DNOW Inc.
For the period ended Mar 31, 2026. Filed May 7, 2026.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2026 · Filed May 7, 2026
DNOW$13.27-3.3%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-09-30; filed 2025-11-05.
0001193125-25-266494
Forward-Looking StatementsCompany OverviewMerger AgreementSummary of Reportable SegmentsOperating Environment OverviewExecutive SummaryOutlookResults of OperationsNon-GAAP Financial Measure and ReconciliationLiquidity and Capital ResourcesCapital SpendingShare Repurchase ProgramCritical Accounting EstimatesCurrent report: 10-Q
Period ended 2026-03-31; filed 2026-05-07.
0001193125-26-211564
Forward-Looking StatementsCompany OverviewOperating Environment OverviewLonger Term OutlookResults of OperationsLiquidity and Capital ResourcesCash FlowsCapital SpendingShare Repurchase ProgramCritical Accounting EstimatesThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 79 previous paragraphs and 78 current paragraphs.
5 unchanged; 22 reworded; 51 added; 51 removed; 1 previous and 0 current paragraphs rearranged.
Tables are not compared: 4 previous and 5 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (51)
Current report
On June 26, 2025, DNOW entered into the Merger Agreement with MRC Global in an all-stock transaction, inclusive of MRC Global's debt. On November 6, 2025, DNOW completed its acquisition of MRC Global.
Current report
We are a premier provider of energy and industrial solutions with a legacy of over 160 years as a global leader in the distribution of PVF, gas products, pumps and fabricated process and production equipment and a wide range of MRO consumables and related products. We operate across diversified sectors of the energy value chain and industrial end-markets, including:
Current report
Upstream: exploration, production and extraction of oil and gas, as well as the use and disposal of produced water
Current report
Gas Utilities: gas utilities (storage and distribution of natural gas)
Current report
Downstream and Industrial: downstream and industrial including crude oil refining, petrochemical and chemical processing, general industrials, pharmaceutical, mining, water/wastewater treatment, data centers, LNG terminals and RNG facilities
Current report
Midstream: gathering and transmission infrastructure for processing and transmission of oil, gas or water
Current report
We offer a comprehensive portfolio of products, including an extensive array of PVF, gas products, valve automation, valve modification, gaskets, fasteners, electrical components, instrumentation, artificial lift, pumping systems, process and production equipment, production measurement technology, MRO consumables and a variety of both general and specialty products. Our team of approximately 5,200 employees support our customers through approximately 300 strategic locations including regional distribution centers, super centers, branches and corporate offices.
Current report
We derive our revenue predominantly from the sale of PVF, pumps, and fabricated equipment to upstream, gas utilities, downstream, energy transition and industrial and midstream markets customers globally. Our business is dependent upon both the current conditions and future prospects in these industries and, in particular, our customers' maintenance and expansionary operating and capital expenditures. The outlook for customer spending is influenced by numerous factors, including the following:
Current report
Oil and Natural Gas Demand and Prices. Sales of PVF and infrastructure products to the oil and natural gas industry constitute a significant portion of our sales. As a result, we depend upon the maintenance and capital expenditures of oil and natural gas companies to explore for, extract, produce and process oil, natural gas and refined products. Demand for oil and natural gas, current and projected commodity prices and the costs necessary to produce oil and gas impact customer capital spending, additions to and maintenance of pipelines, refinery utilization and petrochemical processing activity. Additionally, as these participants rebalance their capital investment away from traditional, carbon-based energy toward alternative sources, we expect to continue to supply them and enhance our product and service offerings to support their changing requirements, including in areas such as carbon capture utilization and storage, biofuels, RNG, offshore wind and hydrogen processing.
Current report
Gas Utility and Energy Infrastructure Integrity and Modernization. Ongoing maintenance and upgrading of existing energy facilities, pipelines and other infrastructure equipment is a meaningful driver for business across the sectors we serve. This is particularly true for the Gas Utilities sector. Activity with customers in this sector is driven by upgrades and replacement of existing infrastructure as well as new residential and commercial development. Continual maintenance of an aging network of pipelines and local distribution networks is a critical requirement for these customers irrespective of broader economic conditions. As a result, this revenue from this sector tends to be more stable over time than our traditional oilfield-dependent businesses and fluctuates based on gas utility customer annual budgets, independently of commodity prices.
Current report
Economic Conditions. Changes in the general economy, political affairs, government policies or in the energy sector (domestically or internationally) can cause demand for fuels, feedstocks and petroleum-derived products to vary, thereby causing demand for the products we distribute to materially change.
Current report
Manufacturer and Distributor Inventory Levels of PVF, Pumps, Fabricated Equipment and Related Products. Manufacturer and distributor inventory levels of PVF and related products can change significantly from period to period. Increased inventory levels by manufacturers or other distributors can cause an oversupply of PVF and related products in the industry sectors we serve and reduce the prices that we are able to charge for the products we distribute. Reduced prices, in turn, would likely reduce our profitability. Conversely, decreased manufacturer inventory levels may ultimately lead to increased demand for our products and often result in increased pricing, revenue and improved profitability.
Current report
Steel Prices, Availability and Supply and Demand. Fluctuations in steel prices can lead to volatility in the pricing of the products we distribute, especially carbon steel line pipe products, which can influence the buying patterns of our customers. A majority of the products we distribute contain various types of steel. The worldwide supply and demand for these products and other steel products that we do not supply impact the pricing and availability of our products and, ultimately, our sales and operating profitability. Additionally, supply chain disruptions with key manufacturers or in markets in which we source products can impact the availability of inventory we require to support our customers. Furthermore, logistical challenges, including inflation and availability of freight providers and containers for shipping can also significantly impact our profitability and inventory lead-times. These constraints can also present an opportunity, as our supply chain expertise allows us to meet customer expectations when the competition may not.
Current report
Recent geopolitical developments, including military conflict involving Iran, have contributed to increased volatility in global energy markets, financial markets and international supply chains. While the full impact of these conditions continues to evolve, management is actively monitoring potential effects on customer demand, costs, logistics and overall macroeconomic conditions. Oil and gas producers have generally remained disciplined in their capital expenditures and have generally not increased production beyond their ability to fund their expenditures from prudent borrowings and cash flow from operations. We expect this trend to continue.
Current report
The U.S. government has imposed tariffs on steel products, which were expanded throughout 2025. A significant portion of the products that we sell are made from steel. In addition, a portion of the products that we sell are sourced from China and India, including certain valve sub-assemblies and pump sub-components that are finished in the U.S. The tariffs on products from Canada and Mexico have a lesser direct impact on our business as they do not represent a significant portion of the products that we purchase from those countries for resale to our customers. Even so, a significant portion of our U.S. inventory and products are domestically made but some products, such as valves and pumps, often have a significant portion of non-U.S. components, and we do import some valves, pumps and other products. In many instances, we have successfully collaborated with our customers to implement tariff pass-throughs throughout 2025 and into 2026. However, in some instances, tariffs raised infrastructure costs for our customers, making projects less viable and resulting in delays or cancellations among certain downstream clients.
Current report
The U.S. Supreme Court has now invalidated the use of the International Emergency Economic Powers Act (“IEEPA”) to impose tariffs. The overall impact on tariffs is unknown at this time. The administration has already relied on other statutory authorities to maintain or adjust tariffs, and those sector-specific tariffs remain fully in effect. Notably, Section 232 tariffs on steel and aluminum remain in effect.
Current report
The Upstream sector of our business includes the traditional exploration, production and extraction of oil and gas, as well as the use and disposal of produced water, and is the most cyclical of our markets. In the three months ended March 31, 2026, this sector represented 39% of ourtotal Company revenue. The Upstream sector revenue increased 12% in the three months ended March 31, 2026 compared to the corresponding period of 2025. During the three months ended March 31, 2026, West Texas Intermediate (“WTI”) oil prices averaged $71.98 per barrel, up 0.2% from the corresponding period of 2025. Natural gas prices also drive customer activity and have experienced volatility but increased throughout 2025, driven by climate and seasonal weather patterns, increased LNG exports and lower storage levels.
Current report
Recent industry reports have projected flat to lower upstream customer spending levels in 2026, due to current supply and demand projections. We also expect our larger public customers will remain disciplined and consistent with their commitments to their budgets, maintaining returns to their shareholders and operating within their cash flow requirements. Despite this, we expect opportunities for revenue synergies from cross-selling products related to our acquisitions will support growth in this sector. We also expect incremental growth in water management and disposal solutions, supported by our Flex Flow and Trojan offerings, as customers seek to optimize operating costs and manage produced water volumes more effectively.
Current report
The majority of the revenue in this sector comes from large independents and major exploration and production companies, which are expected to strongly influence the increase in capital spending in the coming years for this sector.
Current report
The Gas Utilities sector contributed 23% of our total Company revenue in the three months ended March 31, 2026, and will represent a greater proportion of revenue in the future following the November 2025 acquisition of MRC Global. Market growth fundamentals of this sector are positive due to the demand for natural gas, distribution integrity upgrade programs as well as new home construction in certain U.S. states. The majority of the work we perform with our gas utility customers are multi-year programs where they continually evaluate, monitor and implement measures to improve their pipeline distribution networks, ensuring the safety and the integrity of their system. As of 2025, which is the most recently available information, the Pipeline and Hazardous Materials Safety Administration (“PHMSA”) estimates approximately 33% of the gas distribution main and service line miles are over 40 years old or of unknown origin. This infrastructure requires continuous replacement and maintenance as these gas distribution networks continue to age. We supply many of the replacement products including valves, line pipe, smart meters, risers and other gas products. A large percentage of the line pipe we sell is sold to our gas utilities customers for line replacement and new sections of their distribution network. As our gas utility customers connect new homes and businesses to their gas distribution network, the growth in the housing market creates new revenue opportunities for our business to supply the related infrastructure products. Some of our customers in this sector support both gas and electric distribution, and certain customers have announced allocating a higher proportion of their capital budget to electric distribution. However, based on market fundamentals, the need for natural gas to fuel new electric generation facilities and new market share opportunities, we expect the Gas Utilities sector to continue to have steady growth in the coming years. Additionally, due to its reduced dependency on energy demand and commodity prices, this sector is less volatile than the others.
Current report
Downstream and Industrial sector generated 20% of our total Company revenue in the three months ended March 31, 2026. We expect this sector to deliver strong growth in the coming years driven by increased customer activity levels related to maintenance, repair and operations (“MRO”) activities, project turnaround activity in refineries and chemical plants and new energy transition related projects. Additionally, we have expanded into new markets, including mining and data centers. We are also negotiating master service agreements with targeted owners and subcontractors for PVF work in new data center cooling systems. While still early, we are seeing encouraging momentum in both areas. This sector has a significant amount of project activity, which can create substantial variability between quarters.
Current report
The outlook for energy transition projects within the Downstream and Industrial sector is supported by government incentives and policies. Many of our customers have made commitments to net zero emissions to address climate change. Our customer base represents many of the primary leaders in the energy transition movement, and they are positioned to lead the effort to decarbonize through nearer-term efforts such as renewable or biodiesel refineries and offshore wind power generation as well as longer-term efforts such as carbon capture and storage and hydrogen. However, as U.S. government support is waning for these projects even while European government support continues, we are monitoring our customers' plans for, and the pace of development of, these projects.
Current report
DNOW’s Midstream sector is primarily U.S. based and driven by the increased demand for pipelines and gathering systems. In the three months ended March 31, 2026, this sector represented 18% of our total Company revenue. The Midstream sector revenue increased 70% in the three months ended March 31, 2026 compared to the corresponding period of 2025. The outlook in 2026 is expected to have growth primarily driven by demand for natural gas infrastructure as LNG exports continue to rise and gas fired power generation increases for data centers. This market driver is anticipated to positively impact the Midstream sector, contributing to growth. The revenue profile for this sector tends to be volatile between quarters, as it can often be tied to large projects.
Current report
Furthermore, as new LNG capacity comes online this drives the need for associated pipeline infrastructure, which several LNG projects are expected to do in 2026. U.S. natural gas production is expected to rise, leading to the need for additional pipeline infrastructure and gathering systems. Rising electricity consumption from AI-driven data centers creates the need for additional natural gas transportation, which is also expected to drive growth in this sector.
Current report
In some cases, the market drivers for the Midstream sector are also tied to the same drivers as the Upstream sector, but on a one to two quarter lag. To the extent completion activity and related production increase, this could also have the impact of improving our revenue opportunities in the Midstream sector. New well completions and higher production levels drive the need for additional surface equipment and gathering and processing infrastructure, benefiting this sector's revenue. Following the acquisition of MRC Global, we have enhanced our capabilities in large-bore valves, larger outside diameter pipe, measurement and instrumentation and valve actuation and automation that are in demand when the Midstream sector expands. We believe the combined company is well positioned to capture midstream growth opportunities both domestically and internationally, supported by an expanded footprint and integrated solutions offering.
Current report
Occasionally, the U.S. imposes tariffs on certain imported products that we distribute. These tariffs typically lead to an increase in the prices we pay for these products. Despite these cost pressures, we are generally able to mitigate the impact by leveraging our long-standing relationships with suppliers and the substantial volume of our purchases. These factors enable us to secure market-competitive pricing even in the face of rising costs.
Current report
Our supply chain expertise, strong relationships with key suppliers, and effective inventory management allow us to navigate both inflationary and deflationary market conditions. This strategic approach ensures that we can maintain stability in our operations despite external economic pressures. Furthermore, our contracts with customers typically include provisions that allow us to respond quickly to price increases. These contractual mechanisms enable us to pass along cost increases to our customers.
Current report
It is important to note that these challenges are dynamic and continue to evolve. If additional pricing fluctuations arise due to tariffs or quotas, the ultimate effect on our revenue and cost of products—which are determined using the LIFO inventory costing methodology—remains uncertain and subject to volatility.
Current report
We play a vital role in supporting customers’ supply chains, providing essential products for energy and industrial markets, including infrastructure across upstream, gas utilities, midstream, downstream, energy transition and industrial sectors. Our business depends on both capital and maintenance spending by our customers. Global oil and gas consumption is rising due to population growth and expanding energy needs in emerging markets. The EIA projects world energy consumption to increase 34% between 2022 and 2050, with significant growth in renewables (118%), natural gas (29%) and hydrocarbon-based liquids (23%). U.S. oil production is expected to peak at 14 million barrels per day in 2028 and gradually decline, while natural gas production will grow, largely driven by LNG expansion and power generation. The gas utilities industry is expected to grow as aging distribution networks prompt replacement and modernization. PHMSA estimates that roughly 33% of gas distribution lines are over 40 years old or of unknown origin, driving ongoing maintenance. Housing market growth further increases demand for related infrastructure products. According to the EIA, the U.S. will remain a net exporter of petroleum products due to expanded terminal capacity, with strong markets for our goods and services. This projected increase in oil and gas to meet the rise in international energy demand continues to provide a robust market for our existing goods and services. We anticipate future growth from energy transition projects, as traditional energy customers shift capital to these areas. Our established relationships and experience position us well for this evolving market. The U.S. midstream sector is expanding, particularly in natural gas infrastructure to meet LNG export and power demands. Federal policies have accelerated project reviews and simplified processes for pipeline development. Globally, refining capacity—especially in Asia and the Middle East—is projected to outpace demand growth later in the decade; the U.S. market remains stable but faces planned capacity reductions. As refineries age or convert to renewable fuels, we supply critical infrastructure for continued operations and conversions. The U.S. chemicals market is expected to grow steadily, while short term cycles will exist, and remain globally competitive through 2040, due to feedstock cost advantage from shale gas and natural gas liquids (“NGLs”). The European market is transitioning toward specialty and sustainable chemicals with commodity chemicals declining. Demand for our products is shaped by operational budgets, capacity expansions, and compliance needs.
Current report
Adjusted Gross Profit and Adjusted EBITDA are non-GAAP financial measures. For a reconciliation of these measures to an equivalent GAAP measure, see pages 24-25 herein.
Current report
Revenue. Our revenue was $1,183 million for the three months ended March 31, 2026, compared to $599 million for the corresponding period of 2025, an increase of $584 million or 97.5%.
Current report
U.S. Segment—Revenue was $985 million for the three months ended March 31, 2026, an increase of $511 million or 107.8% compared to the corresponding period of 2025. The increase was primarily driven by incremental revenue from the MRC Global acquisition completed in the fourth quarter of 2025.
Current report
Canada Segment—Revenue was $51 million for the three months ended March 31, 2026, a decrease of $11 million or 17.7% compared to the corresponding period of 2025. The decrease was primarily due to lower project-related activity.
Current report
Our Canadian revenue was approxim ately 4% of total revenue for the three months ended March 31, 2026, compared to 10% for the three months ended March 31, 2025. We are subject to fluctuations in foreign currency exchange rates relative to the U.S. dollar. Our Canadian revenue is favorably impacted as the U.S. dollar weakens relative to the Canadian dollar, and unfavorably impacted as the
Current report
U.S. dollar strengthens relative to the Canadian dollar. Our Canadian segment revenue was favorably impacted by approximately $2 million due to changes in foreign currency exchange rates over the prior year.
Current report
International Segment—Revenue was $147 million for the three months ended March 31, 2026, an increase of $84 million or 133.3% compared to the corresponding period of 2025. The increase was primarily due to the acquisition of MRC Global in the fourth quarter of 2025.
Current report
Our international revenue was approx imately 13% of total revenue for the three months ended March 31, 2026, compared to 11% for the three months ended March 31, 2025. We are subject to fluctuations in foreign currency exchange rates relative to the U.S. dollar. Our international revenue is favorably impacted as the U.S. dollar weakens relative to other foreign currencies, and unfavorably impacted as the U.S. dollar strengthens relative to other foreign currencies. Our international segment revenue was favorably impacted by approximately $3 million due to changes in foreign currency exchange rates over the prior year.
Current report
Gross Profit. Our gross profit was $193 million (16.3% of revenue) for the three months ended March 31, 2026, compared to $138 million (23.0% of revenue) for the three months ended March 31, 2025. The $55 million increase was primarily attributable to an increase in revenue due to the acquisition of MRC Global in November 2025. Compared to average cost, our LIFO inventory costing methodology increased cost of products by $16 million for the three months ended March 31, 2026, compared to a $1 million increase in cost of products for the three months ended March 31, 2025.
Current report
Adjusted Gross Profit. Adjusted Gross Profit increased to $256 million (21.6% of revenue) for the three months ended March 31, 2026 from $141 million (23.5% of revenue) for the three months ended March 31, 2025, an increase of $115 million. The increase was primarily driven by the U.S. and International segments, partially offset by the Canada segment. The reduced margin percentage is primarily driven by the impact of MRC Global contributions.
Current report
Adjusted Gross Profit is a non-GAAP financial measure. We define Adjusted Gross Profit as revenues, less cost of products, plus amortization of intangibles, plus inventory-related charges incremental to normal operations, plus transaction costs associated with acquisitions, such as inventory fair value step-up or write-downs, and plus or minus the impact of our LIFO inventory costing methodology. We present Adjusted Gross Profit because we believe it is a useful indicator of our operating performance without regard to items, such as amortization of intangibles that can vary substantially from company to company depending upon the nature and extent of acquisitions. Similarly, the impact of the LIFO inventory costing method can cause results to vary substantially from company to company depending upon whether they elect to utilize LIFO and depending upon which method they may elect. We use Adjusted Gross Profit as a key performance indicator in managing our business. We believe that gross profit is the financial measure calculated and presented in accordance with GAAP that is most directly comparable to Adjusted Gross Profit.
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Removed paragraphs (51)
Previous report
Our product and service offerings are consumed throughout the energy industry – from upstream drilling and completion, exploration and production (“E&P”), midstream transmission, gas and crude oil processing infrastructure development to downstream petroleum refining and petrochemicals – as well as in other industries, such as chemical processing, mining, water/wastewater, food and beverage, gas utilities and the evolution of energy transition markets inclusive of greenhouse gas reduction and emissions capture and storage, renewable fuels such as biofuels and renewable natural gas (“RNG”), wind, solar, production of hydrogen as a fuel to power equipment and select industrial markets. The energy and industrial distribution end markets we serve are inclusive of engineering and construction firms that perform capital and maintenance projects for their clients. We also provide supply chain and materials management solutions to the same markets where we sell products.
Previous report
Our global product offering includes pipe, manual and automated valves, fittings, flanges, gaskets, fasteners, electrical, instrumentation, artificial lift, pumping solutions and modular process, production, measurement, automation, control equipment, and consumable maintenance, repair and operating (“MRO”) supplies. We also offer sourcing, procurement, warehouse and inventory management solutions as part of our supply chain and materials management offering. We have developed expertise in providing application systems, work processes, parts integration, optimization solutions and after-sales support that provide more efficient and productive solutions for our customers.
Previous report
Our solutions include outsourcing portions or entire functions of our customers’ procurement, warehouse and inventory management, logistics, point of issue technology, project management, business process and performance metrics reporting. These solutions allow us to leverage the infrastructure of our SAP™ Enterprise Resource Planning (“ERP”) system and other technologies to streamline our customers’ purchasing process, from requisition to procurement to payment, by digitally managing workflow, improving approval routing and providing robust reporting functionality.
Previous report
We support land and offshore operations for the major oil and gas producing regions through our network of locations. Our key markets include the U.S., Canada, the United Kingdom (“UK”), Norway, Australia, the Netherlands, Singapore and the Middle East area with the ability to provide products through an export model to operators with operations in Southeast Asia and West Africa. Products sold through our locations support brownfield and greenfield expansion upstream capital projects, midstream infrastructure and transmission and MRO consumables used in day-to-day production. We provide downstream energy and industrial products for petroleum refining, chemical processing, liquefied natural gas (“LNG”) terminals, power generation, gas utilities serviced by a combination of customer on-site locations and off-site service locations in combination with our digital offerings.
Previous report
Our supplier network consists of thousands of vendors in approximately 30 countries. From our operations, we sell to customers operating in approximately 70 countries. The supplies and equipment stocked by each of our locations are customized to meet varied and changing local customer demands. We believe the breadth, scale and availability of our product offering enhances our value proposition to our customers, suppliers and shareholders.
Previous report
We employ advanced information technologies, including ERP business technology platforms, to provide complete procurement, warehouse and inventory management and logistics coordination to our customers around the globe. Having ERP business technology platforms allow immediate visibility into our inventory assets, operations and financials worldwide, enhancing decision making and efficiency.
Previous report
On June 26, 2025, the Company entered into a definitive merger agreement to acquire MRC Global in an all-stock transaction valued at approximately $1.5 billion, inclusive of MRC Global’s net debt, with MRC Global shareholders receiving 0.9489 shares of DNOW common stock for each share of MRC Global common stock. The transaction has received unanimous approval by both the DNOW and MRC Global Boards of Directors. The transaction is currently anticipated to close in the fourth quarter of 2025, subject to satisfaction of customary closing conditions. For additional information regarding the Merger, please see our Current Report on Form 8-K filed on June 26, 2025 and see Part II, Item 1A. Risk Factors contained herein for a discussion of risks related to this Merger.
Previous report
Demand for our products is driven primarily by the level of oil and gas drilling, completions, servicing, production, transmission, refining and petrochemical activities. It is also influenced by the global supply and demand for energy, the economy in general and geopolitics. Several factors drive spending, such as investment in energy infrastructure, the North American conventional and shale plays, Organization of Petroleum Exporting Countries (“OPEC”) and non-OPEC supply and investments, market expectations of future developments in the oil, natural gas, liquids, refined products, petrochemical, plant maintenance and other industrial, manufacturing and energy sectors.
Previous report
We primarily have operations in the U.S. and Canada, complemented with a number of strategic international operations, through acquisitions and organic investments, in Australia, England, Kuwait, the Netherlands, Norway, Scotland, Singapore, and the United Arab Emirates (“UAE”).
Previous report
We operate through three reportable segments: United States, Canada and International. The segment data included in our Management’s Discussion and Analysis are presented on a basis consistent with our internal management reporting. Segment information appearing in Note 9 “Business Segments” of the notes to the unaudited consolidated financial statements (Part I, Item 1 of this Form 10-Q) is also presented on this basis.
Previous report
We have approximately 105 locations in the U.S., which are geographically positioned to best serve the upstream, midstream, downstream, renewable energy and industrial markets.
Previous report
We offer higher value solutions in key product lines in the U.S. which broaden and deepen our customer relationships and related product line value. Examples of these include pumps, valves and valve actuation, process and production equipment, fluid transfer products, measurement, automation and controls, spoolable and coated steel-pipe and composite pipe, along with many other products required by our customers, which enable them to focus on their core business while we manage varying degrees of their supply chain. We also provide additional value to our customers through the engineering, design, construction, assembly, fabrication and optimization of products and equipment essential to the safe and efficient production, transportation and processing of oil and gas and produced water.
Previous report
We have a network of approximately 35 locations in the Canadian oilfield, predominantly in the oil rich provinces of Alberta, Saskatchewan, and Manitoba. Our Canada segment primarily serves energy exploration, production, mining and drilling businesses, offering customers many of the same products and value-added solutions that we perform in the U.S. In Canada, we also provide training for, and supervise the installation of, jointed and spoolable composite pipe. This product line is supported by inventory, as well as product and installation expertise to serve our customers.
Previous report
We serve the needs of our international customers from approximately 15 locations outside the U.S. and Canada, which are strategically located in major oil and gas development areas. Our approach in these markets and the products we offer is similar to our strategy in the U.S. and Canada, with the addition of the distribution of electrical products in the UK, Australia and international export markets. Our long legacy of operating in select international regions provides a competitive advantage as few of our competitors have a presence in most of the global energy producing areas.
Previous report
The Company has committed to close certain foreign subsidiaries in the International segment. Impairment of assets were not material for the three and nine months ended September 30, 2025; however, accumulated translation gains and losses attributable to the foreign subsidiaries which are components of other comprehensive income (loss) are reclassified to earnings and may result in additional charges when liquidations are substantially complete.
Previous report
U.S. rig count at October 24, 2025 was 550 rigs, up 10 rigs from the third quarter 2025 average. The price for West Texas Intermediate Crude was $62.27 per barrel at October 24, 2025, down 5.3% from the third quarter 2025 average. The price for natural gas was $3.21 per MMBtu at October 24, 2025, up 5.9% from the third quarter 2025 average. The price for Hot-Rolled Coil was $815.00 per short ton at October 27, 2025, down 3.3% from the third quarter 2025 average.
Previous report
For the three and nine months ended September 30, 2025, the Company generated net income attributable to DNOW Inc. of $25 million and $72 million on $634 million and $1,861 million in revenue, respectively. For the three and nine months ended September 30, 2025, revenue increased $28 million or 4.6% and increased $59 million or 3.3%, respectively, and net income attributable to DNOW Inc. increased $12 million and $14 million, respectively, when compared to the corresponding periods of 2024.
Previous report
For the three and nine months ended September 30, 2025, the Company generated an operating profit of $33 million and $95 million, respectively, compared to $23 million and $84 million, respectively, for the corresponding periods of 2024.
Previous report
Our outlook for the Company remains tied to crude oil and natural gas commodity prices, global oil and gas drilling and completions activity, oil and gas spending, and global demand for oil, its refined petroleum products, crude oil, natural gas liquids and natural gas production and decline rates. Crude oil and natural gas prices as well as crude oil and natural gas storage levels are primary catalysts for determining customer activity. In recent years, oil prices have remained volatile, and ongoing economic and geopolitical uncertainty continues to drive commodity price volatility globally. Additionally, the U.S. government has announced the imposition of tariffs on several foreign jurisdictions, which has increased economic uncertainty. Current uncertainties about tariffs and their effects on trading relationships may affect costs for and availability of products or contribute to inflation in the markets in which we operate. Although we are continuing to monitor the economic effects of such announcements, as well as opportunities to mitigate their related impacts, costs and other effects associated with the tariffs remain uncertain. Amid these dynamics, we will continue to support our customers, maintain close communication with our strategic vendors, optimize our operations, advance our strategic goals and manage the Company based on market conditions.
Previous report
For the three and nine months ended September 30, 2025, revenue was $527 million and $1,529 million, an increase of $45 million or 9.3% and $100 million or 7.0%, respectively, when compared to the corresponding periods of 2024. For the three and nine months ended September 30, 2025, the increases were primarily driven by incremental revenue from acquisitions completed in 2024, and midstream growth, and for the nine months ended, that growth was partially offset by lower market activity.
Previous report
For the three and nine months ended September 30, 2025, the U.S. generated an operating profit of $28 million and $80 million, an increase of $3 million and $4 million, respectively, when compared to the corresponding periods of 2024. For the three and nine months ended September 30, 2025, operating profit increased primarily due to the increase in revenue discussed above.
Previous report
For the three and nine months ended September 30, 2025, revenue was $53 million and $163 million, a decrease of $12 million or 18.5% and $24 million or 12.8%, respectively, when compared to the corresponding periods of 2024. For the three and nine months ended September 30, 2025, the decreases were primarily driven by weaker project activity, coupled with unfavorable foreign exchange rate impacts for the nine month period compared to the prior year.
Previous report
For the three and nine months ended September 30, 2025, revenue was $54 million and $169 million, a decrease of $5 million or 8.5% and $17 million or 9.1%, respectively, when compared to the corresponding periods of 2024. For the three and nine months ended September 30, 2025, the decreases were primarily driven by weaker project activity.
Previous report
For the three and nine months ended September 30, 2025, the International segment generated an operating profit of $3 million and $9 million, an improvement of $8 million and an increase of $9 million, respectively, when compared to the corresponding periods of 2024. For the three and nine months ended September 30, 2025, operating profit improved primarily as a result of $8 million of expenses related to the restructuring plan in the International segment recognized in the third quarter of 2024 that did not repeat.
Previous report
For the three and nine months ended September 30, 2025, cost of products was $489 million and $1,433 million, respectively, compared to $471 million and $1,400 million, respectively, for the corresponding periods of 2024. For the three and nine months ended September 30, 2025, the increases were primarily due to the increases 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.
Previous report
Warehousing, selling and administrative expenses
Previous report
For the three and nine months ended September 30, 2025, impairment and other charges were nil, compared to $5 million in both periods for the corresponding periods of 2024. For the three and nine months ended September 30, 2024, the Company recognized approximately $5 million of foreign currency translation losses as a result of substantially completing the liquidation of certain foreign subsidiaries in the International segment.
Previous report
For the three and nine months ended September 30, 2025, other income (expense) was $1 million expense in both periods compared to $1 million expense and nil, respectively, for the corresponding periods of 2024. For the three and nine months ended September 30, 2025, the changes were primarily attributable to decreases in interest income compared to the prior year.
Previous report
In an effort to provide investors with additional information regarding our results of operations as determined by GAAP, we disclose non-GAAP financial measures. The primary non-GAAP financial measure we disclose is earnings before interest, taxes, depreciation and amortization, excluding other costs (“EBITDA excluding other costs”) and EBITDA excluding other costs as of percentage of revenue. This financial measure excludes the impact of certain amounts and is not calculated in accordance with GAAP. A reconciliation of this non-GAAP financial measure, to its most comparable GAAP financial measure, is included below.
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Reworded paragraphs (22)
Previous wording
Some of the statements in this document including information referenced or incorporated by reference from our other filings with the SEC, constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995. Statements that are not historical facts, including statements about our beliefs and expectations, are forward-looking statements. Forward-looking statements typically are identified by use of terms such as “anticipates,” “assumes,” “believes,” “estimates,” “expects,” “plans,” “may,” “will,” “might,” “would,” “should,” “seeks,” “project,” “predict,” “potential,” “currently,” “continue,” “intends,” “outlook,” “forecasts,” “targets,” “reflects,” “could,” or other similar words and phrases, although some forward-looking statements could be expressed differently. Forward-looking statements are current only as of the date they are made. You should be aware that our actual results could differ materially from results anticipated in the forward-looking statements due to a number of factors and risks many of which are outside of our control, including, but not limited to, changes in oil and gas prices, changes in the energy markets, customer demand for our products, changes in trade policies including the imposition or elimination of additional tariffs and duties, significant changes in the size of our customers, difficulties encountered in integrating mergers and acquisitions (including but not limited to certain risks relating to any mergers or acquisitions, such as: the timing of the closing of the mergers; the risk that the conditions to the transaction are not satisfied on a timely basis or at all or the failure of the transaction to close for any other reason or to close on the anticipated terms; the possibility that regulatory approvals for any dispositions or acquisitions will not be received on a timely basis, if at all, or that such approvals may require modification to the terms of the mergers or remaining businesses; the risk that the expected benefits and synergies of the mergers may not be fully achieved in a timely manner, or at all), general volatility in the capital markets, ability to complete the share repurchase program, changes in applicable government regulations, increased borrowing costs, geopolitical conditions and tensions (including the Ukraine and Middle East conflicts and their regional and global impacts) or any litigation arising out of or related thereto, impairments in long-lived assets, the occurrence of cyber incidents, or failure by us or our third-party service providers to maintain cybersecurity and the integrity of confidential data, and worldwide and national economic conditions and activity. You should also consider carefully the statements under “Risk Factors,” as disclosed in our Form 10-K and any of our subsequent SEC filings, which address a…
Excerpt shortened here; the source contains the full paragraph.
Current wording
Some of the statements in this document including information referenced or incorporated by reference from our other filings with the SEC, constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995. Statements that are not historical facts, including statements about our beliefs and expectations, are forward-looking statements. Forward-looking statements typically are identified by use of terms such as “anticipates”, “assumes”, “believes”, “budget”, “estimates”, “expects”, “goal”, “guidance”, “plans”, “may,” “will”, “might”, “would”, “should”, “seeks”, “project”, “predict”, “potential”, “currently”, “continue”, “intends”, “outlook”, “forecasts”, “targets”, “reflects”, “could”, or other similar words and phrases, although some forward-looking statements could be expressed differently. Forward-looking statements are current only as of the date they are made. You should be aware that our actual results could differ materially from results anticipated in the forward-looking statements due to a number of factors and risks many of which are outside of our control, including, but not limited to, changes in oil and gas prices, changes in the energy markets, customer demand for our products, changes in trade policies including the imposition or elimination of additional tariffs and duties, significant changes in the size of our customers, difficulties encountered in integrating mergers and acquisitions (including but not limited to certain risks relating to any mergers or acquisitions, such as: the timing of the closing of the merger or acquisition; the risk that the conditions to the transaction are not satisfied on a timely basis or at all or the failure of the transaction to close for any other reason or to close on the anticipated terms; the possibility that regulatory approvals for any dispositions or acquisitions will not be received on a timely basis, if at all, or that such approvals may require modification to the terms of the mergers or remaining businesses; the risk that the expected benefits, synergies and cost reduction efforts of the mergers or acquisitions may not be fully achieved in a timely manner, or at all), successful integration of the business of MRC Global into our business, general volatility in the capital markets, ability to complete the share repurchase program, changes in applicable government regulations, increased borrowing costs, geopolitical conditions and tensions (including Iran, the Ukraine and Middle East conflicts and their regional and global impacts) or any litigation arising out of or related thereto, impairments in long-lived assets, the occurrence of cyber incidents, or failure by us or our third-party service providers to maintain cybersecurity and the integrity of confidential data, and worldwide and national economic conditions and acti…
Excerpt shortened here; the source contains the full paragraph.
Previous wording
We are a distributor to the oil and gas, energy transition and industrial markets with a legacy of over 160 years. We operate primarily under the DNOW brand along with several affiliated brands operating in local, regional or international markets that are tied to prior acquisitions. Through a network of approximately 155 locations and approximately 2,500 employees worldwide, our operating locations utilize a complementary suite of technology, systems, order and fulfillment processes and sourcing and procurement channels to provide products and services to a variety of customers operating in the energy and industrial markets. Additionally, through our DigitalNOW® platform, customers can leverage technology across applications to solve a wide array of complex operational and product sourcing challenges to assist in maximizing their return on assets.
Current wording
DNOW is a holding company headquartered in Houston, Texas that was incorporated in Delaware on November 22, 2013. We operate primarily under the DNOW and MRC Global brands along with several affiliated brands operating in local, regional or international markets that are tied to prior acquisitions.
Previous wording
Our results are dependent on, among other factors, the level of worldwide oil and gas drilling and completions, well remediation activity, crude oil and natural gas prices, capital spending by oilfield service companies and drilling contractors, and the worldwide oil and gas inventory levels. Key industry indicators for the third quarter of 2025 and 2024 and the second quarter of 2025 include the following:
Current wording
Our results are dependent on, among other factors, the level of worldwide oil and gas drilling and completions, well remediation activity, crude oil and natural gas prices, capital spending by oilfield service companies and drilling contractors, and the worldwide oil and gas inventory levels. Key industry indicators for the first quarter of 2026 and 2025 and the fourth quarter of 2025 include the following:
Previous wording
Averages for the quarters indicated, except for U.S. Wells Completed. See sources on following page.
Current wording
Monthly averages for the quarters indicated, except for U.S. Wells Completed. See sources on following page.
Previous wording
The following table details the U.S., Canadian and international rig activity and West Texas Intermediate oil prices for the past seven quarters ended September 30, 2025. During the third quarter of 2025, Baker Hughes’s methodology for calculating rig counts in the Kingdom of Saudi Arabia has been updated effective for periods beginning January 2024. As a result, previously reported international rig counts have been recast to conform to the updated methodology.
Current wording
The following table details the U.S., Canadian and international rig activity and West Texas Intermediate oil prices for the past nine quarters ended March 31, 2026. During the third quarter of 2025, Baker Hughes’s methodology for calculating rig counts in the Kingdom of Saudi Arabia has been updated effective for periods beginning January 2024. As a result, previously reported international rig counts have been recast to conform to the updated methodology.
Previous wording
Sources: Rig count: Baker Hughes, Inc. (www.bakerhughes.com); West Texas Intermediate Crude and Natural Gas Prices: Department of Energy, Energy Information Administration (www.eia.gov); Hot-Rolled Coil Prices: SteelBenchmarker™ Hot Roll Coil USA (www.steelbenchmarker.com); U.S. Wells Completed: Department of Energy, Energy Information Administration (www.eia.gov) (As revised).
Current wording
Sources: Rig count: Baker Hughes, Inc. (www.bakerhughes.com); West Texas Intermediate Crude and Natural Gas Prices: Department of Energy, Energy Information Administration (“EIA”) (www.eia.gov); Hot-Rolled Coil Prices: SteelBenchmarker™ Hot Roll Coil USA (www.steelbenchmarker.com); U.S. Wells Completed: Department of Energy, Energy Information Administration (www.eia.gov) (As revised).
Previous wording
The worldwide quarterly average rig count increased 1.1% (from 1,778 rigs to 1,797 rigs) and the U.S. declined 5.4% (from 571 rigs to 540 rigs) in the third quarter of 2025 compared to the second quarter of 2025. The average price per barrel of West Texas Intermediate Crude increased 1.7% (from $64.63 per barrel to $65.74 per barrel), and average natural gas prices declined 5.0% (from $3.19 per MMBtu to $3.03 per MMBtu) in the third quarter of 2025 compared to the second quarter of 2025. The average price per short ton of Hot-Rolled Coil declined 6.5% (from $901.50 per short ton to $842.60 per short ton) in the third quarter of 2025 compared to the second quarter of 2025. U.S. Wells Completed declined 5.6% (from 2,975 completion count to 2,807 completion count) in the third quarter of 2025 compared to the second quarter of 2025.
Current wording
The worldwide quarterly average rig count increased 1.8% (from 1,799 rigs to 1,832 rigs) and the U.S. remained flat (at 548 rigs) in the first quarter of 2026 compared to the fourth quarter of 2025. The average price per barrel of WTI Crude increased 20.7% (from $59.64 per barrel to $71.98 per barrel), and average natural gas prices increased 27.7% (from $3.75 per MMBtu to $4.79 per MMBtu) in the first quarter of 2026 compared to the fourth quarter of 2025. The average price per short ton of Hot-Rolled Coil increased 11.4% (from $828.78 per short ton to $923.51 per short ton) in the first quarter of 2026 compared to the fourth quarter of 2025. U.S. Wells Completed declined 5.6% (from 3,055 completion count to 2,885 completion count) in the first quarter of 2026 compared to the fourth quarter of 2025.
Previous wording
The results of operations are presented before consideration of the noncontrolling interest. Operating results by reportable segment are as follows (in millions):
Current wording
The results of operations are presented before consideration of the noncontrolling interests. Our results of operations are as follows (in millions):
Previous wording
For the three and nine months ended September 30, 2025, warehousing, selling and administrative expenses were $112 million and $333 million, respectively, compared to $107 million and $313 million, respectively, for the corresponding periods of 2024. For the three and nine months ended September 30, 2025, the increases were primarily driven by increases 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.
Current wording
Selling, general and administrative (“SG&A”) expenses. SG&A expenses were $243 million forthe three months ended March 31, 2026, compared to$109 million for the corresponding period of 2025, an increase of $134 million. The increasewas primarily drivenby incremental expenses from the MRC Global acquisition completed in the fourth quarter of 2025. SG&A expenses include branch location, distribution center and regional expenses (including costs such as compensation, benefits and rent) as well as depreciation and corporate selling, general and administrative expenses.
Previous wording
For the three and nine months ended September 30, 2025, Canada generated an operating profit of $2 million and $6 million, a decrease of $1 million and $2 million, respectively, when compared to the corresponding periods of 2024. For the three and nine months ended September 30, 2025, operating profit decreased primarily due to the decline in revenue discussed above.
Current wording
Canada Segment—Operating profit was $1 million for the three months ended March 31, 2026, a decrease of $3 million compared to the corresponding period of 2025. Operating profit decreased primarily due to the decline in revenue discussed above.
Previous wording
The effective tax rates for the three and nine months ended September 30, 2025, were 21.9% and 22.3%, respectively, compared to 40.9% and 29.8%, 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. For the three and nine months ended September 30, 2024, the effective tax rates were also impacted by foreign currency translation losses and other charges incurred as a result of substantially completing the liquidation of certain foreign subsidiaries with no associated tax benefit. The effective tax rates for the three and nine months ended September 30, 2025, were lower than the effective tax rates for the three and nine months ended September 30, 2024, primarily due to the aforementioned foreign currency translation losses and other charges incurred in 2024 which did not repeat in the corresponding periods in 2025, as well as due to an increase in tax benefits related to stock-based compensation and utilization of U.S. foreign tax credits.
Current wording
Income tax (benefit) provision. The effective tax rate for the three months ended March 31, 2026, was 26.7% compared to 24.1% for the corresponding period of 2025. 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 rate for the three months ended March 31, 2026, was higher than the effective tax rate for the three months ended March 31, 2025, primarily due to discrete tax benefits recognized in the quarter which increase the effective tax rate as a result of the loss before income taxes reported in the period.
Previous wording
Transaction-related charges include transaction costs, inventory fair value step-up, retention bonus accruals and integration expenses associated with acquisitions.
Current wording
We define Adjusted EBITDA as net (loss) income plus interest, taxes, depreciation and amortization and excluding other costs, such as stock-based compensation, restructuring and exit costs, transaction-related charges, long-lived asset impairments (including goodwill and intangible assets), inventory-related charges incremental to normal operations and plus or minus the impact of our LIFO inventory costing methodology. Transaction-related charges include transaction costs, inventory fair value step-up and write-down, retention bonus accruals and integration expenses associated with acquisitions. This financial measure excludes the impact of certain amounts and is not calculated in accordance with GAAP. A reconciliation of this non-GAAP financial measure, to its most comparable GAAP financial measure, is included below.
Previous wording
We use EBITDA excluding other costs internally to evaluate and manage the Company’s operations because we believe it provides useful supplemental information regarding the Company’s ongoing operating performance. We have chosen to provide this information to investors to enable them to perform more meaningful comparisons of operating results.
Current wording
We believe Adjusted EBITDA provides investors with a helpful measure for comparing our operating performance with the performance of other companies that may have different financing and capital structures or tax rates. We believe it is a useful indicator of our operating performance without regard to items, such as amortization of intangibles, which can vary substantially from company to company depending upon the nature and extent of acquisitions. Similarly, the impact of the LIFO inventory costing method can cause results to vary substantially from company to company depending upon whether they elect to utilize LIFO and depending upon which method they may elect. We use Adjusted EBITDA internally to evaluate and manage the Company’s operations because we believe it provides useful supplemental information regarding the Company’s ongoing operating performance. Adjusted EBITDA has important limitations as an analytical tool and should not be considered in isolation or as a substitute for analysis of the Company’s results as reported under GAAP. We believe that net (loss) income attributable to DNOW Inc. is the financial measure calculated and presented in accordance with GAAP that is most directly comparable to Adjusted EBITDA.
Previous wording
For thethree and nine months ended September 30, 2025, stock-based compensation excludes less than $1 million and $1 million, respectively, as such amounts were reported in Other.
Current wording
For the three months ended March 31, 2026 and 2025, stock-based compensation excludes $1 million and less than $1 million, respectively, as such amounts were reported in transaction-related charges.
Previous wording
As of September 30, 2025 and December 31, 2024, we had cash and cash equivalents of $266 million and $256 million, respectively. As of September 30, 2025, $108 million of our cash and cash equivalents were maintained in the accounts of our various foreign subsidiaries. During the first nine months of 2025, we repatriated $3 million from our foreign subsidiaries. The Company makes a determination each period concerning its intent and ability to indefinitely reinvest the cash held by its foreign subsidiaries. The Company has not recorded deferred income taxes on undistributed foreign earnings that it considers to be indefinitely reinvested. Future changes to our indefinite reinvestment assertion could result in additional taxes (withholding and/or state taxes), offset by any available foreign tax credits.
Current wording
As of March 31, 2026 and December 31, 2025, we had cash and cash equivalents of $116 million and $164 million, respectively. As of March 31, 2026, $108 million of our cash and cash equivalents were maintained in the accounts of our various foreign subsidiaries. During the first three months of 2026, we repatriated $31 million from our foreign subsidiaries. The Company makes a determination each period concerning its intent and ability to indefinitely reinvest the cash held by its foreign subsidiaries. The Company has not recorded deferred income taxes on undistributed foreign earnings that it considers to be indefinitely reinvested. Future changes to our indefinite reinvestment assertion could result in additional taxes (withholding and/or state taxes), offset by any available foreign tax credits.
Previous wording
We maintain a $500 million five-year senior secured revolving credit facility that will mature on December 14, 2026. Availability under the revolving credit facility is determined by a borrowing base comprised of eligible receivables, eligible inventory and certain cash deposits in the U.S. and Canada. As of September 30, 2025, we had no borrowings against our revolving credit facility, and had approximately $487 million in availability (as defined in the Credit Agreement) resulting in the excess availability (as defined in the Credit Agreement) of 99%, subject to certain restrictions. Availability excluding certain cash deposits was approximately $363 million. Borrowings that result in the excess availability dropping below the greater of 10% of the borrowing base or $40 million are conditioned upon compliance with or waiver of a minimum fixed charge ratio (as defined in the Credit Agreement). The credit facility contains usual and customary affirmative and negative covenants for credit facilities of this type including financial covenants. As of September 30, 2025, we were in compliance with all covenants. We continuously monitor compliance with our debt covenants. A default, if not waived or amended, would prevent us from taking certain actions, such as incurring additional debt.
Current wording
We maintain an $850 million five-year senior secured revolving credit facility that will mature on November 6, 2030. Availability under the revolving credit facility is limited to the lesser of the commitments and a borrowing base comprised of eligible account receivables, eligible inventory andeligible rental equipment assets of the Borrowers and subsidiary guarantors. As of March 31, 2026, we had $571 million borrowings against our revolving credit facility and had approximately $263 million in availability (as defined in the Credit Agreement). The credit facility includes a springing financial covenant that requires us to maintain, during any period when availability falls below specified thresholds, a minimum fixed charge coverage ratio (as defined in the Credit Agree ment). The credit facility contains usual and customary affirmative and negative covenants for credit facilities of this type including financial covenants. As of March 31, 2026, we were in compliance with all covenants. We continuously monitor compliance with our debt covenants. A default, if not waived or amended, would prevent us from taking certain actions, such as incurring additional debt.
Previous wording
In connection with acquisitions in 2024, the Company is committed to total future retention payments of up to $13 million payable in 2026 and 2027. Payments are due to various employees if non-financial post combination service conditions are met pursuant to the terms and conditions of the retention agreements.
Current wording
In connection with acquisitions in 2024, 2025 and 2026, the Company is committed to total future retention payments of up to$11 million payable in 2027, 2028 and 2029. Payments are due to various employees if non-financial post combination service conditions are met pursuant to the terms and conditions of the retention agreements.
Previous wording
The following table summarizes our net cash flows provided by (used in) operating activities, investing activities and financing activities for the periods presented(in millions):
Current wording
The following table summarizes our net cash flows (used in) provided by operating activities, investing activities and financing activities for the periods presented (in millions):
Previous wording
For the nine months ended September 30, 2025, net cash provided by operating activities was $72 million compared to $176 million net cash provided by operating activities in the corresponding period of 2024. For the nine months ended September 30, 2025, the decrease in net cash provided by operating activities was primarily driven by a net increase of $78 million in working capital in 2025. The increase in working capital reflected a proactive investment of $24 million in inventory to support customer demand, coupled with $35 million growth in accounts receivable due to revenue growth.
Current wording
For the three months ended March 31, 2026, net cash used in operating activitieswas $95 million compared to $16 million net cash used in operating activities in the corresponding period of 2025. For the three months ended March 31, 2026, net cash used in operating activities was primarily driven by a net decrease of $115 million in working capital in 2026. The decrease in working capital primarily related to a decrease in accrued liabilities for severance and legal and professional fees associated with the acquisition of MRC Global, along with increases in accounts receivable and inventory and a reduction in income taxes payable. For the three months ended March 31, 2025, net cash used in operating activities was primarily driven by a net decrease of $65 million in working capital in 2025. The decrease in working capital primarily related to a proactive investment of $32 million in inventory to support customer demand, coupled with $52 million growth in accounts receivable due to revenue growth and timing of collections.
Previous wording
For the nine months ended September 30, 2025, net cash used in investing activities was $19 million compared to $190 million net cash used in investing activities in the corresponding period of 2024. For the nine months ended September 30, 2025, net cash used in investing activities was primarily related to purchases of property, plant and equipment of $14 million and business acquisition of $8 million, while net cash used in investing activities in the corresponding period of 2024 was primarily related to business acquisitions of $185 million, net of cash acquired.
Current wording
For the three months ended March 31, 2026, net cash used in investing activities was $53 million compared to $5 million net cash used in investing activities in the corresponding period of 2025. For the three months ended March 31, 2026, net cash used in investing activities was primarily related to business acquisitions of $46 million and purchases of property, plant and equipment of $8 million. Net cash used in investing activities in the corresponding period of 2025 was primarily related to purchases of property, plant and equipment of $6 million.
Previous wording
For the nine months ended September 30, 2025, net cash used in financing activities was $45 million compared to $25 million net cash used in financing activities in the corresponding period of 2024. For the nine months ended September 30, 2025, net cash used in financing activities primarily related to share repurchases of $27 million and withholding tax payments for employee awards of $8 million.
Current wording
For the three months ended March 31, 2026, net cash provided by financing activities was $101 million compared to $17 million net cash used in financing activities in the corresponding period of 2025. For the three months ended March 31, 2026, net cash provided by financing activities primarily related to net borrowings under the revolving credit facility of $160 million, partially offset by share repurchases of $50 million and shares withheld for taxes for employee awards of $5 million. Net cash used in financing activities in the corresponding period of 2025 was primarily related to share repurchases of $8 million and shares withheld for taxes for employee awards of $7 million.
Previous wording
On January 24, 2025, the Company’s Board of Directors authorized a new share repurchase program to purchase up to $160 million of its outstanding common stock. We expect to fund share repurchases primarily with cash on hand, cash flow from operations and the usage of the available portion of the revolving credit facility. The timing and amount of any repurchases will be made at our discretion, taking into account a number of factors, including market conditions. The share repurchase program does not obligate the Company to repurchase shares and may be suspended or discontinued at any time at our discretion. All shares repurchased shall be retired pursuant to the terms of the share repurchase program. For the nine months ended September 30, 2025, we repurchased 1,711,235 shares of our common stock for a total of approximately $27 million. As of September 30, 2025, we had approximately $133 million remaining under the program’s authorization. In connection with the Merger, we have temporarily suspended share repurchase activity and expect share repurchases to remain paused until the Merger is completed.
Current wording
On January 24, 2025, the Company’s Board of Directors authorized a new share repurchase program to purchase up to $160 million of its outstanding common stock. We expect to fund share repurchases primarily with cash on hand, cash flow from operations and the usage of the available portion of the revolving credit facility. The timing and amount of any repurchases will be made at our discretion, taking into account a number of factors, including market conditions. The share repurchase program does not obligate the Company to repurchase shares and may be suspended or discontinued at any time at our discretion. All shares repurchased shall be retired pursuant to the terms of the share repurchase program. For the three months ended March 31, 2026, we repurchased 4,201,928 shares of our common stock for a total of approximately $50 million. As of March 31, 2026, we had approximately $73 million remaining under the program’s authorization.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
We believe that net income attributable to DNOW Inc. is the financial measure calculated and presented in accordance with GAAP that is most directly comparable to EBITDA excluding other costs. EBITDA excluding other costs measures the Company’s operating performance without regard to certain expenses. EBITDA excluding other costs is not a presentation made in accordance with GAAP and the Company’s computation of EBITDA excluding other costs may vary from others in the industry. EBITDA excluding other costs has important limitations as an analytical tool and should not be considered in isolation or as a substitute for analysis of the Company’s results as reported under GAAP.