NOW (DNOW 6.45%), a global industrial distributor serving energy and industrial markets, reported earnings on August 6, 2025. The company posted earnings per share (Non-GAAP) of $0.27, beating analyst expectations by $0.06 or 28.2% for non-GAAP EPS, and reported GAAP revenue of $628 million, also above estimates. Results reached the high end of company guidance, with record EBITDA excluding other costs. Despite a year-over-year revenue (GAAP) decline, operational improvements and outperformance in cash generation marked the period as a solid one for the company.
| Metric | Q2 2025 | Q2 2025 Estimate | Q2 2024 | Y/Y Change |
|---|---|---|---|---|
| EPS (Non-GAAP) | $0.27 | $0.21 | $0.25 | 8.0% |
| Revenue (GAAP) | $628 million | $612.7 million | $633 million | -0.8% |
| EBITDA (Non-GAAP) | $51 million | $50 million | 2.0% | |
| Free Cash Flow (Non-GAAP) | $41 million | $19 million | 115.8% | |
| Cash and Cash Equivalents | $232 million | $256 million | (9.4%) |
Source: Analyst estimates for the quarter provided by FactSet.
Business Overview and Focus Areas
NOW is an industrial distributor with a core focus on supplying pipe, valves, fittings, pumps, and automation control equipment to energy and industrial markets. Its operations span approximately 165 locations worldwide, serving oil and gas, midstream, utilities, and process industries.
The company’s recent strategy centers on several fronts: leveraging its extensive distribution network to offer timely product delivery; adopting digital solutions like the DigitalNOW platform to improve procurement and workflow; broadening its product range for diverse customer needs; and emphasizing growth in sustainable and adjacent industrial segments. Success depends on deep customer relationships, inventory management, adaptation to industry changes, and execution of large-scale integration—especially as it moves forward with its pending merger with MRC Global.
Second Quarter Highlights and Financial Performance
NOW delivered a clear beat on key financial metrics, with GAAP revenue of $628 million and non-GAAP EPS of $0.27, both exceeding analyst estimates. Non-GAAP earnings per share rose to $0.27, comfortably ahead of Wall Street’s $0.21 estimate. Revenue (GAAP) declined from $633 million in Q2 2024 to $628 million, a drop of $5 million, but still landed above the analyst expectation (non-GAAP). The company’s EBITDA excluding other costs was $51 million, representing 8.1% of revenue (non-GAAP)—a record in its public history.
The quarter saw robust free cash flow (non-GAAP) of $41 million. Cash and liquidity remain solid, with $232 million in cash and no long-term debt, supporting both ongoing share repurchases and acquisition plans.
On the regional front, U.S. revenue (GAAP) was $528 million, rising from $474 million in Q1 2025 and $512 million in Q2 2024, as the company benefitted from midstream project demand and recent acquisitions in produced water management and fluid handling. Canada and international segments lagged, with declines driven by the absence of one-time project revenue and continued volatility in project timing, especially in places like Kazakhstan. Management emphasized a strategic exit from less profitable regions internationally, focusing resources on core markets with solid profitability and cash flow.
Product-wise, NOW continues to leverage its diversified portfolio. Core offerings include pipe, valves, and fittings for traditional markets, as well as automation/electrical solutions and engineered pumping equipment supporting water, industrial, and process sectors. DigitalNOW is cited as a driver of procurement efficiency, with digital revenue accounting for 53% of SAP-based sales—a new high. Environmental solutions such as EcoVapor, designed for vapor management and emission reduction, remain a focal point as sustainability trends reshape industrial demand.
Business Model, Segments, and Key Initiatives
The heart of NOW’s business lies in its large distribution network and customer-centric operating model. By holding inventory close to customers, the company can respond quickly to urgent needs—critical in industries where downtime is costly. Segment expansion into process solutions—for example, lobe and vertical pumps, as well as rental equipment for produced water management—continues to broaden revenue streams.
Digital transformation remains a management focus. The DigitalNOW platform automates procurement, integrates with customer systems, and has recently seen greater use of artificial intelligence to streamline document processing. This digital emphasis aims to improve efficiency.
Geographically, the U.S. remains the company’s primary engine, making up the largest share of revenue and showing growth thanks to investments in inventory and acquisitions. The Canadian and international businesses experienced lower results, mainly as a result of project-based activities not repeating and a strategic refocus away from volatile or less profitable markets.
Sustainability and environmental products such as EcoVapor are seeing traction in areas like renewable natural gas and emission control projects. These solutions align the company with broader industry trends toward decarbonization, carbon capture, and energy transition activities.
Outlook and Capital Allocation
Management reaffirmed its outlook for flat to high-single-digit percent revenue growth for 2025 compared to 2024, and expects 2025 EBITDA margins to approach 8% of revenue. The company is targeting $150 million in free cash flow for 2025. No changes were made to forward guidance.
Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.
