UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark one) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number 001-36325 NOW INC. (Exact name of registrant as specified in its charter) (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identificati ...

Financial Data and Key Metrics Changes - Total revenue for Q4 2022 was $547 million, down 5% or $30 million from Q3, but up 27% year-over-year, with full-year revenue reaching $2.1 billion, an increase of 31% from 2021 [18][101] - Net income for Q4 was $32 million or $0.28 per diluted share, with non-GAAP net income at $29 million or $0.25 per diluted share [26] - EBITDA for Q4 was $47 million, representing 8.6% of revenue, while full-year EBITDA was $175 million or 8.2% of revenue, marking a significant improvement from previous years [73][112] Business Line Data and Key Metrics Changes - U.S. revenue for Q4 was $414 million, down 5% sequentially, with U.S. energy centers contributing 76% of total U.S. revenues for the quarter [9][19] - Canadian revenue for Q4 was $75 million, a 13% decrease sequentially but up 4% year-over-year, with full-year Canadian revenue totaling $315 million, a 27% increase from 2021 [24][113] - International revenue for Q4 was $58 million, up $2 million sequentially, with full-year international revenue totaling $230 million, a 5% increase despite a negative foreign currency impact [78][85] Market Data and Key Metrics Changes - In the U.S. downstream sector, customer spending remained strong, particularly in refining and chemical sectors, with increased demand for fabricated equipment packages [10] - The Middle East saw increased rig activations and drilling activity, with significant investments in local pipe inventory [14] - The U.K. market returned to growth with higher order inquiries for various products, indicating a positive trend in market activity [13] Company Strategy and Development Direction - The company aims to enhance customer intimacy and improve product availability by transitioning to a more cohesive regional supercenter model [6] - Focus on acquisitions to strengthen market position, with two acquisitions completed in December 2022 to enhance pump and engineered process equipment capabilities [8][118] - Commitment to energy evolution and ESG solutions, with a focus on reducing emissions and improving supply chain efficiencies [90][138] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism for 2023, expecting customer spending to increase year-over-year, despite potential challenges from rising costs and inflation [92][120] - The company anticipates a slight decline in gross margins in Q1 2023 due to seasonal impacts but expects strong performance throughout the year [39][125] - Management highlighted the importance of maintaining a disciplined capital allocation strategy while focusing on organic growth and M&A opportunities [28][123] Other Important Information - The company reported zero debt and a cash position of $212 million at year-end, with a focus on maintaining strong liquidity [87][134] - The company is leveraging digital technologies to streamline operations, with digital revenue accounting for 46% of total revenue in Q4 [110] - The company is actively working on integrating ESG solutions into its offerings, particularly through the EcoVapor acquisition [118][138] Q&A Session Summary Question: Plans for cash allocation between M&A and repurchase - Management indicated a focus on funding organic growth while also prioritizing M&A opportunities and share repurchase programs as cash flow increases [36][123] Question: Gross margin seasonality in 2023 - Management expects Q1 to be the lowest gross margin period due to seasonal impacts, with a potential easing of margins as the year progresses [39][125] Question: Customer activity outlook in the U.S. upstream market - Management noted that while there is pressure from lower gas prices, they are monitoring customer budgets and project pipelines closely [61][142]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark one) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE YEAR ENDED DECEMBER 31, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission file number 001-36325 NOW INC. (Exact name of registrant as specified in its charter) Delaware 46-4191184 (State of Incorporation) (IRS Identification No.) 7402 North Eldridge Parkway, Houst ...

NOW Inc. (NYSE:DNOW) Q3 2022 Earnings Conference Call November 2, 2022 9:00 AM ET Company Participants Brad Wise - Vice President of Digital Strategy and Investor Relations David Cherechinsky - President and Chief Executive Officer Mark Johnson - Senior Vice President and Chief Financial Officer Conference Call Participants Nathan Jones - Stifel Jeff Robertson - Water Tower Research Sean Mitchell - Daniel Energy Partners Operator Good morning. My name is Sam, and I will be your conference operator today. At ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark one) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number 001-36325 NOW INC. (Exact name of registrant as specified in its charter) Delaware 46-4191184 (State or other jurisdiction of (I.R.S. Employer incorporation or or ...

Financial Data and Key Metrics Changes - Revenues in Q2 2022 were $539 million, a 14% increase or $66 million growth over Q1 2022, and a 35% increase or $139 million year-over-year [40][41] - Gross margins reached 23.7%, up 110 basis points from Q1 2022, exceeding previous full-year guidance of 22% to 22.5% [45][40] - EBITDA for Q2 was $47 million, representing 8.7% of revenue, the highest level since being public [11][40] - GAAP net income for Q2 was $26 million or $0.23 per share, while non-GAAP net income excluding other costs was $29 million or $0.26 per share [50] Business Line Data and Key Metrics Changes - U.S. revenue was $408 million, up 22% sequentially and 38% year-over-year, driven by increased E&P customer activity [41][17] - Canadian revenue was $72 million, down 12% sequentially but up 41% year-over-year, marking the smallest second-quarter pullback on record [42][25] - International revenue was $59 million, up 4% sequentially and 11% year-over-year, with a 19% increase when excluding foreign currency impacts [43][44] Market Data and Key Metrics Changes - U.S. rig count growth was 13%, contributing to revenue growth in the U.S. segment [41][17] - International market conditions are improving, with increased offshore investments and activity in the Middle East and Southeast Asia [28][29] Company Strategy and Development Direction - The company is focused on maximizing efficiencies through regionalized fulfillment and enhancing customer proximity [14][17] - Recent acquisitions aim to fortify the company's position in non-commoditized customer solutions with better gross margins [35][37] - The company plans to invest in technology and training to improve operational efficiencies and customer service [96][98] Management's Comments on Operating Environment and Future Outlook - Management expects Q3 revenues to increase in the mid-single-digit percent range, with gross margins remaining at record high levels [64] - Full-year revenue is now expected to grow up to 30% compared to 2021, with EBITDA approximating 7% of full-year revenue [66] - The company anticipates generating positive free cash flow in 2022 despite potential seasonal revenue declines in Q4 [89][90] Other Important Information - The company has authorized an $80 million share repurchase program, reflecting confidence in its financial performance and balance sheet [38][62] - The company has ceased operations in Russia and reduced its footprint in certain international markets, impacting quarterly revenue by approximately $4 million [31][47] Q&A Session Summary Question: Can you comment on the upside drivers for gross margins in Q2? - Management noted that proactive inventory building and a large project contributed to higher gross margins, but expects margins to narrow slightly in Q3 [70][72] Question: What are the expectations for operating margins moving forward? - Management aims for a full-year EBITDA of 7%, with goals to grow further in future years [75][76] Question: What was the catalyst for the share repurchase announcement? - The catalyst was the belief that shares were undervalued, combined with a strong earnings profile and balance sheet [79] Question: How will free cash flow be impacted in the back half of the year? - Management expects a slight dip in free cash flow in Q4 due to seasonal revenue declines but remains optimistic about generating positive cash flow overall [88][90] Question: What is the outlook for international growth next year? - Management expressed optimism for double-digit growth in the international segment, supported by increasing activity and project opportunities [90]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark one) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number 001-36325 NOW INC. (Exact name of registrant as specified in its charter) Delaware 46-4191184 (State or other jurisdiction of (I.R.S. Employer incorporation or organiz ...

Financial Data and Key Metrics Changes - Total revenue for Q1 2022 was $473 million, a sequential increase of $41 million or 9.5% [45] - Year-over-year revenue growth was $112 million or 31% [45] - Gross margin for Q1 2022 was 22.6%, above the record 21.9% from 2021 [48] - GAAP net income for Q1 2022 was $30 million or $0.27 per share, while non-GAAP net income was $15 million or $0.14 per share [52] Business Line Data and Key Metrics Changes - U.S. revenue was $334 million, up 10% sequentially and 33% year-over-year [46] - Canada revenue grew to $82 million, a 14% sequential increase and 41% year-over-year [47] - International segment revenue was flat at $57 million sequentially but up 12% year-over-year [47] Market Data and Key Metrics Changes - The U.S. energy centers contributed approximately 79% of total U.S. revenues in Q1 2022 [46] - The company experienced growth in the Permian, Eagle Ford, Powder River, and Williston Basin markets [22] Company Strategy and Development Direction - The company is focused on transforming its business to serve as a critical link between global manufacturers and customers [11] - A regionalized project fulfillment strategy is being implemented, with plans to establish five supercenters by the end of the year [78] - The company aims to maintain a strong balance sheet with zero debt and significant liquidity to support growth and acquisitions [59] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the momentum in the business and the ability to generate positive cash flow despite growth [16][68] - The company raised its full-year revenue guidance to a 20% increase, with EBITDA to revenue incrementals approximating 20% [63] - Management noted the impact of geopolitical events, such as the Russian invasion of Ukraine, on energy security and demand for products [36] Other Important Information - The company has ceased operations in Russia, where revenues represented less than 1% of total [36] - The company is actively pursuing acquisitions, with a focus on smaller deals in the current market [74][75] - Workplace safety has improved, achieving a record low total recordable incident rate [65] Q&A Session Summary Question: Cash flow improvements despite growth outlook - Management highlighted improvements in working capital velocity and a leaner organization as key factors enabling positive cash flow [68][70] Question: Capital allocation strategy in the current market - Management confirmed plans to pursue acquisitions this year, despite higher seller expectations [74][75] Question: Impact of rig count and DUC count on future spending - Management indicated that the depletion of DUCs could lead to increased spending by customers in the future [76] Question: Regionalized fulfillment strategy progress - Management stated that the rollout of supercenters is more than halfway complete, focusing on customer proximity and efficiency [78] Question: WS&A expense growth in relation to revenue - Management expects WS&A expenses to grow at a lower rate than revenue, indicating a focus on efficiency [82][84] Question: Commodity pricing and potential upside - Management acknowledged the potential for price appreciation but noted that it depends on supply and demand dynamics [86]

Part I [Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited consolidated financial statements for the quarter ended March 31, 2022, detailing the company's financial position, performance, and cash flows, alongside explanatory notes [Consolidated Balance Sheets](index=3&type=section&id=Consolidated%20Balance%20Sheets) As of March 31, 2022, the balance sheet reflects total assets of **$1,162 million**, driven by increased receivables and inventories, with total stockholders' equity growing to **$746 million** Consolidated Balance Sheet Highlights (in millions) | Account | March 31, 2022 | December 31, 2021 | | :--- | :--- | :--- | | **Total current assets** | $946 | $883 | | Inventories, net | $296 | $250 | | **Total assets** | **$1,162** | **$1,104** | | **Total current liabilities** | $395 | $369 | | **Total liabilities** | $416 | $392 | | **Total stockholders' equity** | $746 | $712 | [Consolidated Statements of Operations](index=4&type=section&id=Consolidated%20Statements%20of%20Operations) For Q1 2022, the company reported a significant turnaround to **$30 million** net income from a **$10 million** net loss in Q1 2021, driven by a **31%** revenue increase to **$473 million** Q1 2022 vs Q1 2021 Statement of Operations (in millions, except per share data) | Metric | Q1 2022 | Q1 2021 | | :--- | :--- | :--- | | **Revenue** | **$473** | **$361** | | Cost of products | $366 | $286 | | Operating profit (loss) | $23 | $(8) | | **Net income (loss)** | **$30** | **$(10)** | | Diluted earnings (loss) per share | $0.27 | $(0.09) | [Consolidated Statements of Cash Flows](index=6&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Net cash used in operating activities for Q1 2022 increased to **$22 million**, primarily due to investments in working capital to support revenue growth Q1 2022 vs Q1 2021 Cash Flow Summary (in millions) | Cash Flow Activity | Q1 2022 | Q1 2021 | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $(22) | $(4) | | Net cash provided by (used in) investing activities | $2 | $(7) | | Net cash provided by (used in) financing activities | $(1) | $(2) | | **Net change in cash and cash equivalents** | **$(20)** | **$(13)** | | Cash and cash equivalents, end of period | $293 | $374 | [Notes to Unaudited Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Unaudited%20Consolidated%20Financial%20Statements) These notes provide critical context to the financial statements, detailing the company's business, accounting policies, segment performance, debt structure, and significant non-recurring income items - The company operates as a global distributor of energy and industrial products under the DistributionNOW and DNOW brands, serving upstream, midstream, and downstream sectors in approximately 80 countries[15](index=15&type=chunk) - The company has a **$500 million** senior secured revolving credit facility maturing in December 2026, with no borrowings and approximately **$436 million** availability as of March 31, 2022[28](index=28&type=chunk) - A contingent consideration liability of approximately **$13 million** from a 2021 acquisition was removed in Q1 2022 as the performance target was not met, resulting in a benefit recognized in other income[40](index=40&type=chunk) Revenue and Operating Profit by Segment (in millions) | Segment | Revenue Q1 2022 | Revenue Q1 2021 | Operating Profit (Loss) Q1 2022 | Operating Profit (Loss) Q1 2021 | | :--- | :--- | :--- | :--- | :--- | | United States | $334 | $252 | $14 | $(13) | | Canada | $82 | $58 | $7 | $4 | | International | $57 | $51 | $2 | $1 | | **Total** | **$473** | **$361** | **$23** | **$(8)** | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=14&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management attributes the strong Q1 2022 performance, including a **31%** revenue increase and return to profitability, to improved market conditions, while highlighting strong liquidity and discussing market uncertainties and energy transition opportunities - For Q1 2022, the company generated net income of **$30 million** on **$473 million** in revenue, a **$40 million** improvement in net income compared to the same period in 2021[59](index=59&type=chunk) - The company's outlook remains tied to commodity prices and drilling activity, with noted uncertainty from the COVID-19 pandemic and the Russia-Ukraine conflict, and the company is winding down its operations in Russia[48](index=48&type=chunk)[60](index=60&type=chunk) - The company views the energy transition as an opportunity to supply existing and new products to both traditional and new customers involved in these projects[60](index=60&type=chunk) Key Industry Indicators (Q1 2022 vs. Q1 2021) | Indicator | 1Q22 | 1Q21 | % Change | | :--- | :--- | :--- | :--- | | U.S. Active Drilling Rigs | 633 | 392 | 61.5% | | Canada Active Drilling Rigs | 198 | 139 | 42.4% | | WTI Crude Price (per barrel) | $94.45 | $57.79 | 63.4% | [Results of Operations by Segment](index=18&type=section&id=Results%20of%20Operations) All operating segments reported significant year-over-year revenue growth in Q1 2022, with the U.S. segment's revenue increasing by **32.5%** and operating profit improving by **$27 million**, while Canada and International segments also saw strong growth - U.S. revenue increased by **$82 million** (**32.5%**) YoY, with operating profit improving by **$27 million**, driven by drilling activity and improved product margins[61](index=61&type=chunk) - Canada revenue increased by **$24 million** (**41.4%**) YoY, driven by a higher rig count[64](index=64&type=chunk) - International revenue increased by **$6 million** (**11.8%**) YoY, driven by increased rig count and project activity[65](index=65&type=chunk) [Non-GAAP Financial Measure and Reconciliation](index=21&type=section&id=Non-GAAP%20Financial%20Measure%20and%20Reconciliation) The company reconciles GAAP Net Income to non-GAAP EBITDA excluding other costs, which significantly increased to **$28 million** in Q1 2022 from **$3 million** in Q1 2021, reflecting improved economic performance Reconciliation to EBITDA excluding other costs (in millions) | Line Item | Q1 2022 | Q1 2021 | | :--- | :--- | :--- | | GAAP net income (loss) | $30 | $(10) | | Interest, net | — | — | | Income tax provision (benefit) | 3 | 1 | | Depreciation and amortization | 4 | 6 | | Stock-based compensation | 2 | 2 | | Other | (11) | 4 | | **EBITDA excluding other costs** | **$28** | **$3** | [Liquidity and Capital Resources](index=22&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains a strong liquidity position with **$293 million** in cash and **$436 million** available on its **$500 million** credit facility, despite **$22 million** in cash used for operating activities to fund working capital growth - As of March 31, 2022, the company had cash and cash equivalents of **$293 million**[77](index=77&type=chunk) - The company had no borrowings against its **$500 million** revolving credit facility and approximately **$436 million** in availability[77](index=77&type=chunk) - Net cash used in operating activities was **$22 million**, primarily due to an increase in working capital resulting from growing market activity[78](index=78&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=24&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risks include foreign currency exchange rate fluctuations, particularly for its **30%** international sales, and commodity steel pricing, which it manages through inventory control - The company is exposed to foreign currency risk as approximately **30%** of its net sales for Q1 2022 were outside the U.S[86](index=86&type=chunk) - A hypothetical **10%** change in foreign currency rates would have resulted in a **$1 million** change in net income for the first three months of 2022[86](index=86&type=chunk) - The business is sensitive to steel prices, particularly for tubular products, and mitigates this risk by managing inventory levels[87](index=87&type=chunk) [Controls and Procedures](index=25&type=section&id=Item%204.%20Controls%20and%20Procedures) The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of March 31, 2022, with no material changes in internal control over financial reporting during the quarter - The CEO and CFO concluded that the company's disclosure controls and procedures are effective at a reasonable assurance level as of the end of the reporting period[89](index=89&type=chunk) - No change in internal control over financial reporting occurred during the last fiscal quarter that has materially affected, or is reasonably likely to materially affect, internal controls[90](index=90&type=chunk) Part II [Exhibits](index=26&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Form 10-Q report, including key corporate documents, credit agreements, executive compensation forms, and Sarbanes-Oxley Act certifications - The report includes exhibits such as the Amended and Restated Certificate of Incorporation, Bylaws, Credit Agreement, and various executive compensation and award agreements[92](index=92&type=chunk)[93](index=93&type=chunk)[99](index=99&type=chunk) - Certifications from the CEO and CFO pursuant to Rule 13a-14(a) and Section 906 of the Sarbanes-Oxley Act of 2002 are filed as exhibits[100](index=100&type=chunk)[101](index=101&type=chunk)

NOW Inc. (NYSE:DNOW) Q4 2021 Earnings Conference Call February 17, 2022 9:00 AM ET Company Participants Brad Wise - Vice President of Digital Strategy and Investor Relations David Cherechinsky - President and Chief Executive Officer Mark Johnson - Senior Vice President and Chief Financial Officer Conference Call Participants Adam Farley - Stifel Tommy Moll - Stephens Jon Hunter - Cowen & Company Operator Welcome to the NOW Incorporated Fourth Quarter and Full Year 2021 Earnings Conference Call. My name is ...