With a combined revenue of $21 trillion and $2.1 trillion in profits, the 2026 Fortune 500 is the definitive list of America's largest companies.

Fortune 500

The 300 companies on this year’s list brought in over $12.5 trillion in revenue for the latest 12 months, with the median revenue figure at $24 billion.

America's Most Innovative Companies

AI is a major force shaping this year’s list—but it’s far from the only story.

World's Most Admired Companies

Almost $20 trillion in revenue—and a record-breaking $1.87 trillion in profits. Introducing the 2025 Fortune 500, the definitive list of the biggest companies in America.

The 300 companies on this year’s list brought in over $12.6 trillion in revenue for the latest 12 months, with the median revenue figure at $22 billion.

Leaders in all industries rely more than ever on Big Tech—and appreciate the giants that deliver, at scale, without drama.

Industries included in the sector are diversified, electronics, and food and grocery.

Fortune Sector Leaders: Wholesalers

The Fortune 500, in its 70th year in 2024, ranks the biggest U.S. companies by revenue.

The 26th edition of the list shows how much esteem Big Tech giants command among other business leaders.

The 25th Fortune World’s Most Admired Companies list suggests that tech giants’ peers respect them as much as ever.

The Fortune 500, in its 69th year in 2023, ranks the biggest U.S. companies by revenue.

Just as it dominates our economy, Big Tech now dominates Fortune’s annual ranking of corporate reputation.

This year’s Fortune 500 marks the 68th running of the list.

After a year in which humanity leaned more heavily than ever on tech giants, see which companies topped Fortune's ranking of corporate reputation.

This year’s Fortune 500 marks the 67th running of the list.

F500-2021-479-Fastenal

<p class="xmsonormal">Duct tape. Faucets. Power tools. When companies need to remodel their buildings, fix their office toilets, or repair broken desks, they head to Fastenal to buy their industrial and construction supplies. Fastenal is a distributor for big manufacturers like 3M, DeWalt, and Honeywell; some of its rivals include the larger and older W.W. Grainger and ecommerce giant Amazon.</p>

For an astounding 13th straight year, Apple claims the top spot in Fortune’s annual ranking of corporate reputation, based on a survey of almost 3,800 executives, directors, and analysts.

Explore this year's ranking of the 50 companies with the best long-term growth potential.

Future-50-2020-Fastenal

<p class="p1">When the coronavirus emerged in early 2020, the company, based in Winona, Minn., had a head start. A distributor of factory floor supplies, including personal protective equipment, Fastenal reacted quickly to the virus’s rise in China, adapting its supply chains and becoming a major supplier of PPE. That helped it set itself apart even as industrial activity softened amid lockdowns. Its next challenge will be whether it can manage both a surplus of PPE and a still-soft industrial base going into 2021.</p>

The Future 50

This year's Fortune 500 marks the 66th running of the list.

Here are the World's Most Admired Companies for 2019 as ranked in their industries. See who made the list.

This year's Fortune 500 marks the 65th running of the list.

This year's Fortune 500 marks the 64th running of the list.

This year's Fortune 500 marks the 63rd running of the list.

This year's Fortune 500 marks the 62nd running of the list.

This year's Fortune 500 marks the 61st running of the list. Wal-Mart claims the top spot again. See who made the list.

Wal-Mart stayed on top as its sales crept closer to half-a-trillion dollars. Apple moved into the top five. And UnitedHealth Group continued its steady climb. 

Future 50

Overall Score

Sector

Industry

Current All-Star Rank

Previous All-Star Rank

Industry Rank

Previous Industry Rank

Innovation

People Management

Use of Corporate Assets

Social Responsibility

Quality of Management

Financial Soundness

Long-Term Investment Value

Quality of Products/Services

Global Competitiveness

Strongest Dimension

Years on list

Previous rank

State

Key Financials (last Fiscal Year)

Revenues ($M)

Profits ($M)

Assets ($M)

Total Stockholder Equity ($M)

Profit Ratios

Profit as % of Revenues

Profits as % of Assets

Profits as % of Stockholder Equity

Earnings Per Share (last Fiscal Year)

Earnings Per Share ($)

EPS % Change (from prior fiscal year)

EPS % Change (5 year annual rate)

EPS % Change (10 year annual rate)

Total Return

Total Return to Investors (last year)

Total Return to Investors (5 year, annualized)

Total Return to Investors (10 year, annualized)

Fastenal Company provides industrial and construction supplies in the U.S., Canada, and Mexico through wholesale distributors. In addition to an array of hardware and manufacturing supplies, Fastenal offers threaded fasteners, bolts, nuts, screws, studs, and related washers that are used in manufactured products and construction projects, as well as in the maintenance and repair of machines.

Q2 2026

Q1 2026

Q4 2025

Q3 2025

Q2 2025

Q1 2025

Q4 2024

Fastenal (FAST): Company Profile, Stock Price, News, Rankings

legacy

Fastenal

fastenal

Greetings, and welcome to the Fastenal 20 24 Annual and Q4 Earnings Results Conference Call. At this time, all participants are in a listen only mode. As a reminder, this conference is being recorded. It's now my pleasure to turn the call over to Taylor Ranta with The Fastenal Company. Please go ahead, Taylor.

Welcome to The Fastenal Company 2024 Annual and 4th Quarter Earnings Conference Call. This call will be hosted by Dan Flores, our Chief Executive Officer Jeff Watts, our President and Chief Sales Officer and Holden Lewis, our Chief Financial Officer. The call will last for up to 1 hour and start with a general overview of our annual and quarterly results and operations with the remainder of the time being open for questions and answers. Today's conference call is a proprietary Fastenal presentation and is being recorded by Fastenal. No recording, reproduction, transmission or distribution of today's call is permitted without Fastenal's consent.

This call is being audio simulcast on the Internet via the Fastenal Investor Relations homepage, investor. Fastenal.com. A replay of the webcast will be available on the website until March 1, 2025 at midnight Central Time. As a reminder, today's conference call may include statements regarding the company's future plans and prospects. These statements are based on our current expectations and we undertake no duty to update them.

It is important to note that the company's actual results may differ materially from those anticipated. Factors that could cause actual results to differ from anticipated results are contained in the company's latest earnings release and periodic filings with the Securities and Exchange Commission, and we encourage you to review those factors carefully. I would now like to turn the call over to Mr. Dan Flores.

Thank you, and good morning, everybody, and welcome to the Q4 Fasten Earnings Call. And I'll if you would I'm going to start in the foot book on Page 3. And our business grew 3.7% in the Q4 in extra days, so daily was 2.1%. Frankly, a frustrating finish to a challenging year. Our business gets and loses leverage relatively quickly when our growth expands or our growth contracts.

And you saw evidence of that in the quarter where we lost some leverage and EPS came in at $0.46 down about 2%. December, I think it's worthwhile to talk a little bit about December and then frankly, we've already moved on to 2025. But look at December from the standpoint of it's there's 2 months going on there. The first roughly 15 days, so you know that when I think of, say, the Friday before Christmas, We were trending towards sales growth, daily growth. We felt it would be in excess of 3%.

Depending on which voice you listen to when we were comparing trends, you could have argued for 4%, but a 3 plus percent number. And in the last that Christmas week and then that New Year's Day week, that collapsed. And if I'm doing the math, it tells me if the 1st 15 days of the month were growing at 3% to 4%, and you wait that against the last 5 days and having all that evaporate, that means in the last 5 days, we were probably negative somewhere between 9% 12%. And however, we don't believe we believe the first part of the month is more indicative of where we are and where we're going to be in January February than what we saw in the last area. If you look at the data of what's happening, we have a lot of anecdotal data, but I sat down on January 2 with our vending team.

And I said, we have something unique here that we really should understand better, and that is we have vending machines in just over 20,000 facilities on the planet. And the calendar is the calendar. And let's look at a baseline. And I asked them we give a lot of the information that comes in, and we look at it in weekly snapshots. So Sunday to Saturday type snapshot.

And I said, look at the 2 weeks prior to the week that Christmas touches and look at what our trends were and what our pace of business was in that timeframe. And then look at each week thereafter. So the week that Christmas touches, the week that New Year's touches, the first clean week of January and the 2nd clean week of January. So you can really look at has did something different happen there. The other thing that I asked them to do is we we're fortunate with a range of customers.

Obviously, industrial is our biggest component. But in the vending area, we have a meaningful customer base that represents non manufacturing entities and a handful of those are e commerce companies. So and their trends would be completely different because they're really busy around the holidays. So take out our top 10 vending customers. We did that and I said let's analyze the rest.

And excuse me, the top 10 non manufacturing vending customers. So if I look at and then I said, determine a bright line of where you think the facility shut down. And the team came to the conclusion that if we're doing 100 transactions on average a day and that number goes to 25 or less, we're going to consider that facility is essentially shut down. And because the only people there are maybe there's some maintenance folks that are in there because it's good time to do maintenance. Maybe there's a few production lines that are running because they're behind or maybe there's an area you don't shut down like heat treatment because it's too expensive to start it back up.

So in 20 22, about 25% of the facilities we sell into that have vending, about 25% saw the activity drop more than 75%. So they were running less than 25% of normal. In 2023, that was 30%. In 2024, that's 35%. So a meaningful uptick really since the economy weakened in 'twenty two, the industrial economy.

We saw a meaningful uptick in each of the 2 years and that was accentuated this year. More telling was the week of New Year's. So the week after Christmas, 5% were shut down, 6% were shut down. This year, it's 17% were shut down. So there were a tremendous number of companies that probably shut down the day after Christmas.

And I don't know if they're open the Monday or Tuesday before, but the day after Christmas and they stayed shut down until through January 2. They just said we're idling operation. And that plays very true to what we saw in our numbers. The only other item that was noteworthy is we looked also at their activity is just down because if there's normally 5 workdays in a week and you're down to 4, you'd expect to be at about 80%. We did see the week after Christmas and 2 weeks after Christmas, a very strong increase in the number of customers that were down at least 25%.

And when I look at so last week, that number the activity had normalized as far as how many are shut down, it's about 4%. But we saw an impact of the weather in the Southeast, and we don't have this week's data yet. Our anticipation is that normalized, and Holden will touch on a little bit of that when he looks at truck routes and things like that, that we canceled during last week. So a lot of waiting into the weeds there. I hope that made sense.

My guess is a few of you will have follow-up questions for Holden on his after the call. The next piece and I'll touch I'll dive a little deeper when we get on Page 2. But in preparation for Investor Day, we thought we'd share some information we're going to be talking about and we're planning on Investor Day in March. And we thought we'd share a new view. So when I joined the organization back in 1996, it was all about account numbers and dollars per active.

So active accounts, how many customers how many accounts bought from you and dollars per customer and growing both of those over time. And we used to always say in a typical branch, you had 100 active accounts, 10 of those represented about 65 percentage of sales. If you would have looked at it not as an account base, but as a customer, and what I mean by that is we might have 3 account numbers in a building because we're selling to the maintenance area, we're selling to the production area and we're selling maybe a second production line. So you have 3 account numbers to track the activity. That's one customer, but we looked at it as 3 accounts or 3 at the time.

I'll touch on that in a second on Page 2. Finally, on Page 3, we raised our quarterly dividend by roughly 10%. If you annualize the dividend we just declared, it's about 1.72 dollars We feel very confident on our ability to continue strong cash flow generation, very indicative of our business model for many, many years. So you see a new chart here, probably an unfamiliar look to the business, but some I felt the best way to address this and I'm not seeing my sheet of paper here unfortunately is to address a letter I did for our employees. And in that letter sorry, I had to go back to my desk to grab it.

I described to our employees what they're looking at in this information. Some quick definitions. Each customer site is a roll up of revenue going into a unique site from a branch or on-site. It includes everything we provide, whether it's dropped at a dock or a customer desk, supplied via an FMI device, shipped to the facility using the 3rd party or picked up at a Fastenal location. Each customer site also rolls together all the individual accounts our local team uses to summarize and build for the products and services we provide.

The information in the slide is based on analysis of roughly 270,000 unique customer sites that we supply products into during 2024. Again, it's a simple looking graphic, but it tells a powerful story about our business. The top two buckets summarize customers that are doing more than $10,000 a month and then the subset of that that do more than $50,000 So the 10 ks plus includes about 5% of the customer sites we serve, but represents about 77% of our total sales. Since 2017, revenue through these customer sites has grown at a compound annual growth rate of 14%. When I look at these customers, they really value what we bring to the marketplace, and we've been incredibly successful.

In 2024, there are about 13,000 customer sites in this group, again, about 5% of 270,000, which translates into about 54 sites in the average district. There's 240 districts across our business. The average customer site spends about 38,000 per month and the number of 10 ks customer sites has increased about 9% a year since 2017. Thanks to the strength of our on-site program, there's a subset of this group that has grown even faster. The customer sites were spend is at least $50,000 per month.

Since 2017, revenue through this subset of customer sites has grown at a compound annual growth rate of 18%. The scale of this business changes the customer site economics. It allows us to operate more cost effectively, hence the On-site program. This in turn expands the resources we can provide, improves the opportunity for the customer and for Fastenal. In 2024, there were 2,547 customer sites in this bucket, about 1% of the total sites we serve, which translates to about 11 customer sites in average in an average district.

Since 2017, the number of 50 ks plus customers has grown 16% per year. So we've heavily talked about on-site acquisition. And as you see, of this 2,500, about 2,000 of them are physically in an on-site. We'll talk in March about how we intend to deemphasize on-site numbers and change it to talking about 50 ks plus customers. We believe that positions the best story of telling the business to make it clear what we're striving to accomplish and how successful we are at that endeavor.

On the lower half of the slide, there are 2 buckets of customer sites where we appear less successful. Here are some thoughts on these. Customer sites spending between $510,000 per month represent about 4% of the customer sites we serve. In 2024, there are about 10,000 customer sites in this bucket, roughly 42 in an average district, and we've added about 4% more sites per year to this bucket since 2017. This would be mediocre except for one fact.

We've been incredibly successful with many of the customer sites formerly in this group. In fact, many have become 10 ks plus customer sites over the last 7 years. This success has been driven by your efforts to introduce our supply chain, transformational capabilities using FMI, on-site, production parts, MRO products and many industrial services. In fact, sidebar here, industrial services broke $100,000,000 in revenue for the first time in 2024. It's been great for those customers, for our employees, for our shareholders and for our suppliers.

In this light, our performance isn't mediocre. However, it's not great either. That 4% CAGR should probably be upper single digits, if not 10%. The final bucket of customer sites less than 5,000 per month has borne the brunt of changes in our business in the world over the past several years. A decade of strategically closing locations, COVID-nineteen and its impact on how customers purchase product, thank e commerce, the removal of products from our previously stocked in our distribution centers, this we reversed in 2024.

A strategic decision regarding sales time allocation and maybe some slippage in execution by the Fasten organization. I believe the critical aspect of this group is you close a lot of locations, that customer that sees us as convenient but not special, that business falls off. The way you make that special is you push harder on your e commerce capabilities and what it means for unplanned spend because what that do does, it benefits every customer bucket you see on this page because we're more than planned spend, we're everything they need. Flipping to Page 5. On-site, we signed 56 in the quarter.

So we finished the year with 2,031, increase of about 12% of what we saw a year ago. Customers in the on-site world grew mid single digits. We did see similar to what we saw in 2000, older contingents of on sites go negative during the year, and it's not uncommon on a call with a district manager to learn about 2 or 3 or 4 customers where their business is down 40%, 50%, 60%, 70% where it was a year ago. That's a sign of what the industrial economy is taking away. Our execution and our ability to take market share is a sign of how we do self help and fight back.

All told, we signed 358 Onsites in 2024. We signed 326 last year, so an increase, not at our goal, but a meaningful increase and signings that are consistent with previous peaks in 2019, the year before COVID, in 2022, the 1st year we came out. FMI Technology, huge aspect of the business here and strong success. We broke 100 MAU signings per day for the first time. We feel very good about how we exit the year and what that means for 2025.

And in the Q4, FMI Technology touched about 44% of our revenue versus 42% and 39% in the last two years. And we established a goal of 28,000 to 30,000 MEUs for 2025 versus the 28,000 we just signed. And Holden touches on that a bit in our CapEx expectations. E Commerce, a good story, not a great story, grew about 28%. E procurement, where we have established customer relations, continues to grow almost 40%, 37.6%.

Percent. However, the e commerce piece that contains web, we still struggle there and we're putting double down efforts into that. We realigned some teams to make that a more relevant part of our business. All told, you take e business and FMI Technology, about 62% of our sales, just over 62% touch our digital footprint. Our goal was to get that to 63% in 2024, so just shy of that number.

We our goal for next year is 66 to 68. And before I turn it over to Holden, I just want to touch on a couple of things. First off, some comments that Holden made to our regional leaders and our VPs this morning. He talked about in 2024 a cost structure that was effectively managed. And one challenge I gave to the group, I believe our incremental margin will be stronger in 2025.

And the challenge to them is, as our momentum takes us through the year, and time will tell what the economy allows that momentum to shine through as, but as our momentum takes us into 2025, there's a lot of expenses that we've been squeezing really tightly on in the last couple of years. We have to maintain that because it puts us in a position to allow for the reload of bonuses. We have a large group of folks within Fastenal that haven't seen bonuses for close to 2 years, year and a half at least, and we need to allow the inherent capabilities of Fastenal to reload that and the best way to do that is to get the revenue growth, capture the gross profit and manage our expenses incredibly well. The other thing I touched on with the group this morning was as all of you saw in December, Holden announced his decision to leave Fastenal effective April. I think back to when Holden joined the organization, I think back to that conversation he had with me in December when he told me, I think it was probably a hard conversation for him, at least I hope it was.

And when Holden joined our organization back a number of years ago, what we were looking for in a CFO was somebody to bring in a fresh perspective, a very analytical look who could pick apart the business maybe in ways that the previous CFOed into and give it a new set of eyes. And from that, I want to thank Holden for what he brought to our organization from the standpoint of somebody that didn't grow up in the organization, but knew a lot about the industry and also had a keen mind towards analysis. The other thing that Holden, I think was saying to Jeff and Jeff stepped into the President role here last fall is it allows Jeff the opportunity, Jeff Watts, the opportunity to figure out who our CFO should be for our next 10 years, What skill set are we looking for to serve the business today at close to $8,000,000,000 versus the business 8 years ago at around 4. And so I wish Holden well and I applaud the movie to recognize that maybe Jeff needs a different CFO in the future. And finally, before that comment sounds like Florence is out the door, I thought I'd share a conversation ahead with my kids in August.

We do a family vacation every year and our kids are in their late teens or 20s now. And they asked me, hey, Dad, what does it mean being CEO versus President? And I said, yes, 10 people, you're going to get 13 different answers. Here's what it means to me. I think of the CEO side of the business as you're focused on the strategy where you're going and you're focused very keenly on what that means for people development and how the organization should position itself for what it's going to become, whereas the President is much more about executing what you're doing every day, every month, every quarter, every year.

And but I said, Jeff is stepping into that President piece, but he's also stepping he's training for that CEO piece, but he still has his first title, and that is Chief Sales Officer. And as long as he has that title and even when he gives it up, his number one priority is how we're executing to grow the business and the part of our strategy that's about growing the business. That's his focus. When we get to 10%, we can change that focus. Anyway, I'll turn it over to Holden.

Thanks, Dan. Yes, it was a very difficult conversation, just so you know, but this has been a tremendous opportunity. I just want to make sure all investors understand. I have a unique opportunity to go try something different, but this has been an honor to work for Fastenal and this is a great organization and a great opportunity.

So jumping into Slide 6, I know what the investors want to hear is what's going on with the quarter. Sales in the Q4 of 2024 were up 3.7%, daily sales were up 2.1%. Daily sales growth ranged from 1.8% to 2.1% throughout the year, a consistency that makes sense in the context of a PMI that spent most of the year signaling modest contraction in manufacturing. The attributes of our sales in the Q4 of 2024 were similarly comparable to prior quarters. MRO oriented products outperformed OEM oriented products with safety up 4.8% and fasteners down 1.4%.

Larger customers outperformed smaller customers with national accounts up 4.2% and non national accounts down 1%. And manufacturing end markets were up 3.3%, outperforming non manufacturing end markets which were down 0.3% headlined by a 4.1% decline in non residential construction and an 11.3% decline in reseller. There was not a lot of variation in our high level top line trends through 2024. That said, the Q4 of 2024 can't be fully evaluated without addressing the cadence of activity in December. Dan made this point through vending transactions in his review.

We see the same thing in daily sales to our top 100 customers, which grew low to mid single digits in the 1st 15 days of December, but declined more than 20% in the final 5 days. While holiday related production slowdowns occur most years, sustained marketplace weakness and the mid week timing of Christmas and New Year's produced on commonly sharp cuts in December of 2024, we believe that the last 5 business days of December swung the month from trending towards 3% plus growth to finishing flat. Now zooming back out, we remain encouraged heading into 2025. The PMI is still sub-fifty, underlying business activity remains slow and the start of January was impacted by New Year's and winter storms. The latter disrupted business activity in our Southern U.

S. Regions reflected in our needing to cancel 6% of our truck routes through January 10. On the other hand, regional leadership sites broadening post election customer optimism for 2025. We continue to sign new business at a strong rate with our contract base growing double digits including up 12% in December. We believe these wins are beginning to be reflected in sales.

Our monthly daily sales rate exceeded the historical sequential in 3 of the last 5 months and we believe it would have been 4 of the last 5, but for how December finished. As we move forward, we anticipate we will see revenue from these customer signings continue to build. Now to Slide 7. Operating margin in the Q4 of 2024 was 18.9%, down 120 basis points year to year. Gross margin was as expected.

On top of that, our SG and A dollars in the Q4 of 2024 were largely in line with the 1st 3 quarters of 2024 as investments in on-site staffing, technology and data and sales travel were offset with greater control over more discretionary costs. We continue to believe we are managing costs effectively. We expected operating margin to decline due to the effects of slow growth as we've seen all year. That the deleverage was sharper in the current period than experienced in the 1st 3 quarters of 2024 reflects our seasonally lowest volume quarter and the holiday shutdown impacts. Gross margin in the Q4 of 2024 was 44.8 percent, down 70 basis points from the year ago period, primarily from product and customer mix.

We also experienced product margin pressure, which was partly offset by higher rebates reflecting year end opportunities to assist suppliers in leaning out their inventory. The product margin pressure was largely due to shipping with higher container costs affecting fasteners and expedited shipments to warehousing customers during the holiday season affecting safety products. We have made price adjustments to offset the higher container costs and the expedited shipments should not recur, meaning most of the product margin pressure in the Q4 of 2024 should not carry into the Q1 of 2025. SG and A was 25.9 percent of sales in the Q4 of 2024, up from 25.3% from the year ago period. The largest impacts are from higher lease costs as we refresh our field pickup fleet and a currency revaluation on certain assets that relates to the stronger dollar.

The effects of areas such as IT expense and general insurance costs were marginally negative. We continue to believe that as growth picks up, we will leverage the P and L. Putting it all together, we reported Q4 2024 EPS of $0.46 flat with the Q4 of 2023. Now turning to Slide 8. We generated $283,000,000 in operating cash in the Q4 of 2024 or 108 percent of net income.

We generated $1,200,000,000 in operating cash for the full year of 2024 or 102 percent of net income. Our cash conversion in both periods was below the comparable periods in 2023. However, this mostly reflects the effects of inventory buildup and subsequent wind down related to tight supply chains being fully past us. And we view the conversion rates in 2024 as being largely consistent with expectations. We continue to carry a conservatively capitalized balance sheet with year end debt being 5.2 percent of total capital.

Given our current strong capital position and confidence in the future cash generating capability of our model, we increased our dividend by 10%. Accounts receivable were up 1.9%, driven primarily by sales growth. Inventories were up 8%. We added $30,000,000 to $35,000,000 related to our initiatives to improve product availability in our in market locations and improve picking efficiencies in our hubs. Opportunistic year end buys added roughly $10,000,000 and we added stock to support customer growth, including anticipated incremental growth in the warehousing space.

And we accelerated some inventory scheduled for future delivery in the current period to head up potential new tariffs. Accounts payable were up 8.9%, reflecting the increase in inventories. Net capital spending in 2024 was $214,000,000 up versus $161,000,000 in 20 23, but below our projected range of $235,000,000 to $265,000,000 This related to lower purchases of FMI bins and fewer installations of modular picking units in our in market locations. Looking to 2025, we anticipate net capital spending of $265,000,000 to $285,000,000 We're anticipating another step up in FMI signings, which will require additional device spend. We're increasing IT spend to reflect projects that move from 2024 to 2025 and an expansion of projects aimed at developing additional digital capabilities.

Lastly, distribution center spending is up to reflect completion of our new Utah hub, the beginning of construction on a new Atlanta hub and incremental automated picking additions across our hub network. We believe net CapEx is likely to be 3% to 3.5% of sales over the next few years, an increase from 2.7% to 3.2%, largely related to greater incremental capacity upgrades across our distribution center network. Now before moving on to Q and A, a couple of items of housekeeping. First, a little color on our decision to not provide on-site signings targets beginning in 2025. When we first unveiled the on-site strategy in 2014 to 'fifteen, we were challenged with driving internal participation and building scale to justify the investment in the initiative.

Today, Onsites represent nearly 45% of our sales and are fully integrated into the value proposition we offer customers. Getting to this point has prioritized wallet share with existing customers over winning new customers. And at this time, it's appropriate to see greater balance between those two things. Onsites will continue to provide a market advantage for Fastenal and we'll continue to sign them. However, our success is not solely defined by how many Onsites we sign.

It is defined by how many customers we sign that are doing or can do 10 ks or more in sales per month, whether that's through an on-site or through a branch. To ensure internal and external stakeholders are focusing on organizationally meaningful data, in the Q1 of 2025, will begin providing customer data along the lines of what Dan discussed at the start of this call. 2nd, we are planning to host an Investor Day in Minneapolis on March 13. We plan on providing an update on our in market network, which remains critical to our success, but has evolved in the last few years to support a key account strategy. This will be reinforced with a tour of a local branch that is a great representation of our industrial supply house profile.

We will discuss not only our tools and capabilities, but how we deploy them in a truly integrated fashion to provide unparalleled value to our customers in terms of supply chain cost, risk and scalability. And last, we will do a deeper dive into the strategic plan we developed throughout 2024, which is heavily centered on the digitization of tools and capabilities, including AI, to improve our service and addressable market. We'll be sending out invites to the event over the next week. With that, operator, we'll turn it over to begin the Q and A.

Thank you. We'll now be conducting a question and answer session. Our first question is coming from Ryan Merkel from William Blair. Your line is now live.

Hey, good morning and thanks for taking the questions. And Holden, congratulations. It's been great working with you and I wish you all the best.

So my first question, I guess, I want to ask about the shutdowns and then sort of the comment that customer sentiment is more optimistic.

So I guess how do you marry those two comments? Why do you think the shutdowns this year were so intense? And then what are you hearing on customer sentiment, if you can be more specific? Like do you expect trends to improve in 'twenty five and why do you think that?

Good morning, Ryan, and thanks for the question. I'll touch on the shutdowns piece and then how that counters the sentiment. I think every organization gets to January 1, and it's a new year. And it's either what and it's always what can we do to improve upon what we just did, whether you had a great year or a weak year. That's just that's I think how many people are just wired.

So but I also look at it and say, there might be some folks that just got through at this stage 2024 and they're kind of like, it's been a mediocre year and we've been leaning up our balance sheet, maybe we've been leaning up our inventory, whatever it might be And that's the shutdown, let's get the equipment fixed up and ready for the New Year, get everybody's batteries recharged. And I think you had a lot of folks that didn't have a reason to stay open over the holidays, and so they chose not to. Holden, if you want to add on the sentiment part from a customer standpoint, you talked to a lot of our regionals, but I think a lot of folks are looking at their trends and does that make them feel better? The recent election and what that might mean for regulation probably is a lift of burden from the a lot of our customers in the marketplace. Holden?

Yes. I mean, the when I talk about the improving sentiment, what I'll say is that in November, when we reported sales, I mean, there's clearly post election a step up in terms of what the RVPs are feeding back to me about. People are feeling a little bit better about things. I think there's just the there's value in knowing. And I think that a lot of uncertainty was perhaps dissipated once we got through the election.

I will say that the tone from the RVPs was fairly universal about that sentiment continuing to get better heading into next year. And so that's a fairly qualitative read on things. But nonetheless, I've over time learned to really respect the feedback of the RVPs because they really do feel what's going on in the marketplace in real time and pretty intimately. So I think there's value in that. But I also would argue that I'm not sure there's an inconsistency between aggressively shutting down in the back half of December and feeling better about 2025.

Again, as Dan indicated, there's something magical about moving from twelvethirty one to 1.1. And I think that a lot of companies in the face of a second challenging year, are looking to clear the decks and move into 2025 with as little overhang from inventory and things of that nature as they can. And I think that there's probably a relationship between exactly what happened in the back half of December and the very beginning of January and customers feeling better about what comes next.

Yes. No, I think that makes sense. That's helpful. And then my second question, thanks for the new disclosure and it makes sense. And I think I'm a little surprised by how concentrated your sales are.

It's more than I thought. I just want to make sure I'm understanding this right. 1% of sites are roughly 50% of sales and those sites tend to be on-site like, I think is what you said. So should we be reading that as 1% of on sites, which is like 20 on sites is 50% of sales, am I understanding that right?

No, no, no, no. We've always said when we started the On-site program a number of years ago, we said that time about 10% of our revenue came from a few 100 Onsites. And what we saw with On-site was a lot of times our branch personnel, there was business they didn't go after in a facility because the economics didn't work for them on how they were paid because not all the spend is 50%. There's a bunch of production business that might be at in the 30s. There's some other business that might be in the 40s.

And in the way our cost structure works, if you think back to the time our cost structure in the branch was 30% of sales, 32% of sales. And you didn't want 35% margin business. But in an on-site, when we started talking about it, our average on-site had gross margins between 35% 40%, but the operating expenses were just shy of in the upper teens. So from a pretax and a return standpoint, it was nice business, but you had to think about it differently and had to rejigger everything. And so we have roughly 2,000 on sites and that's a little bit over 40% of revenue.

In addition to those 2,000 on sites, we have another 500 customers roughly where we do 70,000 a month, 60,000 a month, 80,000 a month, but we do it out of the branch and the branch is just the general manager in that branch look at it and said this, I might get hurt on my pay plan, but this is good business for us and it's good business for me and the team. And it's good business and you think about it as a business person. And so that those 2,500 locations represent about 48% of sales, and they all do more than 50,000 a month. But there are a subset of customers that do more than 10,000 a month that represent over 75% of our sales. But Ryan, that's no different than if you think about it years ago, hey, we have 100 active customers in this branch and 10 of them represent 65%, 70% of sales.

And it was probably more like 80% of sales, but we didn't measure it that way because there was a bunch of customers that had multiple account numbers. Does that make sense?

Yes. And the color I may add to that is first off, I'm not sure that eightytwenty is unique to Fastenal's business. I don't know everybody else's businesses, but I would suspect that there's an element of eightytwenty in most businesses that are out there. I'll grant you we're more like eightyten. But the other thing I think to think about is where we're genuinely special in the marketplace is in engaging with customers that have very large, very complex supply chains.

Those tend to be larger multinational, global or national businesses. And so that's because of the breadth of our toolbox and the ability of our services to uniquely affect that complexity. Those types of customers tend to come to our business fairly organically simply because of that capability that we have in contrast to perhaps a purely transactional model, which might get you a lot more customers, but fewer sales, right. So there's an element of our model in there as well.

Added nugget I'll give you is if you go back to 2,000 and 7, when we announced we were going to we were seeing saturation in the location comp and we were slowing it down and we were turning energy into things like automating our warehouse, things like vending and what we call this the pathway to profit, we said, here's the next step of our business.

At that point in time, customers doing more than 10,000 a month. There were about 2,600 of them and represented about 40% of sales. And so in the years since 2007, we weren't opening locations as fast, but we were rolling out vending devices. A number of years later, we're rolling out on-site. And we're getting better and better and better at non fasteners.

And so fasteners keep dropping as a percentage of our business. Our business blossomed as we got deeper into that, and our ability to grow actually accelerated. And so the concentration, if you will, is a sign of success with that group of customers because when if you look at customers doing less than say $5,000 a month, they don't necessarily benefit from vending because if they did, they wouldn't be a $3,000 a month customer, they'd be a $9,000 a month customer because they have enough the things we bring to the table and to the supply chain benefits the business more.

Thank you. Next question is coming from David Manthey from Baird. Your line is now live.

Yes. Hi, good morning. Clearly, there's always been an eighty-twenty rule at Fastenal. But as we look at Slide 4 and think about the big picture, it may be elucidate this on the at the Investor Day, but is 96% of the customer sites generating 22% of sales. Is that an opportunity or is that just the way it is?

It's always an opportunity. When I have throughout the course of the year along with Jeff and Holden and a handful of our leaders, we have discussions with every one of our district managers. And in there, we talk about what's their opportunity and history has told me that we have approaching 10 on sites per DM. It's around 7 or 8 on average on sites per DM. But we've identified the potential on average for 58.

And so it's an incredible opportunity in the marketplace because we're really, really good at planned spend And we're really, really good at helping with supply chain. And you think about what are some of the macro things going on in the marketplace right now. One of the macro things is there's not enough people for the jobs this year, 5 years from now, 10 years from now. So how does a manufacturer solve that? Well, one of them might be, hey, let's bring in FastStone and help with supply chain.

They're incredibly good at it. With their vending platform, they move the product closer to the point of use. That creates productivity in our facility. And by the way, what we're doing with 10 people in a very inefficient manner, Fastenal can do with 3 or 4, and they can actually increase the level of supply chain service in my facility, and we operate more effectively. I see it as an incredible opportunity, and that's why we continue to invest in the things we're doing.

And we're going to touch on a whole bunch of that, Dave, at our Investor Day as well. But I'm more excited about our opportunity to grow in the next 10 years than maybe I was 10 years ago.

Yes. And I would probably add to that. You're right to think about it as the opportunity, but let's not narrow that down too much either.

We measure we are successful in the buckets that we're successful in because we bring something special to that type of customer. But we continue to broaden what it is that we're special at. We didn't use to be special at safety, but the introduction of vending brought that into a realm of specialness for Fastenal that I think others have not figured out how to scale the way that we have. I think the same is true for that on-site world. Is there an opportunity?

And so we're very good. We're special in that planned world. Is there an opportunity to over time move down these buckets more effectively by figuring out ways to get special and service customers in different ways? Those are opportunities, not necessarily for the next 6 months or what have you, but those are opportunities that exist over the next 12, 36, 5 years, 10 years' time. There's tremendous opportunity that exists within these buckets, but whether you want to think geographically by product, what have you?

Just to double down, we're doubling down on the question. I'll throw a little tidbit in too. When you Holden just touched on, we get better moving down those bucket sizes. Clearly, the bottom 2 buckets on that list were impacted by COVID and by our decision a decade ago to not just slow down opening branches, but to actually consolidate branches. In that less than 5 ks bucket, what I can tell you is 98% of the decline in that bucket from a standpoint of both customers and the revenue came from there's 2 populations in that bucket.

There's customers that spend between $505,000 that represent about 90% of the dollars in that bucket and there's and they average about $1,000 a month with us. The majority of the customers represent about 10% of that bucket and they on average spend $49 a month with us. And so it's really a case of being special in all of them. But I believe over time, all these buckets grow because we as we become better and better at unplanned spend, the bottom two buckets is more about sales that look like unplanned spend than planned spend. And then you're successful in all of them.

But that smallest bucket, customers under 500, it's a big group of customers, but it's about 2% of sales. And so it's really we're putting your energy and focus on being great supply chain partner to this group of customers, but that conveyor we have going across North America, anybody can grab a box off it. And with our local footprint, we're better than anybody else out there or we could be.

Okay. That's helpful. Yes. Thanks a lot, Dan. Maybe you can just touch on tariffs.

I'm sure someone else would ask this too, but it's obviously a hot topic right now. Could you talk about how those pass through your contracts and how you're planning on making those happen assuming that comes down the pipe here?

As we've talked on previous calls, we had to get good at tariffs. We were I mean, we were I think we've always been excellent at supply chain, but we had to get good at tariffs back in the 2018 timeframe, 2017 timeframe. A lot of times we focus on tariffs that have been that come into the United States, but tariffs are not something that's unique to the United States. Jeff, in leading our international business in years past, we've been going through tariffs coming into Mexico for the last year and a half. We've been going we've had tariffs as it relates to our Canadian market or other non North American businesses.

So that skill isn't that knife isn't dull in our ability to be surgical. We have great tools to manage that. We have great ability to give visibility to our customers because it's not just about what we do and how to make sure we manage it in our P and L. That's important to everybody in this call, don't get me wrong. What's really important is our ability to give visibility to that to our customer and allow our customer to make better decisions because then we're special to them.

We're not special to just us. We're special to both of us. And that's a great supply chain partner. And we're really, really good at that. We had a lot of conversations with our unrelated tariffs, we had a lot of conversations with customers.

And we diverted a chunk of containers late in the year because there was a risk of a port strike. And we were able to study all the containers coming in and had conversations. I think it was about 40 containers that we had 35, 40 containers. We had conversations with customers and said, we believe the best risk avoidance for your business is we'll spend a little bit extra money, we'll bring it into the West Coast and we'll bring it across North America instead of bringing to the East Coast because that shuts down, that's a production item that you need in February or that's something you need in March and we do not want to put your business at risk. And we diverted 35, 40 containers.

As it turned out, it didn't need to be, but that's what a great supply chain partner does. But we are well poised to communicate and react to whatever happens, and it's going to be an unpredictable world starting here on January 20. Frankly, it's been an unpredictable world for the last 10 years. So that's not new. It's just maybe the intensity of how that happens quickly might change too.

Thank you. Next question is coming from Tommy Moll from Stephens. Your line is now live.

Fastenal Q4 2024 Earnings Call Transcript | Fortune

Companies

John Kell

How brokerage Compass sold its 83,000 real estate agents on the use of AI

/2026/09/23/compass-ai-assistant-real-estate-agents/

Phil Wahba

Steve Jobs made Apple iconic. Tim Cook made it a $5 trillion behemoth

/2026/09/22/tim-cook-apple-ceo-legacy-stock-price-growth-services-supply-chain/

Indrani Sen

Apple’s first 50 years: Charts show how the iPhone maker became a $4.85 trillion giant

/2026/09/22/apple-first-50-years-history-iphone-mac-services-revenue-growth-timeline/

Fortune Editors

Fortune 500 Power Moves: Which executives gained and lost power this week

/2026/09/18/fortune-500-power-moves-september-12-18/

AI agents are going rogue. CIOs are racing to put guardrails around them

/2026/09/16/ai-agents-are-going-rogue-cios-are-racing-to-put-guardrails-around-them/

Fernanda Tronco

Mark Zuckerberg, chief executive officer of Meta Platforms Inc., during the Meta Connect event in Menlo Park, California, US, on Wednesday, Sept. 17, 2025.

Fastenal (FAST) Q4 2024 Earnings Call Transcript

Company Participants