DNOW Inc (DNOW) 2024 Q4 法說會逐字稿

Good morning. My name is John, and I will be your conference operator today.

早安.我叫約翰，今天我將擔任您的會議主持人。

(Operator Instructions)

（操作員指示）

Thank you. Mr. Brad Wise, Vice President of Digital Strategy and Investor Relations, you may begin your conference.

謝謝。數位策略和投資者關係副總裁布拉德懷斯先生，您可以開始您的會議了。

Well, good morning, John. Good morning, everyone, and welcome to DNOW's fourth quarter and full year 2024 earnings conference call. We appreciate you joining us and thank you for your interest in DNOW. With me today is David Cherchensky, President and Chief Executive Officer, and Mark Johnson, Senior Vice President and Chief Financial Officer.

嗯，早上好，約翰。大家早安，歡迎參加 DNOW 2024 年第四季和全年財報電話會議。感謝您的加入我們，並感謝您對 DNOW 的關注。今天與我一起的有總裁兼首席執行官戴維·切爾琴斯基 (David Cherchensky) 和高級副總裁兼首席財務官馬克·約翰遜 (Mark Johnson)。

We operate under the DNOW brand, which is also our New York Stock Exchange ticker symbol. Please note that some of the statements we make during this call, including responses to your questions, may contain forecasts, projections, and estimates, including but not limited to comments about our outlook for the company's business.

我們以 DNOW 品牌經營，這也是我們的紐約證券交易所股票代碼。請注意，我們在本次電話會議中所做的一些聲明（包括對您的問題的回答）可能包含預測、預期和估計，包括但不限於對公司業務前景的評論。

These are forward-looking statements within the meaning of the U.S. Federal Securities laws based on limited information as of today, February 13, 2024, 2025, excuse me, which is subject to change. They are subject to risks and uncertainties and actual results may differ materially. No one should assume these forward-looking statements remain valid later in the quarter or later in the year.

這些是美國聯邦證券法所定義下的前瞻性陳述，基於截至今天（2024 年 2 月 13 日、2025 年）的有限信息，可能會發生變化。它們受風險和不確定性的影響，實際結果可能存在重大差異。任何人都不應假設這些前瞻性陳述在本季稍後或今年稍後仍然有效。

We do not undertake any obligation to publicly update or revise any forward-looking statements for any reason. In addition, this conference call contains time-sensitive information that reflects management's best judgment at the time of the live call. I refer you to the latest Forms 10-K and 10-Q that DNOW has on file with the U.S. Securities and Exchange Commission for a more detailed discussion of the major risk factors affecting our business.

我們不承擔因任何原因公開更新或修改任何前瞻性聲明的義務。此外，本次電話會議包含時間敏感訊息，反映了管理層在現場通話時的最佳判斷。我請您參閱 DNOW 向美國證券交易委員會提交的最新 10-K 和 10-Q 表格，以便更詳細地討論影響我們業務的主要風險因素。

Further information, as well as supplemental financial and operating information, may be found within our earnings release on our website at ir.denow.com or in our filings with the SEC. In an effort to provide investors with additional information, regarding our results as determined by U.S. GAAP, you'll note that we disclose various non-GAAP financial measures in our earnings releases and other public disclosures.

更多資訊以及補充財務和營運資訊可在我們的網站 ir.denow.com 上的收益報告或我們向美國證券交易委員會 (SEC) 提交的文件中找到。為了向投資者提供更多關於我們根據美國公認會計準則確定的業績的信息，您會注意到，我們在收益報告和其他公開披露中披露了各種非公認會計準則財務指標。

These are non-GAAP financial measures, include earnings before interest taxes, depreciation and amortization, or EBITDA, excluding other costs, EBITDA excluding other costs as a percentage of revenue, net income attributable to DNOW, Inc., excluding other costs, and diluted earnings per share attributed to DNOW, Inc., stockholders excluding other costs, and finally, free cash flow. Please refer to a reconciliation on each of these non-GAAP financial measures to its most comparable GAAP financial measure and the supplemental information available at the end of our earnings release.

這些是非公認會計準則 (GAAP) 財務指標，包括息稅折舊攤銷前利潤 (EBITDA)（不包括其他成本）、不包括其他成本的 EBITDA 佔收入的百分比、歸屬於 DNOW, Inc. 的淨收入（不包括其他成本）以及歸屬於 DNOW, Inc. 股東的每股現金稀釋收益（不包括其他成本），最後是自由流。請參閱這些非 GAAP 財務指標與其最可比較的 GAAP 財務指標的對帳表以及我們的收益報告末尾提供的補充資訊。

As of this morning, the investor relations section of our website contains a presentation covering our results and key takeaways for the fourth quarter and full year of 2024. A replay of today's call will also be available on our site for the next 30 days.

截至今天上午，我們網站的投資者關係部分包含一份演示文稿，其中介紹了我們的 2024 年第四季度和全年業績和要點。今天的電話會議重播也將在未來 30 天內在我們的網站上提供。

Now, let me turn the call over to David.

現在，讓我把電話轉給大衛。

Thanks, Brad, and good morning, everyone. I want to start where I'll end my prepared remarks, with a glimpse into the full year 2025. We are forecasting growth in 2025, despite expectations that the activities that drive our revenues will decline for the third year in a row. We expect we could post our fifth consecutive year of growth despite the potential of three consecutive years of market activity declines expected to the end of 2025.

謝謝，布拉德，大家早安。我想以結束我準備好的發言的方式開始，展望一下 2025 年全年。儘管預計推動我們收入的活動將連續第三年下降，但我們預測 2025 年將實現成長。儘管預計到 2025 年底市場活動可能會連續三年下滑，但我們預計我們仍可能實現連續第五年的成長。

This is notable given the perception that upstream sector headwinds limit growth opportunities for DNOW. I'm confident in our ability to overcome these headwinds because of my fellow employees. As we close the books on 2024 and look ahead optimistically, I want to extend my deepest gratitude to our employees for their skills, aptitude, energy, and most importantly, their attitude.

鑑於人們認為上游產業的不利因素限制了 DNOW 的成長機會，這一點值得注意。我相信，在我的同事們的幫助下，我們有能力克服這些困難。當我們結束 2024 年的歲月並樂觀地展望未來時，我要向我們的員工表示最深切的感謝，感謝他們的技能、才能、精力，最重要的是他們的態度。

The character of our people shines through in the attitude they project, from their unwavering support for our suppliers to the relentless urgency they show in taking care of our customers and help them succeed, to the way they help and encourage each other. acting as cheerleaders for their teammates. These are the qualities that set us apart.

我們員工的個性體現在他們所展現的態度中，從他們對供應商的堅定支持，到他們在照顧客戶和幫助他們取得成功時所表現出的不懈緊迫感，再到他們互相幫助和鼓勵的方式。為隊友們加油打氣。這些正是我們與眾不同的特質。

This is why we win. We inspire one another. I know this from personal experience. The notes of encouragement and support I receive from employees, these small acts of kindness, mean as much to me as if they were coming from a member of my family. Thank you. Our people are the secret sauce. The elements of our strategy are how we succeed. There are four signature elements to our strategy that afford us maximum flexibility in the market, give us an effective edge on the competition, and provide a winning platform that keep our fellow employees excited about the future.

這就是我們獲勝的原因。我們互相激勵。我從個人經驗中知道這一點。我從員工那裡收到的鼓勵和支持的字條，這些小小的善舉，對我來說意義重大，就像來自我的家人一樣。謝謝。我們的員工就是我們的秘密武器。我們的戰略要素決定了我們的成功之道。我們的策略有四個標誌性要素，它們為我們提供了最大的市場靈活性，使我們在競爭中佔據了有效優勢，並提供了一個成功的平台，讓我們的同事對未來充滿期待。

First, the strength in our balance sheet is the signature element, where in the early years of being a public company, say from 2014 through 2020, we turned our working capital excluding cash on average about four times a year.

首先，我們資產負債表的強勁是我們標誌性的因素，在作為上市公司的初期，例如從 2014 年到 2020 年，我們平均每年週轉營運資本（不包括現金）約四次。

Today, we enjoy working capital velocity of approximately seven times a year. This result, primarily driven by substantially improved inventory choreography enhanced by our Supercentre network, means improved product availability for our customers to help maximize market penetration, reduced logistics costs as we position inventory at the right place in the supply chain, lower inventory expense related to obsolescence and slow movement, And not to mention the resulting boost to gross margins simply from faster turning and less risky inventory.

如今，我們的營運資本週轉率約為每年七倍。這一結果主要得益於我們的超級中心網絡大幅改善的庫存編排，這意味著我們為客戶提供了更好的產品供應，以幫助最大限度地滲透市場，由於我們將庫存放置在供應鏈中的正確位置，從而降低了物流成本，降低了與過時和緩慢移動相關的庫存費用，更不用說僅僅通過更快的周轉和更低的庫存風險就提高了毛利率。

In 2024, for example, it marked the lowest level of inventory provisions that we've experienced as a public company. Second, M&A is DNOW DNA and is a signature element. DNOW has completed 23 acquisitions since going public in 2014. With a solid balance sheet, no debt, and a strong cash position, inorganic growth remains a key growth lever and certainly was in 2024.

例如，2024 年是我們作為上市公司所經歷的最低庫存撥備水準。其次，併購是DNOW的DNA，是一個標誌性元素。自 2014 年上市以來，DNOW 已完成 23 筆收購。憑藉穩健的資產負債表、無債務和強勁的現金狀況，無機成長仍然是一個關鍵的成長槓桿，並且在 2024 年肯定是如此。

Our strategy prioritizes margin-accretive businesses, aiming to strengthen and diversify our capabilities in serving our customers. We apply rigorous standards, investing in opportunities where we are the natural operator, poised to create value, increase the contributions of the acquired companies, and drive long-term shareholder value.

我們的策略優先考慮利潤增值業務，旨在加強和多樣化我們服務客戶的能力。我們採用嚴格的標準，投資於我們是天然營運商的機會，準備創造價值，增加被收購公司的貢獻，並推動長期股東價值。

We are putting substantial M&A muscle into process solutions, a business we built from scratch, growing the business around pumping and moving fluids, which provides the right kind of long-term diversification strategy. I'll talk more about our Trojan acquisition in a bit. Third, self-help and high grading as signature elements.

我們正在對流程解決方案投入大量的併購力量，這是我們白手起家建立的一項業務，圍繞泵送和輸送流體發展業務，這提供了正確的長期多元化策略。稍後我將詳細談論我們對 Trojan 的收購。第三是自助、高評分為標誌要素。

We transformed our business several years ago through a self-help strategy that continues to drive a philosophy of focusing on the things our customers place high importance on and discontinuing the things our customers view as highly commoditized, avoiding the higher operating costs to service those activities, which also happen to be less lucrative for DNOW.

幾年前，我們透過自助策略實現了業務轉型，該策略繼續推動這樣的理念：專注於客戶高度重視的事物，並停止客戶認為高度商品化的事物，從而避免了為這些活動提供服務的更高營運成本，而這些活動對 DNOW 來說利潤較低。

This approach drives significantly improved earnings. and sheds the low operating margin distractions for our competitors to scoop up.

這種方法可以顯著提高收益。並消除了低營業利潤率的干擾，讓我們的競爭對手能夠搶得先機。

In terms of self-help initiatives deployed in 2024, in addition to seeking other efficiencies, we are actively rationalizing IT costs, third-party expenses, vehicle facility and footprint rationalization, in addition to managing T&E expenses. And we aligned our workforce down 12% during the year-end since the year end of 2023, as revenue, when excluding the benefits from the two acquisitions closed during the year, declined about 10% per DNOW and down 9% in the U.S., in a period where U.S. completions declined 9% and U.S. rigs declined 13%

在2024年部署的自助措施方面，除了尋求其他效率之外，我們還在積極合理化IT成本、第三方費用、車輛設施和占地面積合理化，以及管理差旅費用。自 2023 年底以來，我們的員工人數在年底減少了 12%，因為如果不包括當年完成的兩筆收購帶來的收益，按 DNOW 計算的收入下降了約 10%，而美國的收入下降了 9%，而同期美國完井量下降了 9%，美國鑽井平台數量下降了 13%。

This self-help responsiveness improved the earnings and cash generation of our core legacy businesses and afforded plenty of free cash flow to fund both our largest acquisition since 2015, and a supersized share repurchase program, which leads into our fourth signature element and the output of the above, durable free cash flow generation through the cycle that fuels our capital allocation options.

這種自助響應提高了我們核心傳統業務的盈利和現金產生能力，並提供了充足的自由現金流，以資助我們自 2015 年以來最大的收購和超大規模的股票回購計劃，這引出了我們的第四個標誌性要素和上述要素的產出，即在整個週期內持久的自由現金流產生，為我們的現金配置選擇提供動力。

In the fourth quarter, we delivered impressive results, surpassing expectations in earnings and free cash flow in a challenging environment resulting from a combination of industry headwinds, such as lower U.S. operating rigs, U.S. wells completed, and oil and gas prices.

第四季度，我們取得了令人矚目的業績，在美國鑽井數量減少、美國油井完工量下降以及油氣價格下跌等一系列行業不利因素的共同作用下，盈利和自由現金流超出預期。

Historically, we discussed how U.S. rigs and completions represent a good barometer to forecast DNOW revenue. However, in a period of increased operator efficiencies, we believe surface production volumes are becoming another important and useful way to gauge demand for our U.S. process solutions pump packages and fabricated equipment, which represent 27% of our U.S. revenue for the full year 2024. That's one reason why 11 out of the last 12 acquisitions we've made have been to bolster the process solutions business.

從歷史上看，我們討論過美國鑽井平台和完井量如何成為預測 DNOW 收入的良好晴雨表。然而，在營運商效率提高的時期，我們相信地面產量正在成為衡量我們美國製程解決方案泵浦組和製造設備需求的另一個重要且有用的方法，這些設備占我們 2024 年全年美國收入的 27%。這就是為什麼我們在過去 12 次收購中，有 11 次都是為了加強流程解決方案業務。

So I'll give some colour on our most recent purchase, Trojan, that supports this strategy. Trojan has built a fantastic business with outstanding talent who are unified by a customer-first mindset and solutions-oriented approach to the market.

因此，我將對我們最近購買的 Trojan 進行一些介紹，以支持此策略。Trojan 憑藉其出色的人才打造了一家出色的企業，這些人才秉持著客戶至上的理念和以解決方案為導向的市場方法。

And I'd like to welcome the 90 women and men of Trojan to the DNOW family. Trojan further strengthens and expands DNOW's existing water management solution business, augmenting an already solid DENOW offering through the combination of Odessa pumps, power service, and FlexFlow. all prior acquisitions in our U.S. Process Solutions business. D

我歡迎特洛伊的 90 位男女成員加入 DNOW 大家庭。Trojan 進一步加強並擴展了 DNOW 現有的水管理解決方案業務，透過結合敖德薩泵浦、電力服務和 FlexFlow 增強了已經很強大的 DENOW 產品。我們美國過程解決方案業務的所有先前收購。D

DNOW is focused on intensifying the growth of process solutions, and after a highly opportunistic and successful WITCO onboarding in early 2024 within energy centers, in addition that assisted DNOW to double our midstream business to 20% of sales, we resumed accelerated growth in our U.S. Process Solutions business with our addition of the Trojan family.

DNOW 專注於加強製程解決方案的成長，在 2024 年初在能源中心內成功引入 WITCO 之後，DNOW 的中游業務成長了一倍，達到銷售額的 20%，隨著 Trojan 家族的加入，我們恢復了美國製程解決方案業務的加速成長。

Trojan is comprised of three primary businesses that provide solutions in the water treatment, water sourcing, and water transfer markets. The pump rental offering is comprised of diesel and electric-driven, trailer-mounted centrifugal pumps sought after by customers to solve short-term water movement challenges.

Trojan 由三個主要業務部門組成，為水處理、水源和水轉移市場提供解決方案。泵租賃服務包括柴油和電動驅動、拖車安裝的離心泵，受到客戶青睞，可解決短期水流動難題。

Next, Trojan sells lathe, hose, and other products for the water management space, which include pipe, valves, fittings, flow meters, diesel, and electric pump packages, and other items. The third is the Sable automation business. It is a rental-based service and software solution that ties together equipment supplied by Trojan into a turnkey water automation, analysing, and monitoring solution, which enables customers to increase efficiency, improve accuracy, enhance productivity, realize cost savings, and achieve scalability by outsourcing their water transfer and management needs.

其次，Trojan 銷售水管理領域的工具機、軟管和其他產品，其中包括管道、閥門、配件、流量計、柴油和電動幫浦套件以及其他物品。第三個是Sable自動化業務。它是一種基於租賃的服務和軟體解決方案，將 Trojan 提供的設備整合成一個交鑰匙水自動化、分析和監控解決方案，使客戶能夠透過外包其水轉移和管理需求來提高效率、提高準確性、提高生產力、節省成本並實現可擴展性。

Trojan's capabilities, complemented by DNOW's broad footprint and access to capital, provide an excellent synergistic foundation. We believe there are revenue synergies to be gained by introducing Trojan's offering as customers recognize DNOW as a leader in water solutions provider.

Trojan 的能力，加上 DNOW 的廣泛影響力和資本管道，提供了出色的協同基礎。我們相信，隨著客戶認可 DNOW 是水解決方案提供者的領導者，引入 Trojan 的產品將帶來收入綜效。

And now moving to our results. Fourth quarter revenue was $571 million, lower sequentially by 6%, beating the guidance we provided during the last quarter's earnings call. In 4Q24, overall gross margin improved to 23.3%, up 100 points sequentially, aided by improvement in product mix and additional vendor consideration in the fourth quarter.

現在來看看我們的結果。第四季營收為 5.71 億美元，季減 6%，超過了我們在上一季財報電話會議上提供的預期。2024 年第四季度，整體毛利率提高至 23.3%，環比增長 100 個百分點，這得益於第四季度產品組合的改善和額外的供應商考慮。

For the full year of 2024, revenues were $2.4 billion, up 2% year over year, our highest revenue year since 2019. a period then that averaged 944 U.S. rigs compared to 2024's market of 599 U.S. rigs. Our full-year 2024 gross margins were lower than 2023, but sturdy at 22.5%, given the pricing deflation in steel products experienced in 2024.

2024 年全年營收為 24 億美元，年增 2%，是自 2019 年以來收入最高的一年。當時美國鑽井平台平均數量為 944 座，而 2024 年美國鑽井平台市場數為 599 座。我們 2024 年全年的毛利率低於 2023 年，但考慮到 2024 年鋼鐵產品價格下跌，仍穩定在 22.5%。

For the fourth quarter, EBITDA was $45 million, or 7.9% of revenue, well above expectations. In a year where activity that drives our U.S. revenues declined by more than 9%, our full-year actual revenues grew 2%, achieving more than 99% of the revenue target forecast a year ago. 2024 represents the third year in a row we have delivered at or greater than 7.4% EBITDA as percent of revenues.

第四季度，EBITDA 為 4,500 萬美元，佔營收的 7.9%，遠高於預期。在推動我們美國收入的活動下降超過 9% 的一年裡，我們的全年實際收入增長了 2%，實現了一年前預測的收入目標的 99% 以上。 2024 年是我們連續第三年實現 EBITDA 佔收入的百分比達到或超過 7.4%。

We generated $119 million in free cash flow during the fourth quarter, an exceptional $289 million for the full year, delivering a 165% free cash flow conversion in 2024. In 2024, one of our best free cash flow years since 2015, but unlike 2015, a year that generated 100% of free cash flow from the balance sheet, 2024's free cash flow haul was amassed from both a solid earnings year as well as efficient use of working capital from the balance sheet.

我們在第四季產生了 1.19 億美元的自由現金流，全年達到了驚人的 2.89 億美元，2024 年實現了 165% 的自由現金流轉換率。2024 年是我們自 2015 年以來自由現金流最好的年份之一，但與 2015 年不同，2015 年從資產負債表中產生了 100% 的自由現金流，而 2024 年的自由現金流既來自穩健的盈利年度，也來自資產負債表中營運資金的有效利用。

This solid execution, with a smaller market speaks to the success of our strategy. Now some select highlights on the business. Demand for our horizontal trailer mounted pumping solutions provided by FlexFlow remains strong, with leased assets operating in the U.S. and Canada. Our FlexFlow solutions target water disposal applications, hydraulic jet pump oil recovery operations, and recently expanded new markets like downstream refinery applications.

在較小的市場中，我們能夠如此穩健地執行，這證明了我們策略的成功。現在選擇一些業務亮點。FlexFlow 提供的水平拖車式泵送解決方案的需求仍然強勁，其租賃資產在美國和加拿大營運。我們的 FlexFlow 解決方案針對水處理應用、液壓噴射泵採油作業以及最近擴展的新市場，如下游煉油廠應用。

On a year-over-year basis, we grew revenues in the energy evolution space by more than 60%, from around $30 million in 2023 to more than $50 million in 2024, and we expect future growth in 2025. The outlook for decarbonization and non-oil and gas energy sources continues to drive investments, with more project FIDs advancing.

與去年同期相比，我們在能源發展領域的營收成長了 60% 以上，從 2023 年的約 3,000 萬美元成長到 2024 年的 5,000 萬美元以上，我們預計 2025 年還將實現成長。脫碳和非石油及天然氣能源的前景繼續推動投資，更多項目的最終投資決策正在推進。

We continue to participate in quoting activity indicating future market growth, While we acknowledge operators are closely assessing and evaluating any new policy decisions from the administration and its impact on larger scale CCUS and RNG projects related to government subsidies. For our EcoVapor business, the fourth quarter represented the largest revenue quarter in the company's history, fuelled by packaged unit sales to operators in oil and gas, as well as renewable natural gas customers.

我們繼續參與表明未來市場成長的報價活動，同時我們承認營運商正在密切評估和評估政府的任何新政策決定及其對與政府補貼相關的更大規模 CCUS 和 RNG 項目的影響。對於我們的 EcoVapor 業務而言，第四季度是該公司歷史上收入最高的一個季度，這得益於向石油和天然氣營運商以及再生天然氣客戶銷售的套裝產品。

On the rental and service side, we continue to expand our EcoVapor product offerings in the U.S., where demand is improving, aided by an increase in natural gas prices, as well as operators' desire to reduce Scope 1 emissions. In an effort to expand R&G sales, our engineering team has been working closely with customers to design and supply larger capacity units that can process higher volumes of gas.

在租賃和服務方面，我們繼續在美國擴大 EcoVapor 產品供應，由於天然氣價格上漲以及營運商希望減少範圍 1 排放，美國的需求正在改善。為了擴大 R&G 的銷售，我們的工程團隊一直與客戶密切合作，設計和提供能夠處理更多氣體的更大容量的設備。

This ability to service a broader range of gas processing volume expands our addressable market in RNG and opens more adjacent markets like agricultural processing and hydrogen production. As DNOW expands into new adjacent markets, we add new customers, which unlocks an opportunity to provide additional products like PVF, pump packages, and fabricated equipment.

這種為更廣泛的天然氣處理量提供服務的能力擴大了我們在 RNG 領域的潛在市場，並開闢了更多鄰近市場，如農業加工和氫氣生產。隨著 DNOW 擴展到新的鄰近市場，我們增加了新客戶，這為我們提供 PVF、泵浦組和製造設備等附加產品創造了機會。

Moving to our Digital Now initiatives, our digital revenue as a percent of total SAP revenue was 47% during the quarter as we continue to leverage technology, automate processes, and work with customers to integrate our systems by leveraging digital technologies to implement highly efficient procurement models.

轉向我們的「數位化當下」計劃，本季我們的數位收入佔 SAP 總收入的 47%，因為我們繼續利用技術、自動化流程並與客戶合作，利用數位技術整合我們的系統，以實施高效的採購模式。

We completed a number of new digital customer integrations during the quarter, ranging from invoice and purchase order integration to centralized procurement via punch-out solutions. These B2B digital integrations increase efficiencies for DNOW and our customers. As we automate manual processes, it reduces data entry errors and processing time and leads to faster transaction cycles and reduced administrative costs.

我們在本季完成了許多新的數位客戶集成，從發票和採購訂單整合到透過打卡解決方案進行集中採購。這些 B2B 數位整合提高了 DNOW 和我們客戶的效率。隨著我們實現手動流程的自動化，它減少了資料輸入錯誤和處理時間，從而縮短了交易週期並降低了管理成本。

Furthermore, it improves data accuracy and visibility for both parties through real-time access to information. This integration reduces the cost per transaction and drives cost savings over the long term. And as Mark will discuss, our B2B initiatives also aid in the improvement of working capital. With that, let me hand it over to Mark.

此外，透過即時存取訊息，它提高了雙方的數據準確性和可見性。這種整合降低了每筆交易的成本，並從長遠來看節省了成本。正如馬克所討論的，我們的 B2B 計畫也有助於改善營運資金。說完這些，讓我把它交給馬克。

Thank you, Dave, and good morning, everyone. Total fourth quarter 2024 revenue was $571 million, down 6% or $35 million from the third quarter. On a full year basis, total 2024 revenue was $2.373 billion, up $52 million from 2023, or an increase of 2%. EBITDA excluding other costs or EBITDA for the fourth quarter was $45 million or 7.9% of revenue. On a full year basis total 2024 EBITDA was $176 million or 7.4% of revenue. US revenue for the fourth quarter 2024 totaled $451 million, a decrease of $31 million or 6% from the third quarter of 2024

謝謝你，戴夫，大家早安。2024 年第四季總營收為 5.71 億美元，較第三季下降 6% 或 3,500 萬美元。從全年來看，2024 年總收入為 23.73 億美元，比 2023 年增加 5,200 萬美元，增幅為 2%。第四季扣除其他成本的息稅折舊攤提前利潤（EBITDA）為 4,500 萬美元，佔營收的 7.9%。2024 年全年 EBITDA 總額為 1.76 億美元，佔營收的 7.4%。2024 年第四季美國營收總計 4.51 億美元，較 2024 年第三季減少 3,100 萬美元，降幅 6%

On a full year basis, 2024, U.S. revenue totaled $1.88 billion, up 7%, or $131 million from 2023. U.S. energy centers contributed approximately 73% of total U.S. revenue in the fourth quarter, and U.S. process solutions contributed the remainder. In Canada, for the fourth quarter, revenue totaled $66 million, an increase of $1 million, or 2% from the third quarter of 2024. despite an unfavourable impact of $2 million from foreign currency changes.

從全年來看，2024 年美國營收總計 18.8 億美元，比 2023 年成長 7%，即 1.31 億美元。美國能源中心在第四季度貢獻了美國總收入的約 73%，美國流程解決方案貢獻了剩餘部分。在加拿大，第四季收入總計 6,600 萬美元，比 2024 年第三季增加 100 萬美元，增幅為 2%，儘管外匯變化造成了 200 萬美元的不利影響。

On a full year basis, 2024 Canada revenue totaled $253 million, down 10% or $29 million from 2023, impacted unfavourably by $4 million from foreign currency changes. International revenue for the fourth quarter of 2024 was $54 million, a decrease of $5 million or 8% sequentially. We experienced some project delays in the international segment in the fourth quarter that shifted into the first half of 2025.

從全年來看，2024 年加拿大的收入總計 2.53 億加元，比 2023 年下降 10% 或 2,900 萬美元，受到 400 萬美元外匯變化的不利影響。2024 年第四季國際營收為 5,400 萬美元，季減 500 萬美元，降幅為 8%。我們在第四季度的國際業務中遇到了一些專案延遲，這些專案將推遲到 2025 年上半年。

On a full year basis, 2024 international revenue totaled $240 million, down 17% or $50 million from 2023, a year with heavy project activity. When looking back before 2023, the 2024 revenue delivered surpassed both revenue in 2021 and 2022. But this year, we not only expanded revenue over those years, but with meaningfully higher operating profits.

從全年來看，2024 年國際收入總計 2.4 億美元，比專案活動繁忙的 2023 年下降 17% 或 5,000 萬美元。在回顧 2023 年之前，2024 年的收入超過了 2021 年和 2022 年的收入。但今年，我們不僅收入比前幾年有所成長，而且營業利潤也顯著提高。

Now moving back to the income statement, gross margins for the fourth quarter were 23.3%, or up 100 basis points sequentially, aided by additional vendor consideration in the fourth quarter, and we benefited from favourable product mix.

現在回到損益表，第四季的毛利率為 23.3%，比上一季成長 100 個基點，這得益於第四季度額外的供應商考慮，並且我們受益於有利的產品組合。

On a full year basis, gross margins for 2024 were 22.5%. Warehousing, selling, and administrative, or WSA, for the quarter was $103 million, or lower by $4 million sequentially, resulting from stringent focus on operational efficiencies combined with resource alignment activities in response to migratory and shifting customer activity.

從全年來看，2024 年的毛利率為 22.5%。本季的倉儲、銷售和管理費用（WSA）為 1.03 億美元，比上一季減少 400 萬美元，這是由於嚴格關注營運效率，並結合資源調整活動以應對客戶活動的遷移和轉變。

For the first quarter of 2025, we expect WSA to increase approximately $7 million to [$110 million] (corrected by company after the call), as we move from the fourth quarter with additional WSA dollars related to the impact from our fourth quarter acquisition and the resetting of limit-based payroll taxes paired with a favorable fourth quarter collection

對於 2025 年第一季度，我們預計 WSA 將增加約 700 萬美元至 [1.1 億美元]（電話會議後公司進行了更正），因為我們從第四季度開始將增加 WSA 美元，這與第四季度收購的影響以及基於限額的工資稅的重置以及第四季度的良好收入有關

on accounts receivable for approximately $2 million that is not expected to repeat in the first quarter of 2025. In the fourth quarter, we reported $10 million of depreciation and amortization expense and forecast quarterly 2025 depreciation and amortization will be approximately $11 million.

應收帳款約 200 萬美元，預計 2025 年第一季不會再出現這種情況。第四季度，我們報告的折舊和攤銷費用為 1,000 萬美元，預測 2025 年季度折舊和攤提費用約為 1,100 萬美元。

Now moving to operating profit. In the fourth quarter, total company operating profit was $29 million. In the quarter, the U.S. generated $19 million in operating profit, and the Canadian and international segments each delivered strong operating profit of $5 million. With operating profit percent for the fourth quarter in Canada of 7.6%, an operating profit in international of 9.3%, inclusive of the $2 million favourable impact from the aged accounts receivable collections.

現在轉向營業利潤。第四季度，公司總營業利潤為2,900萬美元。本季度，美國業務實現了 1,900 萬美元的營業利潤，加拿大和國際業務分別實現了 500 萬美元的強勁營業利潤。第四季加拿大地區的營業利潤率為 7.6%，國際地區的營業利潤率為 9.3%，其中包括來自帳齡應收帳款回收的 200 萬美元的有利影響。

Interest income in the quarter was $2 million, and moving to income taxes in the fourth quarter of 2024, DNOW's income tax expense was $7 million, and $32 million on a full-year basis. And our effective tax rate, as computed on the face of the income statement, 28.1% for the full year 2024. We estimate our 2025 full-year effective tax rate to be approximately 27% to 29%

本季利息收入為 200 萬美元，轉入 2024 年第四季的所得稅後，DNOW 的所得稅支出為 700 萬美元，全年為 3,200 萬美元。根據損益表計算，2024 年全年的有效稅率為 28.1%。我們預計 2025 年全年有效稅率約為 27% 至 29%

From a cash income tax perspective, we are not expecting to pay material U.S. federal cash income taxes in 2025 due to available net operating loss carry-forwards. Net income attributable to DNOW, Inc. for the fourth quarter was $23 million. or $0.21 per fully diluted share.

從現金所得稅的角度來看，由於可用的淨營業虧損結轉，我們預計 2025 年不會繳納重大美國聯邦現金所得稅。第四季歸屬於 DNOW, Inc. 的淨收入為 2,300 萬美元。或每股完全稀釋後 0.21 美元。

And on a non-GAAP basis, Q4 2024 net income attributable to DNOW, Inc., excluding other costs, was $27 million, or $0.25 per fully diluted share. On a full year basis, 2024 net income attributable to DNOW, Inc., excluding other costs, was $100 million, or $0.91 per fully diluted share.

依照非公認會計準則 (non-GAAP)，2024 年第四季歸屬於 DNOW, Inc. 的淨收入（不包括其他成本）為 2,700 萬美元，即每股完全稀釋後 0.25 美元。從全年來看，2024 年歸屬於 DNOW, Inc. 的淨收入（不包括其他成本）為 1 億美元，即每股 0.91 美元。

Our profitability performance and bottom line contribution in 2024 is notable. It marks the third consecutive year of delivering net income of at least $100 million, excluding other costs.

我們在 2024 年的獲利表現和底線貢獻是顯著的。這是該公司連續第三年實現至少 1 億美元的淨收入（不包括其他成本）。

Now moving to the balance sheet, at the end of the fourth quarter, we had zero debt and a cash position of $256 million. Even after investing $114 million in an acquisition to expand our water management and pump and automation offerings, plus organically investing $3 million in capital expenditures and returning $5 million of capital to shareholders as we completed our $80 million share buyback program in the fourth quarter.

現在轉到資產負債表，在第四季末，我們的債務為零，現金狀況為 2.56 億美元。即使在我們投資 1.14 億美元進行收購以擴大我們的水管理和泵及自動化產品之後，加上在資本支出中有機投資 300 萬美元，並在第四季度完成 8000 萬美元的股票回購計劃後向股東返還 500 萬美元的資本。

DNOW cash decreased from the third quarter by only $5 million thanks to an impressive fourth quarter cash flow from operations of $122 million. The outsized cash flow generation is in large part from the disciplined and dedicated teammates here at DNOW, who are focused on efficiencies and cash flow generation.

由於第四季營運現金流達到驚人的 1.22 億美元，DNOW 現金較第三季僅減少 500 萬美元。超額現金流的產生很大程度上歸功於 DNOW 紀律嚴明、盡職盡責的隊友，他們專注於提高效率和產生現金流。

We ended the quarter with total liquidity of $556 million, comprising our net cash position of $256 million plus $300 million in additional credit facility availability. Our existing $500 million revolving credit facility extends into December 2026, providing DNOW with immediate access to capital under the facility.

本季末，我們的總流動資金為 5.56 億美元，包括 2.56 億美元的淨現金部位以及 3 億美元的額外信貸額度。我們現有的 5 億美元循環信貸額度將延長至 2026 年 12 月，使 DNOW 能夠立即獲得該額度下的資金。

Ending accounts receivable was $388 million, a decrease of $17 million from the third quarter. Gage Sales Outstanding, or DSO, was 62 days at the end of the fourth quarter, but that includes acquired accounts receivable from our fourth quarter acquisition.

期末應收帳款為 3.88 億美元，較第三季減少 1,700 萬美元。第四季末，Gage 銷售應收帳款（DSO）為 62 天，但其中包括我們第四季收購產生的應收帳款。

When excluding the incongruent partial quarter revenue impact on the fourth quarter DSO calculation, DSOs would have improved sequentially by four days. On strong year-end collections, partially aided by expanding our use of technology for customer B2B integrations to drive higher efficiencies, and in large part to the tremendous teaming of sales and operations with our incredible credit and collections team.

當排除不一致的部分季度收入對第四季度 DSO 計算的影響時，DSO 將連續改善四天。在年終收款強勁方面，部分得益於我們擴大了對客戶 B2B 整合技術的使用，從而提高了效率，並且很大程度上得益於我們出色的信貸和收款團隊與銷售和營運部門的緊密合作。

Inventory was $352 million at the end of the fourth quarter, a decrease of $12 million from the third quarter, with an annualized turn rate of 5.0 times. Inventory optimization was a source of cash for DNOW in 2024. For example, inventory contributed approximately $80 million to our cash flow generation in the year.

第四季末庫存為3.52億美元，較第三季減少1,200萬美元，年化週轉率為5.0次。庫存優化是 DNOW 在 2024 年的現金來源。例如，庫存為我們當年的現金流貢獻了約 8,000 萬美元。

However, we do expect inventory to grow into 2025, consuming cash based on our forecasted model. Our operating model, incredible talent in the field, partnered with our inventory planning and operational teams have done an outstanding job to ensure the right products are on hand that the market demands and are located in proximity to our customers, all while managing the perishable risk that comes with inventory and being outstanding stewards of one of our largest assets.

然而，根據我們的預測模型，我們確實預計庫存將在 2025 年成長，並消耗現金。我們的營運模式、該領域的傑出人才以及庫存規劃和營運團隊的合作，出色地確保了我們能夠提供市場所需的正確產品，並且產品位於客戶附近，同時管理庫存帶來的易腐爛風險，並出色地管理著我們最大的資產之一。

Accounts payable was $300 million at the end of the fourth quarter, an increase of $22 million from the third quarter. And for the fourth quarter 2024, working capital, excluding cash as a percentage of annualized fourth quarter revenue, was 14.4%. a notable improvement from the pre-COVID levels of 20% plus before we transformed the business.

第四季末應付帳款為3億美元，較第三季增加2,200萬美元。2024 年第四季度，營運資本（不含現金）佔第四季年化收入的百分比為 14.4%。與我們轉型業務之前的新冠疫情之前的 20% 以上的水平相比，有了顯著改善。

In the fourth quarter of 2024, we generated $122 million of cash from operating activities attributable to strong earnings contribution and about $80 million reduction in net working capital driven by strong collections of receivables in the period

2024 年第四季度，我們因強勁的盈利貢獻而產生了 1.22 億美元的經營活動現金，同時由於本季度應收賬款的強勁回籠，淨營運資本減少了約 8,000 萬美元

On a full year basis, we beat our 2024 expectations on cash flows from operating activities and delivered $298 million during the year. And once considering the full year capital expenditures of $9 million, free cash flow generated in the full year 2024 was $289 million. As Dave highlighted, this is our largest free cash flow generation since 2015.

從全年來看，我們 2024 年的經營活動現金流超出預期，全年實現 2.98 億美元。一旦考慮到全年資本支出 900 萬美元，2024 年全年產生的自由現金流將為 2.89 億美元。正如戴夫所強調的，這是我們自 2015 年以來最大的自由現金流。

As previously announced, we successfully completed our $80 million share repurchase program following through on our commitment to our shareholders. This program resulted in the repurchase of approximately $7 million of our outstanding shares at an average price of $11.39 a share. We also announced that our Board of Directors has authorized a new $160 million share repurchase program that is double in size of the inaugural program.

正如先前宣布的，我們成功完成了 8000 萬美元的股票回購計劃，履行了對股東的承諾。該計劃導致我們以每股 11.39 美元的平均價格回購了約 700 萬美元的流通股。我們還宣布，董事會已批准一項新的 1.6 億美元股票回購計劃，其規模是首次計劃的兩倍。

This enhances our ability to opportunistically return capital to shareholders as market and business conditions warrant. all while maintaining our focus on investing in accretive organic growth and strategic acquisitions while adhering to our disciplined approach to balance sheet management. We continue to be debt-free, have no interest payments, while keeping cash flow generation a top priority.

這增強了我們根據市場和商業條件適時向股東返還資本的能力。同時，我們繼續專注於投資增值性有機成長和策略性收購，並堅持嚴格的資產負債表管理方法。我們繼續保持無債務、無利息支付的狀態，同時將現金流產生作為首要任務。

And with that, let me turn the call back to David.

說完這些，讓我把電話轉回給大衛。

Thank you, Mark. Switching to our outlook for 2025. In the U.S., as customer budgets reset, we expect upstream customer spending to be lower than year-over-year due to efficiency gains in drilling and completions, yet budgets are allocated primarily to maintain current production levels, noting some have announced modest production growth in the Permian.

謝謝你，馬克。轉向我們對 2025 年的展望。在美國，隨著客戶預算的重新調整，我們預計上游客戶支出將低於去年同期，原因是鑽井和完井效率的提高，但預算主要用於維持當前的生產水平，並注意到一些公司已宣布二疊紀盆地的產量將適度增長。

We expect continued investment in midstream infrastructure and new projects based on increased demand for natural gas from a combination of increased electrical demand due to growth in data centers, reshoring of manufacturing, and expected increased increases in LNG export capacity 2023 and 2024 were heavy build-up years for one of our largest customers with orders being placed to meet demand as well as forecasted activity with 12 to 18 months line of sight. In 2025, that customer plans to exhaust existing inventory and only place fabrication orders for project-specific needs versus large-scale production planning.

我們預計中游基礎設施和新項目的投資將繼續進行，這是因為由於資料中心的成長、製造業的回流以及液化天然氣出口能力的預期增加而導致的電力需求增加對天然氣的需求增加。 2023 年和 2024 年是我們最大客戶之一的大規模建設年，訂單將滿足需求，並且預測活動將持續 12 至 18 個月。2025 年，該客戶計劃耗盡現有庫存，僅根據專案特定需求下達製造訂單，而不是進行大規模生產計劃。

This will post DNOW sales declines in fabrication by about $40 million in 2025 also we expect about a $30 million reduction $30 million reduction of revenues from 2024 business that was bid out at margins lower than the cost to service those revenues so we sidestepped low-margin dilutive activities that were picked up by competitors.

這將導致 DNOW 2025 年的製造銷售額下降約 4,000 萬美元，同時我們預計 2024 年業務的收入將減少約 3,000 萬美元，這些業務的利潤率低於服務這些收入的成本，因此我們避開了被競爭對手搶走的低利潤稀釋活動。

As a result we expect our US business to grow from 2024 levels as we look to capture market share and continue to execute on growing in the midstream and industrial adjacent markets, combined with the expected revenue contributions from the Trojan acquisition.

因此，我們預計我們的美國業務將從 2024 年的水平開始成長，因為我們希望佔領市場份額並繼續在中游和工業鄰近市場實現成長，再加上特洛伊收購帶來的預期收入貢獻。

In Canada, we expect customers to look to maintain production, but given the fluidity and impact of tariffs on the sector and impacts to our business, our outlook is more opaque than normal. However, for modelling purposes, we see a flat scenario playing out in Canada for the year. Internationally, we see a flat scenario playing out as well as we continue to high grade the business, resulting in improvements in operating profit.

在加拿大，我們預計客戶將尋求維持生產，但考慮到關稅的流動性和對該行業的影響以及對我們業務的影響，我們的前景比正常情況下更加不透明。然而，出於建模目的，我們預計今年加拿大的經濟將呈現平穩勢。在國際上，我們看到情況平穩，我們繼續對業務進行高評級，從而提高了營業利潤。

Taking it all together, for the first quarter of 2025, we expect sequential revenue to increase in the low to mid-single digit percent range compared to the fourth quarter of 2024. First quarter 2025 EBITDA as a percent of revenue could approach 7%, incorporating a reset of payroll taxes reduced vendor consideration, and favourable fourth quarter bad debt benefit not expected in the first quarter of 2025.

綜合來看，我們預計 2025 年第一季的環比營收將比 2024 年第四季成長低至個位數百分比。2025 年第一季的 EBITDA 佔營收的百分比可能接近 7%，其中包括重新設定薪資稅、減少供應商對價，以及 2025 年第一季預計不會出現的第四季壞帳收益。

We expect full year 2025 revenues to be flat to up in the high single digit percent range from 2024 levels. And full year 2025 EBITDA could approach 8% of revenue. We are targeting free cash flow in 2025 of $150 million to support growth at these forecasted levels of activity.

我們預計 2025 年全年營收將與 2024 年水準持平或成長 10% 左右。2025 年全年 EBITDA 可能接近收入的 8%。我們的目標是到 2025 年實現 1.5 億美元的自由現金流，以支持預測活動水準的成長。

I am proud of the strong results we achieved in 2024, accentuated by $289 million in free cash flow, nearly I am proud of the strong results we achieved in 2024, accentuated by $289 million in free cash flow, nearly twice our projections from last February.

我為我們在 2024 年取得的強勁業績感到自豪，其中 2.89 億美元的自由現金流幾乎是我們去年 2 月預測的兩倍。

I'm also pleased that the fourth quarter EBITDA was markedly higher than expectations at $45 million, or 7.9% of revenue, thanks to expanded gross margins and implemented cost control initiatives. our second-best fourth-quarter EBITDA level in our history. The recently announced $160 million share repurchase authorization, which is double in size from our previous program, demonstrates confidence in the strength of our business.

我也很高興看到，由於毛利率的提高和成本控制措施的實施，第四季度的 EBITDA 明顯高於預期，達到 4,500 萬美元，佔營收的 7.9%。我們歷史上第二好的第四季 EBITDA 水準。最近宣布的 1.6 億美元股票回購授權，是我們先前計劃的兩倍，顯示了對我們業務實力的信心。

This substantial increase signals our strong conviction in DNOW's cash generation capabilities and future earnings potential. Our commitment to maintain an acquisition focus alongside share buybacks provides multiple avenues for shareholder value creation. I'm honored to represent the talented women and men of DNOW who work creatively and enthusiastically to win in the market.

這一大幅成長顯示我們對 DNOW 的現金創造能力和未來獲利潛力充滿信心。我們致力於在股票回購的同時維持收購重點，為股東價值創造提供多種途徑。我很榮幸能夠代表 DNOW 的才華橫溢的女性和男性，他們富有創意且充滿熱情地工作以在市場上獲勝。

Your determination and dedication give me great confidence in our bright future as we lay the groundwork for a successful 2025. A year that could mark the fifth consecutive year of growth for DNOW. With that, let's open the call for questions.

你們的決心和奉獻精神讓我對我們美好的未來充滿信心，我們為2025年的成功奠定了基礎。今年可能是 DNOW 連續第五年成長。現在，讓我們開始提問。

Thank you. (Operating Instructions)

謝謝。（操作說明）

Your first question comes from the line of Nathan Jones with Stifel. Please go ahead.

您的第一個問題來自 Stifel 的 Nathan Jones。請繼續。

Good morning.

早安.

Good morning, Nathan. Good morning. Looks like you should have done the share repurchase yesterday. For sure. I guess I'll start with the topic du jour around tariffs. I've viewed you guys as one of the few industrial net beneficiaries from tariffs as it's typically not only accretive to your revenue, but also accretive to gross margins.

早安，內森。早安.看來你昨天就應該完成股票回購。一定。我想我將從當前的關稅話題開始。我認為你們是關稅帶來的少數工業淨受益者之一，因為關稅通常不僅可以增加你們的收入，還可以增加毛利率。

We have seen steel prices spike up over the last few weeks, unsurprisingly. Can you talk about what's baked into the guidance that you've given for 2025? And maybe just remind us of how those inflationary pressures on steel prices pass through your business.

我們看到過去幾週鋼鐵價格飆升，這並不令人意外。您能談談您對 2025 年的指導方針中包含哪些內容嗎？也許只是提醒我們鋼鐵價格的通膨壓力是如何影響您的業務的。

Okay. In terms of how we've kind of metered in the impact of tariffs on our first quarter and full year guidance, we expect that there will be varying degrees of implementation of tariffs, maybe not the full amount, but it could be. And that's baked into our forecast. We gave a wider range of revenue possibilities in our forecast than we normally do.

好的。就我們如何衡量關稅對第一季和全年指引的影響而言，我們預期關稅的實施程度將有所不同，也許不是全部，但有這種可能。這已包含在我們的預測中。我們在預測中給出了比通常更廣泛的收入可能性。

But to your point, Nathan, tariffs generally should be constructive to gross margins and revenues. Now, if the tariffs were too widespread and they could become revenue destructive, we don't see that. And the reason we don't see that is probably at least 60% of the steel products we sell are sourced from the United States. So we have a little bit of a hedge there.

但就你的觀點而言，內森，關稅通常應該對毛利率和收入產生正面影響。現在，如果關稅範圍過於廣泛，可能會對收入造成破壞，我們不會認為這是可能的。我們沒有看到這種情況的原因可能是我們銷售的鋼鐵產品至少有 60% 來自美國。所以我們在這方面有一點對沖。

And we think we'll have a mix of products that will work with our various supply sources around the world to mitigate the average cost of the products we sell to our customers. So I think we have the ability, I think we'll see higher costs or the arresting of deflation we've experienced, that'll be a positive. And I think we'll see the recurrence of inflation, at least at a moderate level, which should help gross margins and the bottom-line performance of the business.

我們認為，我們將擁有多種產品，可以與我們在世界各地的各種供應源合作，以降低我們向客戶銷售的產品的平均成本。所以我認為我們有能力，我認為我們會看到更高的成本或我們所經歷的通貨緊縮得到遏制，這將是積極的。我認為我們將看到通貨膨脹的再次出現，至少處於適度水平，這應該有助於提高毛利率和企業的底線表現。

In terms of the sourcing and where the tariffs are being applied, Mexico and Canada are very low sources of products for us. The primary one would be China, but that's going to be a smaller portion of the overall total of goods we sell.

就採購和徵收關稅而言，墨西哥和加拿大對我們來說是極低的產品來源。主要市場是中國，但這只是我們銷售商品總量的一小部分。

Is that the primary driver of that wide range? I mean, flat to up high single digits is a pretty wide range. Is the primary input there the potential for tariffs at the top and bottom of that range? And what are the other inputs that split the top and the bottom?

這是造成這範圍如此廣泛的主要原因嗎？我的意思是，從平穩到高個位數是一個相當廣泛的範圍。那裡的主要投入是否有可能產生該範圍頂部和底部的關稅？那麼，還有哪些輸入可以分割頂部和底部呢？

Well, I would say that the tariffs are probably at the lower end of that range. I think that the things that excite us about 2025 is we're seeing more interest in midstream markets a very important target and market for us.

嗯，我想說關稅可能處於該範圍的低端。我認為 2025 年令我們興奮的是，我們看到人們對中游市場的興趣日益濃厚，這對我們來說是一個非常重要的目標和市場。

We've doubled our position in midstream. We expect to exploit that in the new year. If we see the kind of, if we see activity higher than what we'd expect, that would move us up that, the midpoint of that range. Contrarily, if we see some of the government subsidies for our big push in energy evolution and adjacent markets and infrastructure-related spend, that could bring us down within that spectrum on that range of guidance.

我們在中游的地位已經翻了一番。我們希望在新的一年充分利用這一點。如果我們看到這種活動高於我們的預期，那麼我們就會將範圍的中點推高。相反，如果我們看到政府對我們大力推動能源發展和鄰近市場以及基礎設施相關支出的部分補貼，這可能會使我們在該指導範圍內下降。

Those are probably the main things. We do expect some shrinkage in upstream, like I said in my prepared remarks, but we expect some real strength in midstream, and that's a big organizational push, not just from our [WITCO] team, but our legacy folks as well, so we expect growth there.

這些可能是主要的事情。正如我在準備好的發言中所說的那樣，我們確實預計上游業務會有所萎縮，但我們預計中游業務會有一些真正的實力，這是一個巨大的組織推動力，不僅來自我們的 [WITCO] 團隊，也來自我們原有的員工，所以我們預計那裡會有所增長。

I guess my last question was just going to be around upstream. There's obviously a focus from the new administration on increasing domestic production. It doesn't sound like you think that's going to happen, certainly not in terms of higher rig count. So just any insights you can give us on what you're hearing from your customers about their intentions to drill and produce more or not based on current US policy?

我想我的最後一個問題只是關於上游。新政府顯然將重點放在提高國內產量上。聽起來你不認為這種情況會發生，從鑽孔機數量增加的角度來看肯定不會發生。那麼，您能否根據客戶的回饋，根據當前的美國政策，就他們是否打算進行更多鑽探和生產提供一些見解？

Well, I think our assessment of what's probable in upstream is just based on what we're hearing from our customers and from the people that really cover the industry well. Now, it doesn't mean, and we do have customers that feel liberated by a less controlling administration, and they're going to simply invest more and take more risk and spend more because they because the sentiments change.

嗯，我認為我們對上游可能發生的情況的評估只是基於我們從客戶和真正了解該行業的人士那裡聽到的信息。現在，這並不意味著，我們確實有一些客戶因為控制力減弱的管理而感到自由，他們只會投資更多，承擔更多風險，花費更多，因為情緒改變了。

So we do have customers that are going to change their budgets favourably in that regard. But the heavy weight we're using in our assessment of upstream is just what our customers are saying. But I do think, there's a wild card on could things be better in upstream than we think? We're not counting on that right now, Nathan.

因此，我們確實有一些客戶願意在這方面改變他們的預算。但我們在評估上游時所採用的權重正是我們的客戶所說的。但我確實認為，上游的情況會比我們想像的更好嗎？我們現在不指望這一點，內森。

Awesome thanks very much for taking my questions. Thank you.

太棒了，非常感謝您回答我的問題。謝謝。

Your next question comes from the line of Jeff Robertson with Water Tower Research. Please go ahead.

您的下一個問題來自 Water Tower Research 的 Jeff Robertson。請繼續。

Thank you. Good morning, David, on the Trojan acquisition, can you talk about how much exposure DNOW had prior to this to the water transfer business, especially in a place like the Permian Basin? And then secondly, does the addition of Trojan water allow DNOW to pull through more of your other products to essentially sell bigger tickets to the customers?

謝謝。早安，大衛，關於特洛伊收購案，您能否談談 DNOW 在此之前對輸水業務的了解程度，尤其是在二疊紀盆地這樣的地方？其次，添加特洛伊水是否可以讓 DNOW 推出更多其他產品，從而向客戶銷售更多產品？

Brad, you want to take that and start with Odessa Pumps and FlexFlow and how this leverages that?

布拉德，你想從敖德薩泵和 FlexFlow 開始，並了解如何利用這一點？

Yeah, good morning, Jeff. Thank you for your question. Yeah, we're really excited about the Trojan acquisition and the opportunity that fits nicely into our water supply solutions business within our process solutions group.

是的，早安，傑夫。感謝您的提問。是的，我們對收購 Trojan 感到非常興奮，這個機會與我們流程解決方案部門內的供水解決方案業務完美契合。

if you look at where FlexFlow plays predominantly in areas that have saltwater disposal, injection sites, subservice permits and injection sites, and then also in production where you have a higher water to oil ratio FlexFlow has carved out a real nice market niche there, and we're growing that business. They tend to be higher volumes, higher capacity.

如果您看一下 FlexFlow 在鹽水處理、注入點、子服務許可證和注入點領域的主要表現，以及在水油比較高的生產領域，FlexFlow 已經在那裡開闢了一個非常好的市場利基，我們正在發展這項業務。它們的體積和容量往往更大。

Over the few years we've owned FlexFlow, they've actually declined the number of water transfer opportunities just because it's just not the right technology fit for the fleet, we have that's operating in the U.S. and in Canada. When we came into contact with the Trojan opportunity, it really expanded a gap in the water solutions market where we really weren't playing.

在我們擁有 FlexFlow 的幾年裡，他們實際上減少了​​水轉移機會的數量，因為它的技術不適合我們在美國和加拿大營運的船隊。當我們接觸到特洛伊機會時，它確實擴大了我們尚未涉足的水解決方案市場的空白。

We do have some small fleet of water transfer pumping rental options within our Adessa pumps fleet, so there's a small overlap there. But really, Trojan's done a nice job of carving out a niche not only a renting pumping assets for what I call temporary water transfer market, also selling product as a distributor supplier.

在我們的阿德薩泵隊中，我們確實有一些小型輸水泵租賃選擇，因此存在少量重疊。但實際上，Trojan 不僅在所謂的臨時調水市場中租賃抽水資產，還作為分銷商供應商銷售產品，在開拓利基市場方面做得很好。

And then recently really coming out with the Sable automation business, which is really kind of a nice – glue that kind of brings that all together and offers a really nice package solution offering to an operator, a water operator, or a production operator to allow them to turnkey and outsource moving that water to a number of locations.

然後最近又推出了 Sable 自動化業務，這真的是一種很好的粘合劑，可以將所有東西結合在一起，並為運營商、水務運營商或生產運營商提供非常好的一攬子解決方案，使他們能夠將水輸送到多個地點，並進行交鑰匙和外包。

So kind of minimal overlap with what we have with FlexFlow and Odessa Pumps. There's some complementary areas, but we think there's going to be opportunity for revenue synergies with Trojan and with our process solutions group.

因此，與 FlexFlow 和 Odessa Pumps 之間的重疊很小。雖然存在一些互補領域，但我們認為與 Trojan 以及我們的流程解決方案部門將有機會實現收入協同效應。

Brad, does the Sable system allow you to integrate some of the automation platform you have, I think, with FlexFlow into a, I guess, a broader package that you can supply to customers?

布拉德，Sable 系統是否允許您將您擁有的一些自動化平台（我認為是 FlexFlow）整合到一個您可以提供給客戶的更廣泛的軟體包中？

It does, Jeff. Trojan has a SCADA platform that's really kind of like a rental software as a service model. It's been very popular with customers, they're growing that. We see a large area of growth opportunity with that platform, really not only in the oil and gas market, but also some adjacent markets like agricultural processing and other areas.

確實如此，傑夫。Trojan 有一個 SCADA 平台，它實際上有點像租賃軟體即服務模式。它非常受顧客歡迎，而且他們正在不斷擴大其規模。我們看到該平台擁有巨大的成長機會，不僅在石油和天然氣市場，而且在一些鄰近市場，如農業加工和其他領域。

We've mentioned in prior earnings call, FlexFlow, we have our OptiWatch platform that is a real-time monitoring solution for not only rental SWD units, but also permanent SWD units. So our teams are working together with Trojan and FlexFlow, identifying opportunities on the technology and looking to potentially merge that in the future, although we haven't done anything from that since it's pretty early at the moment.

我們在先前的收益電話會議中提到過，FlexFlow，我們有 OptiWatch 平台，它不僅適用於租賃 SWD 單元，也適用於永久 SWD 單元的即時監控解決方案。因此，我們的團隊正在與 Trojan 和 FlexFlow 合作，尋找技術上的機會並尋求在未來可能將其合併，儘管我們還沒有採取任何行動，因為目前還處於早期階段。

Thanks. And then lastly on Trojan, can you bring their business to some of the other basins that you operate in?

謝謝。最後，關於 Trojan，您能將他們的業務擴展到您經營的其他一些盆地嗎？

Yeah, for sure. they're predominantly in, again, the higher water-to-oil ratio upstream markets, so kind of, Permian, southwest area with DNOW's footprint, as Dave mentioned in his prepared remarks not only do we think we can expand DNOW, to our current customers that they're not servicing in the markets that they're currently at, but we could also expand geographically, much like we did with FlexFlow.

是的，當然。他們主要集中在水油比較高的上游市場，也就是二疊紀、西南地區，DNOW 的業務範圍很廣，正如 Dave 在他的準備好的發言中提到的那樣，我們認為我們不僅可以將 DNOW 擴展到我們目前在他們所在市場中尚未提供服務的客戶，而且我們還可以在地理上進行擴展，就像我們對 FlexFlow 所做的那樣。

When we acquired FlexFlow, we expanded geographically into the Williston Basin, into Canada, and other areas. So we're excited about the opportunity to expand Trojan's customer base, but also geographical reach.

當我們收購 FlexFlow 時，我們的地理範圍擴展到了威利斯頓盆地、加拿大和其他地區。因此，我們很高興有機會擴大 Trojan 的客戶群以及地理覆蓋範圍。

And just a question, David, on revenue. In your comments, I think you mentioned that essentially production volumes and obviously with Trojan water handling volumes are becoming a better proxy for DNOW's business as opposed to capital spending on things like the rig count.

大衛，我有一個關於收入的問題。在您的評論中，我認為您提到，基本上產量和特洛伊水處理量正在成為 DNOW 業務的更好代表，而不是鑽機數量等方面的資本支出。

So if we are to assume that U.S. production grows slightly, then that essentially is where you're getting the expectation that U.S. revenues – also grow with it. Is that the right way to think about your business at this point?

因此，如果我們假設美國的產量略有成長，那麼基本上就可以預期美國的收入也會隨之成長。這是目前思考您的業務的正確方式嗎？

Well, what I said, Jeff, was, rigs and completions still are good barometers for DNOWs, revenue opportunities. In fact, they're probably the preeminent two. However, process solutions, which is 27% of our U.S. business and growing, of course, we've been investing heavily there and will continue to do so, they're seeing, much more water-oriented revenue opportunities, which are, disconnected from rigs and, or partly disconnected from rigs and completions.

好吧，傑夫，我說的是，鑽孔機和完井仍然是 DNOW 收入機會的良好晴雨表。事實上，他們可能是其中最傑出的兩位。然而，工藝解決方案占我們美國業務的 27% 並且還在不斷增長，當然，我們一直在那裡投入巨資並將繼續這樣做，他們看到了更多以水為導向的收入機會，這些機會與鑽機無關，或部分與鑽機和完井無關。

We see that as a bit of a hedge. So it's not all of our, it's not the prime driver of revenues. The prime driver of revenues, it's still rigs and completions, but it, it's an avenue for us to diversify our, target and markets, and we're doing that with the acquisitions we've made, including Trojan.

我們認為這有點像是一種對沖。所以這不是我們的全部收入，也不是收入的主要動力。收入的主要驅動力仍然是鑽機和完井，但它是我們實現目標和市場多元化的途徑，我們透過收購（包括 Trojan）來實現這一目標。

Thank you. I'll get back in the queue.

謝謝。我會回到隊列中。

Okay, thanks. Your next question comes from the line of Josh Jane with Daniel Energy Partners. Please go ahead.

好的，謝謝。您的下一個問題來自 Daniel Energy Partners 的 Josh Jane。請繼續。

Thanks. Good morning. First one for me, we've talked a lot about the U.S. Could you talk about your outlook for not only Canada but then also international markets in 2025 where there are opportunities and some areas that might be challenged over the course of this year?

謝謝。早安.首先，我們已經談了很多關於美國的事情。您能否談談對加拿大以及 2025 年國際市場的展望？今年國際市場有哪些機遇，哪些領域可能面臨挑戰？

Yeah, we I did touch on Canada in international, but just briefly in my prepared remarks we expect relatively flat activity in Canada. And we expect the same for international 2023 was a very big project here for us in international.

是的，我確實談到了加拿大的國際地位，但在我準備好的發言中，我們簡要地表示，我們預計加拿大的活動相對穩定。我們對國際市場也有同樣的期望，2023 年對我們國際市場來說是一個非常大的項目。

We talked in our prepared remarks of how we saw revenues decline due to the reduction in projects in 2024 and we've been kind of recasting our position in international with a focus on improving profitability. We're really strong in the North Sea, in the international electrical business, in the U.K., in Australia, in the Middle East.

我們在準備好的演講中談到，由於 2024 年項目減少，我們的收入出現了下降，我們一直在重塑我們在國際上的地位，重點是提高盈利能力。我們在北海、國際電力業務、英國、澳洲和中東地區都擁有強大的實力。

We're less strong elsewhere, and we're making adjustments there. that's going to impact revenues generally, at least in the first half, negatively. So we're forecasting international to be flat. But that could springboard into really focusing on the places in international where we're strong, and as we remove those distractions where we weren't, we'll see a platform for growth there.

我們在其他地方實力較弱，我們正在做出調整。這將對整體收入產生負面影響，至少在上半年是如此。因此我們預測國際市場將持平。但這可以讓我們真正專注於我們在國際上實力雄厚的領域，當我們消除那些幹擾因素時，我們將在那裡看到一個成長平台。

And then on the M&A side, just given that you were able to do a couple of deals, especially the larger one earlier in the year, could you speak to the M&A just general environment today? If you're seeing more opportunities come through your pipeline than maybe six to nine months ago, and how we should be thinking that against your return to shareholder framework, which has been among, especially with your most recent announcement, one of the most aggressive across the entire Just talk about how you're balancing those and opportunities for M&A that you're seeing today.

然後在併購方面，鑑於您能夠完成幾筆交易，特別是今年早些時候的一筆較大的交易，您能否談談當今併購的整體環境？如果您發現您的管道中出現的機會比六到九個月前更多，那麼我們應該如何看待您回歸股東框架，特別是您最近的公告，這是整個框架中最積極的框架之一，請談談您如何平衡這些機會以及您今天看到的併購機會。

Yeah, we are seeing a similar stream of opportunities. Not a big increase, not a big decrease at this point in the cycle. Of course, like I said earlier, we had our biggest acquisition year since 2015 and 2024. Those are harder to come by, and things just worked out with us being the natural operator. and those being prime revenue synergistic opportunities for us.

是的，我們看到了類似的機會。在這個週期中，沒有大幅增加，也沒有大幅減少。當然，就像我之前說的，我們迎來了自 2015 年以來最大的收購年和 2024 年。這些都很難實現，而我們身為自然的操作者，事情就順利解決了。這些對我們來說是主要的收入協同機會。

So we're cultivating that list of options, of opportunities, and it's going to come down to timing and price like it always does. Now, in terms of how we manage both inorganic expenditures and... share repurchases, we think we could do both. We think we can, like Mark had talked about, we're going to be, we generated about $80 million in cash last year from inventory from our core business, inventory decline from our core business.

因此，我們正在製定一系列選項和機會，最終還是會像往常一樣取決於時機和價格。現在，就我們如何管理無機支出和…股票回購而言，我們認為我們可以同時做到這兩點。我們認為我們可以，就像馬克所說的那樣，去年我們從核心業務的庫存中產生了大約 8000 萬美元的現金，核心業務的庫存下降了。

Next year, we're going to be adding inventory to our core business and to our acquisitions, so we'll consume cash there. But we can fund organic growth and do M&A and also, execute on our share of a purchase program.

明年，我們將為我們的核心業務和收購增加庫存，因此我們將在那裡消耗現金。但我們可以資助有機成長、進行併購，並執行我們的購買計畫份額。

So we think we could do all three things. We will do so opportunistically. If the right deal comes along, and right now we're really more in an M&A play because there's not a lot of organic growth up there, but we're going to favour M&A if the right deal comes along.

所以我們認為我們可以做到這三件事。我們將抓住機會這樣做。如果出現合適的交易，目前我們實際上更傾向於併購，因為那裡沒有太多的有機成長，但如果出現合適的交易，我們將傾向於併購。

If it doesn't, we're going to Favor share of purchases. But we think, you know, we ended the year. We ended last year, I think, at $291 million in cash. We spent over $300 million in acquisitions in 2024. We ended the year with $256 million in cash. And we completed our share repurchase program. So we did all of it in 2024, and we think we can do the same in 2025.

如果沒有的話，我們將會支持購買份額。但我們認為，你知道，我們結束了這一年。我認為，去年年底我們的現金餘額為 2.91 億美元。2024 年，我們花了超過 3 億美元進行收購。截至本財年末，我們的現金餘額為 2.56 億美元。我們完成了股票回購計畫。因此，我們在 2024 年完成了所有工作，我們認為我們可以在 2025 年完成相同的事情。

Understood. Thank you. I'll turn it back.

明白了。謝謝。我會把它轉回去。

Thank you.

謝謝。

As there are no further questions at this time, Mr. Brad Wise, I turn the call back over to you.

布拉德懷斯先生，由於目前沒有其他問題，我將電話轉回給您。

Thank you, everyone, for joining us today and your interest in DNOW. We look forward to discussing our first quarter 2025 results on our next earnings conference call in May. Hope everyone has a wonderful Thursday. And with that, we'll turn it back to the operator to conclude the call.

感謝大家今天的參與以及對 DNOW 的關注。我們期待在 5 月的下一次財報電話會議上討論 2025 年第一季的業績。祝大家有個美好的星期四。然後，我們將把電話轉回給接線員，結束通話。

Ladies and gentlemen, this concludes today's conference call. You may now disconnect.

女士們、先生們，今天的電話會議到此結束。您現在可以斷開連線。