FASTENAL CO (FAST) Q2 2025 Earnings Summary

Executive Summary

Fastenal delivered a clean top-line and bottom-line beat: revenue rose 8.6% year over year to $2.08B and diluted EPS increased 12.8% to $0.29; both exceeded S&P Global consensus (EPS $0.27*, revenue $2.07B*) (consensus: GetEstimates)*.
Mix and execution improved margins: gross margin ticked up to 45.3% (+20 bps YoY) on favorable price/cost and fastener expansion; operating margin expanded 80 bps to 21.0% .
Management trimmed 2025 capex guidance to $250–$270M (from $265–$285M) and lowered the annual FMI signings goal to 25–26k MEUs (from 28–30k), reflecting disciplined spend and tariff-driven focus shifts .
Commercial momentum accelerated: contract sales grew 11% and reached 73.2% of mix; 84 contracts were signed in Q2, and management expressed confidence in double‑digit sales growth for 2H25 given the pipeline and pricing actions .
Capital returns remain steady post 2‑for‑1 split: Board declared a $0.22 dividend payable Aug 26, 2025; all per‑share figures are split‑adjusted .

What Went Well and What Went Wrong

What Went Well
- Contract momentum and share gains: “In Q2, we saw 84 contract signings… Contract customer sales for the quarter increased 11% and now represent 73.2% of our revenues” .
- Margin execution: Gross margin rose to 45.3% on improved fastener margins and slightly favorable price/cost; operating margin reached 21.0% .
- Digital leverage: Digital Footprint represented 61.0% of sales, with eBusiness at 30.0% and FMI at 44.1%, providing scalable growth and efficiency .
What Went Wrong
- Tariff overhang slowed device signings: Weighted FASTBin/FASTVend signings were 6,458 in Q2 (101/day), as tariff discussions crowded sales bandwidth; full‑year signings goal cut to 25–26k MEUs .
- Mix and logistics headwinds: Customer/product mix diluted gross margin; higher import duties and fleet/third‑party freight costs also weighed on gross profit .
- Working capital intensity: Inventories rose 14.7% YoY to support growth, tariff mitigation, and fastener expansion; operating cash conversion declined YoY for the six‑month period .

Financial Results

Key metrics (chronological: Q2 2024 → Q1 2025 → Q2 2025)

Metric	Q2 2024	Q1 2025	Q2 2025
Revenue ($USD Millions)	$1,916.2	$1,959.4	$2,080.3
Diluted EPS ($)	$0.25	$0.26*	$0.29
Gross Profit Margin %	45.1%	45.1%	45.3%
EBIT Margin % (Operating Margin)	20.2%	20.1%	21.0%

Note: Q1 2025 EPS shown split-adjusted via S&P Global; values marked with an asterisk are from S&P Global. Values retrieved from S&P Global.*

Q2 2025 actuals vs S&P Global consensus

Metric	Consensus	Actual	Surprise
Revenue ($USD Billions)	$2.066*	$2.080	Beat
Diluted EPS ($)	$0.270*	$0.29	Beat

Consensus values marked with an asterisk are from S&P Global. Values retrieved from S&P Global.*

Product and End-Market Mix (Q2 2025)

Category	DSR YoY	% of Sales
OEM fasteners	+8.4%	19.4%
MRO fasteners	+3.4%	11.1%
Total fasteners	+6.6%	30.5%
Safety supplies	+10.7%	22.2%
Other product lines	+9.0%	47.3%
Total non-fasteners	+9.5%	69.5%

End Market	DSR YoY	% of Sales
Heavy manufacturing	+7.5%	42.9%
Other manufacturing	+11.5%	33.0%
Total manufacturing	+9.2%	75.9%
Non‑residential construction	+3.0%	8.1%
Other end markets	+8.7%	16.0%
Total non‑manufacturing	+6.7%	24.1%

Customer Mix (Q2 2025)

Customer Type	DSR YoY	% of Sales
Contract	+11.0%	73.2%
Non‑contract	+2.6%	26.8%

KPIs (Q2 2025)

KPI	Q2 2025	Prior Qtr / Yr
Daily Sales ($)	$32.5	$29.9 in Q2 2024
FMI sales as % of sales	44.1%	41.8% in Q2 2024
eBusiness as % of sales	30.0%	28.7% in Q2 2024
Digital Footprint as % of sales	61.0%	59.4% in Q2 2024
Weighted FASTBin/FASTVend installations (MEUs; end)	132,174	119,306 in Q2 2024
$50K+/mo customer sites (count)	2,683	2,502 in Q1 2025

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Capital Expenditure	FY 2025	$265–$285M	$250–$270M	Lowered
Weighted FASTBin/FASTVend signings (MEUs)	FY 2025	28,000–30,000	25,000–26,000	Lowered
Gross Margin outlook	FY 2025	—	“Relatively flat with 2024”	Set
Ongoing tax rate	Ongoing	~24.5%	~24.5% (no material change expected post OBBBA)	Maintained
Quarterly dividend	Q3 2025 payable Aug 26	—	$0.22/share declared	Announced
Stock split	Effective May 21, 2025	—	2‑for‑1 split completed (per-share figures retro‑adjusted)	Completed

Earnings Call Themes & Trends

Topic	Previous Mentions (Q4 2024, Q1 2025)	Current Period (Q2 2025)	Trend
Tariffs & pricing	Q1: Initiated pricing actions aiming for 3–4% in Q2 with potential to double in 2H25	Implemented three pricing actions; contributed 140–170 bps in Q2 with plans for additional actions (3–5% in Q3, potentially 5–8% by EOY subject to policy) [12] [13]	Intensifying pricing cadence
Digital & FMI	Q1: Digital Footprint 61%; device installed base 129,996 MEUs	Digital Footprint 61.0%; FMI 44.1% of sales; installed base 132,174; signings at 101/day	Installed base rising; signings slower near term
Contracts & mix	Q1: Double‑digit contract growth; contracts 73.1% of sales	84 signings; contracts 73.2% of sales; contract DSR +11%	Strengthening
Fastener expansion	Q1: Inventory build to improve availability; neutral to GM in Q1	Fastener expansion improved GM; spot buys at higher margins; availability/time benefits	Positive margin impact building
Capex & distribution	Q1: Capex $265–$285M; Utah/Atlanta hubs; IT and FMI	Capex trimmed to $250–$270M; continued hub automation and FMI hardware	More disciplined spend
eCommerce	Q1: “Need to get better” to capture spot buys; target 66–68% digital footprint	fastenal.com relaunch later in 2025 to capture small‑ticket spot buys; AI‑enhanced search/checkout	Execution underway

Management Commentary

“Sales in the second quarter increased by 8.6%, marking our highest daily growth since early 2023… contract customer sales… increased 11% and now represent 73.2% of our revenues.” — Jeff Watts, President & CSO .
“Our operating income… increased to 21.0%… Gross margin… increased to 45.3%… improved margin on fastener sales relating to the fastener expansion project…” .
“We implemented three separate pricing actions which aimed to contribute 3%–4% of price by the end of the second quarter… Additional pricing actions will be necessary in the second half of 2025.” — Management .
“Because of… tariffs… there were fewer discussions about expanding the FMI footprint… we ended the quarter with just over 132,000 devices… 44.1% of sales.” — CEO Dan Florness .
“We expect our gross margin for 2025 will be relatively flat with 2024.” — Management .

Q&A Highlights

Pricing cadence and exit rate: Q2 exit around ~3%; Q3 likely 3–5%, potentially 5–8% by year‑end depending on tariff outcomes and execution [12] [13].
Margin outlook: FY25 gross margin expected “relatively flat” vs 2024; price/cost tougher in 2H as higher‑cost inventory flows through; aim is to defend, not expand, margin .
Fastener expansion economics: Improved availability and more profitable spot‑buy mix boost gross margin and free up field time, supporting growth and contribution margins .
Demand trajectory: Management voiced confidence in achieving double‑digit sales growth in 2H25 given pipeline and pricing momentum .
eCommerce strategy: Website relaunch in 2025 to capture spot buys (including small customers) with AI‑enhanced search/checkout; large accounts also show share‑of‑wallet upside online .

Estimates Context

Q2 2025 beats: Revenue $2.080B vs $2.067B* and EPS $0.29 vs $0.27*; Q1 2025 was roughly in line on EPS ($0.26 vs $0.26*) and modest revenue beat ($1.959B vs $1.951B*) (consensus: GetEstimates)*.
Implications: Street models likely move higher for 2H revenue (contract signings, easier comps, pricing) and reflect flat GM% with EBIT leverage from SG&A efficiency; capex reduction should modestly lift FCF forecasts .
Estimates marked with an asterisk are from S&P Global. Values retrieved from S&P Global.*

Key Takeaways for Investors

Commercial momentum + pricing delivered a clean beat; narrative pivoting to sustained double‑digit 2H top‑line potential, contingent on tariff execution and demand stability .
Quality of growth improved: contract mix up to 73.2% and digital penetration at 61% should support durable share gains and operating efficiency .
Margins: modest gross margin tailwind from fastener expansion and price/cost discipline, offset by mix and logistics; FY25 GM% guided flat; EBIT margin benefitting from SG&A leverage .
Capital discipline: capex trimmed to $250–$270M while executing Utah/Atlanta hubs and FMI hardware; supports FCF resilience amid elevated inventories for tariff mitigation .
Near‑term swing factors: tariff policy cadence (affecting pricing and device signings), logistics costs, and mix toward large accounts and non‑fasteners .
Tactical setup: Beat/raise dynamic on revenues possible if pricing flows as planned and contract wins convert; margin trajectory likely steady with upside tied to fastener expansion mix benefits .
Income/support: $0.22/share dividend post split provides steady return while the business reinvests in digital and distribution network .

Sources: Q2 2025 8-K and press release, Q2 2025 earnings call transcript, Q1 2025 and Q4 2024 press releases, dividend and split announcements.

Q2 2025 8‑K (including Exhibit 99.1 press release):
Q2 2025 standalone press release:
Q2 2025 earnings call transcript:
Q1 2025 press release (trend):
Q4 2024 press release (trend):
Dividend (7/11/25):
2‑for‑1 stock split (4/23/25):

Notes on S&P Global data: Consensus estimates and select split‑adjusted EPS values are from S&P Global and are marked with an asterisk. Values retrieved from S&P Global.*