DXP Enterprises (NASDAQ:DXPE) executives highlighted record sales and sustained margin expansion in fiscal 2025, pointing to both organic growth initiatives and contributions from acquisitions while emphasizing diversification across end markets.
Fiscal 2025: Record sales and expanding profitability
Chairman and CEO David Little said 2025 was “a year of execution,” with performance improving across key metrics such as sales per business day, gross profit margin, and adjusted EBITDA margin. For the full year, DXP reported sales growth of 11.9% to $2.0 billion. Gross profit margin expanded 67 basis points to 31.5%, and adjusted EBITDA increased to $225.3 million, representing an 11.2% margin. Little described 2025 as a record year for sales and adjusted EBITDA margin.
Quarterly results and sales-per-day trends
DXP’s fourth-quarter sales increased 11.9% year-over-year to a record $527.4 million. Yee attributed the quarterly increase to higher average daily sales and acquisition contributions. Average sales per business day rose to $8.51 million in Q4 (62 business days), up from $8.03 million in Q3 (64 business days).
Management also provided monthly sales-per-day figures for the quarter in response to a question from Stephens analyst Zach Marriott:
- October: $7.5 million per day
- November: $8.2 million per day
- December: $9.8 million per day
For January, DXP reported $6.9 million in average sales per business day, which Yee said was up 2% year-over-year and is typically the company’s slowest month seasonally. He added that the company felt good about how February was “shaping up,” while noting that only January data was available at the time given the earlier filing timeline.
For the full year, average daily sales were $8.0 million compared with $7.13 million in fiscal 2024, an increase of 12.3%. Excluding acquisitions, Yee said average daily organic sales were $7.6 million in 2025 versus $6.7 million in 2024. Little noted sales per business day improved sequentially throughout the year, averaging $7.57 million in the first quarter and reaching $8.51 million by the fourth quarter.
Segment performance: IPS growth led by Water platform
DXP executives pointed to strong growth in Innovative Pumping Solutions (IPS), which increased 26.4% year-over-year to $390.3 million in fiscal 2025. Management attributed IPS growth to strength in energy and water-related project activity along with contributions from acquisitions.
Little emphasized that IPS includes two broad project-oriented businesses: energy-related project work and DXP Water. Within IPS, DXP Water represented 55% of segment sales in 2025, up from 46% the prior year. Management said the platform’s growth has been accompanied by improvements in both gross and operating income margins, and noted that backlog at DXP Water has grown organically and through acquisitions including Triangle, APSCO, and Pump Solutions.
Service Centers delivered 11% total sales growth, including 9.8% organic growth, driven by end-market diversity and an MRO-focused operating model. Little and Yee pointed to growth initiatives including automation, vacuum pumps, new pump brands for water and industrial markets, process equipment, and filtration, as well as expansion into new markets such as data centers. Management also said DXP’s e-commerce channel had a record year in 2025.
Supply Chain Services (SCS) sales declined 1.4% year-over-year, which management attributed primarily to customer facility closures, reduced activity at certain energy-related sites, and pullbacks at oil and gas and diversified chemical customer sites. Executives said SCS continues investing in customer care and remote technologies to expand service offerings and improve efficiencies, and they expect improvement in 2026 as new customers are onboarded.
Margins, cash flow, and balance sheet updates
DXP posted gross margin gains across all segments in fiscal 2025, with IPS delivering the largest expansion at 166 basis points, followed by SCS at 121 basis points and Service Centers at 59 basis points. Yee said acquisition contributions were accretive to gross and operating margins, and noted that 2025 sales mix consisted of 68% Service Centers, 19% IPS, and 13% SCS.
SG&A rose $48.2 million to $459.1 million, reflecting business growth, acquisitions, incentive compensation, merit and pay raises, higher insurance premiums, technology investments, acquisition costs, and growth initiatives. As a percentage of sales, SG&A was 22.8%, down 3 basis points year-over-year.
Cash flow from operations was $94.3 million for fiscal 2025, including $42.6 million in Q4, translating to $54 million of free cash flow for the year. Capital expenditures increased to $40.3 million from $25.1 million in 2024, which Yee said was driven by facility and equipment investments, software, and other growth-oriented projects; he added that CapEx is expected to be lower overall in 2026.
Acquisitions, refinancing, and outlook themes
Management said DXP completed six acquisitions during 2025—Arroyo, McBride, Moores Pump, APSCO, Triangle Pump, and Pump Solutions—contributing $96 million in sales for the year. The company also repurchased 182,000 shares, returning $17 million to shareholders.
In the fourth quarter, DXP refinanced and repriced its term loan B, maintaining a maturity of October 2030. Yee said the repricing reduced borrowing costs by 50 basis points to SOFR plus 325 from SOFR plus 375, and included raising an incremental $205 million to support acquisitions and investments over the next 9–12 months. As of December 31, DXP reported $303.8 million in cash and $846.8 million of total debt outstanding, along with liquidity of $457.3 million, including cash and availability under its ABL.
Yee said DXP closed three acquisitions after year-end—Mid-Atlantic, PREMIERflow, and Ambiente—that will be included in first-quarter 2026 reporting. He also said the company expects to close a minimum of one to three additional acquisitions by mid-year, citing a growing pipeline and “reasonable” valuations.
On the energy market, management noted that IPS energy-related backlog remained above long-term averages, although it declined in Q3 and Q4. Yee said average energy-related backlog finished the year up 36.9% compared to 2024, while Q4 energy-related average backlog declined 9.3% from Q3. In Q&A, executives said they were seeing increased quoting activity and suggested energy could be more back-end weighted in 2026 if projects currently on hold move forward.
When asked about potential margin differences between Q4 and Q1, Yee reiterated that DXP does not provide guidance but said recent water-focused acquisitions (APSCO, Triangle, and Pump Solutions) are expected to be accretive to margins if they perform as indicated in due diligence.
About DXP Enterprises (NASDAQ:DXPE)
DXP Enterprises, Inc is a Houston, Texas–based industrial products and services distributor serving customers across North America. The company provides a broad portfolio of maintenance, repair and operations (MRO) supplies, including fluid power components, safety products, mechanical power transmission parts, and instrumentation. DXP’s product offering spans well-recognized private brands as well as equipment and parts from leading global manufacturers, enabling clients in energy, heavy industrial and manufacturing sectors to source critical components from a single supplier.
Through its network of service centers and specialized repair facilities, DXP delivers inventory management programs, turnkey fluid power rebuilds and custom assembly solutions.
