Contradictions in Focus: Analyzing Inflation, Gas Utilities, and ERP Challenges in Q1 2025

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Strong Financial Performance and Revenue Growth:
- MRC Global reported revenue growth of 7% sequentially in Q1 2025, reaching $712 million.
- The growth was driven by increased activity in all three market sectors, led by the gas utilities sector and strong backlog growth, particularly in the US segment.

Backlog Expansion and Confidence in Future Growth:
- MRC Global's total US backlog increased by 23% at the end of April compared to the beginning of the year.
- This expansion, particularly in the gas utilities business, indicates confidence in achieving another quarter of strong sequential revenue improvement in Q2.

Gas Utilities Sector Recovery:
- The gas utilities sector achieved an 8% increase in backlog by the end of April, reaching the highest level in three quarters.
- The sector's resurgence is attributed to increased customer investments in safety and modernization projects and the resurgence in natural gas as a key fuel for electrification and LNG export opportunities.

Tariff Impact and Strategic Inventory Management:
- MRC Global is experiencing significant tariffs on steel and aluminum products and over 100% tariffs on products from China.
- The company proactively managed inventory to mitigate tariff impacts, leading to increased inventory levels in the first quarter to navigate potential disruptions.