Houston-based industrial PVF distributor DNOW reported Nov. 5 that third-quarter sales reached $1.337 billion, up 2.3% sequentially and 110.9% year-over-year. The annual comparison reflects its $1.5 billion acquisition of MRC Global in November 2025.

Net income totaled $26 million, compared with a $21 million loss in 2Q26 and $23 million in profit a year earlier. Gross margin improved to 19.8% from 18.6% sequentially, while adjusted gross margin rose to 21.2% from 20.8%.

Adjusted EBITDA increased 26.7% sequentially to $76 million, or 5.7% of sales, up from 4.6% in 2Q. That exceeded the 5.0%-5.5% margin forecast DNOW issued in August.

U.S. sales totaled $1.125 billion, up 1.4% sequentially. Canada increased 19.1% to $56 million, while International rose 3.3% to $156 million. Approximately $15 million of international projects shifted to future periods.

President and CEO David Cherechinsky said gas utilities generated their highest quarterly revenue in three years, with growth also coming from downstream, industrial and midstream businesses.

Operating cash flow totaled $120 million. DNOW reduced net debt by $95 million to $265 million and repurchased $17 million of shares, bringing year-to-date buybacks to $92 million.

DNOW increased its expected year-end annualized MRC cost-synergy run rate to approximately $32 million, compared with $30 million projected in August and an original $17 million target. The revised estimate represents 46% of its $70 million three-year goal.

The company said facility consolidations and efficiencies were ahead of plan, while upstream and midstream locations continued migrating to its SAP ERP platform.

For 4Q26, DNOW expects a seasonal sales decline in the high-single-digit percentage range sequentially and an adjusted EBITDA margin of approximately 4.5%. Full-year sales are expected modestly above the midpoint of its previous $5.0-$5.1 billion outlook. DNOW also raised its full-year operating cash flow outlook to approach $200 million, from a previous $125-$200 million range.