DNOW Inc. is accelerating merger-related cost savings while working to streamline software integration in MRC Global’s U.S. operations, executives said during the company’s fourth-quarter and full-year 2025 earnings call.
The all-stock acquisition of MRC Global closed Nov. 6, significantly expanding DNOW’s scale and end-market reach. CEO David Cherechinsky said the company is now operating as a unified organization.
“Today, we are operating as one company, united by shared values, complementary strengths, and a common ambition to win in the market,” Cherechinsky said on the earnings call. “Without a doubt, we are better together.”
DNOW reported fourth-quarter revenue of $959 million, up 68% from $571 million a year earlier, reflecting the inclusion of MRC Global. Full-year revenue rose 18.9% to $2.82 billion, compared with $2.37 billion in 2024.
The company reported a fourth-quarter net loss attributable to DNOW of $147 million, compared with net income of $23 million a year earlier. For the full year, DNOW reported a net loss of $89 million, compared with net income of $78 million in 2024. Management said the year-over-year decline was driven primarily by costs associated with completing the MRC Global transaction.
Cost Savings Target Raised to $23 Million in First Year
Cherechinsky said DNOW is moving faster than expected to capture expense reductions from the merger and reaffirmed its longer-term goal.
“We said we could achieve $70,000,000 in cost savings within three years of closing,” Cherechinsky said on the earnings call. “We are on track to achieve year one cost synergies faster than planned and now expect to reach $23,000,000 in cost savings by the end of the first year, compared to the $17,000,000 we said we would achieve for 2026.”
During the question-and-answer portion of the call, Cherechinsky linked the accelerated timeline to the urgency created by the software disruption in the acquired U.S. business.
“That is primarily due to — this is one of the positive offshoots of having had issues with the ERP implementation in U.S. MRC Global — there is a real urgency to be able to take care of our customers through a system that can accommodate normal activity,” he said on the call.
Cherechinsky said the software issues are confined to MRC Global’s U.S. operations and do not affect legacy DNOW or MRC Global’s international business.
“The ERP issues are limited to U.S. MRC only, not the international MRC business,” he said on the earnings call. “And of course, the ERP impacts do not affect the legacy business for DNOW.”
He said the scale of the problem became clearer after the merger closed.
“While we have been making progress bringing together DNOW and MRC Global, including with our people, customers, and suppliers, we have identified the ERP challenges to be a much heavier lift than previously known,” Cherechinsky said on the call.
He said the system has impaired service and internal operations.
“Observed limitations across the system are that it is slow, impedes customer service, requires more resources, increases safety stock, and difficulty in processing orders,” he said during his prepared remarks.
Asked about the timeline for resolution, Cherechinsky said the company does not yet have a firm answer.
“We are not really sure when the resolution happens,” he said on the earnings call.
To reduce disruption, DNOW is rerouting certain work through its own systems and increasing staffing levels, Cherechinsky said.
“We have immediately — we have DNOW systems focused on handling projects, especially bulky projects with a lot of deliveries that are cumbersome to move through the Oracle system at MRC,” he said on the call. “We are trying to push projects to the DNOW system to eliminate those snags that happened in Oracle.”
He said DNOW has added personnel in the field to support customers.
“We have added over 200 personnel in the field to maximize customer service, to mitigate customer frustration, and to get products out the door and improve how we service our customers,” Cherechinsky said during the Q&A.
The disruption is also accelerating moves onto DNOW’s preferred platform.
“For the first time in my career, I have seen locations clamoring to get on SAP — for example, the DNOW standard for communicating commerce in the business,” he said on the earnings call.
DNOW is also changing how it reports results to reflect its expanded portfolio, Brad Wise, vice president of digital strategy and investor relations, said during the earnings call.
“We have enhanced our reporting across all three geographic reporting segments by disclosing revenues for each of the four reporting sectors: upstream, midstream, gas utilities, and downstream and industrial,” Wise said on the call.
Cherechinsky said the combined company is emphasizing markets beyond upstream oil and gas, including gas utilities, midstream infrastructure, and data centers.
“Gas utility system modernization is set to continue, and we expect the gas utilities market to grow in 2026,” he said on the earnings call. “Our Emtek gas meter solution, which began pilot testing last year, aims to increase customer wallet share and accelerate adoption with our gas utility clients.”
On data centers, he said DNOW has built a customer base quickly.
“We entered this market in January 2025 with no prior data center experience and have made meaningful progress in a short period of time,” Cherechinsky said on the call. “We are now supplying our core product offerings — pumps, pipe, valves, fittings, and flanges — to 11 new customers across four key data center markets.”
Cherechinsky said the merger is already producing early commercial benefits.
“Since completing the merger, we have begun realizing revenue synergies across multiple channels,” he said on the earnings call.
Do not miss any content from Distribution Strategy Group. Join our list.
