UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark one) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2025 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number 001-36325 DNOW INC. (Exact name of registrant as specified in its charter) Securities registered pursuant to Section 12(b) of the Act: | Title of each class | Trading ...

DNOW (DNOW) Q1 2025 Earnings Call May 07, 2025 09:00 AM ET Speaker0 Good morning. My name is Janine, and I will be your conference operator for today. At this time, I would like to welcome everyone to the DN Now First Quarter twenty twenty five Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session. Mr. Brad Weiss, Vice President of Digital Strategy and Investor Relations, you may begin your confe ...

Core Insights - DNOW reported quarterly earnings of $0.22 per share, exceeding the Zacks Consensus Estimate of $0.19 per share, and showing an increase from $0.21 per share a year ago, resulting in an earnings surprise of 15.79% [1] - The company achieved revenues of $599 million for the quarter ended March 2025, surpassing the Zacks Consensus Estimate by 2.66% and increasing from $563 million year-over-year [2] - DNOW shares have increased approximately 23.2% since the beginning of the year, contrasting with a decline of -4.7% in the S&P 500 [3] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $0.23, with projected revenues of $630.3 million, and for the current fiscal year, the EPS estimate is $0.93 on revenues of $2.48 billion [7] - The estimate revisions trend for DNOW is mixed, leading to a Zacks Rank 3 (Hold), indicating expected performance in line with the market in the near future [6] Industry Context - The Manufacturing - General Industrial industry, to which DNOW belongs, is currently ranked in the bottom 37% of over 250 Zacks industries, suggesting potential challenges ahead [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which could impact DNOW's stock performance [5]

In an effort to provide investors with additional information regarding our results as determined by GAAP, we disclose various non-GAAP financial measures in our quarterly earnings press releases and other public disclosures. The non- GAAP financial measures include: (i) earnings before interest, taxes, depreciation and amortization (EBITDA) excluding other costs, (ii) EBITDA excluding other costs as a percentage of revenue, (iii) net income attributable to DNOW Inc. excluding other costs, (iv) diluted earn ...

Exhibit 99.1 DNOW Reports First Quarter 2025 Results HOUSTON, TX, May 7, 2025 – DNOW Inc. (NYSE: DNOW) announced results for the first quarter ended March 31, 2025. Recent Capital Allocation Actions Financial Highlights David Cherechinsky, President and CEO of DNOW, added, "Following our second-best fourth quarter in history, we beat first-quarter expectations with revenue growth of 5% sequentially to $599 million, and delivered our second-best first-quarter EBITDA of $46 million, in a market with fewer ope ...

Core Insights - The article discusses an active investing approach focused on identifying breakout stocks within specific price ranges, recommending to sell if prices drop below the lower band and hold for gains if they surpass the upper band [1] Group 1: Breakout Stock Identification - Breakout stocks are identified by calculating support and resistance levels, where support is the lower bound and resistance is the upper bound of stock movements [2] - Demand for a stock is lowest at the support level, while traders are more inclined to buy at the resistance level, indicating potential breakout candidates [3] - A genuine breakout occurs when the previous resistance level becomes the new support level, which can be confirmed through long-term price trend analysis [5] Group 2: Screening Criteria - The screening criteria for identifying breakout stocks include a percentage price change over four weeks between 10% and 20%, current price being at least 90% of the 52-week high, and a Zacks Rank of 1 [6] - Additional criteria include a beta of 2 or less, and a current price of $20 or less, narrowing the stock universe to only six candidates [7] Group 3: Featured Stocks - EMX Royalty Corporation focuses on exploring and generating royalties from metal and mineral properties, with an expected earnings growth rate of 200% for the current year [7] - DNOW Inc. distributes energy and industrial products globally, with an expected earnings growth rate of 18.6% for the next year [8] - EZCORP, Inc. provides pawn services in the U.S. and Latin America, with an expected earnings growth rate of 17.9% for the current year [8]

Core Insights - DNOW's international revenue performance is crucial for assessing its financial resilience and growth prospects [1][2] - The company's total revenue for the recent quarter reached $571 million, reflecting a 2.9% increase year-over-year [4] International Revenue Breakdown - Canada contributed $66 million, accounting for 11.56% of total revenue, with a surprise increase of 7.67% compared to analyst expectations [5] - International revenue was $54 million, representing 9.46% of total revenue, which was a 15.09% miss against the consensus estimate [6] - In the previous quarter, international revenue was $59 million (9.74%), and in the same quarter last year, it was $72 million (12.97%) [6] Future Projections - Analysts project total revenue of $583.5 million for the current fiscal quarter, a 3.6% increase year-over-year, with expected contributions of 11% from Canada ($64.2 million) and 9.7% from International ($56.6 million) [7] - For the full year, total revenue is anticipated to be $2.48 billion, a 4.6% increase from last year, with Canada and International expected to contribute 10.1% ($250.9 million) and 9.4% ($234.2 million) respectively [8] Market Performance - DNOW's stock has gained 25.2% over the past month, outperforming the S&P 500's 4.7% increase, and has increased 14.9% over the past three months compared to the S&P 500's 3.1% increase [12]

Group 1: Oportun Financial Corporation (OPRT) - Oportun Financial Corporation is a financial services provider with a Zacks Rank 1 [1] - The Zacks Consensus Estimate for its current year earnings has increased by 9.2% over the last 60 days [1] - The company has a price-to-earnings ratio (P/E) of 7.11, significantly lower than the S&P's 22.11, and possesses a Value Score of A [1] Group 2: Priority Technology Holdings, Inc. (PRTH) - Priority Technology Holdings, Inc. is a payment technology company with a Zacks Rank 1 [2] - The Zacks Consensus Estimate for its next year earnings has increased by 4.1% over the last 60 days [2] - The company has a price-to-earnings ratio (P/E) of 15.04, compared to the S&P's 24.81, and possesses a Value Score of A [2] Group 3: DNOW Inc. (DNOW) - DNOW Inc. is a downstream energy services provider with a Zacks Rank 1 [3] - The Zacks Consensus Estimate for its next year earnings has increased by 18.6% over the last 60 days [3] - The company has a price-to-earnings ratio (P/E) of 22.03, which is slightly lower than the industry average of 22.90, and possesses a Value Score of B [3]

Company Overview - DNOW operates approximately 165 locations globally with around 2,575 employees, providing products and services to the energy and industrial markets[11]. - The company has a supplier network consisting of thousands of vendors across approximately 30 countries, selling to customers in around 80 countries[17]. - The company serves key markets including the U.S., Canada, UK, Norway, Australia, and the Middle East, with a focus on energy transition markets[15]. - As of December 31, 2024, the company had approximately 2,575 employees, with about 180 being temporary employees[44]. - The company operates approximately 110 locations in the United States, 40 in Canada, and 15 internationally, with 85% of properties leased[132]. Financial Performance - For the year ended December 31, 2024, the company generated net income of $81 million, or $0.74 per fully diluted share, on revenue of $2,373 million, representing a revenue increase of $52 million or 2.2% compared to 2023[161]. - Operating profit for 2024 was $113 million, a decline of $27 million compared to $140 million in 2023[164]. - Revenue from the U.S. segment was $1,880 million, an increase of $131 million or 7.5% compared to 2023, primarily driven by acquisitions[165]. - Canadian revenue was $253 million, a decline of $29 million or 10.3% compared to 2023, impacted by lower project activity and unfavorable foreign exchange rates[167]. - International revenue was $240 million, a decline of $50 million or 17.2% compared to 2023, primarily due to weaker project activity[170]. - The worldwide average rig count declined 4.4% in 2024, with U.S. rigs down 13.1% and Canadian rigs up 6.2% compared to 2023[159]. - The average price of West Texas Intermediate crude oil decreased by 1.4% to $76.55 per barrel in 2024 compared to 2023[159]. - Natural gas prices fell by 13.8% to $2.19 per MMBtu in 2024 compared to 2023[159]. Strategic Initiatives - The company began a restructuring plan in the International segment to optimize efficiencies and improve operating margins, indicating a strategic focus on cost management[27]. - DNOW's DigitalNOW® platform allows customers to leverage technology for operational challenges, enhancing their return on assets[11]. - The company plans to expand revenues by targeting new customers in non-oil and gas markets while supporting existing customers in energy transition projects[163]. Market Conditions - The distribution industry in which DNOW operates is highly fragmented, with a mix of large global companies and numerous small regional competitors[28]. - DNOW's operations are influenced by global supply and demand for energy, as well as geopolitical factors affecting the oil and gas industry[19]. - The company may face significant adverse effects from geopolitical tensions and military conflicts impacting the global economy and capital markets[65]. - Future inflationary pressures could lead to increased operating and capital costs, which may not be fully offset by price increases[66]. Risks and Challenges - Cyber incidents pose risks to the company's operations, potentially leading to operational disruptions and financial losses[87]. - A shift in purchasing behavior by customers towards direct purchases from manufacturers could significantly decrease the company's profitability[68]. - The company lacks long-term contracts with many customers, making it vulnerable to significant customer loss or reduced purchasing volumes[71]. - Changes in customer and product mix could lead to fluctuations in product margins, adversely affecting the company's financial condition[74]. - Supply chain disruptions may lead to unexpected product shortages, adversely affecting the company's ability to meet customer demand[92]. - The absence of contracts with most suppliers increases reliance on existing suppliers and may lead to higher prices if significant suppliers are lost[94]. - Changes in trade policies could increase material input costs and limit availability of raw materials, negatively impacting competitive position[100]. - The company is subject to strict environmental regulations that may lead to significant liabilities and affect financial results[101]. Employee and Corporate Governance - Approximately 25% of the U.S. workforce is female, and about 33% are racial minorities as of December 31, 2024[49]. - The company emphasizes employee development through training programs, including a growing online learning platform[45]. - The company has a commitment to safety, driven by its health, safety, and environment (HSE) management system[51]. - The company recognizes individual achievements through programs like Milestone Service Awards for years of service[47]. - The company has established policies and procedures to comply with U.S. and international anti-corruption and trade control laws, but acknowledges the risk of violations[119]. Financial Position and Capital Management - The company maintained a $500 million revolving credit facility with approximately $433 million available as of December 31, 2024, with no borrowings against it[187]. - The company expects capital expenditures for fiscal year 2025 to approximate $20 million, primarily for property, plant, and equipment purchases[195]. - The share repurchase program authorized up to $80 million was fully utilized by December 31, 2024, with 1,823,249 shares repurchased for $23 million[196]. - As of December 31, 2024, the allowance for credit losses totaled $15 million, representing 3.7% of gross accounts receivable, down from $26 million or 6.3% in 2023[199]. - Inventory reserves amounted to $17 million as of December 31, 2024, which is 4.6% of gross inventory, compared to $21 million or 5.4% in 2023[200]. - The company recorded $230 million of goodwill as of December 31, 2024, with no impairment testing required as fair values were determined to be greater than carrying amounts[202]. Tax and Compliance - The effective tax rate for 2024 was 28.1%, significantly impacted by foreign currency translation losses and other charges, compared to a benefit of (79.7%) in 2023 driven by a $148 million deferred tax benefit[178]. - A valuation allowance of $21 million was recognized on certain deferred tax assets, with a reduction of $3 million in the U.S. and $1 million in other foreign jurisdictions during the year[209]. - The company utilizes a two-step process to record unrecognized tax benefits, ensuring that tax positions are more-likely-than-not to be sustained based on technical merits[210].

Key Takeaways Fourth Quarter and Full-Year 2024 © 2025 DNOW. All Rights Reserved Disclosure Statement Statements made in the course of this presentation that state the Company's or management's intentions, hopes, beliefs, expectations or predictions of the future are forward-looking statements. It is important to note that the Company's actual results could differ materially from those projected in such forward-looking statements. Additional information concerning factors that could cause actual results to ...