Dnow Inc.

Second-quarter 2026 revenue was $1.3 billion, up $124 million sequentially, or 10%, with U.S. revenue at $1.1 billion, up 13% sequentially. Adjusted gross profit was $272 million, or 20.8%, versus $256 million, or 21.6% in the first quarter. Adjusted EBITDA was $60 million, or 4.6% of revenue, up $21 million sequentially, and adjusted EPS was $0.12; reported net loss was $21 million, or $0.11 per diluted share. Cash from operations was $133 million, with $9 million of capex, $25 million of share repurchases, net debt of $360 million, and leverage of 1.7x. For the third quarter, DNOW expects sequential revenue growth in the low to mid-single-digit percentage range and EBITDA in the 5% to 5.5% range above prior guidance. For full-year 2026, the company raised guidance to revenue of approximately $5.0 billion to $5.1 billion and EBITDA margin approaching 4.5%.

David Cherechinsky framed the quarter as a meaningful step forward in the first full combined quarter, emphasizing that the company is “retrieving the revenue we want while improving profitability and cash generation.” He highlighted strong execution in the U.S., especially upstream and midstream, progress on SAP conversions, and improving customer engagement across gas utilities, data centers, LNG, and water. His tone was confident and constructive, but he also acknowledged temporary ERP-related costs, seasonal fourth-quarter pressure, and continued weakness in downstream and parts of international markets.

Mark Johnson focused on the financial mechanics of the quarter: adjusted gross profit of $272 million, 20.8% margin, SG&A of $238 million, adjusted EBITDA of $60 million, and adjusted EPS of $0.12. He cited improved working capital metrics, including DSO of 62 days, inventory of $1.1 billion, working capital excluding cash at 19.4% of annualized revenue, and liquidity of $472 million, with $114 million cash and $358 million available on the revolver. He also said 2026 GAAP tax rate is expected in the mid- to high single digits, D&A should be about $24 million in Q3, interest expense should decline slightly, and synergies remain on track for a $30 million year-one exit rate and $70 million by year 3.

Analysts focused on working capital upside, turnaround season visibility, ERP performance, and the sustainability of 4Q seasonality. Management said inventory can come down another $25 million to $50 million over the rest of the year and receivables could fall by another $25 million to $50 million, with additional cash generation likely in 4Q. On turnarounds, they said prebuys typically build toward the end of 3Q and that high refinery utilization should support a constructive maintenance cycle. They also said ERP stabilization is improving speed and service levels, and that the 17 SAP conversions are helping restore upstream and midstream share.