AI-extracted from the 10-Q filed 2026-08-06 — Q2 FY2026 (quarter ended June 30, 2026). Every figure is machine-verified against the filing text on SEC EDGAR.
DNOW revenue doubled to $1.31B on MRC Global acquisition, but net loss of $21M reflects integration headwinds and LIFO inventory impacts.
Biggest Revenue Drivers
Largest Expense Items
Impairment and other charges$4Mn/a (nil in prior year)
$4M impairment on operating right-of-use asset for Houston corporate office lease.
Margins: Gross margin declined to 18.6% from 20.5% YoY due to LIFO reserve increases ($19M), acquisition inventory fair-value step-ups ($3M), and product/customer mix shift from MRC Global integration. Adjusted gross margin was 20.8% vs. 23.2% YoY, reflecting lower profitability from acquired operations.
Watch Items from the Filing
MRC Global integration drag: Operating loss of $8M in U.S. segment Q2 2026 vs. $15M profit in Q2 2025; $62M operating loss in first half 2026 vs. $36M profit in first half 2025, driven by inventory write-downs ($44M) and elevated SG&A from acquisition.
Asbestos litigation exposure: Named defendant in ~444 lawsuits with ~497 claims; third-party insurance covers substantial portion but policy caps present risk if future claims exceed coverage limits.
Multi-state unclaimed property audit underway; timing and outcome unpredictable; potential assessment of penalties, interest and remittance requirements if noncompliance found.
Tariff headwinds: Significant products sourced from China/India; tariff pass-throughs successful in some cases but caused delays/cancellations among downstream clients in others.
Strong sector fundamentals: Gas Utilities sector (23% of H1 revenue) driven by ~33% of gas distribution lines >40 years old requiring replacement; Midstream expansion supported by $1T+ North American infrastructure investment opportunity.
AI-extracted and verified against SEC EDGAR filing text. Not investment advice.
Cherechinsky David APresident and CEOOption exercise · Aug 10, 2026
Chang Raymond WVP and General CounselOption exercise · Aug 10, 2026
Reed SonyaReporting ownerGrant or award · May 20, 2026
Damiris George JohnReporting ownerGrant or award · May 20, 2026
Cobb GalenReporting ownerGrant or award · May 20, 2026
David-Green KarenReporting ownerGrant or award · May 20, 2026
Coppinger Paul MReporting ownerGrant or award · May 20, 2026
Bonno TerryReporting ownerGrant or award · May 20, 2026
Jadin Ronald LReporting ownerGrant or award · May 20, 2026
About DNOW Inc. (DNOW): stock profile, AI score and financials
DNOW Inc. (DNOW) stock profile, AI quality score, and SEC EDGAR financial data, a Energy sector company. 13F Pro's AI-powered ranking engine scores DNOW at 48.6/100 on a composite quality score built from its SEC filings, placing it at rank #1,732 of 2,925 stocks — the bottom half of the AI-ranked universe. DNOW scores in the top quartile across revenue growth (89.1), revenue scale (75.0). Areas of concern include earnings quality (11.1) and balance sheet strength (19.4), which score below median versus the broader universe. Based on the latest XBRL financial filings (Q2 2026), DNOW Inc. reports quarterly revenue of $1.3B, net income of $-21.0M, an operating margin of 0.1%. DNOW trades on the NYSE exchange and files with the SEC under CIK 1599617. 13F Pro's AI research platform runs 10 specialized AI analysts — value, growth, momentum, macro, and activist specialists — that debate DNOW daily and publish AI-generated analysis with cited SEC sources. The platform aggregates historical XBRL financial facts, 10-Q and 10-K filings, insider Form 4 transactions, and institutional 13-F holdings for DNOW Inc. directly from SEC EDGAR.