Graybar Electrifies Q3: Sales Up 10% as Net Income Climbs

TL;DR

**Graybar is crushing it with double-digit sales and income growth, making it a solid bet in the industrial distribution space.**

AI Summary

Graybar Electric Company, Inc. reported robust financial performance for the nine months ended September 30, 2025, with Net Sales increasing by 10.3% to $9,618.5 million from $8,717.5 million in the prior year. Net Income attributable to Graybar Electric Company, Inc. rose by 9.9% to $358.3 million, up from $325.8 million in the same period of 2024. Income from Operations also saw a healthy increase of 9.3% to $485.5 million. The company's cash and cash equivalents significantly improved, jumping from $90.4 million at December 31, 2024, to $416.6 million by September 30, 2025, largely driven by a substantial increase in net cash provided by operating activities to $408.8 million. Trade receivables increased by $288.1 million, and merchandise inventory by $55.8 million, indicating higher sales volume and inventory management. The Construction vertical market continues to be the largest revenue driver, accounting for 61.1% of net sales for the nine months ended September 30, 2025, up from 60.0% in 2024. The company is evaluating several new FASB accounting standards, including ASU 2025-05 for credit losses and ASU 2025-06 for internal-use software, which could impact future financial statements.

Why It Matters

Graybar's strong performance, particularly the 10.3% increase in net sales and 9.9% rise in net income, signals robust demand in the electrical, industrial, and automation sectors, which is a positive indicator for the broader construction and infrastructure markets. For investors, the significant increase in cash and cash equivalents to $416.6 million provides enhanced financial flexibility and potential for future investments or shareholder returns. Employees benefit from a growing company with stable operations, while customers can expect continued reliable supply chain management and logistics services. In a competitive landscape, Graybar's consistent growth demonstrates its ability to capture market share and adapt to evolving industry needs, especially with its focus on the expanding Construction vertical.

Risk Assessment

Risk Level: medium — The company faces medium risk due to its exposure to foreign currency translation, which resulted in a $4.3 million loss for the three months ended September 30, 2025, compared to a $2.4 million gain in the prior year. Additionally, the substantial increase in trade receivables by $288.1 million and merchandise inventory by $55.8 million for the nine months ended September 30, 2025, could indicate potential working capital management challenges or increased credit risk if economic conditions deteriorate.

Analyst Insight

Investors should consider Graybar's consistent growth and strong cash generation as a positive signal, especially given its critical role in the construction and industrial supply chains. Monitor future filings for impacts from new FASB accounting standards, particularly ASU 2025-05 on credit losses, as this could affect reported asset values and profitability. The company's stable dividend of $0.30 per share also offers a consistent return.

Financial Highlights

revenue

$9,618.5M

operating Margin

5.05%

net Income

$358.3M

eps

$11.04

gross Margin

19.27%

cash Position

$416.6M

revenue Growth

+10.3%

Revenue Breakdown

Key Numbers

• $9,618.5M — Net Sales (Increased by 10.3% for the nine months ended September 30, 2025)
• $358.3M — Net Income attributable to Graybar Electric Company, Inc. (Increased by 9.9% for the nine months ended September 30, 2025)
• $416.6M — Cash and cash equivalents (Increased from $90.4 million at December 31, 2024, to September 30, 2025)
• $408.8M — Net cash provided by operating activities (Increased from $304.2 million in 2024 to September 30, 2025)
• 61.1% — Construction vertical market share of net sales (Increased from 60.0% in 2024 for the nine months ended September 30, 2025)
• $3.68 — Net Income per share of Common Stock (For the three months ended September 30, 2025, up from $3.42 in 2024)
• $11.04 — Net Income per share of Common Stock (For the nine months ended September 30, 2025, up from $10.08 in 2024)
• $288.1M — Increase in Trade receivables (For the nine months ended September 30, 2025)
• $55.8M — Increase in Merchandise inventory (For the nine months ended September 30, 2025)
• $0.30 — Cash Dividends per share of Common Stock (Consistent for the three months ended September 30, 2025 and 2024)

Key Players & Entities

• GRAYBAR ELECTRIC COMPANY, INC. (company) — registrant
• FASB (regulator) — Financial Accounting Standards Board
• SEC (regulator) — U.S. Securities and Exchange Commission
• New York (company) — state of incorporation
• St. Louis (company) — principal executive offices location
• ASU 2023-07 (regulator) — Segment Reporting Update
• ASU 2023-09 (regulator) — Income Taxes Update
• ASU 2024-04 (regulator) — Expense Disaggregation Disclosures Update
• ASU 2025-05 (regulator) — Credit Losses Update
• ASU 2025-06 (regulator) — Internal-Use Software Update

FAQ

Risk Factors

• Adoption of New Accounting Standards [medium — regulatory]: The company is evaluating new FASB accounting standards, including ASU 2025-05 for credit losses and ASU 2025-06 for internal-use software. These changes could impact future financial statements, requiring adjustments to reporting and potentially affecting reported financial metrics.

Industry Context

Graybar operates in the electrical distribution industry, a sector characterized by its role in connecting manufacturers with end-users across various markets. The industry is influenced by construction cycles, infrastructure spending, and technological advancements in electrical and communication systems. Competition is typically based on product availability, pricing, logistics, and technical support.

Regulatory Implications

The company must comply with evolving accounting standards, such as those related to credit losses and software capitalization, which require careful implementation and may alter financial reporting. Adherence to financial reporting regulations ensures transparency and investor confidence.

What Investors Should Do

1. Monitor the impact of new accounting standards (ASU 2025-05 and ASU 2025-06) on future financial statements.
2. Analyze the continued growth in the Construction vertical market and its contribution to overall sales.
3. Evaluate the significant increase in cash and cash equivalents and operating cash flow.

Glossary

ASU 2025-05

Accounting Standards Update related to credit losses, likely impacting how the company recognizes and accounts for potential losses on its receivables. (Will affect the company's financial reporting and potentially its balance sheet and income statement.)

ASU 2025-06

Accounting Standards Update related to internal-use software, likely affecting how costs associated with developing or acquiring software for internal use are capitalized and amortized. (Could impact the company's reported expenses and asset values related to software development.)

Noncontrolling interests

Represents the portion of equity in a subsidiary that is not attributable to the parent company. It is the ownership interest of 'other' shareholders in the consolidated entity. (Indicates that Graybar has subsidiaries where it does not own 100% of the equity, and this portion is subtracted to arrive at net income attributable to Graybar Electric Company, Inc.)

Year-Over-Year Comparison

Graybar Electric Company, Inc. has demonstrated strong year-over-year performance. Net Sales increased by 10.3% to $9,618.5 million for the nine months ended September 30, 2025, compared to the prior year. Net Income attributable to the company also saw a healthy rise of 9.9% to $358.3 million. The company's liquidity has significantly improved, with cash and cash equivalents growing substantially, supported by a robust increase in net cash provided by operating activities. The Construction vertical continues to gain prominence, indicating a positive shift in revenue mix.

Filing Documents

• c402-20250930x10q.htm (10-Q) — 2720KB
• c402-20250930xex31_1.htm (EX-31.1) — 18KB
• c402-20250930xex31_2.htm (EX-31.2) — 20KB
• c402-20250930xex32_1.htm (EX-32.1) — 9KB
• c402-20250930xex32_2.htm (EX-32.2) — 10KB
• c402-20250930x10qg001.jpg (GRAPHIC) — 3KB
• 0000205402-25-000045.txt ( ) — 7533KB
• c402-20250930.xsd (EX-101.SCH) — 23KB
• c402-20250930_cal.xml (EX-101.CAL) — 63KB
• c402-20250930_def.xml (EX-101.DEF) — 71KB
• c402-20250930_lab.xml (EX-101.LAB) — 255KB
• c402-20250930_pre.xml (EX-101.PRE) — 202KB
• c402-20250930x10q_htm.xml (XML) — 1442KB

Financial Statements

Financial Statements Condensed Consolidated Statements of Income 3 Condensed Consolidated Statements of Comprehensive Income 4 Condensed Consolidated Balance Sheets 5 Condensed Consolidated Statements of Cash Flows 6 Condensed Consolidated Statements of Changes in Shareholders' Equity 7 Notes to Condensed Consolidated Financial Statements 9 Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 18 Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 22 Item 4.

Controls and Procedures

Controls and Procedures 22 PART II. OTHER INFORMATION Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 24 Item 5. Other Information 24 Item 6. Exhibits 25

FINANCIAL INFORMATION

PART I FINANCIAL INFORMATION

Financial Statements

Item 1. Financial Statements. Graybar Electric Company, Inc. and Subsidiaries CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited) Three Months Ended September 30, Nine Months Ended September 30, (Stated in millions, except per share data) 2025 2024 2025 2024 Net Sales $ 3,298.8 $ 2,979.5 $ 9,618.5 $ 8,717.5 Cost of merchandise sold ( 2,660.0 ) ( 2,382.3 ) ( 7,764.9 ) ( 6,986.5 ) Gross Margin 638.8 597.2 1,853.6 1,731.0 Selling, general and administrative expenses ( 449.8 ) ( 426.8 ) ( 1,305.2 ) ( 1,235.8 ) Depreciation and amortization ( 21.9 ) ( 20.2 ) ( 64.5 ) ( 59.9 ) Other operating (expense) income, net ( 6.8 ) 1.1 1.6 8.7 Income from Operations 160.3 151.3 485.5 444.0 Non-operating expenses, net ( 0.3 ) ( 0.8 ) ( 3.2 ) ( 2.9 ) Income before Provision for Income Taxes 160.0 150.5 482.3 441.1 Provision for income taxes ( 40.4 ) ( 40.0 ) ( 123.2 ) ( 114.5 ) Net Income 119.6 110.5 359.1 326.6 Net income attributable to noncontrolling interests ( 0.3 ) ( 0.3 ) ( 0.8 ) ( 0.8 ) Net Income attributable to Graybar Electric Company, Inc. $ 119.3 $ 110.2 $ 358.3 $ 325.8 Net Income attributable to Graybar Electric Company, Inc. per share of Common Stock $ 3.68 $ 3.42 $ 11.04 $ 10.08 Cash Dividends per share of Common Stock $ 0.30 $ 0.30 $ 0.90 $ 0.90 Average Common Shares Outstanding 32.4 32.2 32.5 32.3 The accompanying Notes to Condensed Consolidated Financial Statements are an integral part of the Condensed Consolidated Financial Statements. 3 Graybar Electric Company, Inc. and Subsidiaries CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) Three Months Ended September 30, Nine Months Ended September 30, (Stated in millions) 2025 2024 2025 2024 Net Income $ 119.6 $ 110.5 $ 359.1 $ 326.6 Oth

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View this 10-Q filing on SEC EDGAR