10-Q · July 16, 2026
Fastenal reported solid second quarter results for 2026, with revenue of $2.39 billion and EPS of $0.33, in line with analyst expectations. The company continued to see strong year-over-year growth in daily sales,…
Earnings analysis · 10-Q
FAST earnings analysis
Filed October 19, 2026 · Our reading of the company's report
The latest report
Fastenal delivered strong Q3 execution, with revenue up 15.5% year over year to $2,463.3 million, diluted EPS up 19.8% to $0.35, and operating margin expanding to 21.5% despite gross-margin pressure. Contract customers,…
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Fastenal delivered strong Q3 execution, with revenue up 15.5% year over year to $2,463.3 million, diluted EPS up 19.8% to $0.35, and operating margin expanding to 21.5% despite gross-margin pressure. Contract customers, manufacturing demand, and digital sales drove growth, while operating cash flow reached $421.6 million and estimated free cash flow was approximately $349.8 million. The main offsets are working-capital investment, tariff and mix-related margin risks, higher planned capital spending, and the lowered 2026 digital-signing target.
Gross and operating margin
How much of each revenue dollar the business keeps.
One point per quarterly or annual filing. Both margins are shares of that report's revenue.
From revenue to operating profit
Where each $100 of revenue went in this report.
Cost of sales, operating expenses, and what remained. Figures are rounded to whole dollars.
How we read each report
Our analysis across the last few reports.
Our model's reading of each filing, not the share price or the market's reaction. Annual and quarterly reports each occupy one position.
Reported figures
- Earnings per share
- $0.35
- Segment
- U.S. reportable segment: Q3 sales of $2,035.2 million, up 14.5% from $1,777.9 million; Q3 ROA pre-tax profit was $456.9 million versus $380.5 million, up 20.1%.
- Segment
- Canada and Mexico Q3 revenue was $342.1 million versus $284.8 million, up 20.1%.
- Segment
- All other foreign countries Q3 revenue was $86.1 million versus $70.6 million, up 21.9%.
- Segment
- Manufacturing represented 76.6% of Q3 sales versus 75.9% last year; manufacturing daily sales rose 17.2%, while non-residential construction daily sales rose 12.0%.
What stood out
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Strong Revenue and EPS Growth
Q3 revenue increased 15.5% year over year to $2,463.3 million and 3.1% sequentially from $2,390.0 million in Q2. Diluted EPS rose to $0.35 from $0.29 a year ago and $0.33 in Q2, exceeding the $0.34 consensus estimate.
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Operating Margin Expanded
Gross margin declined 50 basis points year over year to 44.8% from 45.3%, but improved from 44.6% in Q2. SG&A leverage more than offset gross-margin pressure, with operating margin increasing 80 basis points year over year to 21.5% from 20.7%.
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Contract Customers Drove Growth
Management attributed Q3 sales growth to improved customer contract signings, product pricing contributing approximately 240 basis points, and modestly better industrial production. Contract sales grew 18.8% daily-sales-rate year over year and represented 76.5% of sales.
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Digital Sales Continued to Scale
Digital activity remained strong: FASTBin/FASTVend sales rose 17.6% to $827.2 million, FMI sales rose 14.6% to $1,121.3 million, and Digital Footprint sales rose 16.1% to $1,536.5 million. Weighted device signings increased 6.2% to 7,484 MEUs.
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Robust Cash Generation
Q3 operating cash flow rose 9.0% year over year to $421.6 million. Net capital expenditures were $71.8 million, or 2.9% of sales, producing estimated free cash flow of approximately $349.8 million.
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Debt Reduced and Liquidity Available
The balance sheet remained conservatively leveraged: total debt declined to $100.0 million from $125.0 million at December 31, 2025, while the company retained $835.0 million of committed revolver capacity and reported covenant compliance.
What to watch
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Gross-Margin Pressure
Gross margin fell to 44.8% from 45.3% year over year as customer mix reduced margin by approximately 50 basis points and price/cost reduced it by approximately 30 basis points. Management also noted that approximately 20 basis points of Q3 gross-margin benefit reflected favorable timing.
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Receivables Increased Faster Than Sales
Working capital absorbed cash as Q3 operating cash flow represented 101.1% of net income versus 105.0% last year. Accounts receivable increased 19.9% year over year to $1,615.2 million, and trade working capital increased 8.1% to $2,946.0 million.
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Tariff and Supply-Chain Uncertainty
Management warned that tariff and import-shipping impacts could become more significant as lower-tariff inventory is depleted and replaced. Tariff effects on net income were estimated to be immaterial in the first nine months, but Q3 gross margin still included approximately 20 basis points of favorable tariff-refund and timing benefits.
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Lowered Digital Signing Target
The 2026 weighted FASTBin/FASTVend signing goal was reduced to 27,000-29,000 MEUs from 28,000-30,000 MEUs, despite Q3 signings of 7,484 MEUs. Slower signing growth could limit future digital penetration and sales expansion.
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Higher Capital Spending Requirements
Capital spending is expected to increase materially to $310.0 million-$330.0 million in 2026 from $230.6 million in 2025, driven by the Atlanta hub replacement, IT projects, and trucking investment. Q3 net capital expenditures already increased 31.3% year over year to $71.8 million.
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Lease Guarantee Exposure
The filing states that there were no material changes to the 10-K risk factors, but it identifies a $128.3 million aggregate residual-value guarantee on operating leases. Management considers funding under the guarantees remote, but the obligation remains a contingent exposure.
Management's outlook
No numeric revenue or EPS guidance was provided. Management maintained 2026 net capital expenditure expectations of $310.0 million-$330.0 million, while the 2026 weighted FASTBin/FASTVend signing goal remained lowered at 27,000-29,000 MEUs versus the prior 28,000-30,000 MEUs.
Earlier filings 2
10-Q · April 16, 2026
Fastenal delivered solid Q1 results with revenue of $2,201.7 million (up 12.4% YoY) and diluted EPS of $0.30 (up 13.6% YoY). Operating income rose to $447.6 million (up 13.6%) with operating margin expanding slightly to…
This is our reading of a public filing, not the filing itself. Analysis can contain errors; check the source document for full context.