DNOW Q2 Revenue Doubles to $1.31B, Beats Estimates, but Margins Compress and Net Loss Widens

summarizeSummary

DNOW's Q2 revenue more than doubled to $1.31B, beating estimates, but margins compressed and the company posted a net loss as it digests the MRC Global acquisition.

check_boxKey Events · Earnings and Guidance · DNOW

• Revenue Doubles, Beats Consensus

  Q2 revenue of $1.31 billion exceeded the $1.27 billion consensus, driven by the MRC Global acquisition. Revenue was up 108% year-over-year.

• Margins Compress on Integration Costs

  Gross margin fell to 18.6% from 20.5% a year ago, and SG&A expenses nearly doubled to $238 million. A $35 million LIFO inventory charge and $44 million in inventory-related transaction charges weighed on profitability.

• Net Loss Despite Revenue Surge

  DNOW reported a net loss of $21 million, or $0.11 per share, compared to net income of $14 million a year ago. Adjusted EBITDA was $60 million, up from $51 million.

• Balance Sheet Reflects Acquisition Debt

  Long-term debt rose to $474 million from $411 million at year-end 2025, while cash fell to $114 million from $164 million. The company has $358 million in availability under its credit facility.

auto_awesomeAnalysis · DNOW · Energy & Transportation

The MRC Global acquisition has reshaped DNOW, driving a more than doubling of revenue to $1.31 billion and an adjusted EPS of $0.12—both ahead of consensus. Yet the integration is exacting a toll: gross margins slipped to 18.6% from 20.5%, SG&A nearly doubled, and the bottom line swung to a $21 million net loss. Additional pressure came from a $4 million impairment on a vacated office and a $35 million LIFO inventory charge. While the balance sheet carries higher debt and lower cash, operating cash flow hit a record. The quarter encapsulates both the scale gains and the near-term costs of the merger.