The following is a summary of the DNOW Inc. (DNOW) Q2 2024 Earnings Call Transcript:

Financial Performance:

• Total Q2 2024 revenue was $633 million, a 12% increase from Q1 2024, primarily driven by full quarter contributions from the Whitco acquisition and growth in both the U.S. Energy Centers and Process Solutions.

• EBITDA for Q2 was $50 million, or 7.9% of revenue, aided by $2 million in favorable items not expected to recur in Q3.

• Net income attributable to DNOW Inc. for Q2 was $24 million, or $0.21 per fully diluted share. On a non-GAAP basis, excluding other costs, net income was $28 million, or $0.25 per fully diluted share.

• Generated $18 million of free cash flow during the quarter, bringing the year-to-date amount to $98 million, with trailing four quarters free cash flow totaling $201 million.

Business Progress:

• The Whitco acquisition significantly enhanced DNOW's midstream coverage, more than doubling it.

• Focused on growing opportunities in the energy evolution space, specifically targeting to double energy evolution sales in 2024.

• Achieved inventory velocity of five turns in the quarter despite a slowing market, and recorded the best DSOs since 2020.

• Expanded into industrial adjacent markets, increasing participation in the mining sector and municipal water and chemicals markets.

• Invested in DigitalNOW initiatives, enhancing e-commerce and automated inventory solutions.

Opportunities:

• The Whitco acquisition expanded the business in the midstream market, which is a sprawling, geographically diverse network with aging infrastructure, offering opportunities for MRO business and capital projects.

• The shift towards energy evolution technologies, such as CO2 usage and direct air capture, presents growth opportunities, as evidenced by increasing orders and a focus to double energy evolution sales in 2024.

• Expanding into industrial adjacent markets and international regions with high growth potential.

Risks:

• Challenging onshore oil and gas activity in the U.S. due to E&P consolidation and low natural gas prices impacted by geopolitical factors and lack of infrastructure.

• The potential slowdown in customer activity as large customers may curtail spending in the second half of the year similar to what was experienced last year.

More details: DNOW Inc IR

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