DNOW Inc. (NYSE: DNOW) Q2 loss, record $133M operating cash flow

Rhea-AI Filing Summary

DNOW Inc. reported second quarter 2026 results, with revenue of $1,307 million and a GAAP net loss attributable to DNOW Inc. of $21 million, or $(0.11) per diluted share. Adjusted net income was $21 million, or $0.12 per diluted share, and Adjusted EBITDA was $60 million, 4.6% of revenue.

Operating cash flow reached $133 million, described as a record second-quarter achievement, driving free cash flow of $124 million. The company repurchased $25 million of stock in the quarter and $75 million year-to-date under a $160 million authorization.

At June 30, 2026, cash and cash equivalents were $114 million and total long-term debt was $474 million, resulting in net debt of $360 million and a Net Debt Leverage Ratio of 1.7x based on trailing twelve months Adjusted EBITDA of $211 million. Management highlighted 10% sequential revenue growth to $1.3 billion, 13% growth in the U.S. segment, and a 54% sequential increase in Adjusted EBITDA, supported by integration, cost management, inventory streamlining and strong collections.

Positive

• $133 million cash flow from operating activities in Q2 2026, described as a record second-quarter achievement and supporting strong free cash flow.
• Revenue grew to about $1.3 billion in Q2 2026, a 10% sequential increase with a strong 13% increase in the U.S. segment.
• $60 million Adjusted EBITDA in Q2 2026, up 54% sequentially, reflecting stronger volumes and execution of integration and cost management initiatives.
• Returned $75 million to shareholders via repurchases in the first half of 2026 under a $160 million share repurchase program.
• Net debt of $360 million and a Net Debt Leverage Ratio of 1.7x on trailing twelve months Adjusted EBITDA of $211 million indicate moderate leverage.
• Second-quarter U.S. midstream revenues surpassed an annualized $1 billion for the first time in the company’s history.

Negative

• None.

Filing Explained

At June 30, DNOW reported 180,910,798 shares outstanding alongside $25 million of second-quarter repurchases.

DNOW’s August 6, 2026 Form 8-K, furnished under Item 2.02, reports results for the quarter ended June 30, 2026 and records $25 million of common-stock repurchases during the quarter.

It also reports 180,910,798 shares issued and outstanding at June 30, 2026, versus 186,125,254 at December 31, 2025; the disclosed structural change is a lower reported common-share count.

The release states that $4 million of second-quarter impairment and other charges included an impairment of the operating right-of-use asset for a Houston office lease after the decision to permanently vacate the premises.

DNOW defines net debt as total debt less cash and its net debt leverage ratio as net debt divided by trailing-twelve-month adjusted EBITDA.

The adjusted gross profit, adjusted EBITDA, adjusted net income and free cash flow measures are presented as supplemental non-GAAP measures, not replacements for GAAP results.

8-K Event Classification

2 items: 2.02, 9.01

2 items

Item 2.02 Results of Operations and Financial Condition Financial

Disclosure of earnings results, typically an earnings press release or preliminary financials.

Item 9.01 Financial Statements and Exhibits Exhibits

Financial statements, pro forma financial information, and exhibit attachments filed with this report.

Key Figures

Revenue: $1,307 million Net loss attributable to DNOW Inc.: $(21) million Adjusted Net Income attributable to DNOW Inc.: $21 million +5 more

8 metrics

Revenue $1,307 million Three months ended June 30, 2026

Net loss attributable to DNOW Inc. $(21) million Three months ended June 30, 2026

Adjusted Net Income attributable to DNOW Inc. $21 million Three months ended June 30, 2026

Adjusted EBITDA $60 million Three months ended June 30, 2026; 4.6% of revenue

Cash flow from operating activities $133 million Three months ended June 30, 2026, record second-quarter level

Free Cash Flow $124 million Three months ended June 30, 2026

Net Debt $360 million Based on long-term debt of $474 million and cash of $114 million at June 30, 2026

Net Debt Leverage Ratio 1.7x Net debt divided by trailing twelve months Adjusted EBITDA of $211 million

Key Terms

Adjusted EBITDA, Net Debt Leverage Ratio, Free Cash Flow, Last-In, First-Out ("LIFO"), +2 more

6 terms

Adjusted EBITDA financial

"Adjusted EBITDA was $60 million, or 4.6% of revenue"

Adjusted EBITDA is a way companies measure how much money they make from their core operations, like running a business, by removing certain costs or income that aren’t part of regular business activities. It helps investors see how well a company is doing without distractions from unusual expenses or gains, making it easier to compare companies or track performance over time.

Net Debt Leverage Ratio financial

"Net Debt Leverage Ratio was 1.7x based on trailing twelve months Adjusted EBITDA"

Net debt leverage ratio measures how many years of a company’s core earnings would be needed to pay off its debt after accounting for cash on hand, calculated by dividing net debt (total debt minus cash) by annual operating earnings. Investors use it like a household debt-to-income check: a lower number means the company is in a stronger position to handle obligations and take risks, while a higher number signals greater financial strain and vulnerability to shocks.

Free Cash Flow financial

"Free Cash Flow is defined as net cash provided by operating activities adjusted for purchases of property"

Free cash flow is the amount of money a company has left over after paying all its expenses and investing in its business, like buying equipment or updating facilities. It shows how much cash is available to reward shareholders, pay down debt, or save for future growth. This helps investors understand if a company is financially healthy and able to grow.

Last-In, First-Out ("LIFO") financial

"plus or minus the impact of our Last-In, First-Out ("LIFO") inventory costing methodology"

inventory-related transaction charges financial

"Inventory-related transaction charges are included in cost of products"

stock-based compensation financial

"such as stock-based compensation, restructuring and exit costs, transaction-related charges"

Stock-based compensation is when a company pays employees, directors or consultants with shares or the right to buy shares instead of or in addition to cash. It matters to investors because issuing stock or options spreads ownership thinner (like cutting a pie into more slices), which can reduce each existing share’s claim on profits and can also change reported earnings; investors watch it to assess true cost of running the business and how management is incentivized.

Earnings Snapshot

Revenue: $1,307 million

quarter ended June 30, 2026

Revenue $1,307 million 10% sequential increase

Net (loss) income attributable to DNOW Inc. $(21) million

Adjusted Net Income attributable to DNOW Inc. $21 million

Adjusted EBITDA $60 million up 54% sequentially

Cash flow from operating activities $133 million record second-quarter achievement

AI-generated analysis. How Rhea-AI works. Not financial advice.

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Available on EDGAR 08/06/2026 - 06:56 AM Accepted by SEC EDGAR 08/06/2026 - 06:56 AM Learn about SEC filing dates

FAQ

What were DNOW (DNOW) revenues and earnings for the second quarter of 2026?

DNOW generated $1,307 million in revenue in Q2 2026 and reported a GAAP net loss attributable to DNOW Inc. of $21 million, or $(0.11) per diluted share, while adjusted net income was $21 million, or $0.12 per diluted share.

How much cash flow did DNOW (DNOW) produce in Q2 2026?

DNOW reported $133 million of cash flow from operating activities in Q2 2026, described as a record second-quarter achievement. After $9 million of capital expenditures, free cash flow for the quarter was $124 million, highlighting strong cash generation.

What was DNOW (DNOW) Adjusted EBITDA and margin in the second quarter of 2026?

Adjusted EBITDA for DNOW in Q2 2026 was $60 million, representing 4.6% of revenue. Management noted this Adjusted EBITDA level was up 54% sequentially, driven by stronger volumes and execution of integration and cost management initiatives.

What is DNOW (DNOW) leverage and net debt position as of June 30, 2026?

As of June 30, 2026, DNOW had long-term debt of $474 million and cash of $114 million, resulting in net debt of $360 million. Based on trailing twelve months Adjusted EBITDA of $211 million, the Net Debt Leverage Ratio was 1.7x.

How much stock has DNOW (DNOW) repurchased in 2026 so far?

DNOW repurchased $25 million of common stock in the second quarter of 2026 and $75 million year-to-date. These buybacks were executed under the company’s $160 million share repurchase program, reflecting ongoing capital return to shareholders.

How did the U.S. segment perform for DNOW (DNOW) in Q2 2026?

DNOW stated that Q2 2026 revenue increased to about $1.3 billion, including a 13% sequential increase in the U.S. segment. U.S. midstream revenues surpassed $1 billion on an annualized basis for the first time in the company’s history.

What key non-GAAP adjustments affected DNOW (DNOW) Q2 2026 results?

Key adjustments included increases in the LIFO reserve, transaction-related charges, inventory-related transaction charges, stock-based compensation and $4 million of impairment charges on a vacated Houston office lease, which together bridged GAAP net loss to Adjusted EBITDA and adjusted earnings metrics.

false000159961700015996172026-08-062026-08-06

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): August 06, 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 August 6, 2026, DNOW Inc. issued a press release announcing earnings for the quarter ended June 30, 2026 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 August 6, 2026 announcing the earnings results for the second quarter ended June 30, 2026.
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.

			DNOW INC.
Date:	August 6, 2026	By:	/s/ Raymond W. Chang
			Raymond W. Chang
			Vice President & General Counsel

Earnings Conference Call August 6, 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 Second Quarter 2026 Results

HOUSTON, TX, August 6, 2026 – DNOW Inc. (NYSE: DNOW) announced results for the second quarter ended June 30, 2026.

Recent Capital Allocation

•Repurchased $25 million of common stock in the second quarter of 2026 and $75 million year-to-date under the Company's $160 million share repurchase program

Second Quarter 2026 Highlights

•Revenue was $1,307 million

•Gross profit was $243 million, or 18.6% of revenue, and adjusted gross profit was $272 million, or 20.8% of revenue

•Net loss attributable to DNOW Inc. was $21 million, or ($0.11) per diluted share, and adjusted net income attributable to DNOW Inc. was $21 million, or $0.12 per diluted share

•Adjusted EBITDA was $60 million, or 4.6% of revenue

•Cash flow from operating activities was $133 million

•Cash and cash equivalents was $114 million and total long-term debt was $474 million at June 30, 2026, equating to net debt of $360 million, or a net debt leverage ratio of 1.7x

David Cherechinsky, President and CEO of DNOW, added, “I am thrilled with our significantly improved performance during the second quarter of 2026, highlighted by $133 million of cash flow from operating activities, a record second-quarter achievement. Strong collections improved the quality and liquidity of accounts receivable, while inventory streamlining further enhanced exceptional cash generation.

Revenue increased to $1.3 billion during the quarter, representing a 10% sequential increase and a strong 13% increase in the U.S. segment. Adjusted EBITDA rose substantially to $60 million, up 54% sequentially, reflecting stronger volumes and execution of integration and cost management initiatives. Second-quarter U.S. midstream revenues surpassed $1 billion on an annualized basis for the first time in our history, while both the gas utility and upstream sector revenues delivered their strongest sequential quarter percentage growth since 2022.

During the quarter, our net debt leverage ratio improved to 1.7 times, while we returned capital to shareholders through our share repurchase program, demonstrating the strength of our cash generation and our commitment to disciplined capital allocation. Total repurchases reached $75 million during the first half of 2026, representing more shares purchased in these two quarters than in the previous 10 quarters combined. The continued investment in our own shares reflects our confidence in the execution of our strategy and long-term growth prospects.

I would like to thank our entire team for their efforts to deepen relationships with customers and suppliers, advance our integration initiatives and drive greater operational efficiency with dedication and commitment to growth. Our actions are producing encouraging results, and we continue to take decisive steps to position DNOW for long-term success. I am very proud of the progress we made during the quarter and confident about the second half of the year.”

Prior to the earnings conference call a presentation titled “DNOW Second Quarter 2026 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 5,100 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, gas utilities, downstream and industrial and midstream 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.

1

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

2

DNOW INC.

CONSOLIDATED BALANCE SHEETS

(In millions, except share and par value)

		June 30, 2026				December 31, 2025
		(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents		$	114			$	164
Receivables, net			889				874
Inventories, net			1,062				1,192
Prepaid and other current assets			52				48
Total current assets			2,117				2,278
Property, plant and equipment, net			257				264
Operating right-of-use assets			148				160
Deferred income tax assets			10				11
Goodwill			700				617
Intangibles, net			556				565
Other assets			28				29
Total assets		$	3,816			$	3,924
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable		$	711			$	653
Accrued liabilities			262				300
Other current liabilities			18				21
Total current liabilities			991				974
Long-term debt			474				411
Long-term operating lease liabilities			109				129
Deferred income tax liabilities			74				99
Other long-term liabilities			70				73
Total liabilities			1,718				1,686
Commitments and contingencies
Stockholders' equity:
Common stock - par value $0.01; 330 million shares authorized; 180,910,798 and 186,125,254 shares issued and outstanding at June 30, 2026 and December 31, 2025, respectively			2				2
Additional paid-in capital			3,123				3,193
Accumulated deficit			(901	)			(836	)
Accumulated other comprehensive loss			(131	)			(126	)
DNOW Inc. stockholders' equity			2,093				2,233
Noncontrolling interests			5				5
Total stockholders' equity			2,098				2,238
Total liabilities and stockholders' equity		$	3,816			$	3,924

3

DNOW INC.

CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

(In millions, except per share data)

	Three months ended												Six months ended
	June 30,								March 31,				June 30,
	2026				2025				2026				2026				2025
Revenue	$	1,307			$	628			$	1,183			$	2,490			$	1,227
Cost of products		1,064				499				990				2,054				960
Gross profit		243				129				193				436				267
Selling, general and administrative expenses		238				112				243				481				221
Impairment and other charges		4				—				—				4				—
Operating profit (loss)		1				17				(50	)			(49	)			46
Other (expense) income, net		(10	)			—				(10	)			(20	)			—
(Loss) income before income taxes		(9	)			17				(60	)			(69	)			46
Income tax provision (benefit)		12				3				(16	)			(4	)			10
Net (loss) income		(21	)			14				(44	)			(65	)			36
Net (loss) income attributable to noncontrolling interests		—				—				—				—				1
Net (loss) income attributable to DNOW Inc.	$	(21	)		$	14			$	(44	)		$	(65	)		$	35
(Loss) earnings per share attributable to DNOW Inc. stockholders:
Basic	$	(0.11	)		$	0.13			$	(0.24	)		$	(0.35	)		$	0.32
Diluted	$	(0.11	)		$	0.13			$	(0.24	)		$	(0.35	)		$	0.32
Weighted-average common shares outstanding, basic		182				105				186				184				106
Weighted-average common shares outstanding, diluted		182				106				186				184				106

4

DNOW INC.
SUPPLEMENTAL INFORMATION

BUSINESS SEGMENTS (UNAUDITED)
(In millions)

	Three months ended												Six months ended
	June 30,								March 31,				June 30,
	2026				2025				2026				2026				2025
Revenue:
United States	$	1,109			$	528			$	985			$	2,094			$	1,002
Canada		47				48				51				98				110
International		151				52				147				298				115
Total revenue	$	1,307			$	628			$	1,183			$	2,490			$	1,227

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 Income attributable to DNOW Inc., (vi) Adjusted Diluted Earnings Per Share Attributable to DNOW Inc. Stockholders, (vii) Net Debt, (viii) Net Debt Leverage Ratio and (ix) Free Cash Flow. 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 Last-In, First-Out (“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, inventory-related charges incremental to normal operations, long-lived asset impairments (including goodwill and intangible assets) 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. We define Free Cash Flow as net cash provided by (used in) operating activities adjusted for purchases of property, plant and equipment. The Company believes Free Cash Flow is a useful metric for investors to measure a company's financial flexibility and ability to generate cash after considering normal operating expenses and capital expenditures. 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																				Six months ended
	June 30,													March 31,							June 30,
	2026			As a % of revenue			2025			As a % of revenue				2026			As a % of revenue				2026			As a % of revenue			2025			As a % of revenue
Gross profit, as reported	$	243			18.6	%	$	129			20.5	%		$	193			16.3	%		$	436			17.5	%	$	267			21.8	%
Amortization of intangibles		7						2							6							13						4
Increase in LIFO reserve		19						15							16							35						16
Inventory-related transaction charges		3						—							41							44						—
Adjusted Gross Profit	$	272			20.8	%	$	146			23.2	%		$	256			21.6	%		$	528			21.2	%	$	287			23.4	%

5

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

	Three months ended																				Six months ended
	June 30,													March 31,							June 30,
	2026			As a % of revenue			2025(1)			As a % of revenue				2026			As a % of revenue				2026			As a % of revenue			2025(1)			As a % of revenue
Net (loss) income Attributable to DNOW Inc.	$	(21	)		(1.6	)%	$	14			2.2	%		$	(44	)		(3.7	)%		$	(65	)		(2.6	)%	$	35			2.9	%
Net (loss) income Attributable to noncontrolling interests		—						—							—							—						1
Interest expense (income), net		9						(1	)						8							17						(2	)
Income tax provision (benefit)		12						3							(16	)						(4	)					10
Depreciation and amortization		23						10							23							46						21
Stock-based compensation (2)		4						4							4							8						7
Increase in LIFO reserve		19						15							16							35						16
Transaction-related charges (3)		6						5							5							11						7
Inventory-related transaction charges (4)		3						—							41							44						—
Impairment and other charges (5)		4						—							—							4						—
Restructuring and exit costs (3)		—						1							—							—						2
Other (6)		1						—							2							3						—
Adjusted EBITDA	$	60			4.6	%	$	51			8.1	%		$	39			3.3	%		$	99			4.0	%	$	97			7.9	%

(1)During the fourth quarter of 2025, the Company changed its inventory valuation method for U.S. inventories from the moving average cost method to the LIFO method. The effects of the change in accounting principle have been retrospectively applied to all periods presented. The three and six months ended June 30, 2025 includes a change in accounting principle adjustment decreasing the previously reported net income attributable to DNOW Inc. by $11 million and $12 million, respectively.

(2)For the three months ended June 30, 2026 and 2025 and March 31, 2026, stock-based compensation excludes $1 million, less than $1 million and $1 million, respectively, as such amounts were reported in transaction-related charges. For the six months ended June 30, 2026 and 2025, stock-based compensation excludes $2 million and $1 million, respectively, 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)Inventory-related transaction charges are included in cost of products. For the three months ended June 30, 2026 and March 31, 2026 and for the six months ended June 30, 2026, inventory-related transaction charges includes $3 million, $41 million and $44 million, respectively, of charges related to inventory step-up and inventory write-downs.

(5)For the three and six months ended June 30, 2026, impairment and other charges includes $4 million of impairment charges related to the operating right-of-use asset associated with a corporate office lease in Houston, Texas. The impairment resulted from the Company's decision to permanently vacate the leased premises.

(6)For the three months ended June 30, 2026 and March 31, 2026 and for the six months ended June 30, 2026, other costs includes $1 million, $2 million and $3 million, respectively, related to foreign currency losses.

6

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

	Three months ended												Six months ended
	June 30,								March 31,				June 30,
	2026				2025(1)				2026				2026				2025(1)
Net (loss) income attributable to DNOW Inc.	$	(21	)		$	14			$	(44	)		$	(65	)		$	35
Increase in LIFO reserve		19				15				16				35				16
Transaction-related charges		6				5				5				11				7
Inventory-related transaction charges		3				—				41				44				—
Impairment and other charges		4				—				—				4				—
Restructuring and exit costs		—				1				—				—				2
Tax provision (benefit)(2)		10				(6	)			(15	)			(5	)			(7	)
Adjusted Net Income Attributable to DNOW Inc.	$	21			$	29			$	3			$	24			$	53

(1)The three and six months ended June 30, 2025 includes a change in accounting principle adjustment decreasing the previously reported net income attributable to DNOW Inc. by $11 million and $12 million, respectively.

(2)The tax effect of non-GAAP reconciling items is based on the nature of the item and/or the tax jurisdiction in which the reconciling item has been incurred and is calculated by 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												Six months ended
	June 30,								March 31,				June 30,
	2026				2025(1)				2026				2026				2025(1)
Diluted (loss) earnings per share attributable to DNOW Inc. stockholders	$	(0.11	)		$	0.13			$	(0.24	)		$	(0.35	)		$	0.32
Increase in LIFO reserve		0.10				0.14				0.08				0.19				0.15
Transaction-related charges		0.03				0.05				0.03				0.06				0.07
Inventory-related transaction charges		0.02				—				0.22				0.24				—
Impairment and other charges		0.02				—				—				0.02				—
Restructuring and exit costs		—				0.01				—				—				0.02
Tax provision (benefit)(2)		0.06				(0.06	)			(0.08	)			(0.03	)			(0.07	)
Adjusted Diluted Earnings Per Share Attributable to DNOW Inc. Stockholders	$	0.12			$	0.27			$	0.01			$	0.13			$	0.49

(1)The three and six months ended June 30, 2025 includes a change in accounting principle adjustment decreasing the previously reported diluted earnings per share attributable to DNOW Inc. stockholders by $0.10 and $0.11, respectively.

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

7

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

		June 30,
		2026
Long-term debt		$	474
Plus: current portion of debt obligations			—
Total debt			474
Less: cash			114
Net Debt		$	360
Net Debt		$	360
Trailing twelve months Adjusted EBITDA			211
Net Debt Leverage Ratio		1.7x

NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES TO FREE CASH FLOW (UNAUDITED)

(In millions)

		Three months ended																				Six months ended
		June 30,				March 31,				December 31,				September 30,				June 30,				June 30,
		2026				2026				2025				2025				2025				2026				2025
Net cash provided by (used in) operating activities		$	133			$	(95	)		$	83			$	43			$	45			$	38			$	29
Less: Purchases of property, plant and equipment			(9	)			(8	)			(7	)			(4	)			(4	)			(17	)			(10	)
Free Cash Flow		$	124			$	(103	)		$	76			$	39			$	41			$	21			$	19

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