DXP Posts Growth and Margin Gains as DXC Beats on Profitability but Misses Sales Guide

Overview

• DXP reported first-quarter sales of $521.7 million, up 9.5% year over year, after a soft January that improved in February and strengthened in March with bookings carrying into April.
• DXP lifted gross margin to 32.3% and delivered adjusted EBITDA of $57.8 million, or 11.1%, while generating $26.3 million in free cash flow.
• DXP said higher selling, general and administrative costs came from one-time health care claims and legal and audit work tied to acquisitions, which it expects to normalize.
• DXC closed its fourth quarter with just over $3.1 billion in revenue, about $75 million below its organic outlook, yet exceeded guidance on adjusted operating margin and free cash flow.
• DXC said it won 32% by value of 13 large deals pursued and will pivot to smaller, faster-start contracts to boost in-quarter conversion as it advances an AI-led transformation.