Financial Performance - DNOW Inc achieved revenue of $628 million in Q2 2025, a 5% sequential increase[14,15] - GAAP net income attributable to DNOW Inc was $25 million, with a diluted EPS of $0.23[17] - Non-GAAP net income attributable to DNOW Inc, excluding other costs, was $29 million, with a diluted EPS of $0.27[18,19] - EBITDA reached $51 million, representing 8.1% of revenue[20,21] - Gross margins were 22.9%, showing an increase year-over-year and compared to full-year 2024[21] Capital Allocation and Liquidity - $19 million in shares were repurchased during Q2 2025, with $27 million repurchased year-to-date, as part of a newly authorized $160 million share repurchase program[22,23,30] - The company maintains a strong balance sheet with $582 million in total liquidity and no debt[25] Segment Performance - United States revenue increased to $528 million, a 3% increase compared to Q2 2024[37,40] - Canada revenue decreased to $48 million, a 14% decrease compared to Q2 2024[38,40] - International revenue decreased to $52 million, a 20% decrease compared to Q2 2024[39,40] Strategic Initiatives - DNOW Inc announced a merger agreement with MRC Global, expected to increase scale and scope across diverse industries and global markets[31,57,60] - The company closed the Natron International acquisition in April 2025[31] Outlook - DNOW Inc expects Q3 2025 revenue to increase in the low single-digits percentage range sequentially and EBITDA approaching 8% of revenue[63] - The company reaffirms its full-year 2025 revenue outlook to be flat-to-up in the high single-digit percentage range compared to 2024, with EBITDA approaching 8% of revenue and free cash flow targeted at $150 million[63]

Investment Rating - The report assigns an "In-Line" investment rating to the Capital Goods sector in Europe [4]. Core Insights - The report emphasizes that early adopters of AI with pricing power in the Capital Goods sector are likely to capture significant benefits, particularly in margin expansion [3][7]. - Six key use cases for AI adoption are identified, which include enhancing sales processes, utilizing AI chatbots, predictive maintenance, product design and testing, inventory management, and energy management [7][32]. Summary by Sections Investment Rating - The Capital Goods sector is rated "In-Line" [4]. AI Adoption Overview - AI adoption in the Capital Goods sector has seen a notable increase compared to the previous year, with a focus on identifying companies that have made significant strides in AI integration [3][27]. - The report highlights that only 9% of global industrial companies classified as AI adopters possess high pricing power, indicating a substantial opportunity for early adopters in the sector [29]. Key Use Cases - **Sales Processes**: AI is used to automate customer quotes and enhance sales strategies, with Rexel implementing an automated request for quotes system [9][34]. - **AI Chatbots**: Both internal and external chatbots are deployed to improve efficiency in customer service and internal operations, with Schneider Electric utilizing chatbots for customer inquiries [10][41]. - **Predictive Maintenance**: Companies like KONE leverage AI to enhance maintenance processes, significantly reducing unscheduled call-outs and improving fault identification [11][52]. - **Product Design and Testing**: AI tools are integrated into R&D to streamline product development, as seen with KONE's use of generative AI for rapid prototyping [12][47]. - **Inventory Management**: AI is applied to optimize inventory levels and supply chain efficiency, with Rexel reporting increased sales through AI-assisted inventory management [13][53]. - **Energy Management**: AI technologies are utilized to forecast and optimize energy consumption, with Schneider Electric achieving significant energy savings through AI integration [14][55]. Company Highlights - **Rexel**: Recognized for its extensive AI use cases, including customer churn algorithms and automated pricing models, which have led to substantial revenue increases [15][34]. - **KONE**: Noted for its proactive application of AI in maintenance and service offerings, enhancing operational efficiency and customer satisfaction [18][52]. - **Schneider Electric**: Acknowledged for its strong focus on energy management and inventory optimization through AI, contributing to significant productivity savings [19][55].