Revenue surged 108.1% to $1.3B in 2026Q2, but gross margin collapsed to 7.1% in 2025Q4 from a stable 22-23% range, with operating income swinging to a $107M loss in 2025Q4.
Dnow Inc. (DNOW) annual income statement — 14-year revenue, gross profit & net income history
| Metric | TTM | Dec'25 | Dec'24 | Dec'23 | Dec'22 | Dec'21 | Dec'20 | Dec'19 | Dec'18 | Dec'17 | Dec'16 | Dec'15 | Dec'14 | Dec'13 | Dec'12 |
|---|
| Sales/Revenue | 4.79B | 2.82B | 2.37B | 2.32B | 2.14B | 1.63B | 1.62B | 2.95B | 3.13B | 2.65B | 2.11B | 3.01B | 4.11B | 4.3B | 3.41B |
| Revenue Growth % | 96.79% | 18.84% | 2.24% | 8.66% | 30.88% | 0.8% | -45.14% | -5.63% | 18.09% | 25.68% | -30% | -26.67% | -4.45% | 25.83% | - |
| Cost of Goods Sold | 4.02B | 2.34B | 1.84B | 1.79B | 1.63B | 1.27B | 1.33B | 2.37B | 2.5B | 2.15B | 1.76B | 2.51B | 3.29B | 3.5B | 2.8B |
| COGS % of Revenue | - | 83.05% | 77.45% | 76.95% | 76.31% | 78.13% | 81.96% | 80.14% | 79.85% | 81.08% | 83.63% | 83.32% | 80.05% | 81.45% | 82.1% |
| Gross Profit | 769M | 478M | 535M | 535M | 506M | 357M | 292M | 586M | 630M | 501M | 345M | 502M | 819M | 797M | 611M |
| Gross Margin % | 16.07% | 16.95% | 22.55% | 23.05% | 23.69% | 21.88% | 18.04% | 19.86% | 20.15% | 18.92% | 16.37% | 16.68% | 19.95% | 18.55% | 17.9% |
| Gross Profit Growth % | - | -10.65% | 0% | 5.73% | 41.74% | 22.26% | -50.17% | -6.98% | 25.75% | 45.22% | -31.27% | -38.71% | 2.76% | 30.44% | - |
| Operating Expenses | 887M | 495M | 422M | 395M | 375M | 348M | 712M | 669M | 557M | 542M | 567M | 619M | 638M | 573M | 443M |
| OpEx % of Revenue | - | 17.55% | 17.78% | 17.02% | 17.56% | 21.32% | 43.98% | 22.67% | 17.81% | 20.47% | 26.91% | 20.56% | 15.54% | 13.34% | 12.98% |
| Selling, General & Admin | 883M | 495M | 416M | 395M | 365M | 341M | 391M | 541M | 557M | 542M | 567M | 619M | 638M | 573M | 443M |
| SG&A % of Revenue | - | 17.55% | 17.53% | 17.02% | 17.09% | 20.89% | 24.15% | 18.33% | 17.81% | 20.47% | 26.91% | 20.56% | 15.54% | 13.34% | 12.98% |
| Research & Development | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| R&D % of Revenue | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - |
| Other Operating Expenses | 1000K | 0 | 6M | 0 | 10M | 7M | 321M | 128M | 0 | 0 | 0 | 0 | -3M | -2M | -3M |
| Operating Income | -118M | -17M | 113M | 140M | 131M | 9M | -420M | -83M | 73M | -41M | -222M | -510M | 181M | 224M | 168M |
| Operating Margin % | -2.47% | -0.6% | 4.76% | 6.03% | 6.13% | 0.55% | -25.94% | -2.81% | 2.33% | -1.55% | -10.54% | -16.94% | 4.41% | 5.21% | 4.92% |
| Operating Income Growth % | - | -115.04% | -19.29% | 6.87% | 1355.56% | 102.14% | -406.02% | -213.7% | 278.05% | 81.53% | 56.47% | -381.77% | -19.2% | 33.33% | - |
| EBITDA | -28M | 35M | 147M | 166M | 150M | 32M | -392M | -42M | 114M | 9M | -169M | -472M | 202M | 241M | 180M |
| EBITDA Margin % | -0.58% | 1.24% | 6.19% | 7.15% | 7.02% | 1.96% | -24.21% | -1.42% | 3.65% | 0.34% | -8.02% | -15.68% | 4.92% | 5.61% | 5.27% |
| EBITDA Growth % | -115.56% | -76.19% | -11.45% | 10.67% | 368.75% | 108.16% | -833.33% | -136.84% | 1166.67% | 105.33% | 64.19% | -333.66% | -16.18% | 33.89% | - |
| D&A (Non-Cash Add-back) | 90M | 52M | 34M | 26M | 19M | 23M | 28M | 41M | 41M | 50M | 53M | 38M | 21M | 17M | 12M |
| EBIT | -215M | -100M | 119M | 138M | 141M | 16M | -99M | 45M | 73M | -41M | -222M | -117M | 181M | 222M | 165M |
| Net Interest Income | -7M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Interest Income | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Interest Expense | 7M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Other Income/Expense | -104M | -83M | 1M | -2M | 8M | 3M | -10M | -10M | -15M | -11M | -8M | -8M | -3M | -2M | -3M |
| Pretax Income | -222M | -100M | 114M | 138M | 139M | 12M | -430M | -93M | 58M | -52M | -230M | -518M | 178M | 222M | 165M |
| Pretax Margin % | -4.64% | -3.55% | 4.8% | 5.95% | 6.51% | 0.74% | -26.56% | -3.15% | 1.85% | -1.96% | -10.92% | -17.21% | 4.34% | 5.17% | 4.83% |
| Income Tax | -36M | -12M | 32M | -110M | 10M | 7M | -3M | 4M | 6M | 0 | 4M | -16M | 62M | 75M | 57M |
| Effective Tax Rate % | 16.22% | 12% | 28.07% | -79.71% | 7.19% | 58.33% | 0.7% | -4.3% | 10.34% | 0% | -1.74% | 3.09% | 34.83% | 33.78% | 34.55% |
| Net Income | -186M | -89M | 81M | 247M | 128M | 5M | -427M | -97M | 52M | -52M | -234M | -502M | 116M | 147M | 108M |
| Net Margin % | -3.89% | -3.16% | 3.41% | 10.64% | 5.99% | 0.31% | -26.37% | -3.29% | 1.66% | -1.96% | -11.11% | -16.68% | 2.83% | 3.42% | 3.16% |
| Net Income Growth % | -295.79% | -209.88% | -67.21% | 92.97% | 2460% | 101.17% | -340.21% | -286.54% | 200% | 77.78% | 53.39% | -532.76% | -21.09% | 36.11% | - |
| Net Income (Continuing) | -186M | -88M | 82M | 248M | 129M | 5M | -427M | -97M | 52M | -52M | -234M | -502M | 116M | 147M | 108M |
| Discontinued Operations | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Minority Interest | 4M | 5M | 4M | 3M | 2M | 1M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| EPS (Diluted) | -1.02 | -0.75 | 0.75 | 2.24 | 1.13 | 0.05 | -3.90 | -0.89 | 0.48 | -0.48 | -2.19 | -4.69 | 1.06 | 1.37 | 1.01 |
| EPS Growth % | -231.82% | -200% | -66.52% | 98.23% | 2400% | 101.16% | -338.2% | -285.42% | 200% | 78.08% | 53.3% | -542.45% | -22.63% | 35.64% | - |
| EPS (Basic) | - | -0.75 | 0.75 | 2.26 | 1.14 | 0.05 | -3.90 | -0.89 | 0.48 | -0.48 | -2.19 | -4.69 | 1.07 | 1.37 | 1.01 |
| Diluted Shares Outstanding | 182M | 118M | 107.15M | 108.42M | 111.22M | 110.49M | 109.41M | 108.78M | 109M | 107.75M | 107M | 107M | 108M | 107.06M | 107.06M |
| Basic Shares Outstanding | 181M | 118M | 106.35M | 107.4M | 110.68M | 110.4M | 109.41M | 108.78M | 108M | 107.75M | 107M | 107M | 107M | 107.06M | 107.06M |
| Dividend Payout Ratio | - | - | - | - | - | - | - | - | - | - | - | - | - | 102.72% | - |
Quick answers to the most common questions about buying DNOW stock.
For fiscal year 2025, Dnow Inc. (DNOW) reported total revenue of $2.82B. This represents a 17.4% decline compared to $3.41B in 2012.
Dnow Inc. (DNOW) reported a net loss of $89.0M for the fiscal year ending 2025.
Dnow Inc. (DNOW) reported an operating income of $-17.0M, resulting in an operating profit margin of -0.6%. This margin reflects the operational efficiency of the business before interest and taxes.
Dnow Inc. (DNOW) generated $478.0M in gross profit for the year, representing a gross profit margin of 17.0%. This demonstrates the company's core pricing power and production efficiency.
Key Metrics
Top Statement Risk
Margin compression from acquisition integration
Metrics are mathematically derived from official filings.
Revenue Surge Masks Underlying Volatility
DNOW's revenue jumped 108.1% year-over-year to $1.3B in 2026Q2, per the latest quarterly report, but this acceleration appears acquisition-driven rather than organic, as prior quarters showed modest single-digit growth.
The dramatic revenue spike in 2026Q1 and Q2, with growth rates of 97.5% and 108.1%, respectively, contrasts sharply with the 2024-2025 period where growth ranged from -3.6% to 6.6%. This suggests a major inorganic event, likely an acquisition, that has more than doubled the revenue base. However, the sustainability of this growth is questionable; organic growth in the quarters preceding the spike was tepid, and the integration of acquired operations may introduce volatility. Investors should monitor whether the revenue surge translates into sustained market share gains or if it is a one-time step-up.
Gross Margin Collapse Post-Acquisition
Gross margin plummeted to 7.1% in 2025Q4 from a stable 22-23% range in prior quarters, as reported in financial statements, indicating severe margin dilution likely from acquisition-related costs or lower-margin revenue mix.
The gross margin deterioration is stark: from 22.9% in 2025Q2 to 7.1% in 2025Q4, before recovering to 18.6% in 2026Q2. This suggests the acquired business operates at significantly lower margins, dragging overall profitability. Even with the recovery, the 18.6% margin is well below the historical 22-23% level, implying a structural shift in the business mix. Compared to peers like GWW at 39.1% and MSM at 40.8%, DNOW's gross margin is now substantially lower, indicating weaker pricing power or a less differentiated product offering. The margin compression may persist if the acquired revenue continues to dominate.
Operating Leverage Turns Negative
Operating income swung from a $39M profit in 2025Q2 to a $107M loss in 2025Q4, per SEC filings, as SG&A expenses nearly doubled while gross profit collapsed, indicating a loss of operating leverage.
In 2025Q4, SG&A jumped to $175M from $105M in the prior quarter, while gross profit fell to $68M, resulting in an operating loss of $107M. This suggests that the acquisition brought significant overhead costs that are not yet being offset by gross profit. Even in 2026Q2, with revenue at $1.3B, operating income is only $1M, implying that the cost structure has not scaled efficiently. The operating margin of 0.1% is a dramatic decline from the 5-6% range seen in 2024 and early 2025. This indicates that the company is currently unable to convert its revenue growth into operating profit, a key concern for investors.
Net Losses and SBC Cloud Earnings
DNOW reported a net loss of $147M in 2025Q4 and $21M in 2026Q2, with stock-based compensation of $17M and $10M respectively, as per income statement data, raising questions about earnings quality.
The net losses in recent quarters are substantial, with EPS of -$0.95 in 2025Q4 and -$0.11 in 2026Q2. Stock-based compensation has increased, reaching $17M in 2025Q4, which is higher than the $4M typical in prior quarters. This suggests that a portion of the losses may be non-cash, but the magnitude of the losses indicates underlying operational issues. The tax rate appears anomalous, as net income is negative while pre-tax income is also negative, but the effective tax rate is not clearly disclosed. Investors should scrutinize the sustainability of these losses and whether they are driven by one-time charges or ongoing operational inefficiencies.
SG&A Surge Outpaces Revenue Growth
SG&A expenses rose from $103M in 2024Q4 to $238M in 2026Q2, a 131% increase, while revenue grew only 128% over the same period, as reported in financial statements, indicating cost discipline issues.
The SG&A line has ballooned, particularly in 2026Q1 and Q2, reaching $238M in both quarters. This is a significant increase from the $101-108M range seen in 2024 and early 2025. The growth in SG&A is roughly proportional to revenue growth, but given the gross margin compression, the company is not generating enough gross profit to cover these expenses. This suggests that management may be investing heavily in the acquired business, but the return on that investment is not yet visible. The lack of R&D expenses is notable, but for a distribution company, this is not unusual. The key concern is whether SG&A can be rationalized as integration costs subside.
Acquisition Integration Risks Could Persist
The sharp revenue growth and margin collapse suggest the acquisition may be dilutive; if integration fails, DNOW could face prolonged margin pressure, as evidenced by the 2025Q4 operating loss of $107M.
Short-sellers would likely focus on the deteriorating profitability metrics. The gross margin has not recovered to pre-acquisition levels, and operating income remains minimal despite the revenue surge. The company's net losses in 2025Q4 and 2026Q2 indicate that the acquired operations are not yet generating acceptable returns. Additionally, the increase in stock-based compensation could signal that management is using equity to retain talent, which may further dilute shareholders. If the integration does not yield the expected synergies, the company could face a prolonged period of subpar profitability, making it difficult to justify the current valuation. Investors should monitor whether management can restore margins to historical levels.