On this page of StockholderLetter.com we present the latest annual shareholder letter from FASTENAL CO — ticker symbol FAST. Reading current and past FAST letters to shareholders can bring important insights into the investment thesis.

 •  2/5/2026 Letter Continued (Full PDF)
 •  2/7/2023 FAST Stockholder Letter
 •  2/6/2024 FAST Stockholder Letter
 •  2/6/2025 FAST Stockholder Letter
 •  More "Home Improvement Stores" Category Stockholder Letters
 •  FAST Benford's Law Stock Score = 77

FAST Shareholder/Stockholder Letter Transcript:

Table of
C ON T E N T S
2025 ANNUAL REPORT
1-3
Letters to Shareholders
and Employees from Jeff
Watts and Dan Florness
4-5
10-Year Selected
Financial Data and
Financial Highlights
6
Stock and
Financial Data
7
Stock Performance
Highlights
8
Tech Forward, People First
Inside Back
Cover
Directors | Executive
Officers | Corporate
Information

OUR ESG
JOURNEY
CONTINUES
In our industry, there   s generally a trade-off between service and scope. On one end of the spectrum
are small distributors who offer local service but limited technology and geographic reach. On the other end are
large suppliers with strong eCommerce platforms and national reach but limited local service. In this landscape,
Fastenal stands apart in our ability to support customers with local service, comprehensive technology, expertise
across a broad product scope, and consistent supply chain capabilities on a global scale.
It starts with a simple premise:
great people, close to the customer, with a
passion for learning and growth.
As requirements evolved around the world in
2025, we further enhanced our processes in
preparation for both future disclosures and
limited assurance in 2026. We continued to
invest in ESG reporting structures that inform
investors and provide value to Fastenal. We
also continued to align with several standards,
including the Global Reporting Initiative (GRI),
Sustainability Accounting Standards Board
(SASB), and the Task Force on Climate-related
Financial Disclosures (TCFD).
24,489
employees
70% directly serve our customers.
As a result of these efforts, we again
improved our EcoVadis score to earn a third
consecutive silver medal, indicating Fastenal   s
sustainability performance is in the top 15% of
all companies assessed by EcoVadis in 2025.
Scan to learn more about our
2025 EcoVadis score.
54% of our $1.7B in
inventory is staged locally
or within customer sites
for same-day access.
981,000+
Fastenal School
of Business trainings completed.
1,595
public branches
The year saw meaningful milestones and
recognitions. We surpassed one million
pounds of plastic material collected and
recycled through our Trex Plastic partnership
(initiated in 2023). We achieved our first zero
waste certification by SCS Global (for our
manufacturing facility in Wallingford, CT). In
addition, Fastenal was one of 26 companies
to receive a 2025 Sustainability Leadership
Award from the Business Intelligence Group.
Another theme of 2025 was making a
positive impact through our Blue Team Gives
Back initiatives. We continued to expand
our contributions with a focus on youth,
wellness, workforce development, community
development, customer causes, disaster
response and recovery, and support for armed
forces and first responders.
Our local team operates selling
locations across 25 countries.
Our local service is enhanced by a variety of technology solutions.
61.4% of our total revenue flows through this    Digital Footprint.   (1)
136,638 weighted FASTBin/
FASTVend installations (MEUs(2))
eBusiness
Improves the efficiency of
procurement/purchasing processes.
Represented 29.8% of total sales in
2025 vs. 10.1% in 2020.(3)
FASTStock
FASTBin
FASTVend
Using embedded technologies
to digitally monitor inventory and
trigger restock requests.
Providing secure access and
usage tracking close to the point
of use in a customer   s facility.
SM

Using mobile technology
to illuminate inventory and
simplify replenishment.

In 2025, 44.7% of our total sales came through these Fastenal Managed Inventory (FMI  ) programs.
95% of total revenue comes from customers utilizing more than one of our sales channels and tools, with 76% of total revenue coming from customers utilizing four or more.(4)
This core model is
supported by a range
of high-touch
services and hightech solutions to
help customers solve
problems and gain
efficiencies.
High-Touch Services
High-Tech Solutions

530+ supply chain professionals
including 150+ on the ground in Asia.

FMI Technology     a suite of devices to
monitor, track, and control inventory.

Approximately 90% of product
tonnage is transported between our
hubs and in-market locations via our
captive logistics fleet.

FAST360       a personalized portal for the
customer to manage and analyze their
Fastenal program.
(5)
    6
  58M products made, modified, or maintained
by our manufacturing and industrial services teams.
    600+ subject matter specialists (e.g., Lean, safety,
engineering, and metalworking).

FASTCribSM     proprietary software that
allows us to manage more products
within the customer   s facility.
eBusiness     providing efficient tools for
the customer to procure products and
services.
These services and solutions are combined and tailored to fit the needs of the customer. It often starts with a Total Cost of Ownership (TCO) Analysis,
through which customers are presented with an opportunity to reduce their TCO for products purchased from Fastenal by 20.1% on average.(6)
  Our Digital Footprint is a combination of our sales through FMI (FASTStock, FASTBin, and FASTVend)
plus that portion of our eBusiness sales that do not represent billings of FMI services.
(1) 
  Machine Equivalent Units (MEUs).
(2) 
  Our eBusiness includes eProcurement (integrated transactions such as electronic data interchange, or
EDI) and eCommerce (transactional website sales).
(3) 
  Sales channels and tools include branch, Onsite, FMI, national accounts, and web.
(4) 
  Includes individuals specializing in sourcing, quoting, purchasing, supplier development and
operations, compliance, and logistics.
(5) 
(6)
Based on a study of 876 vetted TCO Analysis exercises conducted at customer sites over the last
three years.

To our
SHAREHOLDERS
AND EMPLOYEES
At Fastenal, we don   t just distribute products. We build partnerships
that power industry. Our purpose is to help our customers operate
more efficiently, more safely, and more competitively. This purpose
guided us through 2025, and it   s the foundation for everything
we   re building in 2026.
This past year was a turning point. After a challenging
2024, we entered 2025 with a renewed sense of focus
and urgency. We knew we had the talent, the tools, and the
culture to bounce back; and, in typical Fastenal fashion,
we did. But what makes me proud isn   t just the results we
achieved. It   s how we achieved them.
We didn   t wait for the market to lift us. (As it turned out,
that help never arrived.) We leaned into our strengths: our
people, our service, and our ability to solve problems for
customers. We listened more closely, responded more
quickly, and delivered more value. We didn   t just grow     we
earned growth.
Across our organization, we saw a level of alignment and
energy that reminded me why I love this company. Our sales
teams rallied around new goals and metrics. Our Onsite and
FMI teams embedded deeper into customer operations.
Our support teams, from IT to supply chain, came up with
smarter, faster ways to serve. Everyone played a role, and
everyone showed up with purpose.
Improving results meant embracing change. We rolled out
new tools like AI-powered sourcing, a modern Customer
Relationship Management (CRM) tool, and a redesigned
eCommerce platform, and our teams didn   t flinch. They
saw opportunity, not distraction. This agile and ambitious
mindset is what sets Fastenal apart. It   s how we stay ahead
and continue to evolve in a fast-changing world.
A central theme of our story in 2025 was deepening
customer relationships. Our key accounts program
continued to grow as we added more than 500 new national
account and regional contracts. This is especially gratifying
because each new contract is an expression of trust. When
a customer invites Fastenal into their facility, they   re saying,
   We believe in you.    That trust is earned, and our teams
work hard every day to honor it.
Our FMI technology (vending machines, sensor bins, and
scanning solutions) became even more integral to our
customers    operations. These devices aren   t just about
automation and analytics; they   re about partnership. They
help our customers manage their business better, and help
us serve them more effectively.
Jeff Watts
We continued our journey as a people-centered, resourceconscious organization. We invested in sustainability,
improved our carbon accounting, and found new ways to
reduce waste and energy use. We strive to operate in ways
that reflect the values of our customers and communities.
We want Fastenal to be a company that not only performs
well but also does good, and we   re proud of the steps we
took in 2025.
Looking ahead to 2026, I   m more excited than I   ve ever
been in my 30 years with Fastenal. We   re aiming for bold
goals: double-digit growth, deeper customer partnerships,
and innovation across our business. We   ll continue to
refine our service and expand our reach, pushing into new
industries, new product lines, new geographies, and new
ways to serve. We   re not just growing. We   re innovating and
evolving, and we   re doing it with purpose.
One thing will not change, and that   s our commitment to
invest in our people. The Blue Team is the heartbeat of
Fastenal, and we   re committed to helping every team
member use their full creativity and achieve their full
potential. Whether it   s through training, technology, or new
opportunities, we   ll keep building a culture where great
people do great things and become great leaders.
To our customers, thank you for trusting us with your
business. We   re honored to be your partner, and we   re
committed to helping you succeed. To our shareholders,
thank you for believing in our vision. Your support fuels our
drive to improve, innovate, and lead. And to the Blue Team,
thank you for your passion, your grit, and your commitment.
You are the reason Fastenal is thriving.
2025 reminded us of who we are. 2026 will show the world
what we   re capable of.
Let   s go.
JEFF WATTS
President and Chief Sales Officer
2025 ANNUAL REPORT
1

THANK YOU
In December 2025, Fastenal reported my decision to step out of the CEO role in July
2026. Our board also announced its decision to elect Jeff Watts, our president and
chief sales officer, to the CEO role. This represents the final step in our leadership
succession. I support Jeff and his leadership team!
By way of introduction, here are some quick facts
about Jeff.
    Joined Fastenal in 1996.
    Began his career in a branch in
southern Ontario, Canada.
    Exemplifies our    promote from within   
philosophy.
    Is a great leader and is surrounded by
great leaders (all 24,000 of them).
My tenure as president and CEO began in January
2016. For Fastenal, 2015 was disappointing. We
stumbled through a chaotic year as the economy
weakened. The Purchasing Managers    Index (or
PMI, a diffusion index published monthly by the
Institute for Supply Management) was in the low
50s for the first nine months of the year (indicating
moderate industry growth) before slipping into
the upper 40s (indicating contraction). Normally,
Fastenal can grow in this type of environment;
however, our rate of growth slowed, and we
contracted for the last four months of the year.
My first letter to shareholders was blunt. The
first four paragraphs contained some reasons, or
perhaps excuses, for the weak performance.
However, the letter pivoted from there     we
stopped explaining, and we started to move
forward. The fifth paragraph began with a simple
sentiment: Our biggest strength is great people.
The rest of the letter spoke about our plan and our
priorities. Internally, we shared what an $8-billion
Fastenal would look like, what we needed from
our teams and suppliers, and how we would
serve our customers. We also shared why this
would work. In other words, we discussed
direction, alignment, and commitment (and in
typical Fastenal fashion, we came up with a new
acronym: DAC). The $8-billion vision has become
a reality: In 2025, our sales were $8.2 billion.
Fastenal has experienced tremendous change
since 2015. We closed nearly 40% of our
2
branches. We modified our go-to-market
priorities, which included modifying the look and
function of our in-market locations. We redefined
our purpose     from    branch-based industrial
and construction supplier    to supply chain
partner. This change had really started several
years before. On the surface, we didn   t know it
(or wouldn   t admit it). However, if you looked at
our most successful district and regional business
units, many of our leaders knew it. They knew it
because they were listening to their marketplace
and evolving to meet changing needs.
Several early moves in 2015 and 2016 proved
important. This included elevating a new leader
in the eastern United States and elevating a
new leader of our technology team. It also
included getting closer to (and learning from)
our international sales leaders and our national
account sales leaders.
During this timeframe, several internal habits
served us well. These habits include observation,
listening, inquiring, trusting, and being open to
surrounding ourselves with talent greater than
our own. It   s not always comfortable to practice
these habits, particularly the latter, but we learn,
we challenge each other, and we change.
We were also served well by our decentralized
culture, which encourages experimentation
and idea-sharing across different geographies
and business units. A decade ago, we set out
to understand the extraordinary success within
our Mexico business unit and within several of
our Midwestern and South-Central United States
regions. We also made it a priority to engage
directly with our district-level leaders. This latter
effort has consumed close to 30% of my time
over the last eight years, and the group taught me
so much     thank you!
One of the most impactful observations came
while conducting district-level reviews between
2019 and 2022. A mature district in the
Midwestern United States really stood out. Prior
to 2017, this district   s performance was okay
    it was profitable and enjoyed above average
returns. However, from a growth perspective,
it was just mediocre. From 2007 to 2012, the
district produced, based on net sales, a compound
annual growth rate (CAGR) in the low single digits.
From 2012 to 2017, their CAGR improved slightly
but was still in low single digits. Then a new
district manager arrived and challenged the team
to change their focus. With that, their growth shot
up to double digits (10%+). During the 2017 to
2022 timeframe, their CAGR was almost 15%.
When the economy weakened in 2023 and 2024,
the district   s growth softened a bit to upper single
digits     not bad for a mature business in a weak
economic environment.
The moral of the story? Our success always
centers on great leaders able to challenge their
team with a common goal. Success is greater
when the common goal involves a great plan.
Fortunately for Fastenal, there are numerous
examples like this district, and the secret to
their success is always the same: a great key
accounts program.
Sometimes circumstances force you to change
faster than you expect; or in a positive light, they
provide an opportunity to    experiment big.    When
COVID-19 upended the world in 2020, several
things happened. First, we closed our branch front
door as a safety precaution. As it turned out, the
change positively impacted branch productivity,
positively impacted our return on invested capital
(ROIC), and sparked a mindset shift. We had
previously experimented with this format, but we
adopted it company-wide during March 2020.
(Thanks to the agility and work ethic of our teams,
this transformation took two days     the weekend.)
Second, our customers    buying habits were
changing quickly. This enhanced our ability to
drive market share gains using point-of-use
technology (primarily vending devices at the time).
It also enhanced our ability to engage digitally
with our customers. To clarify some terminology,

we refer to this as eBusiness, consisting of
eProcurement (things like EDI and punchout) and
eCommerce (think websites and apps). Since
2020, our customers    use of eProcurement has
expanded dramatically (we were already pretty
good at this), and our eCommerce business has
significantly increased (although we still have
work to do as we improve this capability).
This productivity gain allowed us to expand our
reach into larger customers and into lower gross
margin products. This gain also allowed us to
expand our investment in non-branch resources,
to expand our investment into FMI (Fastenal
Managed Inventory) tools, and to meaningfully
expand investments related to our technological
capabilities.
In the chaos of the pandemic, our team of
great people stepped up to the plate to help our
customers and each other. Personally, I learned
a lot about empathy and resilience just by
witnessing the Blue Team in action. Great people,
pursuing a common goal, can do great things!
The latter two items improved our ability to
digitally engage with customers and their supply
chain. We measure this as our Digital Footprint
    the percentage of total sales flowing through
our FMI Technology or eBusiness platforms.
In October 2015, our Digital Footprint was
approximately 24% of sales. By October 2025, it
expanded to 62% of sales. We believe this could
someday exceed 85%     only time and effort will
reveal the ultimate opportunity. Our expanded
technology investment also includes a major
redesign of our FASTCrib software. This software
development is still a work in progress, but we
believe in its potential. FASTCrib is part of what
we call Fastenal Crib Management Services    
expect to hear more about this in the future.
During this timeframe, we challenged
assumptions about our market potential within
our existing geographies. We expanded our
potential by assisting customers beyond the
traditional industrial and construction markets.
There are many examples: eCommerce
entities, data centers, healthcare facilities, even
spacecraft manufacturers. Perhaps the best
example is government-connected entities like
K-12 school districts and universities. This was
a niche market for us in 2015. Today, we have
approximately 97 K-12 and higher education
customer sites with supply chain spend greater
than $10,000 per month, and approximately 29
of these customer sites have supply chain spend
greater than $50,000 per month. (We often joke
that our expanded group of university customers
represents a new collegiate super-conference:
The BIG FAST.)
Results matter. As noted earlier, in 2015 and
2016 we spoke openly about what an $8-billion
Fastenal would look like (direction), the resources
needed to get there (alignment), and why it would
work (commitment).
Here are several results we   ve seen over the last
decade thanks to a team of great people within
Fastenal. First, our market capitalization (share
price times the number of shares outstanding)
expanded from about $12 billion to more than
$50 billion. Second, annual dividends expanded
from $327 million in 2015 to just over $1 billion in
2025. Third, our return on invested capital (ROIC)
expanded from 28% in 2015 to 31% in 2025. A
fourth metric has helped to improve everything:
Our local team productivity increased 90%.
As you know, we said goodbye to Bob Kierlin
in February 2025. Bob and four of his friends
founded Fastenal back in 1967. For those of us
blessed to have known him, he was a mentor
and friend. For the Fastenal employees who
didn   t know him directly, they   re    meeting    Bob in
several ways: through the decentralized, peoplecentered culture he worked to instill; and also
through BLUE, the AI-enabled digital assistant we
created several years ago. BLUE allows Fastenal
employees to directly ask questions of Bob
Kierlin, with the answers derived from The Power
of Fastenal People, a book Bob wrote about 30
years ago to share the ideas and culture behind
Fastenal   s success.
We have a
great team of
leaders today.
Florness
They appreciate
their role and
their need to
mentor and develop their successors in ways we
didn   t always appreciate. This group has expertise
in sales, distribution, supply chain, HR, finance,
and technology. Most importantly, they have an
empathetic    self-help    mindset, which has been
instrumental in our ability to grow the business
every month but one over the last three years,
and to grow double digits (10%+) in each of the
last six months of 2025     impressive results in an
environment where the PMI has been sub-50 for
36 of the last 38 months.
Dan
I look forward to seeing this team work toward
success in the years to come.
Thank you for being a shareholder of Fastenal.
Thank you for the opportunity to lead this
organization over the last decade, and thank you
for allowing me to be associated with this group
of great people over the last 30 years.
Go BLUE!
DAN FLORNESS
Chief Executive Officer
We strive to develop five simple traits within our
leaders: (1) a willingness to change and to develop
new skills, (2) a commitment to develop everyone
around us, (3) consistent communication of our
direction, (4) intentional alignment of resources,
and (5) the courage to stay committed to the
direction. Said more succinctly: develop self,
develop others, and DAC (direction, alignment,
and commitment).
2025 ANNUAL REPORT
3

2/5/2026 Letter Continued (Full PDF)

 

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