DNOW Inc.

The results of operations are presented before consideration of the noncontrolling interest. Operating results by reportable segment are as follows (in millions):

United States

For the three and six months ended June 30, 2025, revenue was $528 million and $1,002 million, an increase of $16 million or 3.1% and $55 million or 5.8%, respectively, when compared to the corresponding periods of 2024. For the three and six months ended June 30, 2025, the increases were primarily driven by incremental revenue from acquisitions completed in 2024, partially offset by the weakening in U.S. drilling and completions activity.

For the three and six months ended June 30, 2025, the U.S. generated an operating profit of $30 million and $52 million, an increase of $2 million and $1 million, respectively, when compared to the corresponding periods of 2024. For the three and six months ended June 30, 2025, operating profit increased primarily due to the increase in revenue discussed above.

Canada

For the three and six months ended June 30, 2025, revenue was $48 million and $110 million, a decrease of $8 million or 14.3% and $12 million or 9.8%, respectively, when compared to the corresponding periods of 2024. For the three and six months ended June 30, 2025, the decreases were primarily driven by weaker project activity, coupled with unfavorable foreign exchange rate impacts.

For the three and six months ended June 30, 2025, Canada generated an operating profit of nil and $4 million, a decrease of $2 million and $1 million, respectively, when compared to the corresponding periods of 2024. For the three and six months ended June 30, 2025, operating profit decreased primarily due to the decline in revenue discussed above.

International

For the three and six months ended June 30, 2025, revenue was $52 million and $115 million, a decrease of $13 million or 20.0% and $12 million or 9.4%, respectively, when compared to the corresponding periods of 2024. For the three and six months ended June 30, 2025, the decreases were primarily driven by weaker project activity.

For the three and six months ended June 30, 2025, the International segment generated an operating profit of $2 million and $6 million, a decrease of $1 million and an increase of $1 million, respectively, when compared to the corresponding periods of 2024. For the three months ended June 30, 2025, operating profit decreased primarily due to the decline in revenue discussed above. For the six months ended June 30, 2025, operating profit increased primarily due to a decrease in operating expenses.

Cost of products

For the three and six months ended June 30, 2025, cost of products was $484 million and $944 million, respectively, compared to $495 million and $929 million, respectively, for the corresponding periods of 2024. For the three and six months ended June 30, 2025, the changes were primarily due to the changes in revenue in the periods. Cost of products includes the cost of inventory sold and items, such as vendor consideration, inventory allowances, amortization of intangibles and inbound and outbound freight.

Warehousing, selling and administrative expenses

For the three and six months ended June 30, 2025, warehousing, selling and administrative expenses were $112 million and $221 million, respectively, compared to $105 million and $206 million, respectively, for the corresponding periods of 2024. For the three and six months ended June 30, 2025, the increases were primarily driven by an increase in expenses related to acquisitions completed in 2024. Warehousing, selling and administrative expenses include branch location, distribution center and regional expenses (including costs such as compensation, benefits and rent) as well as corporate general selling and administrative expenses.

Other income (expense)

For the three and six months ended June 30, 2025, other income (expense) was nil in both periods compared to nil and $1 million, respectively, for the corresponding periods of 2024. For the six months ended June 30, 2025, the change was primarily attributable to a decrease in interest income compared to the prior year.

Income tax provision

The effective tax rates for the three and six months ended June 30, 2025, were 21.9% and 22.6%, respectively, compared to 24.2% and 25.8%, respectively, for the corresponding periods of 2024. In general, the Company's effective tax rate differs from the U.S. statutory rate due to recurring items, such as differing tax rates on income earned in foreign jurisdictions, nondeductible expenses, and state income taxes. The effective tax rates for the three and six months ended June 30, 2025, were lower than the effective tax rates for the three and six months ended June 30, 2024, primarily due to an increase in tax benefits related to stock-based compensation and utilization of U.S. foreign tax credits.