DNOW Inc. reported third‑quarter 2025 results that included $634 million in revenue, a 1% sequential increase from $628 million in Q2. The modest sequential growth reflects a slight shift in the company’s mix toward its higher‑margin industrial distribution segment, which offset a small decline in energy‑sector sales that were pressured by commodity price volatility.
EBITDA reached $51 million, translating to an 8.0% margin that held steady from the prior quarter. The margin stability is largely attributable to disciplined cost management and the company’s pricing power in its core energy and industrial distribution businesses, which have maintained healthy gross margins even as input costs rose.
Net income stood at $25 million, giving a GAAP earnings‑per‑share of $0.23 and a non‑GAAP EPS of $0.26. The $0.26 figure beat the consensus estimate of $0.238 by $0.022, a 9% upside, driven by tighter operating expenses and a favorable product mix that increased the contribution of higher‑margin services.
The company closed the quarter with $266 million in cash and no debt, and generated $39 million in free cash flow. The free‑cash‑flow figure supports the company’s 2025 target of $150 million and provides liquidity for the all‑stock merger with MRC Global, which is expected to close in Q4 2025.
The pending merger with MRC Global, valued at approximately $1.5 billion, is designed to create a premier energy and industrial solutions provider. Management anticipates $70 million in annual cost synergies and expanded market reach, positioning the combined entity to capture higher‑margin opportunities in digital commerce and supply‑chain solutions.
Guidance for the full year remains unchanged: flat to high‑single‑digit revenue growth and an EBITDA margin approaching 8%. The guidance reflects confidence that the company’s operational execution will sustain profitability while the merger delivers scale and new revenue streams.
Market reaction to the earnings was muted, with pre‑market activity reflecting a negative response to the revenue miss of $634 million versus analyst expectations of $637–650 million. However, analysts maintained a positive outlook, citing the EPS beat, stable margins, strong cash position, and the strategic value of the MRC Global merger as key factors supporting the company’s long‑term prospects.
CEO David Cherechinsky said, “I am proud of our team for the impressive results achieved in the third quarter, with $51 million in EBITDA, or 8.0% of revenue. We extended our strong performance into the third quarter, achieving our highest level of revenue since the fourth quarter of 2019.” He added, “We believe 2025 will represent our fifth consecutive year of growth and are forecasting our best full‑year earnings ever as a public company, in terms of total EBITDA results.”
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