Distribution Solutions Group, Inc. (DSGR) Q3 2025 Earnings Call

Investor webinar replay

Replay transcript excerpt

remain particularly healthy across aerospace and defense, renewable, semiconductor-related technology, and industrial power, where production demand continues to accelerate. With solid top-line performance, inclusive of the significant investments we continue to make on the income statement, we're pleased to report an increase in our shareholder returns measured through adjusted earnings per share of 40 cents for the third quarter, an increase of 8.1% compared to the same period last year. We enhanced shareholder returns with more than $20 million of share buybacks in the first nine months of 2025, reflecting our confidence in the company's trajectory despite a challenging macro environment. We also enjoyed generating strong quarterly operating cash flow of more than $38 million, with adjusted EBITDA of $48.5 million. This is on top of strong cash flow generated in the second quarter as well. EBITDA margins for the quarter were 9.4%. primarily impacted by a combination of product and customer mix shifts, as well as strategic investments across the verticals. We expect these ongoing initiatives to start realizing returns and improved EBITDA margins in the coming quarters. Importantly, Barry Litwin and the investment we have made in the test equity team are moving expeditiously after a comprehensive review of our significant line of business opportunities. This review has led us to refine our go-to-market strategy which now focuses more on lines of business and capabilities that unlock growth and margin expansion opportunities. Jexpro Services continues to win wallet share while investing in its capabilities and delivered another record quarter. And our Canadian branch division, led by Source Atlantic, showed meaningful improvement in gross margin and expense rationali...