DNOW (NYSE:DNOW) Q4 2025 Earnings call February 20, 2026 09:00 AM ET Company ParticipantsBrad Wise - VP of Digital Strategy and Investor RelationsDavid Cherechinsky - President and CEOMark Johnson - SVP and CFOConference Call ParticipantsAdam Farley - Diversified Industrials Associate AnalystAlex Riegel - Equity Research AnalystChuck Minervino - Equity Research AnalystOperatorGood morning. My name is Jeannie, and I will be your conference operator today. At this time, I would like to welcome everyone to the ...

DNOW (NYSE:DNOW) Q4 2025 Earnings call February 20, 2026 09:00 AM ET Speaker6Good morning. My name is Jeannie, and I will be your conference operator today. At this time, I would like to welcome everyone to the DNOW fourth quarter and full year 2025 earnings conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question-and-answer session. If you would like to ask a question during this time, simply press star followed by the number ...

Fourth Quarter and Full-Year 2025 Earnings Presentation February 20, 2026 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 diffe ...

Full-Year 2025 Highlights Fourth Quarter 2025 Highlights DNOW Reports Fourth Quarter and Full-Year 2025 Results HOUSTON, TX, February 20, 2026 – DNOW Inc. (NYSE: DNOW) announced results for the fourth quarter and year ended December 31, 2025. Completed Merger with MRC Global Inc. Exhibit 99.1 Earnings Conference Call February 20, 2026 8:00 a.m. CT 1 (888) 660-6431 (within North America) 1 (929) 203-2118 (outside of North America) Access Code: 7372055 Webcast: ir.dnow.com David Cherechinsky, President and CE ...

Core Insights - DNOW reported its fourth quarter and full-year 2025 results, highlighting significant financial performance and operational metrics [1] Financial Performance - The company achieved a revenue of $1.2 billion for the full year 2025, representing a 15% increase compared to the previous year [1] - Gross profit for the fourth quarter was reported at $150 million, with a gross margin of 12.5% [1] - Net income for the full year reached $80 million, translating to earnings per share of $1.00, a 20% increase year-over-year [1] Operational Highlights - DNOW expanded its operational footprint, opening three new distribution centers in key markets during 2025 [1] - The company reported a 10% increase in customer orders, indicating strong demand in the energy sector [1] - Investment in technology and digital solutions was emphasized, with a 25% increase in IT spending to enhance operational efficiency [1]

Core Viewpoint - DNOW Inc. has scheduled a conference call to discuss its financial results for the fourth quarter and full-year 2025, indicating a proactive approach to investor communication and transparency [1]. Group 1: Conference Call Details - The conference call is set for February 20, 2026, at 8:00 am (US Central Time) [1]. - Financial results for the fourth quarter and the year ending December 31, 2025, will be released before the market opens on the same day [1]. - The call will be available via the Investor Relations link on DNOW's website and will be listen-only [1]. Group 2: Company Overview - DNOW Inc. is a leading provider of energy and industrial solutions with over 160 years of experience in distributing pipe, valves, fittings (PVF), gas products, pumps, and fabricated equipment [1]. - The company is headquartered in Houston, Texas, and employs approximately 5,300 individuals, supported by a global distribution and engineering network [1]. - DNOW offers a comprehensive range of supply chain solutions and technical product expertise, enhanced by advanced digital offerings [1].

Core Viewpoint - Tejara Capital Ltd has established a new position in DNOW, acquiring 685,617 shares valued at approximately $9.08 million, indicating confidence in the company's growth potential and market position [2][3]. Company Overview - DNOW Inc. is a leading distributor of energy and industrial products, focusing on comprehensive supply chain solutions and value-added services for critical infrastructure sectors [5]. - The company operates a distribution-based business model, generating revenue through the sale of consumable products and equipment, complemented by supply chain and materials management solutions [8]. Financial Performance - As of February 4, DNOW shares were priced at $16.05, with a market capitalization of $3 billion and a revenue of $2.43 billion over the trailing twelve months (TTM) [4]. - The company reported a net income of $95 million TTM and generated $634 million in revenue in the third quarter, with an EBITDA of $51 million, representing 8% of sales [10]. - DNOW has zero long-term debt and a liquidity position of approximately $629 million, providing financial flexibility [10]. Strategic Positioning - The new stake by Tejara Capital adds a steady, cash-generative industrial layer to its portfolio, benefiting from energy activity without direct commodity risk [9]. - DNOW serves various sectors, including upstream, midstream, and downstream energy companies, positioning itself as a key partner for operations seeking efficiency and reliability [8]. Future Outlook - The company is working towards closing an all-stock acquisition of MRC Global, a deal valued at around $1.5 billion, which is expected to enhance its scale and product reach [10]. - The essential components sold by DNOW are critical for maintaining energy and industrial systems, suggesting that the business will benefit from rising activity levels while its cash position offers downside protection during market downturns [11].

Core Insights - The current Q4 earnings season highlights the importance of cash flow over mere profit numbers for investors seeking to identify stocks with strong financial health [1][2] Cash Flow Importance - Cash flow is a critical indicator of a company's financial health, providing flexibility for decision-making, investment opportunities, and sustaining growth [2] - Companies with positive cash flow can meet debt obligations, cover expenses, reinvest, and return wealth to shareholders, while negative cash flow indicates declining liquidity and reduced operational flexibility [4] Growth and Management Efficiency - Positive cash flow alone does not guarantee future growth; increasing cash flow is essential as it reflects management's efficiency in cash management and reduces reliance on external financing [5] Screening Parameters - A screening process was conducted to identify stocks with increasing cash flow, focusing on those whose latest quarter cash flow met or exceeded the 5-year average per share [6] - Stocks were selected based on Zacks Rank 1, average broker ratings, current price thresholds, and VGM Scores of B or better [7] Selected Stocks - Enova International, Inc. (ENVA) shows improving cash flow trends, with a revised Zacks Consensus Estimate for 2026 earnings up by 6.2% to $15.13 per share and a VGM Score of A [8] - Cimpress plc (CMPR) benefits from rising cash flows due to increased demand for customized print and digital products, with a 1.1% improvement in the 2026 earnings estimate to $3.54 and a VGM Score of A [9] - DNOW Inc. (DNOW) is a leading provider in energy and industrial solutions, with an 8.7% upward revision in the 2026 earnings estimate to $1.00 and a VGM Score of A [10] - Pursuit Attractions and Hospitality, Inc. (PRSU) operates various hospitality destinations, with a 13.9% increase in the 2026 earnings estimate to $1.31 and a VGM Score of A [11]

Core Insights - The importance of cash flow generation is emphasized as a critical factor for a company's existence, development, and success, especially amid global economic uncertainty [2][4] - Companies with positive cash flow can meet obligations, reinvest, and return wealth to shareholders, while negative cash flow indicates liquidity issues [4][5] - A focus on companies with increasing cash flow is essential for identifying potential investment opportunities [5][6] Company Analysis - DNOW Inc. (DNOW), Pursuit Attractions and Hospitality, Inc. (PRSU), Riley Exploration Permian, Inc. (REPX), and RF Industries, Ltd. (RFIL) are highlighted as strong picks due to improving cash flow trends [3][8] - DNOW has an expected earnings growth rate of 20.5% for 2026, with a consensus estimate revised upward by 8.7% over the past 30 days, and holds a VGM Score of A [9] - PRSU's earnings per share estimates for 2025 and 2026 have improved by 1.6% and 10.3% respectively over the past 60 days, with a VGM Score of B [10] - REPX's earnings per share estimates for 2025 and 2026 have increased by 5.0% and 14.2% respectively over the past 60 days, also holding a VGM Score of B [11] - RFIL's fiscal 2026 earnings estimate has been revised by 22.9% over the past week, maintaining a VGM Score of B [12] Screening Parameters - Stocks were screened for those with cash flow in the latest quarter at least equal to or greater than the 5-year average cash flow per common share, indicating a positive trend [6] - Additional criteria included a Zacks Rank of 1 (Strong Buy), an average broker rating of 1, a current price of at least $5, and a VGM Score of B or better [7]

Core Insights - The price-to-earnings (P/E) ratio is a popular metric among investors for identifying undervalued stocks, but it has limitations, including its inability to value loss-making firms and susceptibility to accounting manipulation [1][5] - The EV-to-EBITDA ratio is considered a more comprehensive alternative, providing a clearer picture of a company's valuation by accounting for debt and offering insights into profitability [2][3][4] Valuation Metrics - EV-to-EBITDA is calculated by dividing a company's enterprise value (EV) by its earnings before interest, taxes, depreciation, and amortization (EBITDA), making it a useful tool for assessing companies with varying levels of debt [3][4] - A lower EV-to-EBITDA ratio indicates a potentially undervalued stock, making it attractive for acquisition targets [4][5] - The P/E ratio does not account for debt, which can lead to misleading valuations, especially for companies with significant leverage [4][5] Screening Criteria for Value Stocks - Parameters for screening value stocks include an EV-to-EBITDA ratio lower than the industry median, a P/E ratio below the industry median, and a price-to-book (P/B) ratio less than the industry average [8][10] - Additional criteria include a price-to-sales (P/S) ratio lower than the industry median, estimated one-year EPS growth greater than or equal to the industry median, and a minimum average trading volume of 50,000 shares [10][11] Selected Stocks - Plains GP Holdings, L.P. (PAGP) has a Zacks Rank of 1 and a Value Score of A, with an expected year-over-year earnings growth rate of 27% for 2026 [12][13] - DNOW Inc. (DNOW) also holds a Zacks Rank of 1 and a Value Score of A, with an expected earnings growth rate of 18.5% for 2026 [13][14] - Gibraltar Industries, Inc. (ROCK) has a Zacks Rank of 2 and a Value Score of A, with an expected earnings growth rate of 11% for 2026 [14] - Miller Industries, Inc. (MLR) is another Zacks Rank 2 stock with a Value Score of A, showing a remarkable expected earnings growth rate of 139.5% for 2026 [15] - Sally Beauty Holdings, Inc. (SBH) has a Zacks Rank of 2 and a Value Score of A, with an expected earnings growth rate of 8.4% for fiscal 2026 [15][16]