DNOW (DNOW) Q3 2026 earnings summary

Executive summary

• Q3 revenue was $1.337B, up 2.3% sequentially and 110.9% year over year, primarily reflecting the MRC Global acquisition; adjusted EBITDA was $76M, or 5.7% of revenue.

• Operating cash flow was $120M; FY2026 cash-flow expectations rose to approaching $200M, the top end of prior guidance.

Financial highlights

• Adjusted gross profit was $283M, or 21.2% of revenue, versus $272M and 20.8% in Q2; SG&A fell $6M sequentially to $232M.

• Net income was $26M, or $0.14 per diluted share; adjusted net income was $34M, or $0.18 per diluted share.

• Q3 gross profit was $265M, or 19.8% of revenue, versus $143M and 22.6% year over year; adjusted EBITDA increased 26.7% sequentially from $60M.

• Nine-month net loss was $39M versus net income of $58M; acquisition-related inventory charges, LIFO costs, lower margins and higher SG&A weighed on results.

Outlook and guidance

• Q4 revenue is expected to decline sequentially by a high-single-digit percentage; adjusted EBITDA target is 4.5% of revenue.

• FY2026 revenue is projected modestly above the prior $5.0B–$5.1B guidance midpoint; FY2026 operating cash flow is expected to approach $200M.

• 2027 EBITDA scenarios range from $300M to $350M, contingent on sector growth, revenue recovery and margin gains; these are scenarios, not formal guidance.

• Demand expectations vary by sector: steady Gas Utilities growth, midstream opportunities from LNG and power demand, and disciplined upstream spending.