DistributionNOW’s first quarter results surpassed Wall Street’s revenue and adjusted profit expectations, yet the market responded negatively. Management cited ongoing execution in its core U.S. operations and resilience in margins, even as U.S. rig activity remained flat and completions dipped. CEO David Cherechinsky highlighted the company’s ability to deliver sequential and year-over-year top-line growth despite market headwinds, attributing strength to gains in the midstream sector and the full-quarter contribution from the Trojan acquisition. He also noted, “This is notable given the misunderstood perception that the upstream sector alone drives opportunities for DNOW.”
Is now the time to buy DNOW? Find out in our full research report (it’s free).
DistributionNOW (DNOW) Q1 CY2025 Highlights:
- Revenue: $599 million vs analyst estimates of $587.8 million (6.4% year-on-year growth, 1.9% beat)
- Adjusted EPS: $0.22 vs analyst estimates of $0.17 (26.9% beat)
- Adjusted EBITDA: $46 million vs analyst estimates of $40.4 million (7.7% margin, 13.9% beat)
- Operating Margin: 5%, in line with the same quarter last year
- Market Capitalization: $1.51 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions DistributionNOW’s Q1 Earnings Call
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Adam Farley (Stifel): asked how tariffs and inflation are affecting product pricing and gross margins. CEO David Cherechinsky explained most tariff impacts have not yet materialized but are expected to appear in Q2, with margin outcomes still uncertain.
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Adam Farley (Stifel): also inquired about market share opportunities against smaller competitors. Cherechinsky stated DNOW’s scale offers a buying power advantage, while Brad Wise added that adjacent markets such as water, mining, and data centers represent growth avenues.
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Chuck Minervino (Susquehanna): requested detail on geographic revenue trends and the recent Singapore acquisition. Cherechinsky described flat outlooks internationally and in Canada, but highlighted U.S. midstream and M&A as growth drivers.
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Jeff Robertson (Water Tower Research): questioned how DNOW’s diversification insulates it from upstream slowdowns. Cherechinsky cited midstream and energy transition projects as key buffers, with Wise noting rental and process solutions are extending into new industrial segments.
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Josh Jayne (Daniel Energy Partners): probed assumptions around U.S. rig activity and M&A timing. Cherechinsky acknowledged uncertainty around rig declines but noted tariff-driven price increases may offset upstream softness, while M&A remains active but cautious due to oil price volatility.
Catalysts in Upcoming Quarters
In the coming quarters, StockStory analysts will be watching (1) whether DNOW can effectively pass through tariff-driven cost increases without sacrificing market share or margins, (2) the pace of midstream infrastructure and adjacent market project wins, and (3) execution on integration and synergy capture from the Singapore acquisition. Progress in digital sales initiatives and further expansion of rental and process solutions will also be key markers of strategic execution.
DistributionNOW currently trades at $14.29, down from $16.01 just before the earnings. Is the company at an inflection point that warrants a buy or sell? Find out in our full research report (it’s free).
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