Revenue: As of FY2026 Q1, the actual value is USD 496 M, beating the estimate of USD 489.3 M.EPS: As of FY2026 Q1, the actual value is USD 0.01, missing the estimate of USD 0.16.EBIT: As of FY2026 Q1, the actual value is USD 25.8 M.<h3>Consolidated Financial Performance</h3><h4>Operational Metrics</h4><ul><li>Net Income (Loss): Net income for the three months ended March 31, 2026, was $382 thousand, a decrease from $3,261 thousand in the same period of 2025 .</li><li>Operating Income (Loss): Consolidated operating income decreased to $13,630 thousand for the three months ended March 31, 2026, from $20,097 thousand in the three months ended March 31, 2025 .</li><li>Adjusted EBITDA: Consolidated Adjusted EBITDA was $37,833 thousand for the three months ended March 31, 2026, compared to $42,786 thousand for the same period in 2025 .</li></ul><h4>Cash Flow</h4><ul><li>Cash Flow from Operating Activities: Net cash used in operating activities was - $20,359 thousand for the three months ended March 31, 2026, compared to - $4,762 thousand for the same period in 2025 .</li><li>Cash Flow from Investing Activities: Net cash used in investing activities was - $21,824 thousand for the three months ended March 31, 2026, compared to - $5,053 thousand for the same period in 2025 .</li><li>Cash Flow from Financing Activities: Net cash provided by financing activities was $32,046 thousand for the three months ended March 31, 2026, compared to $7,633 thousand for the same period in 2025 .</li></ul><h4>Capital Expenditures</h4><ul><li>Total net capital expenditures for property, plant and equipment and rental equipment were $5,600 thousand for the three months ended March 31, 2026 .</li></ul><h3>Segmented Financial Performance</h3><h4>Lawson Segment</h4><ul><li>Segment Revenue: Increased by 2.7% to $123,736 thousand in Q1 2026 from $120,462 thousand in Q1 2025, driven by increased sales to strategic and government customers .</li><li>Gross Profit: Decreased by 4.8% to $64,987 thousand in Q1 2026 from $68,234 thousand in Q1 2025 . Gross profit margin was 52.5% in Q1 2026 compared to 56.6% in Q1 2025, due to sales mix shift towards lower margin customers, increased vendor costs, and higher tariff rates .</li><li>Selling, General and Administrative Expenses: Remained flat at $61,931 thousand in Q1 2026 compared to $61,918 thousand in Q1 2025 .</li><li>Operating Income (Loss): Decreased by 51.6% to $3,056 thousand in Q1 2026 from $6,316 thousand in Q1 2025 .</li><li>Adjusted EBITDA: Decreased by 19.1% to $11,569 thousand in Q1 2026 from $14,307 thousand in Q1 2025 .</li><li>Capital Expenditures: Totaled $1,367 thousand in Q1 2026, down from $3,976 thousand in Q1 2025 .</li></ul><h4>TestEquity Segment</h4><ul><li>Segment Revenue: Increased by 8.2% to $204,176 thousand in Q1 2026 from $188,773 thousand in Q1 2025, primarily due to a $19.0 million increase from test and measurement, rentals, chambers, refurbished, direct and indirect electronics production supplies .</li><li>Gross Profit: Increased by 9.2% to $45,594 thousand in Q1 2026 from $41,757 thousand in Q1 2025 . Gross profit margin increased to 22.3% in Q1 2026 from 22.1% in Q1 2025, primarily due to lower inventory write-offs .</li><li>Selling, General and Administrative Expenses: Increased by 10.4% to $41,547 thousand in Q1 2026 from $37,627 thousand in Q1 2025, mainly due to higher stock-based compensation, acquisition expenses, and strategic leadership investments .</li><li>Operating Income (Loss): Decreased by 2.0% to $4,047 thousand in Q1 2026 from $4,130 thousand in Q1 2025 .</li><li>Adjusted EBITDA: Increased by 3.4% to $13,246 thousand in Q1 2026 from $12,811 thousand in Q1 2025 .</li><li>Capital Expenditures: Totaled $6,461 thousand in Q1 2026, up from $3,188 thousand in Q1 2025 .</li></ul><h4>Gexpro Services Segment</h4><ul><li>Segment Revenue: Decreased by 1.1% to $117,648 thousand in Q1 2026 from $118,905 thousand in Q1 2025, mainly due to declines in renewables and aerospace and defense vertical markets .</li><li>Gross Profit: Decreased by 3.6% to $35,757 thousand in Q1 2026 from $37,106 thousand in Q1 2025 . Gross profit margin decreased to 30.4% in Q1 2026 from 31.2% in Q1 2025, primarily due to the pass-through of tariff charges .</li><li>Selling, General and Administrative Expenses: Increased by 5.8% to $27,356 thousand in Q1 2026 from $25,865 thousand in Q1 2025, mainly due to higher medical claim costs and stock-based compensation .</li><li>Operating Income (Loss): Decreased by 25.3% to $8,401 thousand in Q1 2026 from $11,241 thousand in Q1 2025 .</li><li>Adjusted EBITDA: Decreased by 19.7% to $12,027 thousand in Q1 2026 from $14,975 thousand in Q1 2025 .</li><li>Capital Expenditures: Totaled $716 thousand in Q1 2026, down from $987 thousand in Q1 2025 .</li></ul><h4>Canada Branch Division Segment</h4><ul><li>Segment Revenue: Increased by 0.9% to $51,022 thousand in Q1 2026 from $50,543 thousand in Q1 2025, driven by $0.8 million of additional revenue from the Eastern Valve acquisition .</li><li>Gross Profit: Increased by 1.9% to $17,210 thousand in Q1 2026 from $16,897 thousand in Q1 2025, primarily due to the Eastern Valve acquisition . Gross profit margin increased slightly to 33.7% in Q1 2026 from 33.4% in Q1 2025 .</li><li>Selling, General and Administrative Expenses: Increased by 3.6% to $16,824 thousand in Q1 2026 from $16,246 thousand in Q1 2025, mainly due to additional expenses from Eastern Valve and higher acquisition-related expenses .</li><li>Operating Income (Loss): Decreased by 40.7% to $386 thousand in Q1 2026 from $651 thousand in Q1 2025 .</li><li>Adjusted EBITDA: Increased by 7.7% to $2,818 thousand in Q1 2026 from $2,616 thousand in Q1 2025, driven by the Eastern Valve acquisition .</li><li>Capital Expenditures: Totaled $368 thousand in Q1 2026, up from $356 thousand in Q1 2025 .</li></ul><h3>Outlook and Strategy</h3>Distribution Solutions Group, Inc. plans to pursue organic growth by exploring opportunities that offer different channels to reach customers, increase revenue, and generate positive results . The company also aims to actively pursue acquisition opportunities that are complementary to its existing businesses and are expected to be financially accretive . For the full fiscal year 2026, Distribution Solutions Group, Inc. expects to spend approximately $25.0 million to $30.0 million for net capital expenditures to support ongoing operations .

Distribution Solutions | 10-Q: FY2026 Q1 Revenue Beats Estimate at USD 496 M