Ferguson

Ferguson operates the industrial economy's mycorrhizal network: 1,700+ locations connecting manufacturers to 35,000 contractors who need plumbing and HVAC supplies delivered within hours. Revenue hit $30.8 billion in fiscal 2025 (up 5.1%), but the real story is network architecture. Non-residential revenue jumped 12% while residential dropped 1%, proving the network adapts resource flow to wherever demand pulses. This is stigmergic coordination—each location responds to local signals (contractor orders, inventory levels) without centralized planning, and the aggregate behavior optimizes supply chains that would collapse under traditional distribution models.

The dual-trade strategy reveals mutualistic evolution. Ferguson serves both plumbing and HVAC contractors, capturing 50% of revenue from residential markets and 50% from non-residential. When housing construction stalls, commercial projects compensate. Gross margin expanded 60 basis points in Q3 2025 to 30.7%, driven by efficiency gains from serving contractors who need both trades. A single delivery truck carrying pipes and duct work costs less than two specialized vehicles. This is functional complementarity: combining niches increases total resource capture while reducing overhead.

Ferguson's competitive moat is invisible to most analysts but obvious through a biological lens. The company invested $252 million in share buybacks during Q2 2025 while simultaneously expanding the network through acquisitions. Operating margin hit 9.4% (up 80 basis points), with $1.4 billion remaining in buyback authorization. This mirrors mycorrhizal fungi: grow the network, extract value through nutrient exchange, and reinvest in both physical infrastructure and shareholder returns. Competitors like Home Depot operate stores for end consumers; Ferguson operates nodes for professional networks. The difference is scale economics—Ferguson's network effects compound with every contractor relationship, while retail stores hit saturation.