Merger charges push DNOW (NYSE: DNOW) to 2025 loss despite growth

Rhea-AI Filing Summary

DNOW Inc. reported fourth-quarter and full-year 2025 results and highlighted the completed merger with MRC Global Inc. Full-year 2025 revenue reached $2.82 billion, up from $2.37 billion in 2024, reflecting growth across its energy and industrial distribution business.

Despite higher revenue, DNOW posted a full-year GAAP net loss of $89 million versus net income of $78 million in 2024, largely driven by fourth-quarter charges that contributed to a quarterly net loss of $147 million. Inventory-related transaction charges, LIFO impacts, and other merger-related items weighed on reported profitability.

On an adjusted basis, 2025 was DNOW’s strongest year, with Adjusted EBITDA of $209 million, or 7.4% of revenue, matching the prior year’s margin, and adjusted net income of $104 million compared with $100 million in 2024. Adjusted diluted EPS was $0.86 versus $0.91 a year earlier. Following the merger, total assets rose to $3.92 billion and Net Debt was $247 million, implying a net debt leverage ratio of 1.2x based on trailing twelve months Adjusted EBITDA. Management noted ERP transition challenges at the U.S. MRC Global business but emphasized ongoing integration efforts and expected synergy realization over time.

Insights

Equity analyst

Revenue grew and adjusted earnings held up, but GAAP results swung to a loss from merger and inventory charges.

DNOW Inc. expanded significantly in 2025, completing the merger with MRC Global and growing revenue to $2.82 billion from $2.37 billion. However, integration costs, inventory-related transaction charges, and LIFO effects drove a full-year GAAP net loss of $89 million after a profitable 2024.

Management emphasizes adjusted metrics to show underlying performance. Adjusted EBITDA reached $209 million, or 7.4% of revenue, matching 2024’s margin, and adjusted net income edged up to $104 million. This suggests core operations remained solid even as reported earnings absorbed merger-related items.

Leverage looks moderate, with Net Debt of $247 million and a net debt leverage ratio of 1.2x based on trailing twelve months Adjusted EBITDA. The CEO pointed to ERP system transition issues at the acquired U.S. MRC Global operations and early-stage integration work. Actual value creation will depend on successful execution of integration plans and realization of the identified synergies, which future results will clarify.

false 0001599617 0001599617 2026-02-20 2026-02-20

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 OR 15(d)

of The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported) February 20, 2026

DNOW INC.

(Exact name of registrant as specified in its charter)

Delaware		001-36325		46-4191184
(State or other jurisdiction of incorporation)		(Commission File Number)		(IRS Employer Identification No.)

7402 North Eldridge Parkway Houston, Texas		77041
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: 281-823-4700

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

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 is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐   

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. ☐

Item 2.02 Results of Operations and Financial Condition

On February 20, 2026, DNOW Inc. issued a press release announcing earnings for the quarter and full year ended December 31, 2025 and conference call in connection therewith. A copy of the release is furnished herewith as Exhibit 99.1 and incorporated herein by reference.

The information contained in this Current Report shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liabilities of that section, nor shall it be incorporated by reference into a filing under the Securities Act of 1933, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

Item 9.01 Financial Statements and Exhibits

(d) Exhibits

The following exhibit is provided as part of the information furnished under Item 2.02 of this Current Report on Form 8-K:

99.1		DNOW Inc. press release dated February 20, 2026 announcing the earnings results for the fourth quarter and full year ended December 31, 2025.
104		Cover Page Interactive Data File (embedded within the Inline XBRL document)

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: February 20, 2026						DNOW INC.
						/s/ Raymond W. Chang
						Raymond W. Chang Vice President & General Counsel

Exhibit 99.1

Earnings Conference Call February 20, 2026 8:00 a.m. CT 1 (888) 660-6431 (within North America) 1 (929) 203-2118 (outside of North America) Access Code: 7372055 Webcast: ir.dnow.com

DNOW Reports Fourth Quarter and Full-Year 2025 Results

HOUSTON, TX, February 20, 2026 – DNOW Inc. (NYSE: DNOW) announced results for the fourth quarter and year ended December 31, 2025.

Completed Merger with MRC Global Inc.

• On November 6, 2025, DNOW completed its acquisition of MRC Global in an all-stock transaction

• Annual merger cost synergies are ahead of plan, with first-year savings now projected at $23 million, or 35% above target, while maintaining our $70 million three-year synergy commitment

Full-Year 2025 Highlights

• Revenue was $2,820 million

• Gross profit was $478 million, or 17.0% of revenue, and adjusted gross profit was $651 million, or 23.1% of revenue

• Net loss attributable to DNOW Inc. was $89 million, or $(0.76) per diluted share, primarily due to transaction charges, and adjusted net income attributable to DNOW Inc. was $104 million, or $0.86 per diluted share

• Adjusted EBITDA was $209 million, or 7.4% of revenue

• Cash provided by operating activities was $155 million

• Repurchased $37 million of common stock

• Cash and cash equivalents was $164 million and long-term debt was $411 million at December 31, 2025 with total liquidity of approximately $588 million

Fourth Quarter 2025 Highlights

• Revenue was $959 million

• Gross profit was $68 million, or 7.1% of revenue, and adjusted gross profit was $217 million, or 22.6% of revenue

• Net loss attributable to DNOW Inc. was $147 million, or $(0.95) per diluted share, primarily due to transaction charges, and adjusted net income attributable to DNOW Inc. was $23 million, or $0.15 per diluted share

• Adjusted EBITDA was $61 million, or 6.4% of revenue

• Cash provided by operating activities was $83 million

• Repurchased $10 million of common stock

David Cherechinsky, President and CEO of DNOW, added, “DNOW delivered strong financial results in 2025 generating $2.8 billion in revenue, with Adjusted EBITDA totaling 7.4% of revenues. Excluding the contribution from MRC Global in the fourth quarter, 2025 marked DNOW’s fifth consecutive year of revenue growth and its highest Adjusted EBITDA year ever.

The merger with MRC Global expands DNOW’s growth opportunities and strategically positions the Company for long-term success. I am encouraged by the strong start to our integration efforts and the early progress of our synergy realization initiatives, which we expect will create meaningful value for our combined business over time.

As we move into 2026, we have taken targeted actions to address persistent challenges related to the U.S. MRC Global ERP system transition, which went live in the third quarter of 2025. While these complexities have created near-term obstacles, we are actively addressing them and remain focused on positioning the business for long-term growth.

I am humbled to represent the talented women and men of DNOW who work hard every day to serve our customers and compete in the market. Their dedication gives me confidence in our future as we lay the groundwork for 2026 and beyond.”

Prior to the earnings conference call a presentation titled “DNOW Fourth Quarter and Full-Year 2025 Earnings Presentation” will be available on the Company’s Investor Relations website.

About DNOW

DNOW is a premier energy and industrial solutions provider with a legacy of over 160 years as a leading distributor of pipe, valves, fittings (PVF), gas products, pumps and fabricated equipment. Headquartered in Houston, Texas, with approximately 5,300 employees and a global network of distribution and engineering locations; we provide a broad mix of quality products our customers require to build and maintain essential infrastructure across the upstream, midstream, gas utilities, downstream, energy transition and industrial markets. We deliver a comprehensive range of value-added supply chain solutions and technical product expertise, supported by advanced digital offerings. Our products and resources enable our customers to run their operations more efficiently and effectively, helping them to meet and exceed their business goals.

Statements made in this press release that are forward-looking in nature are intended to be “forward-looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934 and may involve risks and uncertainties. These statements may differ materially from actual future events or results. Readers are referred to documents filed by DNOW Inc. with the U.S. Securities and Exchange Commission, which identify significant risk factors which could cause actual results to differ from those contained in the forward-looking statements.

Contact:

Mark Johnson

Senior Vice President and Chief Financial Officer

(281) 823-4754

DNOW INC.

CONSOLIDATED BALANCE SHEETS (UNAUDITED)

(In millions, except share and per share data)

		December 31,
		2025				2024
ASSETS
Current assets:
Cash and cash equivalents		$	164			$	256
Receivables, net			874				388
Inventories, net			1,192				352
Prepaid and other current assets			48				32
Total current assets			2,278				1,028
Property, plant and equipment, net			264				157
Operating right-of-use assets			160				40
Deferred income taxes			11				93
Goodwill			617				230
Intangibles, net			565				65
Other assets			29				8
Total assets		$	3,924			$	1,621
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable		$	653			$	300
Accrued liabilities			300				130
Other current liabilities			21				12
Total current liabilities			974				442
Long-term debt			411				—
Long-term operating lease liabilities			129				29
Deferred income taxes			99				—
Other long-term liabilities			73				22
Total liabilities			1,686				493
Commitments and contingencies
Stockholders’ equity:
Common stock - par value $0.01; 330 million shares authorized; 186,125,254 and 105,652,963 shares issued and outstanding at December 31, 2025 and 2024, respectively			2				1
Additional paid-in capital			3,193				2,023
Accumulated deficit			(836	)			(747	)
Accumulated other comprehensive loss			(126	)			(153	)
DNOW Inc. stockholders’ equity			2,233				1,124
Noncontrolling interest			5				4
Total stockholders’ equity			2,238				1,128
Total liabilities and stockholders’ equity		$	3,924			$	1,621

DNOW INC.

CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

(In millions, except per share data)

		Three Months Ended												Year Ended
		December 31,								September 30,				December 31,
		2025				2024				2025				2025				2024
Revenue		$	959			$	571			$	634			$	2,820			$	2,373
Cost of products			891				438				491				2,342				1,842
Gross profit			68				133				143				478				531
Selling, general and administrative expenses			226				103				112				559				416
Impairment and other charges			12				1				—				12				6
Operating (loss) profit			(170	)			29				31				(93	)			109
Other (expense) income			(6	)			1				(1	)			(7	)			1
(Loss) income before income taxes			(176	)			30				30				(100	)			110
Income tax (benefit) provision			(29	)			7				7				(12	)			31
Net (loss) income			(147	)			23				23				(88	)			79
Net income attributable to noncontrolling interest			—				—				—				1				1
Net (loss) income attributable to DNOW Inc.		$	(147	)		$	23			$	23			$	(89	)		$	78
(Loss) earnings per share attributable to DNOW Inc. stockholders:
Basic		$	(0.95	)		$	0.22			$	0.21			$	(0.76	)		$	0.72
Diluted		$	(0.95	)		$	0.21			$	0.21			$	(0.76	)		$	0.71
Weighted-average common shares outstanding, basic			155				106				105				118				106
Weighted-average common shares outstanding, diluted			155				107				106				118				107

DNOW INC.

SUPPLEMENTAL INFORMATION

BUSINESS SEGMENTS (UNAUDITED)

(In millions)

		Three Months Ended												Year Ended
		December 31,								September 30,				December 31,
		2025				2024				2025				2025				2024
Revenue:
United States		$	765			$	451			$	527			$	2,294			$	1,880
Canada			51				66				53				214				253
International			143				54				54				312				240
Total revenue		$	959			$	571			$	634			$	2,820			$	2,373

U.S. GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (GAAP) TO NON-GAAP RECONCILIATIONS

In an effort to provide investors with additional information regarding our results as determined by GAAP, we disclose various non-GAAP financial measures in our quarterly earnings press releases and other public disclosures. The non-GAAP financial measures include: (i) adjusted gross profit, (ii) adjusted gross profit as a percentage of revenue, (iii) adjusted earnings before interest, taxes, depreciation and amortization and excluding other costs (Adjusted EBITDA), (iv) Adjusted EBITDA as a percentage of revenue, (v) adjusted net (loss) income attributable to DNOW Inc., (vi) adjusted diluted earnings per share attributable to DNOW Inc. stockholders, (vii) net debt and (viii) net debt leverage ratio. We use these non-GAAP financial measures to evaluate and manage the Company’s operations because we believe they provide useful supplemental information regarding the financial performance of our business. These non-GAAP financial measures are not intended to replace the GAAP financial measures. The Company defines Adjusted Gross profit as revenue, less cost of products, plus amortization of intangibles, plus inventory-related charges incremental to normal operations, plus transaction costs associated with acquisitions, such as inventory fair value step-up or write-downs and plus or minus the impact of our LIFO inventory costing methodology. We define Adjusted EBITDA as net (loss) income plus interest, taxes, depreciation and amortization and excluding other costs, such as stock-based compensation, restructuring and exit costs, transaction related charges, long-lived asset impairments (including goodwill and intangible assets), inventory-related charges incremental to normal operations and plus or minus the impact of our LIFO inventory costing methodology. Transaction-related charges include transaction costs, inventory fair value step-up, retention bonus accruals and integration expenses associated with acquisitions. We define Net Debt as total long-term debt, including current portion, minus cash. We define our net debt leverage ratio as Net Debt divided by trailing twelve months Adjusted EBITDA. The Company believes Net Debt is an indicator of the extent to which the Company’s outstanding debt obligations could be satisfied by cash on hand and a useful metric for investors to evaluate the Company’s leverage position. We believe the net debt leverage ratio is a commonly used metric that management and investors use to assess the borrowing capacity of the Company. A reconciliation of each of these non-GAAP financial measures to its most comparable GAAP financial measure is included in the schedules herein. Totals in the schedules herein may not foot due to rounding.

GROSS PROFIT TO ADJUSTED GROSS PROFIT RECONCILIATION (UNAUDITED)

(In millions)

		Three Months Ended																								Year Ended
		December 31,																September 30,								December 31,
		2025				As a % of revenue				2024				As a % of revenue				2025				As a % of revenue				2025				As a % of revenue				2024				As a % of revenue
Gross profit, as reported		$	68				7.1	%		$	133				23.3	%		$	143				22.6	%		$	478				17.0	%		$	531				22.4	%
Amortization of intangibles			5								2								2								11								7
Increase in LIFO reserve			9								—								2								27								4
Inventory-related transaction charges			135								1								—								135								7
Adjusted Gross Profit		$	217				22.6	%		$	136				23.8	%		$	147				23.2	%		$	651				23.1	%		$	549				23.1	%

NET (LOSS) INCOME ATTRIBUTABLE TO DNOW INC. TO ADJUSTED EBITDA RECONCILIATION (UNAUDITED)

(In millions)

		Three Months Ended																								Year Ended
		December 31,																September 30,								December 31,
		2025				As a % of revenue				2024 (1)				As a % of revenue				2025 (1)				As a % of revenue				2025				As a % of revenue				2024 (1)				As a % of revenue
Net (loss) income attributable to DNOW Inc.		$	(147	)			(15.3	)%		$	23				4.0	%		$	23				3.6	%		$	(89	)			(3.2	)%		$	78				3.3	%
Net income attributable to noncontrolling interest			—								—								—								1								1
Interest expense (income), net			4								(2	)							—								2								(6	)
Income tax (benefit) provision			(29	)							7								7								(12	)							31
Depreciation and amortization			20								10								11								52								34
Increase in LIFO reserve			9								—								2								27								4
Stock-based compensation (2)			4								4								4								15								13
Transaction-related charges (3)			51								2								4								62								6
Impairment and other charges (4)			12								1								—								12								6
Inventory-related transaction charges (5)			135								1								—								135								7
Restructuring and exit costs (3)			—								—								—								2								2
Other (6)			2								(1	)							—								2								—
Adjusted EBITDA		$	61				6.4	%		$	45				7.9	%		$	51				8.0	%		$	209				7.4	%		$	176				7.4	%

⁽¹⁾ The year ended December 31, 2024 includes a change in accounting principle adjustment decreasing the previously reported net income attributable to DNOW Inc. by $3 million. The three months ended September 30, 2025 includes a change in accounting principle adjustment decreasing the previously reported net income attributable to DNOW Inc. by $2 million.

⁽²⁾ For the three months and year ended December 31, 2025, stock-based compensation excludes $13 million and $14 million, respectively, as such amounts were reported in transaction-related charges. For the three months ended September 30, 2025, stock-based compensation excludes less than $1 million, as such amounts were reported in transaction-related charges.

⁽³⁾ Transaction-related charges and restructuring and exit costs are included in selling, general and administrative expenses.

⁽⁴⁾ For the three months and year ended December 31, 2025, impairment and other charges included $12 million of foreign currency translation losses as a result of substantially completing the liquidation of certain foreign subsidiaries in the International segment. For the three months and year ended December 31, 2024, impairment and other charges included $1 million and $6 million, respectively, of International restructuring charges for foreign currency translation losses.

⁽⁵⁾ Inventory-related transaction charges are included in cost of products. For the three months and year ended December 31, 2025, inventory-related transaction charges included $135 million of charges related to inventory step-up. For the year ended December 31, 2024, inventory-related transaction charges included $5 million of transaction-related charges, coupled with $2 million of inventory write-downs.

⁽⁶⁾ For the three months and year ended December 31, 2025, other costs included $2 million related to foreign currency losses.

NET (LOSS) INCOME ATTRIBUTABLE TO DNOW INC. STOCKHOLDERS TO ADJUSTED NET INCOME ATTRIBUTABLE TO DNOW INC. STOCKHOLDERS RECONCILIATION (UNAUDITED)

(In millions)

		Three Months Ended												Year Ended
		December 31,								September 30,				December 31,
		2025				2024 (1)				2025 (1)				2025				2024 (1)
Net (loss) income attributable to DNOW Inc.		$	(147	)		$	23			$	23			$	(89	)		$	78
Increase in LIFO reserve			9				—				2				27				4
Transaction-related charges			51				2				4				62				6
Impairment and other charges			12				1				—				12				6
Inventory-related transaction charges			135				1				—				135				7
Restructuring and exit costs			—				—				—				2				2
Tax benefit(2)			(37	)			—				(1	)			(45	)			(3	)
Adjusted net income attributable to DNOW Inc.		$	23			$	27			$	28			$	104			$	100

⁽¹⁾ The year ended December 31, 2024 and the three months ended September 30, 2025 include a change in accounting principle adjustment decreasing the previously reported net income attributable to DNOW Inc. by $3 million and $2 million, respectively.

⁽²⁾ The tax effect of non-GAAP reconciling items is calculated based on the nature of the item and/or the tax jurisdiction in which the reconciling item has been incurred and applying the specific tax rate or tax treatment to each item.

DILUTED (LOSS) EARNINGS PER SHARE ATTRIBUTABLE TO DNOW INC. STOCKHOLDERS TO ADJUSTED DILUTED EARNINGS PER SHARE ATTRIBUTABLE TO DNOW INC. STOCKHOLDERS RECONCILIATION (UNAUDITED)

		Three Months Ended												Year Ended
		December 31,								September 30,				December 31,
		2025				2024				2025 (1)				2025				2024 (1)
Diluted (loss) earnings per share attributable to DNOW Inc. stockholders		$	(0.95	)		$	0.21			$	0.21			$	(0.76	)		$	0.71
Increase in LIFO reserve			0.06				—				0.02				0.22				0.04
Transaction-related charges			0.33				0.02				0.04				0.53				0.06
Impairment and other charges			0.08				0.01				—				0.10				0.05
Inventory-related transaction charges			0.87				0.01				—				1.14				0.06
Restructuring and exit costs			—				—				0.01				0.01				0.02
Tax benefit(2)			(0.24	)			—				(0.02	)			(0.38	)			(0.03	)
Adjusted diluted earnings per share attributable to DNOW Inc. stockholders		$	0.15			$	0.25			$	0.26			$	0.86			$	0.91

⁽¹⁾ The year ended December 31, 2024 and the three months ended September 30, 2025 include a change in accounting principle adjustment decreasing the previously reported diluted earnings per share attributable to DNOW Inc. stockholders by $0.03 and $0.02, respectively.

⁽²⁾ The tax effect of non-GAAP reconciling items is calculated based on the nature of the item and/or the tax jurisdiction in which the reconciling item has been incurred and applying the specific tax rate or tax treatment to each item.

LONG-TERM DEBT TO NET DEBT AND NET DEBT LEVERAGE RATIO CALCULATION (UNAUDITED)

(In millions)

		December 31, 2025
Long-term debt		$	411
Plus: current portion of debt obligations			—
Total debt			411
Less: cash			164
Net Debt		$	247
Net Debt		$	247
Adjusted EBITDA			209
Net Debt Leverage Ratio			1.2x

FAQ

How did DNOW (DNOW) perform financially in full-year 2025?

DNOW generated $2.82 billion in revenue in 2025, up from $2.37 billion in 2024. Despite this growth, it reported a GAAP net loss of $89 million, compared with net income of $78 million the prior year, mainly due to merger-related charges.

What were DNOW’s fourth-quarter 2025 results?

In fourth-quarter 2025, DNOW reported revenue of $959 million and a GAAP net loss attributable to DNOW Inc. of $147 million. Adjusted EBITDA for the quarter was $61 million, representing 6.4% of revenue, reflecting significant merger and inventory-related charges in the period.

How did DNOW’s adjusted earnings metrics look for 2025?

For 2025, DNOW reported Adjusted EBITDA of $209 million, or 7.4% of revenue, in line with 2024’s margin. Adjusted net income attributable to DNOW Inc. was $104 million, slightly above $100 million in 2024, and adjusted diluted EPS was $0.86 versus $0.91.

What impact did the MRC Global merger have on DNOW’s 2025 results?

DNOW completed its merger with MRC Global Inc., significantly increasing assets and scale. The transaction brought substantial inventory-related transaction charges and other costs, contributing to a 2025 GAAP net loss, while supporting higher revenue and forming the basis for future synergy realization.

What is DNOW’s leverage position after the MRC Global merger?

At December 31, 2025, DNOW reported long-term debt of $411 million and cash of $164 million, resulting in Net Debt of $247 million. Using trailing twelve months Adjusted EBITDA of $209 million, the company’s net debt leverage ratio was 1.2x.

How did DNOW’s regional revenues break down in 2025?

In 2025, DNOW generated $2.294 billion of revenue in the United States, $214 million in Canada, and $312 million in International markets. Total revenue was $2.82 billion, up from $2.37 billion in 2024, reflecting broad-based expansion.

What challenges did DNOW highlight regarding the MRC Global integration?

Management cited persistent challenges tied to the U.S. MRC Global ERP system transition, which went live in third-quarter 2025. These issues created near-term operational obstacles, though DNOW stated it has taken targeted actions and is focused on integration progress and synergy realization over time.

Filing Exhibits & Attachments

4 documents

Press Releases

• EX-99.1 EX-99.1 185.4 KB

Other Documents

• EX-101 XBRL TAXONOMY EXTENSION SCHEMA 2.8 KB
• EX-101 XBRL TAXONOMY EXTENSION LABEL LINKBASE 16.8 KB
• EX-101 XBRL TAXONOMY EXTENSION PRESENTATION LINKBASE 10.6 KB