Financial Data and Key Metrics Changes - Total revenue for Q1 2022 was 41 million or 9.5% [45] - Year-over-year revenue growth was 30 million or 15 million or 334 million, up 10% sequentially and 33% year-over-year [46] - Canada revenue grew to 57 million sequentially but up 12% year-over-year [47] Market Data and Key Metrics Changes - The U.S. energy centers contributed approximately 79% of total U.S. revenues in Q1 2022 [46] - The company experienced growth in the Permian, Eagle Ford, Powder River, and Williston Basin markets [22] Company Strategy and Development Direction - The company is focused on transforming its business to serve as a critical link between global manufacturers and customers [11] - A regionalized project fulfillment strategy is being implemented, with plans to establish five supercenters by the end of the year [78] - The company aims to maintain a strong balance sheet with zero debt and significant liquidity to support growth and acquisitions [59] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the momentum in the business and the ability to generate positive cash flow despite growth [16][68] - The company raised its full-year revenue guidance to a 20% increase, with EBITDA to revenue incrementals approximating 20% [63] - Management noted the impact of geopolitical events, such as the Russian invasion of Ukraine, on energy security and demand for products [36] Other Important Information - The company has ceased operations in Russia, where revenues represented less than 1% of total [36] - The company is actively pursuing acquisitions, with a focus on smaller deals in the current market [74][75] - Workplace safety has improved, achieving a record low total recordable incident rate [65] Q&A Session Summary Question: Cash flow improvements despite growth outlook - Management highlighted improvements in working capital velocity and a leaner organization as key factors enabling positive cash flow [68][70] Question: Capital allocation strategy in the current market - Management confirmed plans to pursue acquisitions this year, despite higher seller expectations [74][75] Question: Impact of rig count and DUC count on future spending - Management indicated that the depletion of DUCs could lead to increased spending by customers in the future [76] Question: Regionalized fulfillment strategy progress - Management stated that the rollout of supercenters is more than halfway complete, focusing on customer proximity and efficiency [78] Question: WS&A expense growth in relation to revenue - Management expects WS&A expenses to grow at a lower rate than revenue, indicating a focus on efficiency [82][84] Question: Commodity pricing and potential upside - Management acknowledged the potential for price appreciation but noted that it depends on supply and demand dynamics [86]
NOW(DNOW) - 2022 Q1 - Earnings Call Transcript