DNOW Inc. delivered robust revenue growth in the fourth quarter of 2025, reaching $959 million, a 68% increase from $571 million in the prior-year period. This performance reflects the impact of the recent merger with MRC Global, though it came alongside a reported net loss of $147 million due to transaction-related charges.4039
Key Financial Highlights
For the full year 2025, revenue climbed 19% to $2.82 billion compared to $2.37 billion in 2024. Adjusted EBITDA held steady at $209 million, or 7.4% of revenue, matching the previous year. However, GAAP gross profit margins contracted to 17.0% from 22.4%, primarily from inventory step-up charges tied to the merger.37
In Q4, adjusted gross profit stood at $217 million (22.6% margin), while adjusted net income attributable to DNOW reached $23 million, or $0.15 per diluted share. Cash from operations generated $83 million in the quarter and $155 million for the year, supporting $37 million in share repurchases.36
Merger Integration Progress
DNOW completed its all-stock acquisition of MRC Global on November 6, 2025, expanding its footprint across energy and industrial sectors. The company now projects $23 million in cost synergies for 2026, surpassing initial targets by 35%, en route to $70 million over three years. Integration efforts include a new organizational structure with U.S., Canada, and International segments, alongside branch optimization and system migrations.38
Challenges persist with the U.S. MRC Global ERP transition, contributing to revenue headwinds and operational hurdles. Management reports active mitigation through additional field support and hybrid system use, aiming for resolution to unlock long-term growth.38
Executive Commentary
David Cherechinsky, President and CEO, stated, “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.” He emphasized the merger’s strategic positioning and commitment to addressing ERP issues for sustained success.39
Balance Sheet Strength
DNOW maintains a solid balance sheet with $588 million in total liquidity, including $164 million in cash. Net debt stands at $247 million, yielding a leverage ratio of 1.2x. Inventories rose to $1.192 billion, reflecting merger-related expansions.40
2026 Outlook
Guidance for 2026 remains suspended amid ERP disruptions, but executives anticipate free cash flow of $100-200 million and a return to 8% EBITDA margins over time through synergies and optimizations. Priorities include deleveraging, M&A in high-growth areas, and opportunistic share repurchases.38
DNOW operates as a leading distributor of pipe, valves, fittings, and energy solutions, serving global upstream, midstream, and industrial markets with over 5,300 employees across 300 locations.
