DNOW (DNOW) Q2 2026 earnings summary

Executive summary

• Achieved Q2 2026 revenue of $1,307 million, up 10% sequentially and 108% year-over-year, with 13% growth in the U.S. segment, driven by the MRC Global acquisition.

• Adjusted EBITDA reached $60 million (4.6% of revenue), up 54% sequentially, and net cash from operating activities hit a record $133 million.

• Net loss attributable to shareholders was $21 million ($0.11 per share), compared to net income of $14 million in Q2 2025; adjusted net income was $21 million ($0.12 per share).

• Integration of MRC Global progressing, with 17 U.S. locations converted to SAP and $30 million in annualized cost synergies expected by year-end 2026.

• $25 million in share repurchases in Q2 and $75 million in H1 2026, more than the previous 10 quarters combined.

Financial highlights

• Gross profit for Q2 2026 was $243 million (18.6% margin); adjusted gross profit was $272 million (20.8% margin), slightly down from 21.6% in Q1 due to inventory charges.

• Adjusted EBITDA margin was 4.6% of revenue; net debt reduced by $95 million to $360 million, with a net debt/EBITDA leverage at 1.7x.

• Working capital improved to 19% of revenue, with inventory reduced by $131 million and DSO improved by 7 days to 62.

• Cash and cash equivalents were $114 million as of June 30, 2026; free cash flow for the quarter was $124 million.

• Net loss attributable to shareholders was $21 million, or -1.6% of revenue.

Outlook and guidance

• Q3 2026 revenues expected to grow low to mid-single digits sequentially, with EBITDA margin targeted at 5%-5.5%.

• Full-year 2026 revenue guidance raised to $5.0–$5.1 billion, with EBITDA margin approaching 4.5%.

• Net cash from operating activities guidance increased to $125–$200 million for the year.

• Seasonal Q4 revenue decline anticipated, consistent with historical patterns.

• Confident in achieving $350 million EBITDA in 2027, driven by sector growth and efficiency gains.