A global distributor of pipe, valves, fittings, pumps, and process equipment for energy and industrial markets, DNOW supplies everything from gas-utility parts to vapor-recovery systems like its EcoVapor ZerO2. It was spun off from National Oilwell Varco in 2014, long operated under the DistributionNOW brand, and formally renamed DNOW Inc. in 2024. In November 2025 it completed an all-stock acquisition of rival MRC Global, now running under both brands. Fun fact: its ZerO2 vapor-recovery unit has no moving parts.
DNOW returned to operating profitability in Q2 2026 as MRC Global integration charges eased, though net losses continued.
DNOW returned to an after two quarters of losses. rose 108.1% to $1.31 billion from the MRC Global acquisition, and improved 2.3 points sequentially to 18.6% as step-up charges faded, though the company still posted a $21 million net loss. The combined entity is beginning to stabilize, but the legacy profitability of the business remains obscured by integration costs.
Key takeaways
rose 108.1% to $1.31 billion, driven entirely by the November 2025 acquisition of MRC Global, which lifted U.S. and International results.
The company returned to an of $1 million after reporting operating losses of $172 million in Q4 2025 and $50 million in Q1 2026, as the step-up charges tied to the MRC Global deal began to roll off.
improved to 18.6% from 16.3% in the prior quarter, though it remained 1.9 points below the 20.5% reported a year ago, as $44 million in -related transaction charges and $35 million in LIFO charges weighed on the first-half result.
Section summaries
Management's Discussion and Analysis
Revenue more than doubled to $2.49B in H1 2026 driven by the MRC Global acquisition, while net loss reached $65M due to transaction charges and LIFO impacts.
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Total surged 102.9% to $2.49 billion for the first half of 2026, primarily from incremental revenue following the November 2025 acquisition of MRC Global.
U.S. increased $1.09 billion to $2.09 billion, while International segment revenue rose $183 million to $298 million, both driven by the MRC Global deal.
The company reported a net loss attributable to DNOW Inc. of $21 million, an improvement from the $44 million loss in Q1 2026 but a reversal from the $14 million profit in Q2 2025, as acquisition-related costs and a higher cost base continued to pressure the .
swung to a $133 million inflow from a $95 million use in the prior quarter, driven by a seasonal unwinding of , bringing the first-half total to a $38 million inflow.
The company repurchased $75 million in shares during the first half of 2026 and ended the quarter with $114 million in cash and $411 million in .
What changed
The Q1 2026 watch item on recovery is partially resolved: gross margin rose 2.3 points sequentially to 18.6% as step-up charges faded, though it remains well below the pre-acquisition level of 20.5% a year ago.
The Q1 2026 watch item on is resolved: the $95 million Q1 use reversed sharply to a $133 million Q2 inflow, bringing the first half to a positive $38 million as normalized.
The Q1 2026 watch item on the MRC Global ERP system remains open, with no update in this filing indicating the operational deficiencies flagged in the 10-K have been resolved.
The Q1 2026 watch item on share repurchases is partially resolved: the company deployed $75 million in the first half, a significant acceleration from the $8 million spent in Q1 2025, reducing the cash balance to $114 million.
What to watch
Q3 2026 to see if the 18.6% Q2 figure continues to rise toward the pre-acquisition 22-23% range as the remaining step-up charges and LIFO impacts fade.
Progress on stabilizing MRC Global's U.S. ERP system, given the 10-K disclosure that deficiencies could disrupt order-to-cash processes and delay synergy capture.
Q3 2026 to see if the $133 million Q2 inflow is sustained or if builds again, particularly given the $114 million cash balance and $411 million debt load.
Pace of the remaining authorization against the reduced $114 million cash balance and the need to service $411 million in .
margin declined from 21.8% to 17.5% on a basis, pressured by $35 million in LIFO charges and $44 million in inventory-related transaction charges.
The company reported a net loss attributable to DNOW Inc. of $65 million for H1 2026, compared to of $35 million a year ago, due to acquisition-related costs and lower margins.
increased slightly to $99 million from $97 million, as gains from the acquisition were largely offset by reduced margins and higher .
was $38 million, with $75 million used for share repurchases and $46 million for additional business acquisitions during the period.
Quantitative and Qualitative Disclosures About Market Risk
Foreign exchange and floating-rate debt are the primary market risks; a 10% currency swing would impact net income by ~$1M, and a 1% rate rise would add ~$2M in interest expense.
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Approximately 16% of were outside the U.S. for the first six months of 2026, with the Canadian dollar, Norwegian kroner, Euro, and British pound as the top exposures.
A hypothetical 10% adverse change in foreign currency rates would have changed by about $1 million for the six months ended June 30, 2026.
The company reported a $5 million foreign currency translation loss in OCI and $3 million in transaction losses in earnings for the first half of 2026.
All borrowings under the senior secured carry floating rates tied to benchmarks such as , making sensitive to short-term rate moves.
A 1% increase in benchmark rates would raise by roughly $2 million over a six-month period, assuming constant borrowing levels.
Steel price risk, especially for tubular products, is managed through -level discipline rather than derivatives; the company holds no material outstanding derivative instruments.
Company states no pending legal proceedings are likely to have a material effect on its business, financial condition, results of operations, or cash flows.
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The Company is subject to various claims and legal proceedings incidental to its business, with insurance coverage maintained to reduce financial risk.
Management believes no pending proceedings are likely to materially affect the business, financial condition, results of operations, or cash flows.
Resolution of certain actual, threatened, or anticipated claims could have a material adverse effect on results of operations in the period of resolution.
Ordinary-course customer claims involve allegedly defective products or warranty repair/replacement, with manufacturers generally indemnifying the Company.
Management views these ordinary-course product claims as routine and not expected to materially affect financial condition, results of operations, or cash flows.
The Company and its operations are affected by risks specific to the Company as well as factors that affect all businesses operating in a global market. The significant factors known to the Company that could materially adversely affect its business, financial condition or opera…
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The Company and its operations are affected by risks specific to the Company as well as factors that affect all businesses operating in a global market. The significant factors known to the Company that could materially adversely affect its business, financial condition or operating results are contained in Part 1, Item 1A “Risk Factors” in our 2025 Annual Report on Form 10-K for the year ended December 31, 2025.