DNOW (DNOW) Q4 2024 earnings summary

Executive summary

• Achieved fifth consecutive year of growth in 2024, with revenue up 2% year-over-year despite a 9% decline in U.S. market activity and global rig count declines.

• Generated $298 million in operating cash flow and $289 million in free cash flow for 2024, nearly double initial projections.

• Net income attributable to the company was $81 million for 2024 ($0.74 per diluted share); non-GAAP net income was $100 million ($0.91 per diluted share).

• Completed the $114 million acquisition of Trojan Rentals, expanding water management and process solutions.

• Launched a new $160 million share repurchase program, double the previous authorization.

Financial highlights

• Fourth quarter 2024 revenue was $571 million, down 6% sequentially but up 3% year-over-year; full-year revenue reached $2.373 billion, up from $2.321 billion in 2023.

• Fourth quarter EBITDA was $45 million (7.9% of revenue); full-year EBITDA was $176 million (7.4% of revenue).

• Gross margin for Q4 was 23.3%, up 100 bps sequentially; full-year gross margin was 22.5%.

• Cash on hand at year-end was $256 million with no debt; total liquidity was $556 million.

• Free cash flow for 2024 was $289 million, up from $171 million in 2023.

Outlook and guidance

• Forecasting flat to high single-digit percent revenue growth for 2025, with EBITDA potentially approaching 8% of revenue.

• Targeting $150 million in free cash flow for 2025.

• U.S. business expected to grow, driven by midstream and industrial-adjacent markets and the Trojan acquisition; Canada and international expected to be flat.

• 1Q25 revenue expected to rise low- to mid-single digits sequentially; 1Q25 EBITDA approaching 7% of revenue.

• Tariffs and steel price inflation factored into guidance, with a wide revenue range reflecting market uncertainties.