Industrial and commercial distributor Global Industrial (NYSE:GIC) reported Q2 CY2025 results topping the market’s revenue expectations, with sales up 3.2% year on year to $358.9 million. Its GAAP profit of $0.65 per share was 41.3% above analysts’ consensus estimates.
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Global Industrial (GIC) Q2 CY2025 Highlights:
- Revenue: $358.9 million vs analyst estimates of $351.8 million (3.2% year-on-year growth, 2% beat)
- EPS (GAAP): $0.65 vs analyst estimates of $0.46 (41.3% beat)
- Adjusted EBITDA: $34.4 million vs analyst estimates of $29 million (9.6% margin, 18.6% beat)
- Operating Margin: 9.3%, up from 7.6% in the same quarter last year
- Free Cash Flow Margin: 8.4%, up from 5.1% in the same quarter last year
- Market Capitalization: $1.05 billion
Company Overview
Formerly known as Systemax, Global Industrial (NYSE:GIC) distributes industrial and commercial products to businesses and institutions.
Revenue Growth
A company’s long-term sales performance is one signal of its overall quality. Any business can put up a good quarter or two, but the best consistently grow over the long haul. Regrettably, Global Industrial’s sales grew at a mediocre 7.5% compounded annual growth rate over the last five years. This was below our standard for the industrials sector and is a tough starting point for our analysis.
We at StockStory place the most emphasis on long-term growth, but within industrials, a half-decade historical view may miss cycles, industry trends, or a company capitalizing on catalysts such as a new contract win or a successful product line. Global Industrial’s annualized revenue growth of 6.9% over the last two years aligns with its five-year trend, suggesting its demand was consistently weak. 
This quarter, Global Industrial reported modest year-on-year revenue growth of 3.2% but beat Wall Street’s estimates by 2%.
Looking ahead, sell-side analysts expect revenue to grow 6.2% over the next 12 months, similar to its two-year rate. This projection is underwhelming and implies its newer products and services will not catalyze better top-line performance yet.
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Operating Margin
Operating margin is one of the best measures of profitability because it tells us how much money a company takes home after procuring and manufacturing its products, marketing and selling those products, and most importantly, keeping them relevant through research and development.
Global Industrial was profitable over the last five years but held back by its large cost base. Its average operating margin of 7.8% was weak for an industrials business. This result is surprising given its high gross margin as a starting point.
Analyzing the trend in its profitability, Global Industrial’s operating margin decreased by 1.1 percentage points over the last five years. This raises questions about the company’s expense base because its revenue growth should have given it leverage on its fixed costs, resulting in better economies of scale and profitability. Global Industrial’s performance was poor no matter how you look at it - it shows that costs were rising and it couldn’t pass them onto its customers.
In Q2, Global Industrial generated an operating margin profit margin of 9.3%, up 1.7 percentage points year on year. Since its gross margin expanded more than its operating margin, we can infer that leverage on its cost of sales was the primary driver behind the recently higher efficiency.
Earnings Per Share
We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company’s growth is profitable.
Global Industrial’s unimpressive 6.1% annual EPS growth over the last five years aligns with its revenue performance. On the bright side, this tells us its incremental sales were profitable.
Like with revenue, we analyze EPS over a more recent period because it can provide insight into an emerging theme or development for the business.
For Global Industrial, its two-year annual EPS declines of 2.5% show it’s continued to underperform. These results were bad no matter how you slice the data.
In Q2, Global Industrial reported EPS at $0.65, up from $0.52 in the same quarter last year. This print easily cleared analysts’ estimates, and shareholders should be content with the results. Over the next 12 months, Wall Street expects Global Industrial’s full-year EPS of $1.71 to grow 4.1%.
Key Takeaways from Global Industrial’s Q2 Results
We were impressed by how significantly Global Industrial blew past analysts’ EPS expectations this quarter. We were also excited its EBITDA outperformed Wall Street’s estimates by a wide margin. Zooming out, we think this was a good print with some key areas of upside. The stock remained flat at $27.11 immediately following the results.
Is Global Industrial an attractive investment opportunity right now? When making that decision, it’s important to consider its valuation, business qualities, as well as what has happened in the latest quarter. We cover that in our actionable full research report which you can read here, it’s free.