NOW(DNOW) - 2025 Q1 - Quarterly Results

DNOW First Quarter 2025 Results Financial & Operational Highlights DNOW reported strong Q1 2025 results with $599 million revenue and $46 million non-GAAP EBITDA, executing strategic capital allocation and maintaining a strong balance sheet Q1 2025 Financial Highlights | Metric | Value | | :--- | :--- | | Revenue | $599 million | | Net Income (GAAP) | $22 million | | Diluted EPS (GAAP) | $0.20 | | Net Income (Non-GAAP) | $24 million | | Diluted EPS (Non-GAAP) | $0.22 | | EBITDA (Non-GAAP) | $46 million (7.7% of revenue) | | Cash and Cash Equivalents | $219 million | | Long-Term Debt | Zero | - The company repurchased $8 million of common stock in Q1 2025 and $16 million year-to-date under its $160 million share repurchase program[9] - Completed the acquisition of Natron International Pte Ltd in Singapore, expanding electrical supply capabilities in the Asia Pacific region under the MacLean International brand[9] - Strategically invested $33 million in additional inventory, resulting in cash used in operating activities of $16 million for the quarter[9] Management Commentary Management highlighted Q1 2025 outperformance with strong revenue and EBITDA growth, successful capital allocation, and a robust financial position for future opportunities - Achieved 5% sequential revenue growth to $599 million and the second-best first-quarter EBITDA of $46 million, exceeding expectations in a challenging market[4] - Executed on capital allocation by acquiring a company in Singapore to expand the MacLean International brand and repurchasing $16 million of common stock year-to-date[5] - The company is well-capitalized with a significant cash balance and no debt, allowing for selective and patient acquisition strategies[6] - Despite market uncertainties from oil price declines and trade disruptions, management believes the company is well-positioned for organic and inorganic growth[7] Consolidated Financial Statements This section presents unaudited consolidated financial statements, including balance sheets, statements of operations, and revenue breakdowns by segment for Q1 2025 Consolidated Balance Sheets DNOW's balance sheet as of March 31, 2025, shows increased total assets to $1.651 billion, driven by inventory and receivables, with zero long-term debt Balance Sheet Comparison (in millions) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $219 | $256 | | Inventories, net | $385 | $352 | | Total current assets | $1,067 | $1,028 | | Total assets | $1,651 | $1,621 | | Total current liabilities | $460 | $442 | | Total liabilities | $507 | $493 | | Total stockholders' equity | $1,144 | $1,128 | Consolidated Statements of Operations Q1 2025 statements of operations show DNOW's revenue at $599 million, with an operating profit of $30 million and net income of $22 million Quarterly Statement of Operations (in millions) | Metric | Q1 2025 | Q1 2024 | Q4 2024 | | :--- | :--- | :--- | :--- | | Revenue | $599 | $563 | $571 | | Operating profit | $30 | $28 | $29 | | Net income attributable to DNOW Inc. | $22 | $21 | $23 | | Diluted EPS | $0.20 | $0.19 | $0.21 | Business Segments Revenue The United States segment remains the primary revenue driver, contributing $474 million in Q1 2025, with sequential and year-over-year growth Revenue by Business Segment (in millions) | Segment | Q1 2025 | Q1 2024 | Q4 2024 | | :--- | :--- | :--- | :--- | | United States | $474 | $435 | $451 | | Canada | $62 | $66 | $66 | | International | $63 | $62 | $54 | | Total revenue | $599 | $563 | $571 | Non-GAAP Financial Measures & Reconciliations This section reconciles GAAP to non-GAAP financial measures, including EBITDA, net income, diluted EPS, and free cash flow, used for operational performance evaluation - The company uses non-GAAP measures like EBITDA excluding other costs, non-GAAP net income, non-GAAP diluted EPS, and free cash flow to evaluate and manage its operations[20] Reconciliation of Net Income to EBITDA excluding other costs Non-GAAP EBITDA excluding other costs for Q1 2025 was $46 million, representing 7.7% of revenue, an increase from prior periods EBITDA Reconciliation (in millions) | Metric | Q1 2025 | Q1 2024 | Q4 2024 | | :--- | :--- | :--- | :--- | | GAAP net income attributable to DNOW Inc. | $22 | $21 | $23 | | Adjustments (Interest, Tax, D&A, Other) | $24 | $18 | $22 | | EBITDA excluding other costs | $46 | $39 | $45 | Reconciliation of Net Income to Non-GAAP Net Income excluding other costs Non-GAAP net income attributable to DNOW Inc. was $24 million in Q1 2025, adjusted from GAAP net income by removing specific charges Non-GAAP Net Income Reconciliation (in millions) | Metric | Q1 2025 | Q1 2024 | Q4 2024 | | :--- | :--- | :--- | :--- | | GAAP net income attributable to DNOW Inc. | $22 | $21 | $23 | | Other, net of tax | $2 | $2 | $4 | | Net income attributable to DNOW Inc. excluding other costs | $24 | $23 | $27 | Reconciliation of Diluted EPS to Non-GAAP Diluted EPS excluding other costs Non-GAAP diluted EPS for Q1 2025 was $0.22, reflecting an increase from Q1 2024 after adjusting for other costs Non-GAAP Diluted EPS Reconciliation | Metric | Q1 2025 | Q1 2024 | Q4 2024 | | :--- | :--- | :--- | :--- | | GAAP diluted EPS | $0.20 | $0.19 | $0.21 | | Other, net of tax | $0.02 | $0.02 | $0.04 | | Diluted EPS excluding other costs | $0.22 | $0.21 | $0.25 | Reconciliation of Net Cash from Operating Activities to Free Cash Flow DNOW reported a free cash outflow of $22 million in Q1 2025, primarily due to a strategic inventory investment and capital expenditures Free Cash Flow Reconciliation (in millions) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $(16) | $81 | | Less: Purchases of property, plant and equipment | $(6) | $(1) | | Free cash flow | $(22) | $80 | - Other costs in Q1 2025 primarily included approximately $2 million of transaction-related charges and $1 million of International restructuring charges[25]