DNOW Inc. (DNOW) Business

ITEM 1. BUSINESS

Overview

DNOW Inc., (“DNOW” or the “Company”), headquartered in Houston, Texas, was incorporated in Delaware on November 22, 2013. On June 2, 2014, DNOW stock began regular trading on the New York Stock Exchange under the ticker symbol “DNOW”. We are a premier provider of energy and industrial solutions, serving as a global leader in the distribution of pipe, valves and fittings (“PVF”), and pumps, as well as in the fabrication, assembly and testing of process and production equipment. We provide a broad mix of quality products customers require to build and maintain essential infrastructure and operating equipment across the upstream, midstream, gas utilities, downstream, energy transition and industrial markets. We deliver a comprehensive range of value-added supply chain solutions and technical product expertise, supported by advanced digital offerings to customers globally.

On June 26, 2025, DNOW entered into an Agreement and Plan of Merger (the “Merger Agreement”) with MRC Global Inc. (“MRC Global”) in an all-stock transaction, inclusive of MRC Global’s debt. On November 6, 2025 (the “Closing Date”), DNOW completed its acquisition of MRC Global. See Note 20 “Acquisitions” of the Notes to Consolidated Financial Statements (Part IV, Item 15 of this Form 10-K) for additional information.

Following the acquisition, we continue to leverage the existing brand equity, reputation and customer loyalty of MRC Global, including its MRCGO™ digital commerce platform and established supply chain and distribution leadership, while operating under DNOW corporate stewardship.

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General

We are a premier provider of energy and industrial solutions with a legacy of more than 160 years as a leading distributor of PVF, gas products, pumps, fabricated process and production equipment and a wide range of MRO consumables and related products. We operate across diversified sectors of the energy value chain and industrial end-markets, including:

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Upstream: exploration, production and extraction of oil and gas, as well as the use and disposal of produced water

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Midstream: transmission and gathering infrastructure for processing and transmission of oil, gas or water

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Gas Utilities: gas utilities (storage and distribution of natural gas)

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Downstream and Industrial: downstream and industrial including crude oil refining, petrochemical and chemical processing, general industrials, pharmaceutical, mining, water/wastewater treatment, data centers, liquefied natural gas (“LNG”) terminals and renewable natural gas (“RNG”) facilities

The distribution industry is highly fragmented, with both large global participants and numerous smaller regional and local competitors. As a supply chain partner, we deliver value by managing vendor networks and aggregating, stocking and distributing a broad assortment of products from numerous manufacturers near customer operating locations. Across the energy and industrial markets, our customers rely on our extensive inventory, product expertise and comprehensive supply chain solutions for mission-critical process applications.

We offer an extensive portfolio of products, including PVF, gas products, valve automation, valve modification, gaskets, fasteners, electrical components, instrumentation, artificial lift, pumping systems, process and production equipment, production measurement technology, maintenance, repair and operating (“MRO”) consumables and a variety of both general and specialty products.

In the Upstream and Midstream sectors, we provide MRO consumables, safety and original equipment manufacturer (“OEM”) equipment to land drilling rigs, workover rigs and initial offshore drilling rig load-outs. Across upstream production and midstream applications, we serve oil and gas operators with a full suite of steel, fiberglass and composite PVF, pumps, process and production equipment, artificial lift, instrumentation and measurement, and safety and personal protective equipment (“PPE”). These offerings support the exploration, production, separation, storage, gathering and transportation of oil and gas, as well as the separation, treatment, storage and transfer of produced water. In the Gas Utilities sector, we provide a wide array of PVF, gas meters, instrumentation and measurement equipment and general products. In the Downstream and Industrial sectors, we provide API valves to the refining, petrochemical, chemical and process industries in a variety of carbon steel, stainless steel, alloys and specialty and critical valve applications. In addition, we provide pipe, fittings and flanges in various metallurgies to meet customer requirements.

Our team of approximately 5,300 employees supports customers from a strategic network of approximately 300 locations. These locations utilize a complementary suite of technology, systems, order and fulfillment processes and sourcing and procurement channels to provide products and services to a variety of customers operating in the energy and industrial markets.

We serve both land and offshore operations from a local presence in the United States (“U.S.”), Canada, the United Kingdom (“UK”), Europe, Australia, New Zealand, Singapore and the Middle East, and further extend our reach by exporting to regions such as Southeast Asia, Latin America and West Africa. Our supplies and equipment offerings are tailored to meet the unique demands of local markets and customers' operations.

In addition to supplying products, we provide sourcing, procurement, warehouse and inventory management solutions as part of our supply chain and materials management offering. We have developed expertise in application systems, work processes, parts integration, optimization solutions and after-sales support that provide more efficient and productive solutions for our customers. Our solutions include outsourcing portions or entire functions of our customers’ procurement, warehouse and inventory management, logistics, point of issue technology, project management, business process and performance metrics reporting. These solutions allow us to leverage the infrastructure of our Enterprise Resource Planning (“ERP”) systems and other technologies to streamline our customers’ purchasing process, from requisition to procurement to payment, by digitally managing workflow, improving approval routing and providing robust reporting functionality.

Through our DigitalNOW® and MRCGO™ e-commerce platforms, customers can leverage technology across applications to solve a wide array of complex operational and product sourcing challenges.

We operate primarily under the DNOW and MRC Global brands along with several affiliated brands operating in local, regional or international markets which are tied to prior acquisitions. We seek to be the premier solutions provider to the energy and industrial markets by delivering best-in-class service, extensive product breadth, global scale, innovative supply chain solutions and the technical expertise required to support our customers' most complex, multi-site needs. Our critical role in the supply chain, coupled with our broad product and service offerings, global presence, scalable information systems and efficient distribution capabilities, reinforces the long-standing strategic relationships we have built with our customers and supports our continued growth.

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Business Strategy

As a premier solutions provider, distributor of PVF, gas products, pumps, production and process solutions and other infrastructure and general products and services to diversified upstream, midstream, gas utility, downstream and industrial sectors, our strategy is focused on growth, creating efficiencies, targeted acquisitions and the development of long-term customer relationships. Our strategic objectives are to:

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execute the integration, create value and capture synergies from the MRC Global merger,

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create value through successful acquisition integrations recognizing both revenue and cost synergies,

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create scale through targeted mergers and acquisitions primarily in higher margin and higher growth markets,

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generate robust cash flow and opportunistically return capital to shareholders,

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diversify across resilient end-markets,

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supply critical products to develop midstream infrastructure to support power demand driven by data centers,

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invest in technology systems and distribution center infrastructure to achieve improved operational excellence,

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safely and sustainably increase our efficiency and lower our operating costs to enhance our margins,

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invest in efficient operations,

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optimize our working capital,

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continue our reach and expansion of digital interaction with new and existing customers through digital connections and e-commerce,

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maintain superior customer service and,

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provide our products and services to companies engaged in energy transition

We conduct detailed account planning and educate potential customers on the product and service offerings and logistics services we provide. In addition, through digital system integration with our customers and suppliers, we believe transactions can be streamlined and lower the cost of transactions for both parties.

We take a multi-faceted approach to expanding existing markets and accessing new markets. We seek to optimize our geographic footprint through organic investments, pursue strategic acquisitions and cultivate relationships with our existing customer base. We develop innovative supply chain solutions that enable us to consistently deliver the high-quality products that our customers require. By being a consistent and reliable supplier and innovative solution provider, we are able to maintain and grow our sales with both new and existing customers.

We source from a diverse base of suppliers that allows us to strategically partner with the largest manufacturers of the products we distribute while simultaneously providing our customers with access to alternative sources of supply and high-quality products across the entire spectrum of their product needs. We continually evaluate, broaden and optimize our product and service offerings and supplier base.

Sales and Marketing

We distribute our products to a variety of end-users by leveraging a broad inventory offering and distribution network that allows us to serve large customers with consistent, high-quality service that is unrivaled in our industry. Local relationships, depth and availability of inventory, responsive service and timely delivery are critical to the sales process in the energy and industrial distribution industry. Our sales efforts are customer and product driven and provide a system that is more responsive to changing customer and product needs than a traditional, fully centralized structure.

Our sales model applies a two-pronged approach to address regional, national and global customers. Regional sales teams are based in our core geographic regions and are complemented by a global accounts sales team organized by sector or product expertise and focused on large regional, national or global customers. These sales teams are supported by groups with additional specific service or product expertise, including integrated supply chain solutions, valves, valve automation and modification, pumps, compressors, fabricated equipment, electrical products, engineering, procurement and construction projects, corrosion resistant products, pipe, measurement equipment and implementation. Our sales force is further focused on outside and inside sales forces.

Our outside sales force, comprising account managers and external sales representatives, develop relationships with prospective and existing customers to better understand their needs and to increase the number of the products specified or approved by a given customer. Outside sales representatives may be branch-based focusing on customer relationships in specific geographies, or technical

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outside sales representatives, who focus on specific products and provide detailed technical support to customers. Our pumps and process solutions sales are supported by a large number of application and sales engineers who possess technical aptitude to assist customers in the sales, application and service process. Internationally, for valve sales, our sales force is comprised of qualified engineers who are able to meet complex customer requirements, recommend optimal solutions from a range of products to increase customers’ efficiency and lower total product lifecycle costs.

Our inside sales force of customer service representatives is responsible for processing orders that new and existing customers generate as well as orders that our outside sales force generates. The customer service representatives develop order packages based on specific customer needs, interface with manufacturers to determine product availability, ensure on-time delivery and establish pricing of materials and services based on guidelines and predetermined metrics established by management.

Operations

Our distribution network extends throughout the world with a presence in major oil and natural gas providing regions in the U.S., Canada, Europe, Asia, Australia and the Middle East. Many of these locations are strategically located to service oil and gas and midstream operators, gas utilities and industrial customers. We service Africa, Central and South America and other regions on an export basis. Our business operates under three geographical operating segments: U.S., Canada and International. These segments represent our business of providing PVF, gas products, pumps, production and process solutions and other infrastructure and general products and services to the sectors that we serve. Financial information regarding our reportable segments appears in our Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) (Part II, Item 7 of this Form 10-K) and in Note 16 “Business Segments” of the Notes to the Consolidated Financial Statements (Part IV, Item 15 of this Form 10-K).

Our distribution network operates as a multi-region centralized logistics system, where products are managed through central regional distribution centers (“RDCs”) and super centers, that are then distributed to branch locations. Inventory at each site is optimized to maximize efficiency, minimize material handling and excess freight expense and ensure rapid accessibility in alignment with local market demand. In addition to product sales, we offer integrated and complementary supply chain solutions. Our network is designed to scale and adapt to evolving market conditions.

Products

We provide a wide range of products across multiple end markets including:

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Valves, Automation, Measurement and Instrumentation. Our product offering includes ball, butterfly, gate, globe, check, diaphragm, needle and plug valves, which are manufactured from cast steel, stainless/alloy steel, forged steel, carbon steel or cast and ductile iron. Valves are generally used in energy and industrial applications to control direction, velocity and pressure of fluids and gases within processing facilities and transmission networks. Other products include lined corrosion resistant piping systems, control valves, valve automation and top work components used for regulating flow and on/off service, measurement products and a wide range of steam and instrumentation products. In addition, we offer a full range of valve modification services to meet customer requirements including valve control extensions, welding, hydrotesting, painting, coating, x-raying and actuation assembly. We also offer low emission stem packing options to help reduce fugitive emissions.

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Pipe. Customers typically use carbon line pipe in high-yield, high-stress and abrasive applications such as the gathering and transmission of oil, natural gas and natural gas liquids (“NGLs”). We provide steel downhole tubing for workover rigs that provide well maintenance, fiberglass and composite pipe in applications that are highly corrosive to steel products and process steel pipe to downstream and industrial companies.

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Gas Products. Natural gas distribution products include risers, meters, polyethylene pipe and fittings and various other components and industrial supplies used primarily in the distribution of natural gas to residential and commercial customers.

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Pumps, Production and Process Solutions. Our product offering includes process and production fabricated equipment, pump and rotating equipment, horizontal pump solutions for fluid movement and EcoVaporTM products.

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Fittings, Flanges and Other Connectors. Fitting, flanges and other connectors include metal (e.g. carbon or stainless steel) and composite (e.g. fiberglass) fittings and flanges, and piping components used primarily to connect piping and valve systems for the transmission of various liquids and gases.

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General Products. General products include oilfield supplies and other industrial products such as mill, tool, safety and electrical supplies. We offer a comprehensive range of oilfield and industrial supplies and completion equipment, including high density polyethylene pipe, fittings and rods. Additionally, we can supply a wide range of specialized production equipment including tanks and separators.

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We fabricate, assemble and test customer lease automatic custody transfer (“LACT”) units, gas meter runs, ASME code vessels in the form of separators, heater treaters, gas conditioning systems, towers, reactors, condensate stabilizers, slug catchers and pressurized bullet tanks, pig launchers and receivers and water transfer and disposal units as part of our pumps, production and process solutions products.

We also provide modular oil and gas wellsite facility solutions, also known as tank battery solutions, that positively impact our operator customers by enabling them to design a modular tank battery that allows flexibility and scalability for current and future production, while expediting revenue generation by reducing the time to complete a tank battery and getting oil and gas into the pipeline earlier. This solution saves our customers time and expense related to well hookup and tank battery commissioning and reduces field incident exposures due to a reduced labor requirement for facility construction.

Our EcoVaporTM branded vapor recovery systems, such as our ZerO2TM and Sulfur SentinelTM units, help eliminate routine flaring, minimize emissions and purify natural gas streams to maximize the productivity of oil and gas facilities, midstream and saltwater disposal operations, biogas and landfill gas operation. Operators directly benefit through the reduction of their scope 1 emissions by enabling customers to retain and sell residual flash gas commonly found in storage tanks resulting in reduced flaring and a decrease in greenhouse gas emissions. These vapor recovery systems capture and transfer volatile organic compounds during oil, gas and produced water storage, reducing carbon emissions. Additionally, our EcoVaporTM products provide RNG customers with gas treatment and gas drying solutions enabling the RNG operators the ability to sell their gas after treatment to the midstream gas operator.

For produced water, we provide fluid movement products which help our customers dispose of produced water in an environmentally safe manner. For oil streams, we provide products that measure the quality and quantity of oil and gas through the separation process and prior to distribution to the midstream sector. We offer a variety of fluid movement solutions ranging from standard to engineered pump packages and a wide variety of ASME fabricated process and production equipment to remove water and contaminants prior to the midstream transfer of oil, NGLs and other refined products within the midstream sector. For gas processing and gas conditioning, we offer a full suite of PVF and ASME coded fabricated process equipment to efficiently and economically process and condition gas for transfer to end markets. Our products are widely employed at terminals and tank farms within the midstream end-market to support the storage and distribution of oil, gas, NGLs, LNG and other hydrocarbon-based fluids.

The products we distribute are used in the construction, maintenance, repair and overhaul of equipment used in extreme operating conditions such as high pressure, high/low temperatures and highly corrosive and abrasive environments. We strive to provide significant amounts of inventory to meet the rapid delivery, often same day, requirements of our customers. The breadth and depth of our product and service offerings and our extensive global presence allow us to provide high levels of service to our customers. Due to our broad inventory coverage, we are able to fulfill more orders faster, including those with lower volume and specialty items, than if we operated on a smaller scale or only at a local or regional level.

Services

We provide our customers with a comprehensive array of services which result in deeply integrated customer relationships, such as the following:

Our self-service portal and system interfaces facilitate digital transaction exchange between our customers’ and our proprietary IT systems. This allows us to interface with our customers’ IT systems with cross-referenced part numbers, customized pricing and business to business processes, streamlining the order to cash process making it easier and more efficient to purchase our products. Such services strengthen our position with customers as we become more integrated into their supply chain, and we are able to market a “total transaction value” solution rather than individual products.

We continue to invest in and expand our comprehensive IT systems. In the U.S., Canada and International, we operate several ERP systems. These systems provide for customer and supplier digital integrations optimizing business to business processes,

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information exchange and e-commerce applications, including our DigitalNOW® and MRCGO™ platforms. Our highly specialized operational effectiveness and implementation group focuses on the integration of our information systems and implementation of improved business processes with customers during the initiation and technology cycle adoption phases. By maintaining a specialized team, we are able to utilize best practices to implement our technology systems and processes, thereby providing solutions to customers in a more organized, efficient and effective manner. This approach is valuable to large, multi-location customers who have demanding service requirements.

As major gas utilities and integrated and large independent energy companies have implemented efficiency initiatives to focus on their core business, many of these companies have evolved their supply chain model by integrating external solutions for procurement and inventory management. In response to these initiatives and to satisfy customer service requirements, we offer integrated supply services to customers who wish to outsource all or a part of the administrative burden associated with sourcing and managing PVF and other products. In integrated supply relationships, we offer electronic catalog service through DigitalNOW® and MRCGO™ and often have employees on-site full-time at many customer locations. Our supply chain solutions integrated supply group offers procurement-related services, physical warehousing services, product quality assurance and inventory ownership and analysis services.

Our valve engineering centers design and construct assemblies that combine actuators with the valves we sell. We also have a valve engineering and modification center in La Porte, Texas that modifies valves for customer requirements, weld segments of pipe to the intake/outtake openings of large pipeline valves, add extensions to the valve controls while installing actuators to the valve, hydrotest the valves, paint or coat the valves, x-ray the welds and deliver complete valve/actuation assemblies to our customers for field installations. We have a FastTrack™ service that we provide customers, whereby we supply specified classes of actuated valves in short delivery windows.

For our pumps, production and process solutions products, we have a team of distribution experts, technical professionals and licensed engineers who provide expertise and field repair services related to pumps, compressors, fluid movement packages, fabricated liquid and gas measurement systems and process and production equipment. We distribute OEM equipment including pumps, generator sets, air compressors, dryers, blowers, mixers and valves. We produce customer LACT units, Zero2TM, EcoVaporTM and Sulfur SentinelTM units to reduce greenhouse gas emissions.

We provide a variety of field services to customers who lease from our fleet of Flex Flow, Trojan Rentals and EcoVaporTM branded pumps, automation and process units deployed to various process applications across a variety of sectors.

Customers

Our principal customers are companies active in the upstream, midstream, gas utilities and downstream and industrial sectors of the energy industry. We serve customers across the energy value chain in all aspects including onshore and offshore contractors, independent and national oil and gas companies, midstream gathering and processing operators, refineries, petrochemical, chemical, utilities, LNG, RNG facilities and other downstream energy processors. We also serve energy customers involved in the separation, transfer and disposal of produced water as well as energy transition such as carbon capture, utilization and storage (“CCUS”), direct air capture (“DAC”) and offshore wind. In addition, we provide our products, services and supply chain solutions to non-oil and gas end markets such as power generation, data centers, mining and minerals, municipal water and wastewater and industrial manufacturing.

Due to the demanding operating conditions in these sectors, high costs and safety risks associated with equipment failure, customers prioritize highly reliable products and vendors with established qualifications, reputation and experience. As our PVF products typically are mission critical and represent a fraction of the total cost of a given project, our customers often place a premium on service and high reliability given the high cost of maintenance or project delays. We strive to build long-term relationships with our customers by maintaining our reputation as a supplier of high-quality, reliable products and value-added services and solutions.

Digital Customer Services

We invest in IT systems and branch infrastructure to achieve improved operational excellence and customer service. Our operational excellence program leverages systematic and standardized business processes to deliver top-tier safety performance, a consistent customer experience. Our digital transformation strategy is a key component of operational excellence and is designed to further differentiate our product and service offerings, with the objective of maintaining and growing our business with new and existing customers. We continue to develop our digital commerce platforms DigitalNOW® and MRCGO™, which provide our customers the ability to shop for material, track and expedite orders, research payment options, search for documents and receive support from representatives. Through these platforms we are able to enhance the customer experience through a broad array of customized digital services while simultaneously lowering our operating costs by centralizing customer service resources, expanding customer self-service capabilities and routing a greater volume of our business through the RDC and super center fulfillment model. Where practical and cost effective, we deliver directly from our RDCs and super centers to the customer delivery location, supporting our efforts to consolidate inventory and increase working capital efficiency. We employ advanced information technologies, including ERP

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business technology platforms, to provide complete procurement, warehouse and inventory management and logistics coordination to our customers around the world. Having ERP business technology platforms allow immediate visibility into our inventory assets, operations and financials worldwide, which is intended to enhance decision making and efficiency.

Suppliers

We source our products from a global network of thousands of suppliers. Our suppliers benefit from access to our large, diversified customer base and by consolidating customer orders allowing for manufacturing efficiencies. We benefit from stronger purchasing power and preferred vendor programs. We are the largest customer for many of our suppliers, and we source the majority of the products we distribute directly from the manufacturer. The remainder of the products we distribute are sourced from manufacturer representatives, trading companies and, in some instances, other distributors.

Our customers and suppliers recognize us as an industry leader in part due to the quality of products we supply and for the formal processes we use to evaluate vendor performance. This vendor assessment process involves employing individuals who specialize in conducting on-site assessments of our manufacturers and their processes as well as monitoring and evaluating the quality of goods produced. These assessments are aimed at product quality assurance, including all aspects of the manufacturing processes, steel, alloy and material quality, ethical sourcing, product safety and ethical labor practices. The result of this process is our approved manufacturer’s listing (“AML”). Products from the manufacturers on this list are supplied across many of the industries we support. Given that many of our largest customers, especially those in our Upstream, Midstream, Gas Utilities and Downstream and Industrial sectors, maintain their own formal AML listing, we are recognized as an important source of information sharing with our key customers regarding the results of our on-site assessment. For this reason, together with our commitment to promote high quality products that bring the best overall value to our customers, we often become the preferred provider of AML products to these customers. Many of our customers regularly collaborate with us regarding specific manufacturer performance, our own experience with vendors’ products and the results of our on-site manufacturer assessments. The emphasis that both our customers and suppliers place on our AML helps secure our central and critical position in the global PVF supply chain.

We utilize a variety of freight carriers in addition to our corporate truck fleet to ensure timely and efficient delivery of our products. With respect to deliveries of products from us to our customers, or our outbound freight, we utilize both our corporate fleet and third-party transportation providers. With respect to shipments of products from suppliers to us, or our inbound freight, we principally use third-party carriers.

Seasonality

Our business normally experiences mild seasonal effects in the U.S. as demand for the products we distribute is generally higher during the summer and fall months. Demand for the products we distribute during the months of November and December and early in the year generally tends to be lower due to a lower level of activity near the end of the calendar year in the industry sectors we serve and due to winter weather disruptions. In addition, certain exploration and production (“E&P”) activities in Canada, typically experience a springtime reduction due to seasonal thaws and regulatory restrictions, limiting the ability of drilling rigs to operate effectively during these periods.

Competition

The principal methods of competition include offering prompt local service, fulfillment capability, breadth of product and service offerings, price and total costs to the customer. Our distribution competitors include, among others, large distributors, several regional or product-specific competitors and many local, family-owned and privately held distributors. In addition, most of our suppliers also sell directly to end-users. For our pump, production and process solutions products, we compete against a variety of manufacturers, distributors and fabricators, many of which have access to capital who are privately owned, private equity backed or public companies.

Summary of Reportable Segments

We operate through three reportable segments: U.S., Canada and International. The segment data included in our MD&A is presented on a basis consistent with our internal management reporting. Segment information appearing in Note 16 “Business Segments” of the Notes to Consolidated Financial Statements (Part IV, Item 15 of this Form 10-K) is also presented on this basis.

United States

We have approximately 210 locations in the U.S., which are strategically positioned to serve the upstream, midstream, gas utility, downstream and renewable energy and industrial markets.

We offer higher value solutions in key product lines in the U.S. which broaden and deepen our customer relationships and related product line value. Examples of these include pumps, valves and valve actuation, process and production equipment, fluid transfer

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products, measurement, automation and controls, spoolable and coated steel-pipe and composite pipe, gas products, along with many other products required by our customers, which enable them to focus on their core business while we manage varying degrees of their supply chain. We also provide additional value to our customers through engineering, design, construction, assembly, fabrication and optimization of products and equipment essential to safe and efficient production, transportation and processing of oil and gas and produced water.

Canada

We have a network of approximately 35 locations in the Canadian oilfield, predominantly in the oil rich provinces of Alberta, Saskatchewan and Manitoba. Our Canada segment primarily supports energy, mining, drilling, engineering and contracting businesses with products and solutions similar to those offered in the U.S. In Canada, we also provide training for, and supervise the installation of, jointed and spoolable composite pipe. This product line is supported by inventory, as well as product and installation expertise to serve our customers.

International

We serve the needs of our international customers from approximately 55 locations outside the U.S. and Canada, which are strategically located in major oil and gas development and downstream processing areas. Our approach in these markets and the products we offer is similar to our strategy in the U.S. and Canada, with the addition of the distribution of electrical products in the UK, Singapore, Australia and international export markets. Our long legacy of operating in select international regions provides us strategic benefits as few of our competitors have a presence in most of the global energy producing areas.

Human Capital

As of December 31, 2025, we had approximately 5,300 employees, of which approximately 355 were temporary employees. We offer market-competitive benefits for employees and opportunities for growth and advancement. We place a strong emphasis on employee growth and development and provide opportunities for valued contribution and innovation. Our ethos determines how we act and interact, what we value, what we tolerate, how we treat one another, our customers and communities and the drive to continue to surpass expectations.

Training and Development Programs

The acquired skills, knowledge and capabilities of our people are central to our success. To maintain and acquire talented employees in the marketplace, we invest in employee development programs that incorporate training courses and programs, including a growing online learning platform, which provides our employees an opportunity for professional development.

We recognize that the advancement and empowerment of our workforce drives a better quality of work and life for our employees, ultimately resulting in the delivery of exceptional service to our customers. As such, we have designed a wide range of professional and leadership development programs focused on helping our employees reach their career goals.

Recognizing Employees

Recognition of individual achievements and contributions is an important part of our culture. Our Customer Priority One program encourages customers, peers and leaders to recognize our employees, customers or vendors who exemplify the Company’s commitment to customer service to cultivate a culture of inspiring one another to be their best. We award Milestone Service Awards to employees for their years of service and dedication of time to our Company, which recognize employees at each five-year service anniversary.

Workforce Inclusion

We believe that our people are a key driver of innovation, creativity and overall success. We are committed to maintaining an inclusive environment where all employees are appreciated and have a sense of belonging throughout our organization. We recognize the opportunity to enhance our workforce through talent acquisition and retention because we know that one of our greatest strengths is the diverse perspectives of our employees. We appreciate that having a team with a broad range of experience, cultural characteristics and varying perspectives fortifies our brand. Our efforts are rooted in the belief that every individual, regardless of their background, should have the opportunity to thrive and contribute to our shared goals. Our culture respects and values the unique perspectives, experiences, and talents that each employee brings to our organization.

To find the best employees, we must have a deep pipeline of talent with a wide range of experiences and backgrounds. We create a culture where all employees can strive to be their best, to achieve company goals and to deliver superior service to our customers.

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We recognize that we are an integral part of the communities in which we operate. By directly engaging people in the communities we serve, we create a transparent dialogue to listen and learn from alternative views on how we conduct our business.

Workforce Health and Safety

In our business, safety is of paramount importance to us and to our customers. Unsafe conditions can cause or contribute to injuries, deaths, property damage and pollution that, in turn, can create significant liabilities for which insurance may not always be sufficient. We are subject to many safety regulatory standards such as those standards that the U.S. Occupational Safety and Health Administration (“OSHA”), the U.S. Environmental Protection Agency (“EPA”) and the U.S. Department of Transportation or state or foreign agencies of a similar nature may impose and enforce upon us. Failure to meet those standards can result in fines, penalties or agency actions that can impose additional costs upon our business. For all of these reasons, we and our customers demand high safety standards and practices to prevent the occurrence of unsafe conditions and any resulting harm. Our operations, therefore, focus on the safety of our employees and those with whom we do business. Our safety programs are designed to focus on the highest likely safety risks in our business and to build a culture of safe practices and continuous safety improvement for our employees, our customers and others with whom we do business or otherwise come into contact.

Safety is at the center of our actions. We act with high priority on health and safety in our workplace and in the communities where we operate. Our safety culture is driven by our health, safety and environment (“HSE”) training catalog and through our HSE management system beginning with our HSE Policy Statement, which sets the tone for our company’s commitment to safety. A one-page, top-level document, expressly approved by our senior management team, the HSE Policy Statement outlines our expectations for all employees, vendors, customers, contractors, subcontractors and third parties. This HSE Policy Statement, combined with our HSE guiding principles, corporate policies and procedures and our business level HSE policies and procedures, makes up our management system, which is overseen both with corporate supervision and field level management to ensure emphasis is consistent on proper and safe behaviors.

Sustainability

We can assist in reducing emissions of greenhouse gases in our operations by creating a more efficient supply chain. An efficient supply chain can help reduce the carbon footprint of deliveries to our RDCs, super centers and branches and ultimately to our customers. Use of our RDCs and super centers allows us to aggregate products across multiple suppliers and customers, which, in turn, prevents each customer from separately creating duplicative supply chains that require fuel for deliveries and resources to manage. Many of the products we distribute are used by our customers to aid their efforts to reduce their greenhouse gas emissions. We continually assess market opportunities to offer our customers a variety of scope 1 emission reducing products like gas treating technology, sealless pumps and industrial air compressors that are used to replace historically used methane gas pneumatic systems with compressed air pneumatic systems. For gas treating, we offer an expanding suite of emissions reduction technology through our EcoVaporTM branded product line that reduces the venting and flaring of greenhouse gas, targeting the oil and gas and the growing RNG markets.

As a distributor, we perform minimal manufacturing operations. We do not utilize large amounts of water. Our energy inputs are primarily electricity for lighting, heating and office and warehouse equipment, natural gas for heating and gasoline for company sales and delivery vehicles. We strive to make our operations more efficient, and in turn try to work to reduce use of these resources and resulting emissions. We have recycling programs to try and reduce waste from used cardboard, office paper and other recyclables. However, recycling programs are sometimes limited by the unavailability of users, haulers or purchasers for recyclable materials at reasonable costs.

We are a distributor of products that contain and control the movement of gases and fluids in an efficient and sustainable manner. The products we sell are designed by the manufacturers of those products to prevent and minimize accidental leaks of hydrocarbons. Additionally, we offer product lines that further aid in the mitigation of environmental impact. Examples of such products include: domestically produced goods; low emission rated valves; steel piping products produced from recycled scrap; glass reinforced epoxy piping systems; vapor recovery units and valve actuation technologies that capture or control volatile organic compounds (“VOCs”) in an effort to limit and reduce emissions to the atmosphere; produced water transfer and water injection packages that dispose of produced water in an environmentally safe manner; and pipe produced using wind power, recycled water and wood pellet inputs. Additional examples of products we offer our customers to help reduce their scope 1 emissions may be found in our annual sustainability report.

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Environmental Matters

We are subject to a variety of federal, state, local, foreign and provincial environmental, health and safety laws, regulations and permitting requirements (collectively, “environmental laws”), including those governing the following:

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the discharge of pollutants or hazardous substances into the air, soil or water;

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the generation, handling, use, management, storage and disposal of, or exposure to, hazardous substances and wastes;

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the responsibility to investigate, remediate, monitor and clean up contamination; and

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occupational health and safety.

Historically, the costs to comply with environmental laws have not been material to our financial position, results of operations or cash flows. We are not aware of any pending environmental compliance or remediation matters that, in the opinion of management, are reasonably likely to have a material effect on our business, financial position or results of operations or cash flows.

Exchange Rate Information

In this report, unless otherwise indicated, foreign currency amounts are converted into U.S. dollar amounts at the exchange rates in effect on December 31, 2025 and 2024 for balance sheet figures. Income statement figures are converted on a monthly basis, using each month’s average conversion rate.

Available Information

Our website address is www.dnow.com. The information found on our website is not part of this or any other report we file with, or furnish to, the SEC and is expressly not incorporated by reference into this document. Our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, proxy statements and any amendments to these reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 are available on our website, free of charge, as soon as reasonably practicable after such reports are filed with, or furnished to, the SEC. Alternatively, you may access these reports at the SEC’s website at www.sec.gov.