DNOW Reports FY2025 Net Loss Amidst Major Acquisition & Accounting Change; Initiates New Share Buyback

summarizeSummary

DNOW Inc. reported a net loss of $89 million for fiscal year 2025, primarily due to acquisition-related costs and a change to LIFO inventory accounting, despite an increase in Adjusted EBITDA. The company also announced a new $160 million share repurchase program and a subsequent acquisition of Edge Controls.

check_boxKey Events

• Full-Year 2025 Financial Results

  DNOW Inc. reported a net loss of $89 million for fiscal year 2025 on $2.82 billion in revenue, a significant decline from a $78 million net income in 2024. Operating loss was $93 million, but Adjusted EBITDA increased to $209 million.

• MRC Global Acquisition Impact Detailed

  The acquisition of MRC Global, completed on November 6, 2025, for $1.76 billion (net of cash acquired), contributed $388 million in revenue and a $145 million net loss to DNOW's 2025 results. The acquisition resulted in $383 million in goodwill and $510 million in intangible assets.

• Change in Inventory Accounting Method

  The company changed its inventory valuation method for U.S. inventories from moving average cost to Last-In, First-Out (LIFO) in Q4 2025, applied retrospectively to 2023. This change increased the cost of products by $27 million in 2025 and contributed to the decrease in gross profit.

• New Share Repurchase Program Authorized

  A new share repurchase program of up to $160 million was authorized on January 24, 2025. DNOW repurchased $37 million (2,465,089 shares at an average price of $14.93) in 2025, with $123 million remaining under the authorization.

auto_awesomeAnalysis

DNOW Inc. filed its annual report for fiscal year 2025, revealing a significant shift to a GAAP net loss of $89 million, compared to a net income of $78 million in 2024. This loss was primarily driven by $135 million in inventory-related transaction charges and increased legal and professional fees associated with the transformational acquisition of MRC Global. Despite the GAAP loss, Adjusted EBITDA increased to $209 million, indicating improved operational performance when excluding these one-time and non-cash impacts. The company also announced a new $160 million share repurchase program, demonstrating a commitment to returning capital to shareholders. Furthermore, the subsequent acquisition of Edge Controls signals continued strategic expansion into automation and pump solutions. Investors should consider the strategic benefits of the MRC Global acquisition and the new growth initiatives against the short-term financial impact of integration costs and accounting changes.