expansion efforts.
Previous wording
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES ("SG&A"). SG&A for the three months ended September 30, 2025 increased by $11.1 million, or 10.4 percent, to $117.6 million from $106.5 million for the prior year's corresponding period. The increase in SG&A is primarily the result of increased payroll related costs, depreciation and amortization, rent and IT expense.
Current wording
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES ("SG&A"). SG&A for the three months ended March 31, 2026 increased by $16.4 million, or 14.9 percent, to $126.1 million from $109.8 million for the prior year's corresponding period. The increase in SG&A is primarily the result of increased payroll related costs, depreciation and amortization, rent and professional fees.
Previous wording
OPERATING INCOME. Operating income for the third quarter of 2025 increased by $4.1 million to $43.7 million, from $39.6 million in the prior year's corresponding period. This increase in operating income was primarily driven by increases in our SC segment.
Current wording
OPERATING INCOME. Operating income for the first quarter of 2026 increased by $2.0 million to $42.5 million, from $40.5 million in the prior year's corresponding period. This increase in operating income was primarily driven by increases in our SC segment.
Previous wording
INTEREST EXPENSE. Interest expense for the third quarter of 2025 decreased $0.8 million compared to the prior year's corresponding period. This decrease was primarily due to the Company refinancing its Term Loan during the fourth quarter of 2024.
Current wording
INTEREST EXPENSE. Interest expense for the first quarter of 2026 increased $1.8 million compared to the prior year's corresponding period. This increase was primarily due to the Company refinancing its Term Loan B during the fourth quarter of 2025.
Previous wording
INCOME TAXES. Our effective tax rate for continuing operations was 26.6 percent for the three months ended September 30, 2025, compared to 11.1 percent for the three months ended September 30, 2024. Compared to the U.S. statutory rate for the three months ended September 30, 2024, the effective tax rate increased primarily due to a lower tax benefit from research and development tax credits, lower tax benefit from stock compensation vested during the period, partially offset by a higher benefit for state income taxes.
Current wording
INCOME TAXES. Our effective tax rate for continuing operations was 25.0 percent for the three months ended March 31, 2026, compared to 24.2 percent for the three months ended March 31, 2025. Compared to the U.S. statutory rate for the three months ended March 31, 2025, the effective tax rate increased slightly, primarily due to discrete items, including a decrease in tax benefits related to stock-based compensation vested during the period, net of amounts limited by Section 162(m), a lower benefit from research and development tax credits, and an increase in non-deductible expenses.
Previous wording
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.
Current wording
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 plus 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.
Previous wording
As of September 30, 2025, we had available cash of $123.8 million and credit facility availability of $153.4 million. We have a $185.0 million asset-backed line of credit (the "ABL Revolver"), partially offset by letters of credit of $31.6 million. We had no borrowings outstanding on our ABL Revolver as of September 30, 2025.
Current wording
As of March 31, 2026, we had available cash of $213.4 million and credit facility availability of $153.3 million. We have a $185.0 million asset-backed line of credit (the "ABL Revolver"), partially offset by letters of credit of $31.7 million. We had no borrowings outstanding on our ABL Revolver as of March 31, 2026.
Previous wording
The Company generated $56.5 million of cash from operating activities during the nine months ended September 30, 2025 compared to $70.1 million of cash generated during the prior year's corresponding period. The decrease of $13.6 million was primarily due to the higher payment of income taxes in 2025 compared to 2024.
Current wording
The Company generated $29.6 million of cash from operating activities during the three months ended March 31, 2026 compared to $3.0 million of cash generated during the prior year's corresponding period. The increase of $26.6 million was primarily due to income tax payments in 2025 compared to 2026.
Previous wording
For the nine months ended September 30, 2025, net cash used in investing activities was $58.7 million compared to a $165.1 million use of cash during the prior year’s corresponding period. This $106.4 million decrease was primarily driven by lower acquisition activity during the nine months ended September 30, 2025. Total cash paid for acquisitions, net of cash acquired, was $24.4 million compared to $149.4 million for the nine months ended September 30, 2024.
Current wording
For the three months ended March 31, 2026, net cash used in investing activities was $106.0 million compared to a $30.1 million use of cash during the prior year’s corresponding period. This $75.9 million increase was primarily driven by increased acquisition activity during the three months ended March 31, 2026. Total consideration, was $102.7 million compared to $12.9 million for the three months ended March 31, 2025.
Previous wording
For the nine months ended September 30, 2025, net cash used in financing activities was $23.2 million, compared to net cash used in financing activities of $42.4 million during the prior year’s corresponding period. The decrease was primarily due to share repurchase activity of $2.0 million during the nine months ended September 30, 2025 compared to $28.8 million for the nine months ended September 30, 2024.
Current wording
For the three months ended March 31, 2026, net cash used in financing activities was $13.1 million, compared to net cash used in financing activities of $7.1 million during the prior year’s corresponding period. The decrease was primarily due to the timing of shares withheld for taxes relating to shares vesting compared to prior corresponding period.
Previous wording
At September 30, 2025, our total outstanding debt was $644.0 million, or 56.9 percent of total capitalization (total debt plus shareholders' equity) of $1.1 billion. $643.0 million of this outstanding debt bears interest at various floating rates. For a further discussion of the Company's debt refer to Note 8. Long-Term Debt.
Current wording
At March 31, 2026, our total outstanding debt was $844.7 million, or 62.3 percent of total capitalization (total debt plus shareholders' equity) of $1.4 billion. $843.8 million of this outstanding debt bears interest at various floating rates. For a further discussion of the Company's debt refer to Note 8. Long-Term Debt.
Previous wording
At September 30, 2025, the Company had $277.3 million of liquidity including $123.8 million in cash and $153.4 million in availability under the ABL Revolver.
Current wording
At March 31, 2026, the Company had $366.7 million of liquidity including $213.4 million in cash and $153.3 million in availability under the ABL Revolver.
Previous wording
We monitor net working capital, which excludes cash and restricted cash, short-term debt obligations, and short-term operating leases. Net working capital as of September 30, 2025 was $364.6 million, an increase of $73.6 million compared to $291.0 million as of December 31, 2024. The increase was primarily due to sustained sales growth and acquisitions.
Current wording
We monitor net working capital, which excludes cash and restricted cash, short-term debt obligations, and short-term operating leases. Net working capital as of March 31, 2026 was $379.6 million, an increase of $17.9 million compared to $361.7 million as of December 31, 2025. The increase was primarily due to sustained sales growth and acquisitions.
Previous wording
For a discussion of the Company’s acquisitions refer to Note 12. Business Acquisitions. During September 30, 2025 and 2024, the Company invested $24.4 million and $149.4 million, respectively, in acquisitions.
Current wording
For a discussion of the Company’s acquisitions refer to Note 12. Business Acquisitions. During March 31, 2026 and 2025, the Company invested $102.7 million and $12.9 million, respectively, in acquisitions.
Previous wording
The Company's capital expenditures was $37.0 million and $15.7 million for the nine months ended September 30, 2025 and 2024 respectively. This includes a purchase of a facility, continued facility upgrades and enhancements, tools and equipment, software and technology investments and enhancements across the Company.
Current wording
The Company's capital expenditures was $3.3 million and $19.9 million for the three months ended March 31, 2026 and 2025 respectively. This includes continued facility upgrades and enhancements, tools and equipment, and enhancements across the Company.
Previous wording
The Company's unaudited condensed financial statements are prepared in accordance with U.S. GAAP. The accompanying unaudited Condensed Consolidated Financial Statements have been prepared on substantially the same basis as our annual Consolidated Financial Statements and should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2024. For a more complete discussion of our significant accounting policies and business practices, refer to the consolidated Annual Report on Form 10-K filed with the SEC on March 10, 2025. The results of operations for the nine months ended September 30, 2025 are not necessarily indicative of results expected for the full fiscal year.
Current wording
The Company's unaudited condensed financial statements are prepared in accordance with U.S. GAAP. The accompanying unaudited Condensed Consolidated Financial Statements have been prepared on substantially the same basis as our annual Consolidated Financial Statements and should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2025. For a more complete discussion of our significant accounting policies and business practices, refer to the consolidated Annual Report on Form 10-K filed with the SEC on February 26, 2026. The results of operations for the three months ended March 31, 2026 are not necessarily indicative of results expected for the full fiscal year.
Rearranged previous paragraphs (5)
Previous report — wording carried elsewhere
GROSS PROFIT. Gross profit margin for the nine months ended September 30, 2025 was 31.5 percent compared to 30.6 percent for the prior year's corresponding period. The gross profit margin for the nine months ended September 30, 2025 was positively impacted by 90 basis points due to recent acquisitions and continuing margin expansion efforts.
Previous report — wording carried elsewhere
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES ("SG&A"). SG&A for the nine months ended September 30, 2025 increased by approximately $37.4 million, or 12.4 percent, to $339.1 million from $301.7 million for the prior year's corresponding period. The increase in SG&A is primarily the result of increased payroll related costs, depreciation and amortization, rent and IT expense.
Previous report — wording carried elsewhere
OPERATING INCOME. Operating income for the nine months ended September 30, 2025 increased by $24.1 million or 22.7 percent to $130.2 million from $106.1 million in the prior year's corresponding period. This increase in operating income was primarily driven by increases in our SC and IPS segments.
Previous report — wording carried elsewhere
INTEREST EXPENSE. Interest expense for the nine months ended September 30, 2025 decreased $2.3 million compared with the prior year's corresponding period. This decrease was primarily due to the Company refinancing its Term Loan during the fourth quarter of 2024.
Previous report — wording carried elsewhere
The following table sets forth the reconciliation of Acquisition Sales and Organic Sales to the most comparable U.S. GAAP financial measure(in thousands):