Industrial and safety product distributor Distribution Solutions (NASDAQ:DSGR) fell short of the market’s revenue expectations in Q1 CY2025, but sales rose 14.9% year on year to $478 million. Its non-GAAP profit of $0.31 per share was 12.3% below analysts’ consensus estimates.

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  • Revenue: $478 million vs analyst estimates of $497.2 million (14.9% year-on-year growth, 3.8% miss)

  • Adjusted EPS: $0.31 vs analyst expectations of $0.35 (12.3% miss)

  • Adjusted EBITDA: $42.79 million vs analyst estimates of $47.13 million (9% margin, 9.2% miss)

  • Operating Margin: 4.2%, in line with the same quarter last year

  • Free Cash Flow was -$10.41 million, down from $2.94 million in the same quarter last year

  • Market Capitalization: $1.21 billion

Bryan King, CEO and Chairman, said, “Our financial results met expectations for the quarter, despite macro uncertainties that affected all U.S. companies. We are pleased with first quarter sales of $478 million, up 14.9%, comprising inorganic revenue of $51 million and an increase in organic average daily sales of 4.3%. On a constant currency basis our organic ADS was up 4.7%, which includes a full quarter of contribution from Source Atlantic. First quarter’s Adjusted EBITDA grew to $42.8 million, up 18.6% and expanded to 9.0% as a percent of sales compared to 8.7% in the year-ago period.

Founded in 1952, Distribution Solutions (NASDAQ:DSGR) provides supply chain solutions and distributes industrial, safety, and maintenance products to various industries.

A company’s long-term sales performance is one signal of its overall quality. Even a bad business can shine for one or two quarters, but a top-tier one grows for years. Over the last three years, Distribution Solutions grew its sales at an incredible 50.3% compounded annual growth rate. Its growth beat the average industrials company and shows its offerings resonate with customers.

Distribution Solutions Quarterly Revenue
Distribution Solutions Quarterly Revenue

We at StockStory place the most emphasis on long-term growth, but within industrials, a stretched historical view may miss cycles, industry trends, or a company capitalizing on catalysts such as a new contract win or a successful product line. Distribution Solutions’s annualized revenue growth of 17.8% over the last two years is below its three-year trend, but we still think the results suggest healthy demand.

Distribution Solutions Year-On-Year Revenue Growth
Distribution Solutions Year-On-Year Revenue Growth

This quarter, Distribution Solutions’s revenue grew by 14.9% year on year to $478 million but fell short of Wall Street’s estimates.