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- **Record Revenue & Profitability**: Q3 2025 revenue of $634M (highest in 6 years), EBITDA $51M (8% margin). Free cash flow $39M, targeting $150M+ for 2025.
- **MRC Merger Momentum**: $70M annual synergies expected post-close, with integration teams focused on cost savings and growth opportunities.
- **Midstream Dominance**: 24% of Q3 revenue from midstream projects, including a 400-mile LNG pipeline. RNG and CO2 sequestration projects driving growth.
- **Digital Differentiation**: DigitalNOW tools improving DSO by 2 days Q/Q, inventory turns at record 5.2x.
- **Cash Position Strength**: $266M cash, 0 debt, total liquidity $629M. Share buybacks $27M YTD.
- **Growth Catalysts**: Expansion into data center cooling infrastructure, CCUS projects, and MRC's gas utility expertise post-merger.


**【CEO Summary Section】**
- **Revenue Growth**: Q3 2025 revenue of $634M, highest in 6 years, up 1% sequentially. U.S. revenue $527M (flat Q/Q), Canada $53M (+10% Q/Q), International $54M (+4% Q/Q). 
- **Profitability**: EBITDA $51M (8% of revenue), up 60bps YoY. Free cash flow $39M, YTD $58M, targeting $150M+ for 2025.
- **Merger Update**: MRC Global merger nearing completion, $70M annual synergies expected within 3 years. Focus on cost management and customer growth post-close.
- **Market Trends**: U.S. rig count down 5% Q/Q, but midstream activity strong (24% of revenue). Permian and Northeast E&P demand resilient. Canada activity rebounding post-breakup season.
- **Digital Strategy**: DigitalNOW tools improving supply chain efficiency, e.g., real-time inventory visibility for major customers.

**【CFO Financial Commentary】**
- **Financial Highlights**: GAAP net income $25M ($0.23 EPS), Non-GAAP $28M ($0.26 EPS). Gross margin 22.9%, flat Q/Q. WSA expenses $112M, stable Q/Q.
- **Balance Sheet**: $266M cash, 0 debt, total liquidity $629M. DSO 62 days (down 2d Q/Q), inventory turns 5.2x (record high). 
- **Cash Flow**: Operating cash $43M, capex $4M. YTD free cash flow $58M, targeting $150M+ for 2025. Share buybacks $27M YTD.
- **Tax Rate**: Q3 21.9%, full year 26-27%.

**【Q&A Highlights】**
- **Merger Synergies**: $70M cost savings achievable through 3-year integration. Focus on retaining top talent and leveraging combined sales teams.
- **Midstream Growth**: 24% of Q3 revenue, driven by LNG exports and power generation. New 400-mile pipeline project highlights midstream strength.
- **Data Center Opportunities**: Natural gas for power generation (e.g., Texas data centers) and cooling infrastructure (PVF, pumps) present growth avenues.
- **Tax Rate Increase**: Q4 tax rate expected to rise due to discrete items, but full year guidance maintained at 26-27%.
- **Gross Margin Strategy**: Focus on high-margin product lines, services, and acquisitions. Navigating hypercompetitive market through value-added services.


DNOW Inc. (DNOW) Q3 2025 Earnings Call Transcript

Revenue

Sales and Services Revenue

Financing Services Revenue

Other Revenue

Cost of Revenue

Cost of Goods and Services

Cost of Financing Services

Other Cost

Gross Profit

Other Operating Income

Operating Expenses

Selling, General and Administrative Expenses

Selling and Marketing Expenses

General and Administrative Expenses

Research and Development Expenses

Loss on Bad Debts

Loss on Impairment of Other Assets

Loss on Disposal of Assets

Other Operating Expenses

Operating Income

Non-Operating Income (Loss)

Income (Loss) from Affiliates

Income (Loss) from Associates

Income (Loss) from Joint ventures

Gain (Loss) on Other Investment

Gain (Loss) on Change in Fair Value

Gain (Loss) on Foreign Currency Exchange

Other Non-Operating Income (Loss)

Net Interest Expense

Interest Expense

Interest Income

Pretax Income From Continuing Operations

Income Tax Expense

Current Income Tax

Deferred Income Tax

Income Tax Adjustments

Net Income from Continuing Operations

Income from Discontinued Operations

Other Items Before Net Income

Net Income

Net Income Attributable to Minority Interests

Net Income Attributable to Owners of the Company

Preferred Stock Dividends

Other Adjustments

Net Income Attributable to Common Stockholders

Other Comprehensive Income

Total Comprehensive Income

Total Comprehensive Income Attributable to Minority Interests

Total Comprehensive Income Attributable to Owners of the Company

Basic EPS

Basic EPS from Continuing Operations

Basic EPS from Discontinued Operations

Diluted EPS

Diluted EPS from Continuing Operations

Diluted EPS from Discontinued Operations

DNOW

DNOW fundamentals

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