Houston-based industrial PVF distributor DNOW reported second-quarter sales of $1.31 billion, up 10% sequentially from 1Q, including 13% growth in its U.S. segment.

Gross profit was $243 million — 18.6% of sales — while adjusted gross profit was $272 million, or 20.8%. DNOW posted a $21 million net loss, improving from a $44 million loss in the first quarter. Adjusted EBITDA climbed 54% sequentially to $60 million and 4.6% of sales. Operating cash flow reached $133 million, a company second-quarter record. DNOW repurchased $25 million of shares and reduced net debt by $95 million during the quarter to $360 million.

The sequential sales increase exceeded the mid-to-high single-digit growth forecast issued with DNOW’s 1Q results, while the company also characterized its $60 million of adjusted EBITDA as above guidance.

U.S. sales totaled $1.11 billion, representing 85% of company revenue. International sales increased 3% sequentially to $151 million, while Canada decreased 8% to $47 million amid seasonal spring breakup conditions. By end market, upstream accounted for $508 million of sales, followed by gas utilities at $310 million, midstream at $272 million and downstream and industrial at $217 million.

President and CEO David Cherechinsky said U.S. midstream sales exceeded a $1 billion annualized pace for the first time, while gas utilities and upstream posted their strongest sequential percentage growth since 2022.

DNOW increased its expected 2026 year-end annualized cost-synergy run rate to approximately $30 million, up from an original $17 million target. That would represent 43% of its $70 million three-year MRC integration goal.

For 3Q26, DNOW expects revenue to increase in the low-to-mid single digits sequentially, with adjusted EBITDA at 5.0%-5.5% of sales. The company raised its full-year outlook to $5.0-$5.1 billion in revenue, with adjusted EBITDA approaching 4.5% of sales

MRC Global ERP Update

DNOW also reported further progress stabilizing and optimizing MRC Global’s U.S. Oracle ERP system following its $1.5 billion acquisition of MRC in November 2025. Management said warehouse picking, paperwork processing and back-office analysis all improved during the quarter.

“Basically, speed has been the gains we’ve made over the last 90 days,” Cherechinsky told analysts.

Premium: Amid MRC Global Integration, DNOW Wrestles with Challenges from ERP Transition (February 2026)

DNOW has transitioned 17 MRC locations to its SAP platform, primarily serving upstream and midstream markets. Cherechinsky said the converted locations are showing better responsiveness, fulfillment and customer-level revenue retention. System-related invoice delays have been resolved, helping days sales outstanding improve by seven days sequentially. ERP stabilization expenses totaled about $8.5 million in 2Q, with management expecting those costs to decline by approximately $1 million in 3Q and another $1 million in 4Q.