DNOW : First Quarter 2026 Earnings Presentation

Published: 2026-05-07 07:35:00 ET DNOW

Published on 05/07/2026 at 07:35 am EDT

May 7, 2026

1Q 2026 Highlights

R E V E N U E

$1,183M

A D J U S T E D E B I T D A 1

$39M

C A S H U S E D I N O P E R A T I N G A C T I V I T I E S

$95M

$50M share repurchases

$46M acquisition of Edge Controls

While much progress has been made, the system has been stabilized, but is not yet optimized

1. See reconciliation of GAAP to Non-GAAP measures in the appendix

1Q 2026 Consolidated Revenue

Sequential

Adjusted

DNOW

Revenue Change

23%

EBITDA1

$39M

EBITDA %1

3.3%

$1,183M

By End-Market

By Segment

Sequential Revenue Change

Percent of DNOW Revenue

39%

23%

20%

18%

Upstream

U. S. 29% 83%

$985M

International 3% 13%

$147M

Canada 0% 4%

$51M

Gas Utilities

Downstream & Industrial

Midstream

1. See reconciliation of GAAP to Non-GAAP measures in the appendix

1Q 2025-1Q 2026 Revenue Bridge

$1,311

$(94)

$(23) $14 $1,183

$(14)

$(11)

1Q25 DNOW + MRCG MRC Global U.S. LDNOW Intl MRCG Intl LDNOW Canada LDNOW U.S. 1Q26

with 2Q 2026 sequential guide ($ millions)

$1,311

$128M decline

Approximately three-quarters of the decline was in Upstream and Downstream and Industrial. YOY Gas Utilities down 5% and Midstream down 9%. Decline driven primarily by ERP disruptions and upstream and chemicals markets softness.

Forecasting sequential 2Q 2026 revenue growth in the mid-to-high single digit percentage range.

$(94)

Primarily due to country exits and non-repeating projects.

$(23)

Due to large, non-repeating European project.

Primarily due to activity declines.

$(14)

Primarily due to Midstream growth.

$14 $1,183

$(11)

1Q25 Legacy DNOW +

MRC Global

MRC Global U.S.

Legacy DNOW

Int'l

MRC Global

Int'l

Legacy DNOW Canada

Legacy DNOW U.S.

1Q26 2Q26

Estimates above are based on the simple addition of DNOW and MRC Global results, for illustrative purposes

with 2Q 2026 sequential guide ($ millions)

$82

$(29)

$(4)

$(3) $39

$(3)

MRCG U.S. MRCG Intl LDNOW U.S.

1Q25 DNOW + MRCG LDNOW Intl LDNOW Canada 1Q26

$82

$43M decline

Driven by lower revenue, corresponding gross margin pressure, and temporary yet significant costs to stabilize the ERP environment.

Forecasting sequential 2Q 2026 adjusted EBITDA to revenue flowthroughs approaching 25%, well above normal expected flowthroughs of 10-15%.

Resulting from elevated 1Q 2026 bad debt charges.

$(29)

$(4)

$(4) $(3) $39

$(3)

1Q25 Legacy DNOW +

MRC Global U.S.

Legacy DNOW

Int'l

MRC Global

Int'l

Legacy DNOW Canada

Legacy DNOW

1Q26

2Q26

MRC Global

U.S.

Estimates above are based on the simple addition of DNOW and MRC Global results, for illustrative purposes

1. See reconciliation of DNOW Consolidated 1Q 2026 GAAP to Non-GAAP measures in the appendix

MRC Global U.S. ERP Stabilization Progress

Focused on improving operational workflow and workstreams to deliver improved customer service

Workflows / Workstreams

Order, quote and pricing performance improvements

Freight, shipping and fulfillment enhancements

Invoicing, proof of delivery, cash-flow enablement

Integration, B2B and middleware stabilization

Reporting, data alignment,

operational visibility

Targeted Business Value

Improved speed and efficiency, reduce rework across quoting to order execution

Enhanced warehouse efficiency and streamlined invoicing

Enhanced quality and accountability of invoicing

Increased reliability of integrated systems by reducing interruptions and manual escalations

Strengthened reporting and data alignment

to enhance operational insight

While much progress has been made, the system is not optimized

DNOW MRC Global Integration & Cost Synergies Update

1Q 2026 Progress

2028

Public Company

23%

Operational & Supply Chain

27%

Corporate & IT Systems

50%

Breakdown of Synergy Opportunity

$70M

$42M

2027

$17M

$30M

2026

Plan

Revised

Annual Cost Synergy Target Timeline

Revenue Synergies

Early-Stage Commercial Cross-Selling Pipeline

Inventory as a Commercial Lever (Not Just a Synergy)

ERP Migration to SAP Enabling Commercial Synergies

Expanding Capability Through

Proc. Solutions + Legacy MRC

Combined capabilities unlocking new customers, suppliers and markets

Integrated supply and inventory improving bid competitiveness and capturing incremental revenue

Acceleration of annual cost synergies forecast at the end of 2026, estimated to approach

$30M and 43% of the $70M three-year goal

Cost Synergies

Significant upside potential in revenue synergies, cost improvements, margin and cash flow targets beyond 2026

Beyond 2026

Strong Balance Sheet with Financial Flexibility

Focused

we are executing a strategy to maximize strategic flexibility through the cycle

$379M in total liquidity

with access to $500M accordion

Cash of $116M ◊ Debt of $571M ◊ Net Debt1 of $455M

Net debt leverage ratio1 currently at 2.3x

1Q 2026 cash flow used in operations of $95M,

targeting $100M-$200M cash flow from operating activities by year end

1. See reconciliation of GAAP to Non-GAAP measures in the appendix

Disciplined Approach to Capital Allocation

Capex $8M in the first quarter 2026 to support growth in U.S. Process Solutions assets and ERP expenditures

Cumul6tive Sh6re Repurch6ses

$160 million share repurchase program

$87

($ in millions)

$37

$27

1Q25

2Q25

3Q25

4Q25

1Q26

Repurchased $50M of shares during the quarter, with $87M accumulated on the

$160M share repurchase program

Combined with the previous $80M share repurchase program,

$167M shares have been repurchased

Closed Edge Controls acquisition for $46M in cash

Outlook

$100M-$200M

Investor Relations

Brad Wise

Vice President

Digital Strategy & Investor Relations

Contact email: [email protected]

For the most up to date investor information, please click here

Appendix

Adjusted EBITDA Reconciliation

THREE MONTHS ENDED

March 31, 2026

($ millions)

Amount

% of Revenue

Revenue

$ 1,183

Net (loss) attributable to DNOW Inc.

$ (44)

(3.7%)

Interest expense, net

Income tax (benefit)

(16)

Depreciation and amortization

Increase in LIFO reserve

Stock-based compensation

Transaction-related charges

Inventory-related transaction charges

Other

Adjusted EBITDA

$ 39

3.3%

Note: Adjusted EBITDA is a non-GAAP measure. For a discussion of the use of Adjusted EBITDA, see our Current Report on Form 8-K dated May 7, 2026.

Net Debt & Leverage Ratio Calculation

($ millions)

March 31, 2026

Long-term debt

$ 571

Plus: current portion of debt obligations

Total debt

$ 571

Less: cash

116

Net debt

$ 455

Net debt

$ 455

Adjusted EBITDA1

$ 202

Net debt leverage ratio

2.3x

Note: Net debt, net debt leverage ratio and Adjusted EBITDA are non-GAAP measures. For a discussion of the use of net debt, net debt leverage ratio and Adjusted EBITDA, see our Current Report on Form 8-K dated May 7, 2026.

1. Trailing Twelve Months (TTM)

Disclaimer

DNOW Inc. published this content on May 07, 2026, and is solely responsible for the information contained herein. Distributed via Public Technologies (PUBT), unedited and unaltered, on May 07, 2026 at 11:32 UTC.