Dnow Inc. Q4 2025 Earnings Call Summary

21 hours ago 1

Moby Intelligence

Fri, February 20, 2026 astatine 11:32 AM CST 3 min read

Legacy DNOW achieved grounds full-year 2025 EBITDA of $199,000,000 and an 8.2% margin, importantly outperforming a contracting U.S. upstream marketplace done differentiated work models.
The MRC Global merger completed successful November 2025 has transformed the company's scale, diversifying assemblage scope into state utilities and downstream concern markets portion expanding the addressable market.
Management identified that U.S. MRC Global ERP challenges are a overmuch heavier assistance than antecedently disclosed, with plan architecture flaws causing dilatory processing, accrued information banal requirements, and lawsuit work impediments.
To mitigate ERP-driven gross leakage, DNOW is actively migrating prime MRC Global customers and ample projects onto bequest DNOW SAP systems to guarantee transaction travel from bid to payment.
Upstream marketplace dynamics are shifting toward attraction and reliability to offset earthy accumulation declines, arsenic operators prioritize superior subject and currency travel durability implicit measurement growth.
The institution is leveraging combined purchasing standard and in-house valve automation capabilities to amended triumph rates and trim pb times, which has already resulted successful palmy caller lawsuit awards.
Data halfway infrastructure represents a high-growth vertical, with DNOW expanding from zero beingness successful aboriginal 2025 to supplying 11 customers crossed 4 cardinal markets by year-end.

Management has suspended sequential and full-year guidance owed to the deficiency of predictability successful U.S. MRC Global operations caused by the ongoing ERP stabilization phase.
Cost synergy targets for the archetypal twelvemonth person been accelerated to $23,000,000, up from the archetypal $17,000,000 estimate, driven by faster-than-planned integration of upstream locations.
The 2026 outlook assumes a flattish integrated gross environment, with maturation successful state utilities and midstream infrastructure balancing continued softness successful the chemic sector.
Capital allocation volition prioritize deleveraging the merger-related indebtedness to instrumentality to a nett currency position, portion opportunistically executing a $160,000,000 stock repurchase program.
The institution expects to grounds the last $41,000,000 successful inventory step-up charges successful the archetypal 4th of 2026, pursuing $135,000,000 recognized successful the 4th fourth of 2025.

The 4th fourth was impacted by $135,000,000 successful non-cash inventory step-up amortization and $50,000,000 successful transaction-related expenses associated with the MRC Global merger.
A $12,000,000 non-cash complaint was recorded successful the International conception related to the liquidation of a overseas entity and reclassification of cumulative translation losses.
DNOW transitioned its U.S. inventory valuation method from moving mean outgo to LIFO to amended bespeak existent costs amidst commodity terms fluctuations and inflationary pressures.
The U.S. MRC Global ERP issues correspond a important operational risk, presently requiring implicit 200 further tract unit to mitigate lawsuit work disruptions.