CONSOLIDATED BALANCE SHEETS

CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (UNAUDITED)

1. Organization and Basis of Presentation

Nature of Operations

Basis of Presentation

Use of Estimates

Recently Issued Accounting Standards

2. Revenue

Remaining Performance Obligations

Allowance for Credit Losses

Contract Assets and Liabilities

3. Inventories, net

4. Property, Plant and Equipment, net

5. Accrued Liabilities

6. Debt

7. Stockholders’ Equity

Consolidated Variable Interest Entities ("VIE")

8. Accumulated Other Comprehensive Income (Loss) ("AOCI")

9. Business Segments

10. Income Taxes

12. Stock-based Compensation and Outstanding Awards

13. Commitments and Contingencies

14. Acquisitions

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Forward-Looking Statements

Company Overview

Merger Agreement

U.S., Canada and International Operations

Summary of Reportable Segments

Operating Environment Overview

Executive Summary

Outlook

Results of Operations

CONSOLIDATED BALANCE SHEETS

CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (UNAUDITED)

1. Organization and Basis of Presentation

Nature of Operations

Basis of Presentation

Use of Estimates

Recently Issued Accounting Standards

2. Revenue

Remaining Performance Obligations

Allowance for Credit Losses

Contract Assets and Liabilities

3. Inventories, net

4. Property, Plant and Equipment, net

5. Accrued Liabilities

6. Debt

7. Stockholders’ Equity

Share Repurchase Program

Consolidated Variable Interest Entities ("VIE")

8. Accumulated Other Comprehensive Income (Loss) ("AOCI")

9. Business Segments

10. Income Taxes

11. Earnings Per Share

12. Stock-based Compensation and Outstanding Awards

13. Commitments and Contingencies

14. Acquisitions

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Forward-Looking Statements

Company Overview

Merger Agreement

U.S., Canada and International Operations

Summary of Reportable Segments

Operating Environment Overview

Executive Summary

Outlook

Results of Operations

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark one)


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED June 30, 2025


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number 001-36325

DNOW INC.

(Exact name of registrant as specified in its charter)


Delaware		46-4191184
(State or other jurisdiction of incorporation or organization)		(IRS Employer Identification No.)
7402 North Eldridge Parkway, Houston, Texas 77041		(281) 823-4700
(Address of principal executive offices)		(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.01	DNOW	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of July 30, 2025, the registrant had 105,011,966 shares of common stock (excluding 2,095,636 unvested restricted shares), par value $0.01 per share, outstanding.

DNOW INC.

TABLE OF CONTENTS


Part I - Financial Information

Item 1.	Financial Statements	3

	Consolidated Balance Sheets as of June 30, 2025 (Unaudited) and December 31, 2024	3

	Consolidated Statements of Operations (Unaudited) for the three and six months ended June 30, 2025 and 2024	4

	Consolidated Statements of Comprehensive Income (Unaudited) for the three and six months ended June 30, 2025 and 2024	5

	Consolidated Statements of Cash Flows (Unaudited) for the six months ended June 30, 2025 and 2024	6

	Consolidated Statements of Stockholders' Equity (Unaudited) for the three and six months ended June 30, 2025 and 2024	7

	Notes to Unaudited Consolidated Financial Statements	8

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	16

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	25

Item 4.	Controls and Procedures	26

Part II - Other Information

Item 1A.	Risk Factors	27

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	28

Item 5.	Other Information	28

Item 6.	Exhibits	29

Signature		30

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

DNOW INC.

(In millions, except share and per share data)


	June 30, 2025			December 31, 2024
	(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	232		$	256
Receivables, net		440			388
Inventories, net		383			352
Prepaid and other current assets		25			32
Total current assets		1,080			1,028
Property, plant and equipment, net		153			157
Deferred income taxes		83			93
Goodwill		235			230
Intangibles, net		62			65
Other assets		48			48
Total assets	$	1,661		$	1,621

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	318		$	300
Accrued liabilities		125			130
Other current liabilities		12			12
Total current liabilities		455			442
Long-term operating lease liabilities		28			29
Other long-term liabilities		17			22
Total liabilities		500			493
Commitments and contingencies
Stockholders' equity:
Preferred stock - par value $0.01; 20 million shares authorized; no shares issued and outstanding		—			—
Common stock - par value $0.01; 330 million shares authorized; 105,011,316 and 105,652,963 shares issued and outstanding at June 30, 2025 and December 31, 2024, respectively		1			1
Additional paid-in capital		1,997			2,023
Accumulated deficit		(700	)		(747	)
Accumulated other comprehensive loss		(142	)		(153	)
DNOW Inc. stockholders' equity		1,156			1,124
Noncontrolling interest		5			4
Total stockholders' equity		1,161			1,128
Total liabilities and stockholders' equity	$	1,661		$	1,621

See notes to unaudited consolidated financial statements.

DNOW INC.

(In millions, except per share data)


	Three months ended June 30,				Six months ended June 30,
	2025		2024		2025		2024
Revenue	$	628	$	633	$	1,227	$	1,196
Operating expenses:
Cost of products		484		495		944		929
Warehousing, selling and administrative		112		105		221		206
Operating profit		32		33		62		61
Other income (expense)		—		—		—		1
Income before income taxes		32		33		62		62
Income tax provision		7		8		14		16
Net income		25		25		48		46
Net income attributable to noncontrolling interest		—		1		1		1
Net income attributable to DNOW Inc.	$	25	$	24	$	47	$	45
Earnings per share attributable to DNOW Inc. stockholders:
Basic	$	0.24	$	0.21	$	0.44	$	0.41
Diluted	$	0.23	$	0.21	$	0.43	$	0.41
Weighted-average common shares outstanding, basic		105		107		106		107
Weighted-average common shares outstanding, diluted		106		108		106		107

See notes to unaudited consolidated financial statements.

DNOW INC.

(In millions)


	Three months ended June 30,					Six months ended June 30,
	2025		2024			2025		2024
Net income	$	25	$	25		$	48	$	46
Other comprehensive income:
Foreign currency translation adjustments		8		(2	)		11		(6	)
Comprehensive income		33		23			59		40
Comprehensive income attributable to noncontrolling interest		—		1			1		1
Comprehensive income attributable to DNOW Inc.	$	33	$	22		$	58	$	39

See notes to unaudited consolidated financial statements.

DNOW INC.

(In millions)


	Six months ended June 30,
	2025			2024
Cash flows from operating activities:
Net income	$	48		$	46
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization		21			16
Provision for inventory		1			4
Stock-based compensation		8			6
Deferred income taxes		11			13
Other, net		10			6
Change in operating assets and liabilities, net of effects of acquisitions:
Receivables		(45	)		28
Inventories		(28	)		31
Prepaid and other current assets		10			(3	)
Accounts payable, accrued liabilities and other, net		(7	)		(45	)
Net cash provided by (used in) operating activities		29			102
Cash flows from investing activities:
Business acquisitions, net of cash acquired		(8	)		(185	)
Purchases of property, plant and equipment		(10	)		(4	)
Other, net		2			1
Net cash provided by (used in) investing activities		(16	)		(188	)
Cash flows from financing activities:
Repurchases of common stock		(27	)		(11	)
Other, net		(13	)		(4	)
Net cash provided by (used in) financing activities		(40	)		(15	)
Effect of exchange rates on cash and cash equivalents		3			(1	)
Net change in cash and cash equivalents		(24	)		(102	)
Cash and cash equivalents, beginning of period		256			299
Cash and cash equivalents, end of period	$	232		$	197

See notes to unaudited consolidated financial statements.

DNOW INC.

(In millions)


	Attributable to DNOW Inc. Stockholders
			Additional			Retained			Accum. Other								Total
	Common		Paid-In			Earnings			Comprehensive			Treasury			Noncontrolling		Stockholders’
	Stock		Capital			(Deficit)			Income (Loss)			Stock			Interest		Equity
December 31, 2023	$	1	$	2,032		$	(828	)	$	(145	)	$	—		$	3	$	1,063
Net income		—		—			21			—			—			—		21
Common stock repurchased		—		—			—			—			(1	)		—		(1	)
Common stock retired		—		(1	)		—			—			1			—		—
Stock-based compensation		—		2			—			—			—			—		2
Exercise of stock options		—		2			—			—			—			—		2
Shares withheld for taxes		—		(4	)		—			—			—			—		(4	)
Other comprehensive loss		—		—			—			(4	)		—			—		(4	)
March 31, 2024	$	1	$	2,031		$	(807	)	$	(149	)	$	—		$	3	$	1,079
Net income		—		—			24			—			—			1		25
Common stock repurchased		—		—			—			—			(10	)		—		(10	)
Common stock retired		—		(10	)		—			—			10			—		—
Stock-based compensation		—		4			—			—			—			—		4
Exercise of stock options		—		3			—			—			—			—		3
Other comprehensive loss		—		—			—			(2	)		—			—		(2	)
June 30, 2024	$	1	$	2,028		$	(783	)	$	(151	)	$	—		$	4	$	1,099

December 31, 2024	$	1	$	2,023		$	(747	)	$	(153	)	$	—		$	4	$	1,128
Net income		—		—			22			—			—			1		23
Common stock repurchased		—		—			—			—			(8	)		—		(8	)
Common stock retired		—		(5	)		—			—			5			—		—
Stock-based compensation		—		4			—			—			—			—		4
Exercise of stock options		—		1			—			—			—			—		1
Shares withheld for taxes		—		(7	)		—			—			—			—		(7	)
Other comprehensive income		—		—			—			3			—			—		3
March 31, 2025	$	1	$	2,016		$	(725	)	$	(150	)	$	(3	)	$	5	$	1,144
Net income		—		—			25			—			—			—		25
Common stock repurchased		—		—			—			—			(19	)		—		(19	)
Common stock retired		—		(22	)		—			—			22			—		—
Stock-based compensation		—		4			—			—			—			—		4
Shares withheld for taxes		—		(1	)		—			—			—			—		(1	)
Other comprehensive income		—		—			—			8			—			—		8
June 30, 2025	$	1	$	1,997		$	(700	)	$	(142	)	$	—		$	5	$	1,161

See notes to unaudited consolidated financial statements.

DNOW INC.

Notes to Unaudited Consolidated Financial Statements

DNOW Inc., (“DNOW” or the “Company”), is a holding company headquartered in Houston, Texas that was incorporated in Delaware on November 22, 2013. We operate primarily under the DNOW brand along with several affiliated brands operating in local, regional or international markets that are tied to prior acquisitions. DNOW is a distributor of energy and industrial products through its 160 locations in the United States (“U.S.”), Canada and select international locations which are geographically positioned to serve the energy and industrial markets. Additionally, through the Company’s DigitalNOW® platform, customers can leverage technology across applications to solve a wide array of complex operational and product sourcing challenges to assist in maximizing their return on assets.

The Company’s product and service offerings are consumed throughout the energy industry – from upstream drilling and completion, exploration and production, midstream transmission, gas and crude oil processing infrastructure development to downstream petroleum refining and petrochemicals – as well as in other industries, such as chemical processing, mining, water/wastewater, food and beverage, gas utilities and the evolution of energy transition markets inclusive of greenhouse gas reduction and emissions capture and storage, renewable fuels such as biofuels and renewable natural gas, wind, solar, production of hydrogen as a fuel to power equipment and select industrial markets. The energy and industrial distribution end markets we serve are inclusive of engineering and construction firms that perform capital and maintenance projects for their clients. DNOW also provides supply chain and materials management solutions to the same markets where the Company sells products. DNOW’s supplier network consists of thousands of vendors in approximately 30 countries.

The unaudited consolidated financial information included in this report has been prepared in accordance with accounting principles generally accepted in the U.S. (“GAAP”) for interim financial information and Article 10 of SEC Regulation S-X. All significant intercompany transactions and accounts have been eliminated. Variable interest entities for which the Company is the primary beneficiary are fully consolidated with the equity held by the outside stockholders and their portion of net income (loss) reflected as noncontrolling interest in the accompanying consolidated financial statements. The principles for interim financial information do not require the inclusion of all the information and footnotes required by GAAP for complete financial statements. Therefore, these financial statements should be read in conjunction with the audited consolidated financial statements included in the Company’s most recent Annual Report on Form 10-K. In the opinion of the Company’s management, the consolidated financial statements include all adjustments, which are of a normal recurring nature unless disclosed otherwise, necessary for a fair presentation of the results for the interim periods. The results of operations for the three and six months ended June 30, 2025, are not necessarily indicative of the results to be expected for the full year.

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect reported and contingent amounts of assets and liabilities as of the date of the financial statements and reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

In November 2024, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40), which requires more detailed information related to types of expenses in commonly presented captions in income statements. ASU 2024-03 is effective for annual periods beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted. The Company is currently assessing the impact of ASU 2024-03 on its consolidated financial statements and its disclosures.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740), which requires public companies to expand income tax disclosures. The ASU requires entities to disclose more detailed information in their effective tax rate reconciliation and their cash taxes paid both in the U.S., state and foreign jurisdictions. ASU 2023-09 is effective for annual periods beginning after December 15, 2024, with early adoption permitted for annual financial statements that have not yet been issued. The Company is currently assessing the impact of ASU 2023-09 on its consolidated financial statements and its disclosures.

Recently Adopted Accounting Standards

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280), which requires enhanced segment disclosures primarily focusing on significant segment expense disclosures for both interim and annual periods. For the fiscal year ended December 31, 2024, the Company adopted this standard using modified retrospective transition method. See Note 9 “Business Segments” for additional information.

The Company’s primary source of revenue is the sale of products for energy and industrial applications based upon purchase orders or contracts with customers. Substantially all of the Company's revenue is recognized at a point in time once the Company has determined that the customer has obtained control over the product. Control is typically deemed to have been transferred to the customer when the product is shipped, delivered or picked up by the customer. The Company does not grant extended payment terms. Revenue is recognized net of any taxes collected from customers, which are subsequently remitted to proper government authorities. Shipping and handling costs for product shipments occur prior to the customer obtaining control of the goods and are recorded in cost of products.

The amount of revenue recognized reflects the consideration to which the Company expects to be entitled to receive in exchange for products sold. Revenue is recorded at the transaction price net of estimates of variable consideration, which may include product returns, trade discounts and allowances. The Company accrues for variable consideration using the expected value method. Estimates of variable consideration are included in revenue to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur.

See Note 9 “Business Segments” for disaggregation of revenue by reporting segments. The Company believes this disaggregation best depicts how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors.

Remaining performance obligations represent the transaction price of firm orders for which work has not been performed on contracts with an original expected duration of more than one year. The Company’s contracts are predominantly short-term in nature with a contract term of one year or less. For those contracts, the Company has utilized the practical expedient in Accounting Standards Codification (“ASC”) Topic 606 exempting the Company from disclosure of the transaction price allocated to remaining performance obligations when the performance obligation is part of a contract that has an original expected duration of one year or less.

Allowance for credit losses is estimated based on an evaluation of accounts receivable aging, and the related historical loss experience, as adjusted for current and expected future market conditions that are reasonably available. Judgments in the estimate of allowance for credit losses include global economic and business conditions, oil and gas industry and market conditions, customer’s financial conditions and accounts receivable past due. As of June 30, 2025 and December 31, 2024, the allowance for credit losses totaled $15 million in both periods.

Contract assets primarily consist of retainage amounts held as a form of security by customers until the Company satisfies its remaining performance obligations. As of June 30, 2025 and December 31, 2024, contract assets were $1 million in both periods and were included in receivables, net in the consolidated balance sheets. The Company generally accounts for the incremental costs of obtaining a contract as an expense when incurred if the amortization period of the asset that the entity otherwise would have recognized is one year or less; however, these expenses are not material.

Contract liabilities primarily consist of deferred revenues recorded when customer payments are received or due in advance of satisfying performance obligations, including amounts which are refundable, and other accrued customer liabilities. Revenue recognition is deferred to a future period until the Company completes its obligations contractually agreed with customers. As of June 30, 2025 and December 31, 2024, contract liabilities were $27 million and $31 million, respectively, and were included in accrued liabilities in the consolidated balance sheets. For the six months ended June 30, 2025, the decrease in contract liabilities was primarily related to recognizing revenue of approximately $22 million that was deferred as of December 31, 2024, partially offset by net current year customer deposits of approximately $18 million.

Inventories consist primarily of oilfield and industrial finished goods. Finished goods are stated at the lower of cost or net realizable value and using average cost method. Allowances for excess and obsolete inventories are determined based on the Company’s historical usage of inventory on hand as well as its future expectations. As of June 30, 2025 and December 31, 2024, the Company reported inventory of $383 million and $352 million, respectively (net of inventory reserves of $15 million and $17 million, respectively).

Property, plant and equipment consist of (in millions):


	Estimated Useful Lives	June 30, 2025			December 31, 2024
Information technology assets	1-7 Years	$	46		$	45
Operating equipment (1)	2-15 Years		156			152
Buildings and land (2)	5-35 Years		99			100
Finance lease right-of-use assets	2-7 Years		46			46
Construction in progress			4			3
Total property, plant and equipment			351			346
Less: accumulated depreciation			(198	)		(189	)
Property, plant and equipment, net		$	153		$	157

(1)

Includes rental equipment.

(2)

Land has an indefinite life.

Accrued liabilities consist of (in millions):


	June 30, 2025		December 31, 2024
Compensation and other related expenses	$	33	$	33
Contract liabilities		27		31
Taxes (non-income)		16		15
Current portion of operating lease liabilities		13		13
Other		36		38
Total	$	125	$	130

On December 29, 2022, the Company entered into a second amendment to its existing senior secured revolving credit facility with a syndicate of lenders with Wells Fargo Bank, National Association, serving as the administrative agent (as amended, the “Credit Facility”). The second amendment amends certain terms, provisions and covenants of the Credit Facility, including, among other things: (i) replaces London Interbank Offered Rate ("LIBOR") with Secured Overnight Financing Rate ("SOFR") as the interest rate benchmark with the existing applicable margin plus a credit spread adjustment of 0.10% per annum; (ii) modifies certain reporting obligations with respect to the Company’s share repurchase program; and (iii) increases the sublimit for U.S. letters of credit to $20 million.

The Credit Facility provides for a $500 million global revolving credit facility, of which up to $50 million is available for the Company’s Canadian subsidiaries. The Company has the right, subject to certain conditions, to increase the aggregate principal amount of commitments under the credit facility by $250 million. The Credit Facility also provides a letter of credit subfacility of $25 million. The obligations under the Credit Facility are secured by substantially all the assets of the Company and its subsidiaries. The Credit Facility matures on December 14, 2026 and contains customary covenants, representations and warranties and events of default. The Company will be required to maintain a fixed charge coverage ratio (as defined in the Credit Facility) of at least 1.00:1.00 as of the end of each fiscal quarter if excess availability under the Credit Facility falls below the greater of 10% of the borrowing base or $40 million.

Borrowings under the Credit Facility will bear an interest rate at the Company’s option, (i) for borrowings denominated in U.S. dollars, at (a) the base rate plus the applicable margin or (b) adjusted term SOFR for the applicable interest period, plus the applicable margin and (ii) for borrowings denominated in Canadian dollars, the Canadian Dollar Offered Rate plus the applicable margin. In each case, with such applicable margin being based on the Company’s fixed charge coverage ratio. The Credit Facility includes a commitment fee on the unused portion of commitments that ranges from 25 to 37.5 basis points. Commitment fees incurred during the period were included in other income (expense) in the consolidated statements of operations.

Availability under the Credit Facility is determined by a borrowing base comprised of eligible receivables, eligible inventory and certain cash deposits in the U.S. and Canada. As of June 30, 2025, the Company had no borrowings against the Credit Facility and approximately $445 million in availability (as defined in the Credit Facility) resulting in the excess availability (as defined in the Credit Facility) of 99%, subject to certain limitations. The Company is not obligated to pay back borrowings against the current Credit Facility until the maturity date of the Credit Facility.

In connection with the merger agreement with MRC Global Inc. ("MRC Global") discussed further in Note 15 below, we have received committed debt financing of up to an incremental $250 million for our existing asset-based lending facility, which will increase the total potential borrowing capacity to $750 million. Such debt financing will be provided on the terms set forth in a debt commitment letter and is subject to a number of customary conditions, including closing of the Merger.

The Company issued $5 million in letters of credit under the Credit Facility primarily for casualty insurance expiring in June 2026.

On August 3, 2022, the Company’s Board of Directors approved a share repurchase program, under which the Company was authorized to purchase up to $80 million of its outstanding common stock through December 31, 2024. The Company fully utilized this $80 million repurchase program as of December 31, 2024. On January 24, 2025, the Company’s Board of Directors authorized a new share repurchase program to purchase up to $160 million of its outstanding common stock. The Company may from time to time repurchase common stock through various methods, including, but not limited to, open market, privately negotiated transaction, or by other means which comply with applicable state and federal securities laws. The amount and timing of any repurchase will depend on several factors, including share price, general business and market conditions, and alternative investment opportunities. The share repurchase program does not obligate the Company to repurchase shares and may be suspended or discontinued at any time at the Company's discretion. All shares repurchased shall be retired pursuant to the terms of the share repurchase program. Depending on the timing of the retirement and cash settlement of the repurchased shares, the Company could have shares held in treasury stock until retired. Share repurchases made are subject to a 1% excise tax. The impact of this 1% excise tax was less than $1 million for the six months ended June 30, 2025 and 2024. In connection with the merger agreement with MRC Global, the Company has temporarily suspended share repurchase activity. The Company expects share repurchases to remain paused until the merger is completed.

Information regarding the shares repurchased is as follows:


	Three months ended June 30,				Six months ended June 30,
	2025		2024		2025		2024
Total cost of shares repurchased (1) (in millions)	$	19	$	10	$	27	$	11
Average price per share (1)	$	15.14	$	13.64	$	15.66	$	12.90
Number of shares repurchased		1,267,429		669,463		1,711,235		837,518

(1)

Excludes 1% excise tax on share repurchases

The Company holds a 49% interest in one VIE located in the Middle East. The Company is the primary beneficiary and consolidates the VIE as it has the power to direct the activities that most significantly affect the VIE’s economic performance and has the obligation to absorb the VIE’s losses or the right to receive benefits. For the three and six months ended June 30, 2025, net income attributable to noncontrolling interest was approximately nil and $1 million, respectively, compared to approximately $1 million for each corresponding period of 2024.

The assets of the VIE can only be used to settle its own obligations and its creditors have no recourse to the Company’s assets. As of June 30, 2025 and December 31, 2024, the VIE’s assets were primarily current assets of $11 million and $10 million, respectively, and the liabilities were primarily current liabilities of $2 million in both periods.

The components of AOCI are as follows (in millions):


	Foreign Currency Translation Adjustments
	Six months ended June 30,
	2025			2024
Beginning balance	$	(153	)	$	(145	)
Net current-period other comprehensive income (loss)		11			(6	)
Ending balance	$	(142	)	$	(151	)

The Company’s reporting currency is the U.S. dollar. A majority of the Company’s international entities in which there is a substantial investment have the local currency as their functional currency. As a result, foreign currency translation adjustments resulting from the process of translating the entities’ financial statements into the reporting currency are reported in other comprehensive income or loss in accordance with ASC Topic 830, “Foreign Currency Matters.”

The Company has three reportable segments – United States, Canada and International. These segments were determined primarily based on geographic markets. The Chief Operating Decision Maker (“CODM”) uses operating profit to evaluate segment performance and allocate resources. Operating profit is revenue less cost of products, warehousing, selling and administrative expenses and impairment and other charges. The Company’s Chief Executive Officer has been identified as the CODM. The Company has disclosed for each reportable segment the significant expense categories that are reviewed by the CODM in the tables below and there are no additional significant expenses within the expense categories presented.

The following table presents results of operations of the Company’s reportable segments (in millions):


	United States		Canada		International		Total
Three months ended June 30, 2025
Revenue	$	528	$	48	$	52	$	628
Less:
Cost of products		407		36		41		484
Warehousing, selling and administrative expenses		91		12		9		112
Operating profit	$	30	$	—	$	2		32
Other income (expense)								—
Income before income taxes							$	32

Six months ended June 30, 2025
Revenue	$	1,002	$	110	$	115	$	1,227
Less:
Cost of products		770		82		92		944
Warehousing, selling and administrative expenses		180		24		17		221
Operating profit	$	52	$	4	$	6		62
Other income (expense)								—
Income before income taxes							$	62

Three months ended June 30, 2024
Revenue	$	512	$	56	$	65	$	633
Less:
Cost of products		400		42		53		495
Warehousing, selling and administrative expenses		84		12		9		105
Operating profit	$	28	$	2	$	3		33
Other income (expense)								—
Income before income taxes							$	33

Six months ended June 30, 2024
Revenue	$	947	$	122	$	127	$	1,196
Less:
Cost of products		734		92		103		929
Warehousing, selling and administrative expenses		162		25		19		206
Operating profit	$	51	$	5	$	5		61
Other income (expense)								1
Income before income taxes							$	62

The following table presents depreciation and amortization of the Company’s reportable segments (in millions):


	Three months ended June 30,				Six months ended June 30,
	2025		2024		2025		2024
Depreciation and amortization
United States	$	10	$	8	$	20	$	14
Canada		—		—		1		1
International		—		1		—		1
Total	$	10	$	9	$	21	$	16

The following table presents property, plant and equipment, net and total assets of the Company’s reportable segments (in millions):


	June 30, 2025		December 31, 2024
Property, plant and equipment, net
United States	$	133	$	135
Canada		10		11
International		10		11
Total	$	153	$	157

Total assets
United States	$	1,329	$	1,299
Canada		178		177
International		154		145
Total	$	1,661	$	1,621

The effective tax rates for the three and six months ended June 30, 2025, were 21.9% and 22.6%, respectively, compared to 24.2% and 25.8%, respectively, for the corresponding periods of 2024. In general, the Company's effective tax rate differs from the U.S. statutory rate due to recurring items, such as differing tax rates on income earned in foreign jurisdictions, nondeductible expenses, and state income taxes. The effective tax rates for the three and six months ended June 30, 2025, were lower than the effective tax rates for the three and six months ended June 30, 2024, primarily due to an increase in tax benefits related to stock-based compensation and utilization of U.S. foreign tax credits.

The Company is subject to taxation in the U.S., various states, and foreign jurisdictions. The Company has significant operations in the U.S. and Canada and to a lesser extent in various other international jurisdictions. Tax years that remain subject to examination vary by legal entity but are generally open in the U.S. for the tax years ending after 2020 and outside the U.S. for the tax years ending after 2018.

The One Big Beautiful Bill Act (the “OBBBA”) was signed into law in the U.S. on July 4, 2025. The OBBBA contains several tax law changes for corporations, which the Company is continuing to evaluate but does not anticipate having a material impact on its tax provision.

For the three and six months ended June 30, 2025 and 2024, less than 1 million of potentially dilutive shares in each respective period were excluded from the computation of diluted earnings per share due to their antidilutive effect.

Basic and diluted earnings per share are as follows (in millions, except share and per share data):


	Three months ended June 30,					Six months ended June 30,
	2025		2024			2025			2024
Numerator:
Net income attributable to DNOW Inc.	$	25	$	24		$	47		$	45
Less: net income attributable to participating securities		—		(1	)		(1	)		(1	)
Net income attributable to DNOW Inc. stockholders	$	25	$	23		$	46		$	44
Denominator:
Weighted average basic common shares outstanding		105,457,557		106,865,008			105,715,550			106,655,156
Effect of dilutive securities		543,742		757,796			655,661			830,097
Weighted average diluted common shares outstanding		106,001,299		107,622,804			106,371,211			107,485,253
Earnings per share attributable to DNOW Inc. stockholders:
Basic	$	0.24	$	0.21		$	0.44		$	0.41
Diluted	$	0.23	$	0.21		$	0.43		$	0.41

Under ASC Topic 260, “Earnings Per Share”, the two-class method requires a portion of net income attributable to DNOW Inc. to be allocated to participating securities, which are unvested awards of share-based payments with non-forfeitable rights to receive dividends or dividend equivalents, if declared. Net income attributable to these participating securities was excluded from net income attributable to DNOW Inc. stockholders in the numerator of the earnings per share computation.

In 2024, the Company’s shareholders approved the DNOW Inc. 2024 Omnibus Incentive Plan, which allows awards to be granted until 2034, for the granting of restricted stock awards (“RSAs”), restricted stock units and phantom shares (“RSUs”), performance stock awards (“PSAs”), stock options, and stock appreciation rights.

For the six months ended June 30, 2025, the Company granted 747,715 shares of RSAs and RSUs with a weighted average fair value of $15.93 per share. In addition, the Company granted PSAs to senior management employees with potential payouts varying from zero to 502,514 shares. The RSAs and RSUs vest on the first and third anniversary of the date of grant. The PSAs can be earned based on performance against established metrics over a three-year performance period.

Stock-based compensation expense for the three and six months ended June 30, 2025, totaled $4 million and $8 million, respectively, compared to $4 million and $6 million, respectively, for the corresponding periods of 2024.

The Company is involved in various claims, regulatory agency audits and pending or threatened legal actions involving a variety of matters with entities such as suppliers, customers, parties to acquisitions and divestitures, government authorities and other external parties. The Company regularly reviews and records the estimated probable liability in an amount believed to be sufficient and continues to periodically reexamine the estimates of probable liabilities and any associated expenses to make appropriate adjustments to such estimates as necessary. These estimated liabilities are based on the Company’s assessment of the nature of these matters, their progress toward resolution, the advice of legal counsel and outside experts as well as management’s intention and past experience regarding the valuation of these claims. The Company has also assessed the potential for additional losses above the amounts accrued as well as potential losses for matters that are not probable but are reasonably possible. The total potential loss on these matters cannot be determined. While the Company has established estimates it believes to be reasonable under the facts known, the outcomes of litigation and similar disputes are often difficult to reliably predict and may result in decisions or settlements that are contrary to, or in excess of, the Company's expectations.

The Company’s business is affected both directly and indirectly by governmental laws and regulations relating to the oilfield service industry in general, as well as by environmental and safety regulations that specifically apply to the Company’s business. Although the Company has not incurred material costs in connection with its compliance with such laws, there can be no assurance that other developments, such as new environmental laws, regulations and enforcement policies hereunder may not result in additional, presently unquantifiable costs or liabilities to the Company. The Company does not accrue for contingent losses that, in its judgment, are considered to be reasonably possible, but not probable. Estimating reasonably possible losses also requires the analysis of multiple possible outcomes that often depend on judgments about potential actions by third parties.

The Company maintains credit arrangements with several banks providing standby letters of credit, including bid and performance bonds, and other bonding requirements. As of June 30, 2025, the Company was contingently liable for approximately $11 million of outstanding standby letters of credit and surety bonds. The Company does not believe, based on historical experience and information currently available, that it is probable that any amounts will be required to be paid on those letters of credit and surety bonds.

2025 Acquisition

For the six months ended June 30, 2025, the Company completed an acquisition in Singapore for a purchase price consideration of approximately $8 million, net of cash acquired. The acquisition expands the Company's electrical supply capabilities in the Asia Pacific region, serving traditional and renewable energy, infrastructure and other commercial and industrial end-markets. The Company has included the financial results of the acquisition in its consolidated financial statements from the date of the acquisition.

The Company completed its preliminary valuations as of the acquisition date of the acquired net assets and recognized goodwill of $3 million and intangible assets of $2 million in the International segment, which are subject to change. If additional information is obtained about these assets and liabilities within the measurement period (not to exceed one year from the date of acquisition), the Company will refine its estimate of fair value to allocate the purchase price more accurately; any such revisions are not expected to be significant. The goodwill recognized is not deductible for income tax purposes. The Company has not presented supplemental pro forma information because the acquired operations did not materially impact the Company’s consolidated operating results.

2024 Acquisition

For the three months ended December 31, 2024, the Company acquired Trojan Rentals, LLC for a purchase price consideration of $115 million, net of cash acquired. The acquisition expanded the company’s energy products and solutions in the U.S. The Company has included the financial results of the acquisition in its consolidated financial statements from the date of the acquisition.

The Company completed its preliminary valuations as of the acquisition date of the acquired net assets and recognized goodwill of $41 million and intangible assets of $11 million in the U.S. segment, which are subject to change. The primary areas of the preliminary valuation that are not yet finalized relate to the valuation of identifiable intangible assets acquired and the fair value of certain tangible assets acquired. If additional information is obtained about these assets and liabilities within the measurement period (not to exceed one

year from the date of acquisition), the Company will refine its estimate of fair value to allocate the purchase price more accurately. All of the goodwill is expected to be deductible for income tax purposes. The Company has not presented supplemental pro forma information because the acquired operations did not materially impact the Company’s consolidated operating results.

For the six months ended June 30, 2025, the Company recognized measurement period adjustments based on information that was received subsequent to the acquisition date that related to conditions that existed as of the acquisition date. These adjustments resulted in a net decrease of $1 million to current assets, property, plant and equipment, and intangible assets. The net impact of these adjustments was a $1 million increase to goodwill.

15. Merger Agreement

On June 26, 2025, the Company entered into a definitive merger agreement to acquire MRC Global in an all-stock transaction valued at approximately $1.5 billion, inclusive of MRC Global’s net debt, with MRC Global shareholders receiving 0.9489 shares of DNOW common stock for each share of MRC Global common stock (the “Merger”). The transaction has received unanimous approval by both the DNOW and MRC Global Boards of Directors. The transaction is currently anticipated to close in the fourth quarter of 2025, subject to obtaining DNOW and MRC Global shareholder approval and regulatory clearances and satisfaction of other customary closing conditions. See Part I, Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations for further discussion of the Merger and Part II, Item 1A. Risk Factors for a discussion of risks related to this Merger.

Some of the statements in this document including information referenced or incorporated by reference from our other filings with the SEC, constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995. Statements that are not historical facts, including statements about our beliefs and expectations, are forward-looking statements. Forward-looking statements typically are identified by use of terms such as “anticipates,” “assumes,” “believes,” “estimates,” “expects,” “plans,” “may,” “will,” “might,” “would,” “should,” “seeks,” “project,” “predict,” “potential,” “currently,” “continue,” “intends,” “outlook,” “forecasts,” “targets,” “reflects,” “could,” or other similar words and phrases, although some forward-looking statements could be expressed differently. Forward-looking statements are current only as of the date they are made. You should be aware that our actual results could differ materially from results anticipated in the forward-looking statements due to a number of factors and risks many of which are outside of our control, including, but not limited to, changes in oil and gas prices, changes in the energy markets, customer demand for our products, changes in trade policies including the imposition or elimination of additional tariffs and duties, significant changes in the size of our customers, difficulties encountered in integrating mergers and acquisitions (including certain risks relating to the mergers, such as: the risk associated with each of DNOW’s and MRC Global’s ability to obtain the approval of its stockholders required to consummate the mergers; the timing of the closing of the mergers; the risk that the conditions to the transaction are not satisfied on a timely basis or at all or the failure of the transaction to close for any other reason or to close on the anticipated terms; the possibility that regulatory approvals for any dispositions or acquisitions will not be received on a timely basis, if at all, or that such approvals may require modification to the terms of the mergers or DNOW’s or MRC Global’s remaining businesses; the risk that the expected benefits and synergies of the mergers may not be fully achieved in a timely manner, or at all), general volatility in the capital markets, ability to complete the share repurchase program, changes in applicable government regulations, increased borrowing costs, geopolitical conditions and tensions (including the Ukraine and Middle East conflicts and their regional and global impacts) or any litigation arising out of or related thereto, impairments in long-lived assets, the occurrence of cyber incidents, or failure by us or our third-party service providers to maintain cybersecurity and the integrity of confidential data, and worldwide economic conditions and activity. You should also consider carefully the statements under “Risk Factors,” as disclosed in our Form 10-K, which address additional factors that could cause our actual results to differ from those set forth in the forward-looking statements and that are otherwise described from time to time in our SEC reports as filed. Given these uncertainties, current or prospective investors are cautioned not to place undue reliance on any such forward-looking statements. We undertake no obligation to update any such factors or forward-looking statements to reflect new information, future events or developments, or otherwise, except to the extent required by applicable law.

The following discussion should be read in conjunction with the unaudited consolidated financial statements and notes thereto contained in this Quarterly Report on Form 10-Q and the audited consolidated financial statements and notes thereto included in the most recent Annual Report on Form 10-K.

We are a distributor to the oil and gas, energy transition and industrial markets with a legacy of over 160 years. We operate primarily under the DNOW brand along with several affiliated brands operating in local, regional or international markets that are tied to prior acquisitions. Through a network of approximately 160 locations and approximately 2,575 employees worldwide, our operating locations utilize a complementary suite of technology, systems, order and fulfillment processes and sourcing and procurement channels to provide products and services to a variety of customers operating in the energy and industrial markets. Additionally, through our DigitalNOW® platform, customers can leverage technology across applications to solve a wide array of complex operational and product sourcing challenges to assist in maximizing their return on assets.

Our product and service offerings are consumed throughout the energy industry – from upstream drilling and completion, exploration and production (“E&P”), midstream transmission, gas and crude oil processing infrastructure development to downstream petroleum refining and petrochemicals – as well as in other industries, such as chemical processing, mining, water/wastewater, food and beverage, gas utilities and the evolution of energy transition markets inclusive of greenhouse gas reduction and emissions capture and storage, renewable fuels such as biofuels and renewable natural gas (“RNG”), wind, solar, production of hydrogen as a fuel to power equipment and select industrial markets. The energy and industrial distribution end markets we serve are inclusive of engineering and construction firms that perform capital and maintenance projects for their clients. We also provide supply chain and materials management solutions to the same markets where we sell products.

Our global product offering includes pipe, manual and automated valves, fittings, flanges, gaskets, fasteners, electrical, instrumentation, artificial lift, pumping solutions and modular process, production, measurement, automation, control equipment, and consumable maintenance, repair and operating (“MRO”) supplies. We also offer sourcing, procurement, warehouse and inventory management solutions as part of our supply chain and materials management offering. We have developed expertise in providing application systems, work processes, parts integration, optimization solutions and after-sales support that provide more efficient and productive solutions for our customers.

Our solutions include outsourcing portions or entire functions of our customers’ procurement, warehouse and inventory management, logistics, point of issue technology, project management, business process and performance metrics reporting. These solutions allow us to leverage the infrastructure of our SAP™ Enterprise Resource Planning (“ERP”) system and other technologies to streamline our customers’ purchasing process, from requisition to procurement to payment, by digitally managing workflow, improving approval routing and providing robust reporting functionality.

We support land and offshore operations for the major oil and gas producing regions through our network of locations. Our key markets include the U.S., Canada, the United Kingdom ("UK"), Norway, Australia, the Netherlands, Singapore and the Middle East area with the ability to provide products through an export model to operators with operations in Southeast Asia and West Africa. Products sold through our locations support brownfield and greenfield expansion upstream capital projects, midstream infrastructure and transmission and MRO consumables used in day-to-day production. We provide downstream energy and industrial products for petroleum refining, chemical processing, liquefied natural gas (“LNG”) terminals, power generation, gas utilities serviced by a combination of customer on-site locations and off-site service locations in combination with our digital offerings.

Our supplier network consists of thousands of vendors in approximately 30 countries. From our operations, we sell to customers operating in approximately 70 countries. The supplies and equipment stocked by each of our locations are customized to meet varied and changing local customer demands. We believe the breadth, scale and availability of our product offering enhances our value proposition to our customers, suppliers and shareholders.

We employ advanced information technologies, including a common ERP platform across most of our business, to provide complete procurement, warehouse and inventory management and logistics coordination to our customers around the globe. Having a common ERP platform allows immediate visibility into our inventory assets, operations and financials worldwide, enhancing decision making and efficiency.

On June 26, 2025, the Company entered into a definitive merger agreement to acquire MRC Global, a global distributor of pipe, valves, fittings (PVF) and other infrastructure products and services to diversified end-markets including the gas utilities, downstream, industrial and energy transition, and production and transmission infrastructure sectors, in an all-stock transaction valued at approximately $1.5 billion, inclusive of MRC Global’s net debt, with MRC Global shareholders receiving 0.9489 shares of DNOW common stock for each share of MRC Global common stock. The transaction has received unanimous approval by both the DNOW and MRC Global Boards of Directors. The transaction is currently anticipated to close in the fourth quarter of 2025, subject to obtaining DNOW and MRC Global shareholder approval and regulatory clearances and satisfaction of other customary closing conditions. For additional information regarding the Merger, please see our Current Report on Form 8-K filed on June 26, 2025 and see Part II, Item 1A. Risk Factors contained herein for a discussion of risks related to this Merger.

Demand for our products is driven primarily by the level of oil and gas drilling, completions, servicing, production, transmission, refining and petrochemical activities. It is also influenced by the global supply and demand for energy, the economy in general and geopolitics. Several factors drive spending, such as investment in energy infrastructure, the North American conventional and shale plays, Organization of Petroleum Exporting Countries (“OPEC”) and non-OPEC supply and investments, market expectations of future developments in the oil, natural gas, liquids, refined products, petrochemical, plant maintenance and other industrial, manufacturing and energy sectors.

We primarily have operations in the U.S. and Canada, complemented with a number of strategic international operations, through acquisitions and organic investments, in Australia, England, Kuwait, the Netherlands, Norway, Scotland, Singapore, and the United Arab Emirates (“UAE”).

We operate through three reportable segments: United States, Canada and International. The segment data included in our Management’s Discussion and Analysis are presented on a basis consistent with our internal management reporting. Segment information appearing in Note 9 “Business Segments” of the notes to the unaudited consolidated financial statements (Part I, Item 1 of this Form 10-Q) is also presented on this basis.

United States

We have approximately 105 locations in the U.S., which are geographically positioned to best serve the upstream, midstream, downstream, renewable energy and industrial markets.

We offer higher value solutions in key product lines in the U.S. which broaden and deepen our customer relationships and related product line value. Examples of these include pumps, valves and valve actuation, process and production equipment, fluid transfer products, measurement, automation and controls, spoolable and coated steel-pipe and composite pipe, along with many other products required by our customers, which enable them to focus on their core business while we manage varying degrees of their supply chain. We also provide additional value to our customers through the engineering, design, construction, assembly, fabrication and optimization of products and equipment essential to the safe and efficient production, transportation and processing of oil and gas and produced water.

Canada

We have a network of approximately 40 locations in the Canadian oilfield, predominantly in the oil rich provinces of Alberta, Saskatchewan, and Manitoba. Our Canada segment primarily serves energy exploration, production, mining and drilling businesses, offering customers many of the same products and value-added solutions that we perform in the U.S. In Canada, we also provide training for, and supervise the installation of, jointed and spoolable composite pipe. This product line is supported by inventory, as well as product and installation expertise to serve our customers.

International

We serve the needs of our international customers from approximately 15 locations outside the U.S. and Canada, which are strategically located in major oil and gas development areas. Our approach in these markets and the products we offer is similar to our strategy in the U.S. and Canada, with the addition of the distribution of electrical products in the UK, Australia and international export markets. Our long legacy of operating in select international regions provides a competitive advantage as few of our competitors have a presence in most of the global energy producing areas.

The Company has committed to close certain foreign subsidiaries in the International segment. Impairment of assets were not material for the three and six months ended June 30, 2025; however, accumulated translation gains and losses attributable to the foreign subsidiaries which are components of other comprehensive income (loss) are reclassified to earnings and may result in additional charges when liquidations are substantially complete.

Our results are dependent on, among other factors, the level of worldwide oil and gas drilling and completions, well remediation activity, crude oil and natural gas prices, capital spending by oilfield service companies and drilling contractors, and the worldwide oil and gas inventory levels. Key industry indicators for the second quarter of 2025 and 2024 and the first quarter of 2025 include the following:


					%					%
					2Q25 v					2Q25 v
	2Q25*		2Q24*		2Q24			1Q25*		1Q25
Active Drilling Rigs:
U.S.		571		603		(5.3	%)		588		(2.9	%)
Canada		129		137		(5.8	%)		216		(40.3	%)
International		897		963		(6.9	%)		903		(0.7	%)
Worldwide		1,597		1,703		(6.2	%)		1,707		(6.4	%)

West Texas Intermediate Crude Prices (per barrel)	$	64.63	$	81.71		(20.9	%)	$	71.84		(10.0	%)
Natural Gas Prices ($/MMBtu)	$	3.19	$	2.08		53.4	%	$	4.15		(23.1	%)
Hot-Rolled Coil Prices (steel) ($/short ton)	$	901.50	$	796.03		13.2	%	$	753.21		19.7	%
U.S. Wells Completed		2,803		2,967		(5.5	%)		3,005		(6.7	%)

* Averages for the quarters indicated, except for U.S. Wells Completed. See sources on following page.

The following table details the U.S., Canadian and international rig activity and West Texas Intermediate oil prices for the past nine quarters ended June 30, 2025:

Sources: Rig count: Baker Hughes, Inc. (www.bakerhughes.com); West Texas Intermediate Crude and Natural Gas Prices: Department of Energy, Energy Information Administration (www.eia.gov); Hot-Rolled Coil Prices: SteelBenchmarker™ Hot Roll Coil USA (www.steelbenchmarker.com); U.S. Wells Completed: Department of Energy, Energy Information Administration (www.eia.gov) (As revised).

The worldwide quarterly average rig count declined 6.4% (from 1,707 rigs to 1,597 rigs) and the U.S. declined 2.9% (from 588 rigs to 571 rigs) in the second quarter of 2025 compared to the first quarter of 2025. The average price per barrel of West Texas Intermediate Crude declined 10.0% (from $71.84 per barrel to $64.63 per barrel), and average natural gas prices declined 23.1% (from $4.15 per MMBtu to $3.19 per MMBtu) in the second quarter of 2025 compared to the first quarter of 2025. The average price per short ton of Hot-Rolled Coil increased 19.7% (from $753.21 per short ton to $901.50 per short ton) in the second quarter of 2025 compared to the first quarter of 2025. U.S. Wells Completed declined 6.7% (from 3,005 completion count to 2,803 completion count) in the second quarter of 2025 compared to the first quarter of 2025.

U.S. rig count at July 25, 2025 was 542 rigs, down 29 rigs from the second quarter 2025 average. The price for West Texas Intermediate Crude was $66.38 per barrel at July 25, 2025, up 2.7% from the second quarter 2025 average. The price for natural gas was $3.10 per MMBtu at July 25, 2025, down 2.8% from the second quarter 2025 average. The price for Hot-Rolled Coil was $873.00 per short ton at July 28, 2025, down 3.2% from the second quarter 2025 average.

For the three and six months ended June 30, 2025, the Company generated net income attributable to DNOW Inc. of $25 million and $47 million on $628 million and $1,227 million in revenue, respectively. For the three and six months ended June 30, 2025, revenue decreased $5 million or 0.8% and increased $31 million or 2.6%, respectively, and net income attributable to DNOW Inc. increased $1 million and $2 million, respectively, when compared to the corresponding periods of 2024.

For the three and six months ended June 30, 2025, the Company generated an operating profit of $32 million and $62 million, respectively, compared to $33 million and $61 million, respectively, for the corresponding periods of 2024.

Our outlook for the Company remains tied to crude oil and natural gas commodity prices, global oil and gas drilling and completions activity, oil and gas spending, and global demand for oil, its refined petroleum products, crude oil, natural gas liquids and natural gas production and decline rates. Crude oil and natural gas prices as well as crude oil and natural gas storage levels are primary catalysts for determining customer activity. In recent years, oil prices have remained volatile, and ongoing economic and geopolitical uncertainty continues to drive commodity price volatility globally. Additionally, the U.S. government has announced the imposition of tariffs on several foreign jurisdictions, which has increased economic uncertainty. Current uncertainties about tariffs and their effects on trading relationships may affect costs for and availability of products or contribute to inflation in the markets in which we operate. Although we are continuing to monitor the economic effects of such announcements, as well as opportunities to mitigate their related impacts, costs and other effects associated with the tariffs remain uncertain. Amid these dynamics, we will continue to support our customers, maintain close communication with our strategic vendors, optimize our operations, advance our strategic goals and manage the Company based on market conditions.

We see the evolution in energy transition investments to reduce atmospheric carbon, source carbon capture, storage and new energy streams as an opportunity for DNOW to supply many of the current products and services we provide, as well as an opportunity to partner and source from new suppliers to expand our offering and to meet our customers’ needs for their energy evolution investments. A number of our larger customers are leading the investments in energy evolution projects where we expect to continue to support them while expanding our product and solution offerings to meet their changing requirements. Part of our growth strategy is to expand our revenues by targeting new customers in non-oil and gas end markets, in addition to servicing those customers that will play a part in the future of the evolving mix of traditional and new sources of energy.

The results of operations are presented before consideration of the noncontrolling interest. Operating results by reportable segment are as follows (in millions):


	Three months ended June 30,				Six months ended June 30,
	2025		2024		2025		2024
Revenue:
United States	$	528	$	512	$	1,002	$	947
Canada		48		56		110		122
International		52		65		115		127
Total revenue	$	628	$	633	$	1,227	$	1,196

Operating profit:
United States	$	30	$	28	$	52	$	51
Canada		—		2		4		5
International		2		3		6		5
Total operating profit	$	32	$	33	$	62	$	61

United States

For the three and six months ended June 30, 2025, revenue was $528 million and $1,002 million, an increase of $16 million or 3.1% and $55 million or 5.8%, respectively, when compared to the corresponding periods of 2024. For the three and six months ended June 30, 2025, the increases were primarily driven by incremental revenue from acquisitions completed in 2024, partially offset by the weakening in U.S. drilling and completions activity.

For the three and six months ended June 30, 2025, the U.S. generated an operating profit of $30 million and $52 million, an increase of $2 million and $1 million, respectively, when compared to the corresponding periods of 2024. For the three and six months ended June 30, 2025, operating profit increased primarily due to the increase in revenue discussed above.

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DNOW Inc. 10-Q