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DNOWBullishEarningsShort Term

High materiality8/10

DNOW Reports Second Quarter 2026 Results

StockNews.AIAug 6, 6:45 AM EDT1 source

Trading thesisImportance 8/10

Bullish over the next 6–12 months as cash flow strengthens and buybacks support equity value.

AI summary

What happened and why it matters

DNOW reported Q2 2026 revenue of $1.307B with gross margins of 18.6% (20.8% adjusted). The company posted a GAAP net loss of $21M but delivered $133M of operating cash flow and adjusted EBITDA of $60M on $1.307B revenue. Net debt was $360M, with a 1.7x leverage, while buybacks totaled $25M in Q2 and $75M in H1. The U.S. midstream segment surpassed $1B annualized revenue for the first time, supporting a constructive outlook for H2 and capital returns.

Cash flow from operations: $133M, underpinning liquidity and buyback capacity.
Net debt leverage: 1.7x, improvement versus prior periods.
U.S. midstream revenue now over $1B annualized, signaling growth tailwinds.
Share repurchases: $25M in Q2 and $75M in H1 under a $160M program.

Sentiment rationale

The results show meaningful improvement in cash flow, deleveraging progress toward a 1.7x leverage, and sizable buybacks, which can support the stock if transmitted into earnings quality over 2H2026. The strong U.S. midstream momentum provides a bullish backdrop versus prior quarters.

Key facts

01
Q2 2026 revenue $1.307B; gross margin 18.6% (20.8% adjusted).
02
GAAP net loss $21M; adjusted net income $21M; adjusted EPS $0.12.
03
Adjusted EBITDA $60M; operating cash flow $133M; cash $114M; net debt $360M.
04
Net debt leverage at 1.7x; debt $474M; repurchased $25M in Q2 and $75M H1.
05
U.S. midstream revenue >$1B annualized for first time; US segment +13% QoQ.