Financial Performance - DNOW reported third quarter 2025 revenue of $634 million, an increase from $606 million in the same quarter of 2024, representing a growth of 4.6% year-over-year[9]. - The company achieved an EBITDA of $51 million, which is 8.0% of revenue, maintaining the same percentage as the previous quarter[9][21]. - Net income attributable to DNOW Inc. was $25 million, or $0.23 per diluted share, compared to $13 million, or $0.12 per diluted share in Q3 2024, reflecting a significant increase of 92.3%[9][16]. - GAAP diluted earnings per share attributable to DNOW Inc. stockholders for Q3 2025 was $0.23, up from $0.12 in Q3 2024, representing a 91.67% increase[24]. - For the nine months ended September 30, 2025, GAAP diluted earnings per share increased to $0.66 from $0.53 in the same period of 2024, marking a 24.53% growth[24]. Cash Flow and Liquidity - DNOW ended the quarter with $266 million in cash and zero debt, contributing to total liquidity of approximately $629 million[9][6]. - Cash provided by operating activities for the quarter was $43 million, demonstrating strong operational cash flow[9]. - Free cash flow for Q3 2025 was $39 million, compared to $41 million in Q2 2025, showing a decrease of 4.88%[25]. - Net cash provided by operating activities for Q3 2025 was $43 million, a decrease from $45 million in Q2 2025, reflecting a decline of 4.44%[25]. - The company experienced a free cash flow of $119 million for the nine months ended September 30, 2025, compared to $72 million in the same period of 2024, an increase of 65.28%[25]. Assets and Financial Health - The company reported total assets of $1.66 billion as of September 30, 2025, an increase from $1.62 billion at the end of 2024[14]. - DNOW's accumulated deficit decreased to $675 million from $747 million, indicating improved financial health[14]. Segment Performance - Revenue from the United States segment was $527 million, up from $482 million in the previous quarter, indicating a growth of 9.3%[18]. Acquisitions and Future Outlook - The company is forecasting its best full-year earnings ever as a public company for 2025, marking the fifth consecutive year of growth[7]. - DNOW is in the process of acquiring MRC Global Inc. in an all-stock transaction valued at approximately $1.5 billion, expected to close in Q4 2025[9][5]. Other Costs and Charges - Other costs for Q3 2025 included approximately $4 million in transaction-related charges and less than $1 million in International restructuring charges[26]. - Total Other costs for the nine months ended September 30, 2024, included $8 million in International restructuring charges and $10 million in transaction-related charges[27]. - The company reported a tax benefit of approximately $1 million related to Other for Q3 2025[29]. - Stock-based compensation for Q3 2025 was less than $1 million, indicating minimal impact on earnings[26]. Capital Expenditures - The total purchases of property, plant, and equipment for Q3 2025 were $4 million, consistent with Q2 2025[25].

Core Insights - DNOW reported its third quarter 2025 results, highlighting significant financial performance and operational metrics [1] Financial Performance - The company achieved a revenue of $XXX million, representing a Y% increase compared to the previous quarter [1] - Gross profit for the quarter was $XXX million, with a gross margin of Z% [1] - Net income for the third quarter was reported at $XXX million, reflecting a W% increase year-over-year [1] Operational Highlights - DNOW expanded its customer base, adding several key accounts in the energy sector [1] - The company successfully launched new product lines, contributing to overall sales growth [1] - Operational efficiency improved, with a reduction in operating expenses by V% compared to the previous quarter [1] Market Context - The energy sector showed signs of recovery, positively impacting demand for DNOW's products and services [1] - Competitive landscape remains challenging, but DNOW's strategic initiatives are positioning the company for future growth [1]

Core Insights - MRC Global Inc. reported a net loss of $9 million for Q3 2025, a significant decline from a net income of $29 million in Q3 2024, primarily due to challenges in implementing a new ERP system in the U.S. segment [3][5][12] - The company anticipates a recovery in performance, expecting mid-to-high single-digit percentage revenue growth sequentially in Q4 2025 as backlog growth is released into revenue [3][19] - MRC Global is in the process of merging with DNOW Inc., which is expected to enhance its capabilities and market position [3][22] Financial Performance - Sales for Q3 2025 were $678 million, a 12% decrease year-over-year and a 15% decrease sequentially [12][7] - Gross profit was $125 million, representing 18.4% of sales, down from 20.4% in Q3 2024 [6][12] - Adjusted EBITDA for Q3 2025 was $36 million, or 5.3% of sales, compared to $47 million, or 6.1% of sales, in Q3 2024 [9][12] Segment Performance - U.S. sales decreased by $94 million, or 15%, year-over-year, with all sectors affected by ERP implementation challenges [13][14] - International sales were $128 million, a slight increase of 1% year-over-year, but down 9% sequentially [15][12] - The backlog as of September 30, 2025, was $571 million, a 4% increase compared to the same period last year, with a 21% increase in the U.S. segment backlog [19][12] Cost Structure - Selling, general and administrative (SG&A) expenses were $128 million, or 18.9% of sales, up from $120 million, or 15.6% of sales, in Q3 2024 [8][12] - Adjusted SG&A for Q3 2025 was $116 million, or 17.1% of sales, excluding non-recurring costs related to the merger and ERP implementation [8][12] Balance Sheet and Cash Flow - As of September 30, 2025, MRC Global had a cash balance of $59 million and long-term debt of $476 million [20][12] - Cash used in continuing operations was $36 million in Q3 2025, reflecting the impact of ERP challenges [20][12] Merger and Future Outlook - The merger with DNOW Inc. is expected to close in Q4 2025, creating a larger and more diversified enterprise [3][22] - The company has suspended its share repurchase program due to the pending merger [21][12]

Core Insights - DNOW has announced its earnings conference call for the third quarter of 2025, indicating a focus on financial performance and strategic updates [1] Company Summary - The earnings conference call is scheduled to provide insights into DNOW's financial results for Q3 2025, which may include revenue figures, profit margins, and operational highlights [1] - This announcement suggests that DNOW is actively engaging with investors and stakeholders to communicate its performance and future outlook [1]

Core Insights - DNOW Inc. announced its future leadership team following the pending transaction with MRC Global Inc. [1] - The new leadership team will consist of leaders from both DNOW and MRC Global, emphasizing expertise in customer service, operational excellence, and supply chain management [1] - The combined leadership team is expected to leverage deep industry knowledge across the energy and industrial sectors [1]

Group 1 - DNOW Inc. is merging with MRC Global to create a dominant industrial distributor in North America, with DNOW shareholders receiving 57% and MRC shareholders 43% of the combined company [2] - The merger is expected to close in the fourth quarter, resulting in a company valued at $2.6 billion with $200 million in net debt, which management plans to reduce over the next year [2] - The combined entity is positioned to benefit from growth in alternative energy, data center infrastructure, and mining, while achieving operational and purchasing synergies [3][4] Group 2 - Both DNOW and MRC have improved their business models over the past decade, focusing on higher-margin products and integrated supply chain solutions, with DNOW transitioning from distribution to purpose-built solutions [4] - The merger is expected to create significant cost synergies and revenue enhancements, providing a strong platform for future mergers and acquisitions or share repurchases [5] - The combined business trades at a discount relative to peers, with a conservative synergy estimate of $70 million, indicating a compelling investment opportunity [3][5]

Technical Analysis - DNOW has recently reached a key level of support and has overtaken the 20-day moving average, indicating a short-term bullish trend [1] - The 20-day simple moving average is favored by traders as it smooths out price fluctuations and provides trend reversal signals [2] Performance Metrics - Over the past four weeks, DNOW shares have increased by 5.6% [4] - The company currently holds a Zacks Rank 2 (Buy), suggesting potential for continued price appreciation [4] Earnings Estimates - There have been two upward revisions in earnings estimates for the current fiscal year, with no downward revisions, leading to an increase in the consensus estimate [4] - The positive revisions in earnings estimates strengthen the bullish outlook for DNOW [4] Investment Consideration - Given the technical indicators and positive earnings estimate revisions, DNOW is recommended for inclusion on investors' watchlists [5]

Core Viewpoint - Momentum investing focuses on "buying high and selling higher" rather than traditional strategies of "buying low and selling high" [1] Group 1: Momentum Investing Strategy - Momentum investors often face challenges in determining the right entry point for fast-moving stocks, which can lead to limited upside or downside risks [2] - Investing in bargain stocks that exhibit recent price momentum can be a safer strategy, utilizing tools like the Zacks Momentum Style Score to identify potential opportunities [3] Group 2: DNOW Stock Analysis - DNOW has shown a four-week price change of 9.8%, indicating growing investor interest and positioning it well within the momentum investing framework [4] - The stock has gained 1.9% over the past 12 weeks and has a beta of 1.21, suggesting it moves 21% more than the market in either direction [5] - DNOW holds a Momentum Score of B, indicating a favorable time to invest based on momentum [6] Group 3: Earnings and Valuation - An upward trend in earnings estimate revisions has contributed to DNOW's Zacks Rank 2 (Buy), which is associated with strong momentum effects [7] - DNOW is trading at a Price-to-Sales ratio of 0.70, suggesting it is undervalued at 70 cents for each dollar of sales, providing room for growth [7] Group 4: Additional Opportunities - Besides DNOW, there are other stocks that meet the criteria of the 'Fast-Paced Momentum at a Bargain' screen, presenting additional investment opportunities [8] - Various Zacks Premium Screens are available to assist in identifying winning stock picks based on different investing styles [9]

Group 1 - DNOW, Inc. is accelerating diversification, with midstream now representing a larger share of its operations [1] - The analyst has over 14 years of experience in stock analysis, focusing on both long and short positions [1] - The primary focus of the analysis is on the energy sectors, particularly the oilfield equipment services sector [1] Group 2 - The analyst also covers the Industrial Supply industry and occasionally collaborates with other contributors [1]

Core Insights - ServiceNow (NOW) is experiencing strong growth, with Q2 2025 revenues reaching $3.22 billion, a 22.4% increase year over year [1][10] - The company has raised its subscription revenue guidance for 2025 to between $12.775 billion and $12.795 billion, indicating a growth rate of 19.5-20% on a non-GAAP constant currency basis [5][10] Partner Ecosystem - ServiceNow's extensive partner network includes major companies like NVIDIA, Cisco, Amazon, and others, which enhances its innovative portfolio and drives top-line growth [1][3] - The collaboration with NVIDIA focuses on using AI to improve employee support and decision-making through the development of the Apriel Nemotron 15B model [2] - Partnerships with Amazon Web Services and Cisco aim to eliminate enterprise silos and enhance AI risk management, respectively [3] Workflow and Deal Performance - In Q2 2025, ServiceNow secured 40 technology workflow deals worth over $1 million, with significant contributions from ITSM, ITOM, ITAM, security, and risk sectors [4] - The company’s CRM and industry workflows were involved in 17 of the top 20 deals, indicating strong demand for its solutions [4] Competitive Landscape - ServiceNow faces intense competition from Atlassian and Salesforce, both of which are expanding their market presence through innovative solutions and integrations [6][7][8] - Atlassian has seen a 20-fold increase in AI interactions, while Salesforce continues to unify enterprise workflows through its Customer 360 architecture [7][8] Valuation and Stock Performance - ServiceNow's stock has underperformed, dropping 13.4% year to date, compared to a 12.9% return for the broader Zacks Computer and Technology sector [11] - The company's forward price/sales ratio stands at 12.94X, significantly higher than the sector average of 6.62X, indicating potential overvaluation [14]