DNOW Midstream Revenue Hits Annualized Billion-Dollar Milestone
The energy distribution company reported second-quarter revenue of $1,307 million, a 10% increase from the previous quarter.
DistributionNow (DNOW) reported second-quarter revenue of $1,307 million, marking a 10% sequential increase from the $1,183 million recorded in the first quarter.
The results were driven by a significant expansion in the company's domestic footprint. U.S. segment revenue grew 13% during the quarter to reach $1,109 million. Within that segment, U.S. midstream revenues surpassed $1 billion on an annualized basis for the first time in the company's history.
Profitability metrics showed divergent trends. Adjusted EBITDA rose 54% sequentially to $60 million, up from $39 million in the prior quarter. However, adjusted gross profit margin compressed to 20.8% in the second quarter, down from 23.2% in the first quarter.
Liquidity and cash management improved significantly. Cash flow from operating activities reached a record second-quarter level of $133 million, reversing a cash use of $95 million in the first quarter. The company also reduced its long-term debt to $474 million as of June 30, compared to $571 million at the end of March.
These balance sheet improvements contributed to a net debt leverage ratio of 1.7x as of June 30. The company accelerated its capital return program, spending $75 million on share repurchases in the first half of 2024, a sum that exceeded the total shares purchased over the previous 10 quarters combined.
One-time costs impacted the period as the company recognized a $4 million impairment charge related to the operating right-of-use asset of a corporate office lease in Houston, Texas.