NOW(DNOW) - 2025 Q4 - Annual Results

Financial Performance - DNOW generated $2.8 billion in revenue for the full year 2025, with Adjusted EBITDA at 7.4% of revenues[5] - For Q4 2025, revenue was $959 million, with a gross profit of $68 million, representing 7.1% of revenue[16] - Adjusted gross profit for Q4 2025 was $217 million, or 22.6% of revenue, compared to 23.8% in Q4 2024[21] - The company reported a net loss of $89 million for the full year 2025, with an adjusted net income of $104 million, or $0.86 per diluted share[9] - DNOW Inc. reported a net loss of $147 million for the three months ended December 31, 2025, representing a 15.3% loss as a percentage of revenue[22] - Adjusted EBITDA for the same period was $61 million, accounting for 6.4% of revenue, compared to $45 million (7.9% of revenue) in the previous quarter[22] - Adjusted net income attributable to DNOW Inc. was $23 million for the three months ended December 31, 2025, compared to $27 million in the previous quarter[27] Costs and Charges - The merger with MRC Global is expected to yield annual cost synergies of $23 million, which is 35% above the initial target, while maintaining a three-year synergy commitment of $70 million[9] - The company incurred $135 million in inventory-related transaction charges for the three months ended December 31, 2025, related to inventory step-up[25] - Impairment and other charges included $12 million of foreign currency translation losses for the three months ended December 31, 2025[24] - Stock-based compensation for the three months ended December 31, 2025, was $4 million, consistent with the previous quarter[23] Assets and Liquidity - Cash provided by operating activities for the full year 2025 was $155 million, with total liquidity of approximately $588 million[9] - DNOW's total assets increased to $3.924 billion as of December 31, 2025, up from $1.621 billion in 2024[14] - DNOW's long-term debt stood at $411 million at the end of 2025, with cash and cash equivalents of $164 million[14] - DNOW Inc. had total debt of $411 million and net debt of $247 million as of December 31, 2025, resulting in a net debt leverage ratio of 1.2x[30] Tax and Other Financial Metrics - The company reported a tax benefit of $(37) million for the three months ended December 31, 2025[27] - Diluted loss per share attributable to DNOW Inc. stockholders was $(0.95) for the three months ended December 31, 2025, compared to $0.21 in the same period of 2024[28] - The increase in LIFO reserve was $9 million for the three months ended December 31, 2025[27] Operational Challenges - The company is addressing challenges related to the U.S. MRC Global ERP system transition, which went live in Q3 2025[7]