DNOW Inc. Reports 97.5% Revenue Growth to $1.18 Billion in Q1 2026

DNOW Inc. reported significant financial results for the first quarter of 2026, with total revenue reaching $1,183 million, a substantial increase of 97.5% compared to $599 million in the same period of 2025. This growth was primarily driven by the acquisition of MRC Global, which contributed to a 107.8% increase in revenue from the U.S. segment, totaling $985 million. However, the company experienced a net loss of $44 million, a decline from a net income of $21 million in the prior year, largely attributed to increased selling, general, and administrative expenses, as well as inventory-related transaction charges.

The company's gross profit for the quarter was $193 million, representing 16.3% of revenue, compared to $138 million or 23.0% of revenue in the previous year. The decline in gross margin percentage was influenced by the integration of MRC Global and the impact of the Last-In, First-Out (LIFO) inventory costing methodology, which increased product costs by $16 million. Adjusted gross profit, a non-GAAP measure, increased to $256 million, reflecting a 21.6% margin, but still indicated a decrease in profitability compared to the previous year.

Operationally, DNOW's acquisition strategy continued to shape its growth trajectory. The company completed the acquisition of Edge Controls for approximately $46 million, enhancing its automation and controls capabilities. The integration of MRC Global has expanded DNOW's market presence, with operations now spanning approximately 300 locations across the U.S., Canada, and select international markets. The company reported a total employee headcount of approximately 5,200, reflecting its commitment to supporting its expanded operations.

In terms of cash flow, DNOW reported a net cash used in operating activities of $95 million for the quarter, compared to $16 million in the same period last year. This increase was primarily due to a decrease in working capital, particularly in accrued liabilities. The company also utilized $53 million in investing activities, mainly for business acquisitions and capital expenditures. Financing activities provided $101 million, driven by net borrowings under its revolving credit facility, which totaled $571 million as of March 31, 2026.

Looking ahead, DNOW anticipates continued growth driven by its strategic acquisitions and the evolving energy landscape. The company is focused on expanding its product offerings to meet the changing needs of its customers, particularly in the energy transition sector. However, it remains cautious about potential market volatility due to geopolitical factors and fluctuating commodity prices. The management's outlook emphasizes the importance of maintaining operational efficiency and leveraging its expanded capabilities to capture new market opportunities.