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Water Tower Research is a leading equity research firm that provides research on micro, small and mid cap companies.

Water Tower Research was founded by Wall Street veterans after witnessing a fundamental shift in the investment research industry with the result being a declining knowledge base among investors, a lack of awareness and a shrinking pool of fundamental research being conducted on companies across the small-cap and micro-cap spectrum. The same issues are now increasingly occurring in the mid-cap space. This sea change within the investment community is impacting not only the companies themselves but also current shareholders and potential investors. With significantly less active sell-side sponsorship by Wall Street, a substantial information gap has developed between companies and various constituents in the financial community. The net result is fewer channels for insight and information to flow between companies and investors.

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<ul><li>DNOW is well-positioned to execute its strategy of strategically investing in the margin accretive areas of its business and returning cash to shareholders through its repurchase authorization.</li><li>Two 2024 acquisitions, Whitco Supply and Trojan Rentals, expanded the company’s exposure in the midstream and water management sectors.</li><li>In April 2025, DNOW acquired Singapore-based Natron International Pte. Ltd., expanding its electrical supply capabilities under the existing MacLean International brand to serve traditional and renewable energy, infrastructure, and other commercial and industrial end markets in the Asia-Pacific region.</li></ul>

DNOW is well-positioned to execute its strategy of strategically investing in the margin accretive areas of its business and returning cash to shareholders through its repurchase authorization.Two 2024 acquisitions, Whitco Supply and Trojan Rentals, expanded the company’s exposure in the midstream and water management sectors.In April 2025, DNOW acquired Singapore-based Natron International Pte. Ltd., expanding its electrical supply capabilities under the existing MacLean International brand to serve traditional and renewable energy, infrastructure, and other commercial and industrial end markets in the Asia-Pacific region.

DNOW, Inc: Strategy Execution Points to Solid Free Cash Flow Outlook

<ul><li>DNOW’s capacity to generate free cash flow, coupled with its strong balance sheet, position the company to capitalize on accretive growth opportunities in 2025 and continue returning cash to shareholders through its share repurchase program.</li><li>The company generated $289 million of free cash flow during 2024 and ended the year with $256 million of cash on the balance sheet.</li><li>fter completing an $80 million share repurchase program in 4Q24, the board authorized a new $160 million repurchase program in January 2025.</li></ul>

DNOW’s capacity to generate free cash flow, coupled with its strong balance sheet, position the company to capitalize on accretive growth opportunities in 2025 and continue returning cash to shareholders through its share repurchase program.The company generated $289 million of free cash flow during 2024 and ended the year with $256 million of cash on the balance sheet.fter completing an $80 million share repurchase program in 4Q24, the board authorized a new $160 million repurchase program in January 2025.

DNOW, Inc. - Expect 2025 Growth Despite Uncertain Upstream Activity

<ul><li>DNOW’s existing fulfillment model is contributing to increased earnings and free cash flow capacity through industry cycles.</li><li>1H24 revenue totaled $1,196 million compared with $1,178 million in 1H23, despite a 5% decline in the average global rig count. US revenue totaled $947 million in 1H24 compared with $883 million in 1H23 despite a 24% decline in the average US rig count.</li><li>US gains reflect increased market share and a partial contribution from the $185 million Whitco acquisition, which closed March 12, 2024. Free cash flow totaled $98 million in 1H24. </li></ul>

DNOW’s existing fulfillment model is contributing to increased earnings and free cash flow capacity through industry cycles.1H24 revenue totaled $1,196 million compared with $1,178 million in 1H23, despite a 5% decline in the average global rig count. US revenue totaled $947 million in 1H24 compared with $883 million in 1H23 despite a 24% decline in the average US rig count.US gains reflect increased market share and a partial contribution from the $185 million Whitco acquisition, which closed March 12, 2024. Free cash flow totaled $98 million in 1H24. 

DNOW, Inc. - Positioned for an Evolving Energy Market

<ul><li>DNOW’s underlying strategy is to increase earnings and free cash flow by gaining share in its traditional energy markets, while capitalizing on new revenue opportunities in the energy evolution and adjacent industrial markets.</li><li>DNOW is reaping the rewards of management’s efforts to provide procurement and supply chain solutions to customers through innovative technology and an efficient regionalized distribution model to increase market share and profitability.</li><li>Using the rig count as an activity proxy, average revenue per global rig in 2Q24 was $4,086 (~$1.5 million annualized), a 19% increase Q/Q and 12% Y/Y.</li></ul>

DNOW’s underlying strategy is to increase earnings and free cash flow by gaining share in its traditional energy markets, while capitalizing on new revenue opportunities in the energy evolution and adjacent industrial markets.DNOW is reaping the rewards of management’s efforts to provide procurement and supply chain solutions to customers through innovative technology and an efficient regionalized distribution model to increase market share and profitability.Using the rig count as an activity proxy, average revenue per global rig in 2Q24 was $4,086 (~$1.5 million annualized), a 19% increase Q/Q and 12% Y/Y.

DNOW, Inc. - Free Cash Flow Profile Supports Management's Value Proposition

<ul><li>The 1Q24 Whitco Supply acquisition diversified DNOW’s customer base and added new revenue opportunities in the midstream markets.</li><li>Management now expects FY24 revenue to increase in the mid- to high single digits range from FY23 and for adjusted EBITDA margin to be in line with FY23.</li><li>Management lifted its FY24 free cash flow outlook to ~$200 million from ~$150 million.</li></ul>

The 1Q24 Whitco Supply acquisition diversified DNOW’s customer base and added new revenue opportunities in the midstream markets.Management now expects FY24 revenue to increase in the mid- to high single digits range from FY23 and for adjusted EBITDA margin to be in line with FY23.Management lifted its FY24 free cash flow outlook to ~$200 million from ~$150 million.

DNOW, Inc. - FY24 Free Cash Flow Outlook Lifted

United States

NOW Inc distributes oil drilling equipment across the globe. The Company provides maintenance, repair, and operating supplies for the global energy and industrial markets.

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NOW Inc (DNOW US)

DNOW, Inc: Strategy Execution Points to Solid Free Cash Flow Outlook

DNOW is well-positioned to execute its strategy of strategically investing in the margin accretive areas of its business and returning cash to...

Water Tower Research

DNOW, Inc. - Expect 2025 Growth Despite Uncertain Upstream Activity

The company generated $289 million of free cash flow during 2024 and ended the year with $256 million of cash on the balance sheet.

Water Tower Research

DNOW, Inc. - Positioned for an Evolving Energy Market

DNOW’s existing fulfillment model is contributing to increased earnings and free cash flow capacity through industry cycles. 1H24 revenue totaled...

Water Tower Research

DNOW, Inc. - Free Cash Flow Profile Supports Management's Value Proposition

DNOW’s underlying strategy is to increase earnings and free cash flow by gaining share in its traditional energy markets, while capitalizing on new...

Water Tower Research

DNOW, Inc. - FY24 Free Cash Flow Outlook Lifted

The 1Q24 Whitco Supply acquisition diversified DNOW’s customer base and added new revenue opportunities in the midstream markets.

Water Tower Research

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