NOW(DNOW) - 2025 Q2 - Quarterly Results

Financial and Strategic Highlights DNOW reported strong Q2 2025 results, including $628 million revenue and $51 million EBITDA, while announcing a merger with MRC Global and reaffirming full-year guidance. - Announced a definitive merger agreement with MRC Global in an all-stock transaction valued at approximately $1.5 billion, expected to close in Q4 2025, aiming to create a premier energy industrial solutions provider[5][7] Q2 2025 Key Financial Metrics | Metric | Value (in millions, except EPS) | | :--- | :--- | | Revenue | $628 | | Net Income (attributable to DNOW Inc.) | $25 | | Diluted EPS | $0.23 | | Non-GAAP Net Income | $29 | | Non-GAAP Diluted EPS | $0.27 | | EBITDA (excluding other costs) | $51 (8.1% of revenue) | | Cash from Operating Activities | $45 | | Stock Repurchases | $19 | - The company maintains a strong balance sheet with $232 million in cash and cash equivalents, zero long-term debt, and total liquidity of approximately $582 million as of June 30, 2025[7] - DNOW reaffirmed its full-year 2025 guidance for revenue and EBITDA, and also reaffirmed its free cash flow guidance targeted at $150 million[6] Financial Statements This section presents DNOW Inc.'s unaudited consolidated financial statements, including the balance sheet, statement of operations, and revenue breakdown by geographic segment. Consolidated Balance Sheets As of June 30, 2025, DNOW's balance sheet showed total assets of $1,661 million, $232 million in cash, and zero long-term debt, with stockholders' equity at $1,161 million. Balance Sheet Summary (in millions) | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $232 | $256 | | Total current assets | $1,080 | $1,028 | | Total assets | $1,661 | $1,621 | | Total current liabilities | $455 | $442 | | Total liabilities | $500 | $493 | | Total stockholders' equity | $1,161 | $1,128 | Consolidated Statements of Operations Q2 2025 revenue reached $628 million, with net income attributable to DNOW Inc. at $25 million or $0.23 per diluted share, reflecting improved per-share profitability. Q2 2025 Statement of Operations Highlights (in millions, except per share data) | Metric | Q2 2025 | Q2 2024 | Q1 2025 | | :--- | :--- | :--- | :--- | | Revenue | $628 | $633 | $599 | | Operating Profit | $32 | $33 | $30 | | Net Income (to DNOW Inc.) | $25 | $24 | $22 | | Diluted EPS | $0.23 | $0.21 | $0.20 | Business Segments Revenue United States segment revenue grew to $528 million in Q2 2025, while Canada and International segments experienced year-over-year declines. Revenue by Geographic Segment (in millions) | Segment | Q2 2025 | Q2 2024 | YoY Change | | :--- | :--- | :--- | :--- | | United States | $528 | $512 | +3.1% | | Canada | $48 | $56 | -14.3% | | International | $52 | $65 | -20.0% | | Total Revenue | $628 | $633 | -0.8% | Non-GAAP Financial Measures and Reconciliations This section reconciles GAAP results to non-GAAP financial measures, adjusting for 'other costs' to present metrics like EBITDA, non-GAAP net income, EPS, and free cash flow. - The company discloses non-GAAP measures like EBITDA excluding other costs, non-GAAP net income, non-GAAP diluted EPS, and free cash flow to help investors evaluate operational performance[18] - For Q2 2025, 'Other costs' primarily included approximately $6 million of transaction-related charges associated with acquisitions[23] Reconciliation of Net Income to EBITDA excluding other costs Q2 2025 EBITDA excluding other costs was $51 million (8.1% margin), reconciled from GAAP net income by adding back interest, taxes, D&A, and other costs. EBITDA Reconciliation Summary (in millions) | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | GAAP net income (to DNOW Inc.) | $25 | $24 | | Adjustments (Taxes, D&A, etc.) | $16 | $18 | | Other costs | $10 | $9 | | EBITDA excluding other costs | $51 | $50 | Reconciliation of Net Income to Non-GAAP Net Income excluding other costs Q2 2025 non-GAAP net income attributable to DNOW Inc. was $29 million, an increase from Q2 2024, primarily adjusted by adding back $4 million in 'Other, net of tax' costs. Non-GAAP Net Income Reconciliation (in millions) | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | GAAP net income (to DNOW Inc.) | $25 | $24 | | Other, net of tax | $4 | $4 | | Net income excluding other costs | $29 | $28 | Reconciliation of Diluted EPS to Non-GAAP Diluted EPS excluding other costs Q2 2025 non-GAAP diluted EPS was $0.27, a $0.04 per share difference from GAAP diluted EPS, due to the exclusion of transaction-related and other costs. Non-GAAP Diluted EPS Reconciliation | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | GAAP diluted EPS | $0.23 | $0.21 | | Other, net of tax | $0.04 | $0.04 | | Diluted EPS excluding other costs | $0.27 | $0.25 | Reconciliation of Net Cash from Operating Activities to Free Cash Flow DNOW generated $41 million in free cash flow in Q2 2025, a significant increase from the prior year, derived from $45 million in operating cash flow less $4 million in capital expenditures. Free Cash Flow Reconciliation (in millions) | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $45 | $21 | | Less: Purchases of PP&E | ($4) | ($3) | | Free cash flow | $41 | $18 | About DNOW DNOW is a Houston-based supplier of energy and industrial products with a 160-year legacy, offering supply chain solutions to diverse traditional and emerging energy markets. - DNOW is a supplier of energy and industrial products, as well as engineered process and production equipment, with a history spanning over 160 years[8] - The company serves a wide array of end markets, including exploration and production, midstream, refineries, chemical companies, utilities, mining, and companies in the decarbonization, energy evolution, and renewables sectors[8]