NOW(US:DNOW)2023-11-02 20:26Financial Data and Key Metrics Changes - Total revenue for Q3 2023 was $588 million, down $6 million or 1% from Q2 2023, but up $11 million or 2% year-over-year [50][70] - EBITDA for Q3 2023 was $46 million, or 7.8% of revenue, with year-to-date EBITDA at $140 million, or 7.9% of revenue [50][45] - Net income attributable to NOW Inc. for Q3 was $35 million, or $0.32 per fully diluted share, while non-GAAP net income was $28 million, or $0.25 per fully diluted share [51][52] - Cash position at the end of Q3 was $194 million, with total liquidity of $547 million [10][52] Business Line Data and Key Metrics Changes - The US Process Solutions business grew to a record 30% of the US segment in Q3, driven by high demand for various equipment [5] - Canada revenues were $68 million for the quarter, a 3% sequential increase, but lower than expected due to market disruptions [6][9] - DigitalNOW revenue as a percentage of total SAP revenue was 46% in Q3, down from 48% in Q2 2023 [7] Market Data and Key Metrics Changes - International revenue for Q3 was $72 million, flat sequentially but up 29% year-over-year [9] - US revenue for Q3 totaled $448 million, a decrease of $8 million or 2% sequentially, despite a 10% decline in US rig counts [50][45] Company Strategy and Development Direction - The company is focused on maximizing shareholder value, leveraging a debt-free balance sheet, and pursuing margin-accretive acquisitions [13][49] - The strategy includes expanding into carbon capture and renewable natural gas markets, with significant growth opportunities identified [40][92] - The company is transitioning to the DNOW brand to better communicate its vision and enhance market presence [79] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in revenue retention despite a declining rig count, indicating a strong market position [15] - The company expects a seasonal slowdown in Q4 due to customer budget exhaustion and fewer business days [39][53] - Full-year revenue growth is anticipated to be approximately 8%, despite challenges in the US rig count [53][80] Other Important Information - The company repurchased $5 million worth of shares in Q3, with cumulative repurchases totaling $56 million out of an authorized $80 million [49][52] - The effective tax rate for Q3 was 5.4% on a GAAP basis, with a non-GAAP effective tax rate of approximately 26% [76] Q&A Session Summary Question: Expectations for rig growth in 2024 - Management noted that there is speculation about growth in rig counts as customers are expected to reset budgets and add rigs [82] Question: Acquisition opportunities to support Process Solutions business - Management confirmed they are looking for acquisitions that provide exclusivity in territories and enhance margins [23] Question: Customer conversations regarding energy evolution projects - Management indicated that most growth opportunities will come from existing customers investing in energy transition projects [63][88]