Now Inc ((DNOW)) has held its Q2 earnings call. Read on for the main highlights of the call.
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In a recent earnings call, Now Inc. showcased a generally positive outlook, buoyed by record second-quarter EBITDA and significant revenue growth. The company highlighted its robust financial position and expansion in the midstream business as key drivers of this success. However, challenges in the Canadian and international markets, alongside tariff and supply chain issues, were acknowledged, though they did not overshadow the overall positive sentiment due to strong financial results and growth in crucial areas.
Record Second Quarter EBITDA
The second quarter of 2025 marked a milestone for Now Inc., achieving the best second-quarter EBITDA in its public history at $51 million, representing an 11% sequential increase. This record-setting performance underscores the company’s effective financial strategies and operational efficiencies.
Revenue Growth
Now Inc. reported a revenue of $628 million for the second quarter, a 5% increase from the first quarter and double the midpoint of the sequential guidance provided in May. This growth reflects the company’s strong market presence and strategic initiatives that have effectively driven sales.
Midstream Business Expansion
The midstream business played a pivotal role in Now Inc.’s success, with U.S. activity driving an 11% increase in sequential revenue. The midstream segment now accounts for approximately 27% of the company’s total revenue, highlighting its growing importance in the company’s portfolio.
Strong Financial Position
Now Inc. has fortified its financial standing by expanding its cash balance to $232 million while maintaining a debt-free status. This strong financial position provides the company with the flexibility to pursue growth opportunities and navigate market challenges.
Successful Share Repurchase Program
The company’s share repurchase program has been successful, with $27 million in shares bought back year-to-date under the new authorization. This move reflects Now Inc.’s commitment to returning value to shareholders and confidence in its financial health.
Successful Integration of Acquisitions
The acquisition of Natron International, completed in the second quarter, has expanded Now Inc.’s opportunities in the electrical products sector within Singapore and the Asia Pacific region, enhancing its market reach and product offerings.
Revenue Decline in Canada
Despite overall growth, Now Inc. faced a revenue decline in Canada, with quarterly revenue down to $48 million, primarily due to the seasonal breakup period and broader macroeconomic impacts. This highlights the challenges faced in specific regional markets.
International Revenue Decrease
International revenue saw a sequential decrease of 17%, amounting to $52 million, due to non-repeating project activities from the first quarter. This decline underscores the volatility and challenges in international markets.
Challenges in Canada Market
The Canadian market continues to experience softness, affected by U.S. trade negotiations, tariff uncertainties, and political factors impacting customer investments. These challenges present ongoing hurdles for Now Inc. in this region.
Tariff and Supply Chain Challenges
Now Inc. is navigating the complexities of tariffs and political events that pose challenges to supply chain management. While these issues have not significantly impacted growth and margins yet, they remain areas of concern for the company.
Forward-Looking Guidance
Looking ahead, Now Inc. anticipates modest revenue growth in the third quarter, with full-year 2025 revenues potentially reaching high single-digit percentage growth from 2024 levels. The company expects to maintain an EBITDA margin approaching 8% of revenue. Additionally, the merger with MRC Global is projected to generate $70 million in annual cost synergies within three years, opening new opportunities in alternative energy and industrial markets.
In summary, Now Inc.’s earnings call conveyed a positive sentiment, driven by record financial results and strategic growth initiatives. Despite facing challenges in certain markets and supply chain complexities, the company’s strong financial position and forward-looking strategies position it well for continued success.