Q2 2025 DNOW Inc Earnings Call
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Brad why is vice President of digital strategy Investor Relations you May begin your conference.
Thank you Jamie.
And welcome to <unk> second quarter 2025 earnings Conference call. We appreciate you joining us and thank you for your interest and do you know.
With me today is David Church entity, President and Chief Executive Officer, and Mark Johnson, Senior Vice President and Chief Financial Officer.
We operate under the <unk> brand, which is also a 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. These are forward looking statements within the meetings of the U S. Federal Securities laws based on limited information as of today August six 2025, 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, we do not undertake any obligation to publicly update or revise any forward looking statements for any reason and.
Good morning. My name is Jeanne and I will be your conference operator. Today at this time I would like to welcome everyone to the D. Now second quarter 2025 earnings conference call.
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 <unk> has on file with the U S Securities and Exchange Commission for a more detailed discussion of the major risk factors affecting our business.
All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number 1 on your telephone keypad,
Further information as well as supplemental financial and operating information may be found within our earnings release on our website at IR Dot <unk> dot com or in our filings with the SEC.
In an effort to maintain excuse me in an effort to provide investors with additional information regarding our results.
As determined by U S. GAAP, you'll note, we disclosed various non-GAAP financial measures in our earnings press releases and other public disclosures.
These are non-GAAP financial measures.
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 <unk>, Inc. Excluding other costs diluted earnings per share attributable to <unk>, Inc. Stockholders, excluding other costs and free cash flow. Please.
Please refer to a reconciliation of each of these non-GAAP financial measures to its most comparable GAAP financial measure in the supplemental information available at the end of our earnings release.
As of this morning, the Investor Relations section of our website contains a presentation covering our key results and takeaways from the second quarter 2025, a replay of today's call will be available on the site for the next 30 days.
Now, let me turn the call over to Dave.
Thank you Brad and good morning, everyone. We.
We have quite a bit to cover from our second quarter results and achievements to the outlook for our business and some updates on the MRC global transaction.
I'd like to start by acknowledging the continued solid execution by our team driving an exceptional first half of the year, despite macroeconomic headwinds and.
And recent growth years, such as 2021, and 2022 U S rigs and completions grew on a year over year basis, which created more opportunities for targeted growth. However in this current softer market achieving growth necessitates greater focus and a concerted effort to identify and execute on the <unk>.
Aspects that meet our strategic and financial goals.
Our relentless commitment to serving our customers and supplying them with the best solutions and <unk>.
For purpose products from the top manufacturers are instrumental to our success.
I am proud of our team's performance and I'm thankful for their efforts and their desire to win the market.
The second quarter of 2025 represents the best second quarter EBITDA results in our public company history at $51 million. This achievement is a result of the steadfast execution by our team.
Activity has actually declined sequentially and year over year.
And as I stated in our first quarter call. This is important to emphasize given the misunderstood perception at upstream sector activity alone drives opportunities for Dana.
For the second quarter was $628 million up 5% from the first quarter and twice the midpoint of the sequential guidance we gave in may.
Gross margins remained resilient at 22, 9% in line with our expectations and better than the full year 2024 average despite being challenged in a more price sensitive environment.
EBITDA for the quarter was 51 million again, a second quarter company best.
11% sequentially.
EBITDA as a percentage of revenue was eight 1%, beating our second quarter target and demonstrating continued earnings strength.
U S activity drove strong sequential revenue gains up 11% driven by midstream strength with additional contribution from steady demand for our water management solutions.
Our midstream business in the second quarter grew to approximately 27% of total <unk> revenue.
And over the prior six quarters, we have more than doubled our midstream revenue percentage contribution from the end of 2023, demonstrating our ability to diversify into and expand within this key strategic and growing sector.
On the upstream production side U S operators remain disciplined focused on balance sheet management and profitability rather than prioritizing production growth targets.
This has resulted in customers maintaining a limited project backlog driven partially by market uncertainties and adopted a cautious approach to additional spending while seeking inventory preservation and asset expansion primarily through M&A.
Most of our large public upstream customers have scheduled activity for this year at or close to maintenance production levels, which provides <unk> with a steady base of revenue and cash flow.
During the quarter, our strength in managing the balance sheet and income statement yielded free cash flow of $41 million and afford us the opportunity opportunity to continue repurchasing shares.
Through the end of the second quarter and year to date, we have purchased $27 million in shares under our new program authorized earlier this year.
Even still we expanded our cash balance to $232 million and continue to carry no debt enhancing our already solid financial position.
Before I move to our results on a regional basis I wanted to share a brief update about our recently announced combination with MRC global.
Since the announcement, we've spoken with many employees suppliers customers and shareholders.
Who have expressed excitement for what this opportunity means we discussed our confidence in becoming even better able to serve a broader mix of customers in the construction and maintenance of essential energy process production transmission infrastructure downstream processing and gas utilities activities.
This combination will allow for enhanced opportunities in alternative energy artificial intelligence infrastructure electrification LNG mining and other industrial markets.
These are areas with significant runways and bring additional opportunities to drive value creation.
At the same time integration planning is underway with joint MRC Global Dino teams meeting with the initial work to set us on the path for what the combined company will ultimately become.
As the team embarks on this collective effort they will focus on several areas that will be critical once the transaction is completed including bringing together our organizations and retaining key talent.
Operating products and services to one another's customers and working to realize the $70 million with annual cost synergies. The company is expected to generate within three years following closing.
As a reminder, these cost synergies are expected to be derived from public company costs corporate it systems and operational and supply chain efficiencies.
The bedrock to the success of Dino and MRC global joining together is our expected substantial cash flow generation capabilities and robust balance sheet, providing a strong foundation for continued investment in organic and inorganic growth and driving shareholder value or.
Our supplier relationships have always been incredibly important to our success through this transaction, we expect to build upon those valued partnerships some of our customers more holistically and grow the combined business.
This opportunity to bring our two organizations together is thanks to the tremendous efforts of my <unk> colleagues and the MRC global team.
As the customary regulatory and shareholder approval processes proceed I want to highlight that the final S. Four definitive proxy statement was filed yesterday and Dino and MRC global each filed a pre merger notification and report form under the HSR Act on August one.
We look forward to welcoming MRC global and their valued team members in due course, and bringing our organizations together to drive growth and value for our customers partners partners and shareholders alike, we cannot wait to see all we will accomplish together.
Now I'll turn to some comments on our results by region in the U S revenue was $528 million up $54 million or 11% sequentially.
<unk> growth was driven by Witco supply and energy centers locations, we experienced strong sequential growth geared towards customer midstream project investments in the quarter, including a $5 million project pulled forward into Q2 that was previously scheduled for the third quarter.
We also saw sequential growth in U S upstream as customers continue to pursue efficiencies driven by longer laterals, resulting in fewer drilling days fewer drilling rigs and completions crews. However production volumes are resilient and in some areas growing.
We continue to adjust our model to the market environment investing in areas of growing demand, while pruning costs in areas of reduced activity in.
In combination with increasing efficiencies to maximize profitability in.
An emerging trend as operators focus on efficiencies is there a need for larger centralized tank batteries and more specialized material. This type of ships with smaller tank batteries to larger centralized tank batteries tends to favor Dina due to our fabrication infrastructure and our inventory and service capabilities to service larger Si.
Projects like these centralized tank batteries.
And as a reminder, <unk> is focused on providing products and supply chain solutions to customers to extract produce separate and move large volumes of fluids through pipe valves fittings infrastructure as our customers deliver production volumes to the market.
And U S process solutions revenue was relatively flat sequentially.
We continue to see strength in flex flow water management solutions across a number of basins as produced water disposal services demand remains high for our least water disposal and transfer assets.
According to an industry U S. Water solutions report produced water volumes are projected to be up about 2% in 2025 and produced water recycling volumes handled by midstream infrastructure companies are projected to be up 13% for the year presenting growth opportunities for <unk> water management solutions, which.
We are capturing.
In Canada revenue was $48 million for the quarter down $14 million, primarily due to the seasonal breakup period, each year, where road access to oil and gas assets as restricted reducing activity in the second quarter when comparing the second quarter to prior year's this year's breakup impact on revenue was higher than average.
Impacted by additional macro impacts such as tariff uncertainty the recent Canadian federal election, consolidating customer activity and non repeating project and turnaround work sequentially.
We continue to look for organic opportunities for growth in Canada focused on end market diversification and energy evolution opportunities.
For international revenue was $52 million sequentially, lower by $11 million or 17% in line with our main guided $10 million sequential decline due to non repeating first quarter project activity.
Brownfield activity in the UK remained steady while capital project investments are slow due to uncertainty regarding the renewal and approval of north sea oil and gas leases.
In Norway activity was led by increasing oil production and demand for gas coupled with opportunities for additional sales from customer investments in carbon capture hydrogen and offshore wind.
We continue to see strength and flex flow, Water Management Solutions across a number of basins. As produced water Disposal Services demand remains high for our least water, disposal, and transfer assets.
The acquisition of <unk> International close in the second quarter and expands <unk> electrical products opportunities to participate more broadly in Singapore and in the Asia Pacific region.
And now I'd like to make a few comments about several additional growth markets. We continue to pursue.
In the energy evolution Arena, which includes activity primarily associated with carbon capture and storage direct air capture RMG related projects, we experienced sequential growth driven from Ccs project activity and from direct air capture construction.
In the rapidly expanding data center market, we provided balance to a general contractor for a newly constructed data Center project, where we expect to gain additional revenues in the third quarter.
In Canada Revenue is 48 million for the quarter down. 14 million primarily due to the seasonal break up period each year where Road access to oil. And gas assets, is restricted reducing activity. In the second quarter when comparing the second quarter to Prior years, this year's break up impact on Revenue was higher than average impacted by additional macro impacts, such as tariff on uncertainty, the recent Canadian federal election. Consolidating customer activity and
Quoting activity increased in the quarter and the LNG related markets, indicating increased interest in pipe valves and fittings as construction firms work to win and execute projects tied to the continuing buildup of the LNG export market.
We continue to look for organic opportunities for growth in Canada focused on End Market diversification and energy Evolution opportunities.
Looking ahead, we see interest in Dino as products and services growing with several industrial adjacent markets and activity tied to geothermal water wastewater and mining investments.
For International Revenue was 52 million sequentially lower by 11 million or 17% in line with our May guided. 10 million sequential decline, due to non-representative project activity.
All our areas of interest for Dana to provide our products and solutions, while expanding and diversifying our business.
Brownfield activity in the UK remained steady. While Capital project Investments are slow due to uncertainty regarding the renewal and approval of North Sea oil and gas leases
Turning to capital allocation, our core long term priorities remain the same we will balance accretive organic and inorganic growth with opportunistic share repurchases our decision to combine with MRC global is directly in line with this approach and will enable us to capture compelling and diverse growth opportunities with our.
in Norway activity was led by increasing oil production and demand for gas coupled with opportunities for additional sales from customer investments in carbon capture hydrogen and offshore wind.
Banded and complementary portfolio of services and product offerings as.
The acquisition of Natron International closed in the second quarter and expands Dino's Electrical Products opportunities to participate more broadly in Singapore and in the Asia-Pacific region.
As typical with transactions of this nature, we have suspended our share repurchase program until the close of the MRC global transaction.
Our near term focus is on successfully completing the transaction with MRC global and planning for the seamless integration of our two companies in the meantime, we are pursuing potential bolt on acquisitions in process solutions to better serve the needs of our customers with that let me hand, it over to Mark.
And now I'd like to make a few comments about several additional growth markets. We continue to pursue in the energy Evolution Arena which includes activity. Primarily associated with carbon capture and storage direct air capture and RNG related projects, we experience sequential growth driven from ccus Project activity and from direct air capture Construction.
Thank you, Dave and good morning, everyone total revenue for the second quarter of 2025 was $628 million up 5% or $29 million from the first quarter of 2025 at the top end of our guide from our May call.
In the rapidly expanding Data Center Market. We provided valves to a general contractor for a newly constructed data center project where we expect to gain additional revenues in the third quarter.
EBITDA, excluding other costs or EBITDA for the second quarter with $51 million or eight 1% of revenue up $5 million sequentially.
Quoting activity increased in the quarter in the LNG related markets, indicating increased interest in pipe valves and fittings as construction firms work to win and execute projects tied to the continuing buildout of the LNG export Market.
The second quarter also marked the 13th consecutive quarter, where <unk> has delivered EBITDA at or above the six 9% level.
U S revenue for the second quarter of 2025 totaled $528 million, an increase of $54 million were up 11% from the first quarter of 2025.
Looking ahead, we see interest and denies products and services growing with several industrial, adjacent markets and activity. Tied to geothermal water, Wastewater, and Mining Investments, all areas of interest for denial to provide our products and solutions while expanding and diversifying our business
Year over year U S revenue increased $16 million or up 3%.
U S energy centers contributed approximately 72% of total U S revenue in the second quarter and.
And U S process solutions contributed approximately 28%.
Turning to capital allocation, our core long-term priorities remain the same. We will balance creative organic and inorganic growth with opportunistic share repurchases. Our decision to combine with MRC Global is directly in line with this approach and will enable us to capture compelling and diverse growth opportunities with our expanded and complementary portfolio of services and product offerings.
In Canada for the second quarter revenue totaled $48 million, a decrease of $14 million or 23% from the first quarter of 2025.
As is typical with transactions of this nature, we have suspended. Our share repurchase program until the close of the MRC Global transaction.
As seasonality drove sequential revenue lower.
Canada's revenue historically declines in the second quarter due to the seasonal breakup period, where heavy equipment access to production areas is restricted.
MRC Global in planning, for the seamless integration of our 2 companies,
International revenue for the second quarter of 2025 was $52 million down $11 million or 17% sequentially.
In the meantime, we are pursuing potential, bolt-on, Acquisitions and process solutions to better. Serve the needs of our customers with that. Let me hand it over to mark.
As expected based on the $15 million first quarter International projects, we discussed last quarter.
Really offset with increased project activity elsewhere.
Overall <unk> gross margins for the second quarter were 22, 9% down slightly sequentially and up 110 basis points when compared to the second quarter of 2024.
Thank you, Dave. Good morning, everyone, total revenue for the second quarter of 2025 with 628 million up 5% or 29 million from the first quarter of 2025 at the top end of our guide, from our may call.
Eva excluding other costs or ibida for the second quarter with 51 million or 8.1% of Revenue up 5 million sequentially.
Warehousing, selling and administrative or WSI for the quarter was $112 million in line with our expectations from last quarter. After considering the more than $3 million second quarter costs incurred related to the announced merger with MRC global.
The second quarter also marked the 13th consecutive quarter, where D now is delivered ibida at or above the 6.9% level.
We anticipate various other costs in future quarters, as we move towards closing the transaction.
Us revenue for the second quarter of 2025 totaled, 528 million and increase of 54 million, or up 11% from the first quarter of 2025.
In the second quarter, we reported $10 million of depreciation and amortization expense.
Year-over-year us Revenue, increased, 16 million or up 3%.
And total company operating profit was $32 million.
The U S generated $30 million of operating profit, Canada was breakeven in the quarter in our international segment delivered $2 million in operating profit in the second quarter of 2025.
US Energy centers contributed approximately 72% of total us Revenue in the second quarter.
And US process Solutions contributed approximately 28%.
Moving to income taxes in the second quarter of 2025, <unk> income tax expense was $7 million.
in Canada for the second quarter Revenue totaled, 48 million, a decrease of 14 million or 23% from the first quarter of 2025, as seasonality drove sequential Revenue lower,
And our effective tax rate is computed on the face of the income statement was 21, 9%.
The effective tax rate for the quarter was favorably impacted by tax benefits associated with vesting of stock awards during the quarter.
Canada's Revenue. Historically, declines in the second quarter, due to the seasonal break up period, where heavy equipment access to production areas is restricted.
We estimate our 2025 full year effective tax rate to be approximately 26% to 28%.
International Revenue for the second quarter of 2025 with 52 million, down 11 million or 17% sequentially.
Net income attributable to <unk>, Inc. For the second quarter was $25 million or 23 per fully diluted share.
As expected based on the 15s we discussed last quarter.
Partially offset with increased project activity elsewhere.
And on a non-GAAP basis, Q2, 2025, net income attributable to <unk>, Inc. Excluding other costs was $29 million or 27.
Now gross margins for the second quarter were 22.9% down, slightly sequentially and up 110 basis points when compared to the second quarter of 2024.
Per fully diluted share.
Moving to the balance sheet at the end of the second quarter, we had zero debt and a cash position of $232 million, an increase of $13 million from the first quarter.
We ended the quarter with total liquidity of $582 million comprising.
Warehousing selling and administrative or wsa for the quarter was 112 million in line with our expectations from last quarter after considering the more than $3 million. Second quarter costs incurred related to the announced merger with MRC global
Comprising our net cash position of $232 million plus $350 million, an additional credit facility availability.
We anticipate various other costs in future quarters, as we move towards closing the transaction.
Our existing 500 million revolving credit facility extends into December of 2026, providing <unk> with immediate access to capital under the facility.
In the second quarter, we reported 10 million of depreciation and amortization expense.
And total company operating profit was 32 million.
As previously announced we have also secured additional commitments to expand our existing credit facility by $250 million at the close of the merger further enhancing our liquidity and capital allocation flexibility.
The US generated million dollars of operating profit Canada was break even in the quarter and our International segment. Delivered $2 million in operating profit in second quarter of 2025.
Moving to income taxes in the second quarter of 2025 D now's income tax expense with 7 million.
Accounts.
<unk> was $440 million at the end of the second quarter similar to the first quarter of 2025 levels.
And our effective tax rate as computed on the face of the income statement was 21.9%.
<unk> sales outstanding or DSO was 64 days at the end of the second quarter, a three day improvement from the first.
The effective tax rate, for the quarter was favorably, impacted by tax benefits, associated with vesting of stock awards, during the quarter.
Inventory was $383 million at the end of the second quarter down 2 million from the first quarter of 2025 with a strong annualized churn rate of five one times improving from our first quarter turn rate of four eight times.
We estimate our 2025 full year effective tax rate to be approximately 26 to 28%.
Net income attributable to D. Now Inc, for the second quarter was 25 million or 23 cents per fully diluted share.
As we've outlined in the past, we take a strategic approach to intentionally invest in inventory that will support our customers as we proactively navigate the challenges posed by tariffs.
And on a non-gaap basis, Q2 2025 net income attributable, to dino Inc. Excluding other costs was 29 million or 27 cents for fully diluted share.
Accounts payable was $318 million at the end of the second quarter, a decrease of $11 million from the first quarter.
And for the second quarter of 2025, working capital excluding cash as a percentage of annualized second quarter revenue improved to 15, 6%.
Moving to the balance sheet. At the end of the second quarter, we had zero debt and a cash position of 232 million and increase of 13 million from the first quarter.
In the second quarter of 2025, we generated $45 million of cash from operating activities and invested $4 million for capital expenditures to support growth primarily in our U S process solutions business.
We ended the quarter with total liquidity of $582 million, comprising our net cash position of $232 million plus $350 million in additional credit facility availability.
Our existing 500 million revolving credit facility extends into December of 2026.
Providing D. Now with immediate access to Capital under the facility.
Under our new share repurchase program that commenced in January we repurchased $19 million in the second quarter, bringing the cumulative repurchases under our share repurchase program to $27 million year to date through June 32025.
I previously announced we have also secured additional commitments to expand our existing credit facility by $250 million at the close of the merger, further enhancing our liquidity and capital allocation flexibility.
Now over the last 12 months, we've completed acquisitions totaling $122 million.
Generated $210 million in free cash flow and have converted over 100% of our EBITDA to free cash flow while.
Accounts receivable was $440 million at the end of the second quarter. Similar to the first quarter of 2025, days sales outstanding (DSO) was 64 days. At the end of the second quarter, there was a 3-day improvement from the first.
While returning $39 million to our shareholders through share repurchases and increasing our cash balances by $35 million.
Our commitment to growing the company through a combination of organic initiatives and M&A remains a key priority. We continue to be debt free have no interest payments, while keeping cash flow generation a top priority.
183 million. At the end of the second quarter, down 2 million from the first quarter of 2025, with a strong annualized turn rate of 5.1 times.
Improving from our first quarter, turn rate of 4.8 times.
That let me turn the call back to Dave.
Thank you Mark.
As we have outlined in the past, we take a strategic approach to intentionally invest in inventory that will support our customers as we proactively navigate the challenges posed by tariffs.
Now switching to our outlook for the third quarter in the U S. Second quarter revenue was higher than the expect than expected due to <unk> forecasted projects pulling forward into <unk>.
Accounts payable was 318 million. At the end of the second quarter, a decrease of 11 million from the first quarter.
As such we expect U S third quarter revenue to be relatively flat compared to the second quarter as we continue to face sector headwinds impacted by midstream project timing and offset by continued progress in our energy evolution and industrial adjacent market penetration and.
And for the second quarter of 2025 working capital, excluding cash, as a percentage of annualized, second quarter Revenue improved to 15.6%.
In Canada, we expect to see a seasonal increase in revenue sequentially coming out of the second quarter breakup. However, we anticipate continued softness in the Canada market impacted by U S trade negotiations tariff uncertainty and political posturing impacting customer investments.
In the second quarter of 2025, we generated 45 million dollars of cash from operating activities and invested $4 million for Capital expenditures to support growth. Primarily in our us process Solutions business.
Internationally, we expect sequential topline growth due to increases in project activity.
Under our new share repurchase program that commenced in January. We repurchased 19 million in the second quarter. Bringing the cumulative repurchases, under our share repurchase program to 27 million year to date through June 30 2025.
Taken altogether, we expect <unk> third quarter sequential revenues to increase in the low single digits percentage range from the second quarter, we expect third quarter EBITDA to approach, 8% of revenues, we reaffirm our view that full year 2025 revenues will be flat to up in the high single digit percentage range from 2000.
24 levels and full year 2025, EBITDA could approach 8% of revenue.
Now over the last 12 months we've completed Acquisitions totaling, 122 million, we've generated 210 million in free cash flow and have converted over 100% of our Eva to free cash flow. While returning 39 million to our shareholders, through share repurchases and increasing our cash balances by 35 million
We are also reaffirming our target of free cash flow in 2025 or $150 million.
In closing I'd like to again recognize and thank our Dino team.
our commitment to Growing the company through a combination of organic initiatives and m&a remains a key priority. We continue to be debt-free. Have no interest payments while keeping cash flow generation. A top priority.
And with that, let me turn the call back today.
Yielding focus and serving our customers and the continued execution of our strategy.
Thank you, Mark.
Their efforts have enabled solid results for the quarter posting revenues at the top end of our second quarter projections and delivering record setting second quarter EBITDA moving forward, we remain focused on advancing our strategy and planning for the close of our transaction to combine with MRC global.
Now, switching to our outlook for the third quarter in the US second quarter Revenue was higher than the expected than expected due to 3 Q, forecasted projects. Pulling forward into 2 Cube.
This is a transformative milestone in the strategic advancement of <unk> and we are all eager to bring together our teams and pursue growth through an expanded suite of products and services all to serve a diverse and growing customer base.
as such, we expect us third quarter Revenue to be relatively flat compared to the second quarter as we continue to face sector headwinds impacted by mid-stream project timing and offset by continued progress in our energy Evolution and Industrial adjacent Market, penetration,
With that let's open the call for questions.
Thank you at this time I would like to remind everyone in order to ask a question Press Star then the number one on your telephone keypad.
In Canada, we expect to see a seasonal increase in Revenue sequentially coming out of the second quarter break up. However, we anticipate continued softness in the Canada Market impacted by us. Trade negotiations, tariff uncertainty and political posturing, impacting customer Investments.
I'll pause for just a moment to compile the Q&A roster.
Internationally. We expect sequential Topline growth due to increases in Project activity.
Your first question comes from the line of Nathan Jones with Stifel. Your line is open.
Hey, Good morning, this is Adam Farley on for Nathan.
Hi, Adam Good morning, Adam.
Taken all together. We expect Dino's third quarter, sequential revenues, to increase in the low, single digits percentage range from the second quarter. We expect third quarter, EBA to approach, 8% of revenues. We reaffirm our view that full year, 2025 revenues will be flat to up on the high single digit percentage range from 2024 levels.
<unk>.
Hey, good morning, maybe starting first with the merger with MRC.
And full year 2045 Eva could approach 8% of Revenue.
Thank you Bob.
Sort of a work what are the most difficult parts of the integration and likely to be how do you manage the risk and how do you keep your focus during this period.
We are also reaffirming our Target of free cash flow in 2025 of 150 million.
Well.
Our orientation Adam is around.
Bringing the notion to our employees at this flat out is going to make Dino and MRC global combined a better company.
Done transformation transformational combinations in our history.
Adding the second quarter, EBITDA moving forward. We remain focused on advancing our strategy and planning for the close-by transaction to combine with MRC Global.
And the first Cardinal rule is we're going to focus on the customer.
This is a transformative milestone in the Strategic advancement of Dino.
Post close like we are today, it's all about the customer we're going to align our teams early in the process.
And we are all eager to bring together our teams and pursue growth through an expanded Suite of products, and services all to serve a diverse and growing customer base.
Everyone focused on external matters that is managing the supply chain working very closely with our just the manufacturers, we support becoming better distributors to the manufacturers. So we support focusing on our customers and being a better supplier to them with a broader array of products and solutions.
With that, let's open the call for questions.
Thank you at this time. I would like to remind everyone in order to ask a question. Press star, then the number 1 on your telephone keypad, we'll pause for just a moment to compile the Q&A roster.
<unk> locations closer to them.
With a broader array of inventory and simply just too much.
<unk>.
Your first question comes from the line of Nathan Jones with stifel your line is open.
Accompany much better able to satisfy customer requirements as they evolve specially in this consolidation.
Hey, good morning, this is Adam farling on for Nathan.
Hi, Adam. Good morning, Adam.
Experience, we're seeing with our top customers. So the focus is on how do we grow the business going forward that's the focus.
Hey morning, let me start in first with the merger with MRC.
Nope, thinking about.
Having done this before you really have to focus must be external and it must be focused on the supply chain and our customers.
I think if there's a work, you know what what are the most difficult parts of the integration likely to be? How do you manage the risks? And and you know, how do you keep your employees focused during this period?
And getting everyone pumped about the future.
We've got a high caliber team that's focused on the.
Well, you know, our our orientation atom is around.
The integration and we can talk more about that in a bit.
Yes.
Alright.
Good color.
Maybe thinking about 45 guidance.
Is it safe to assume the year's heading towards maybe the top half of our current guidance do you have any color on it.
Bringing the notion to our employees at this flat out is going to make Dino Global combined, a better company. Uh, we've done transformation, transformational combination of our history. Um and and and the first cardinal rule is we're going to focus on the customer.
Customers are telling you anything about possible budget exhaustion in the fourth quarter, just any detail on the back half.
Post close like we are today. It's all about the customer. We're going to align our teams early in the process.
And the answer to the first part of your question I wouldn't I wouldn't bias.
Guide towards the top end I think safer to be in the middle of that of that range.
We've got a.
Exciting second half of the year are planned out, but we will see some of our customers with budget exhaustion, most notably in the fourth quarter and Thats factored in there in terms of.
Get everyone focused on external matters; that is, managing the supply chain working very closely with our manufacturers. We support becoming better distributors to the manufacturers. We focus on our customers and being a better supplier to them with a broader array of products and solutions, and more locations closer to them.
With a broader array of of inventory. And, and simply a, just a, a much.
What was the second part of your question I'm sorry, Adam.
Yes, Andrew what are your assumptions around fourth quarter seasonality and budget exhaustion.
I think it's going to be in line with what we normally experience.
There is nothing today that would be more pronounced I think it'll be pretty much consistent in that 5% range. We've experienced over the last several years I think that's probably a good bet for the fourth quarter.
Okay.
Okay. Thanks for taking my questions I'll hop back in queue.
Thanks, Adam.
Your next question comes from the line of Jeff Robertson with water Tower Research. Your line is open.
A company much better able to satisfy customer requirements as they evolve specially in this consolidation um experience we're seeing with our top customers. So the focus is on how do we grow the business going forward? That's the focus. Um, you know, having done this before you really have to the the focus must be an external 1. It must be focused on the supply chain and our customers and getting everyone pumped about the future. Um, we've got a high caliber team that's focused on uh the integration and we could talk more about that in a bit.
Thank you good morning, David in your comments with respect to the MRC combination you said you had some discussions with vendors and customers and I know the $70 million.
Estimated cost synergies is mostly related to corporate costs are you seeing opportunities at this early stage that you can.
Oh, that's good caller. Uh, Dave, you know, they've been thinking about 25 guests, um, you know, is it safe to assume the years heading towards maybe the top half of the current guidance and do you have any color on it?
Drive some synergies with vendors and with customers that excuse me ultimately add to those costs and accretion over time.
Customers are telling you anything about possible, budget exhaustion in the fourth quarter, just just any detail on the back half.
Yes, we spent a good deal of time on estimating those synergies I'm not going to I'm not going to raise the number it's going to take a lot of work to get there.
Yeah. And the answer to the first part of your question. I wouldn't I wouldn't buy us the the guide towards the top end. You know, I think it's safer to be in the middle of that of that range. Um,
you know, we've got a, you know, a um,
We've just kicked off a joint MRC global <unk> team.
With high.
High caliber talent from both organizations.
Of our groups, having deep understanding understanding of their respective organizations and the focus is on people and talent and growth.
An exciting second half of the year is planned out, but we'll see some of our customers experiencing budget exhaustion, most notably in the fourth quarter. That's factored in there in terms of, um,
What was the second part of your question? I'm sorry, Adam.
Tomorrow once we close the deal we want to be focused on growing our business and being a better distributor to our customers like I said so so.
Yeah, I do 1 of your assumptions around uh, fourth quarter, seasonality and budget. Exhaustion.
So my focus is on growth and the promise of what this combination can mean really not from combining locations.
Yeah, I I think it's going to be in line with what we normally experience. Um, there's nothing saying it would be more pronounced, I think it'll be, you know, pretty much consistent in that 5% range. We've experienced over the last several years. I think that's, that's probably a good bet for the fourth quarter.
It's certainly not considering how that will transpire as we go through this integration process. So the focus remains on growth.
Okay, thank you for taking my questions. I'll call back. Thank you.
You're welcome. Thanks Adam.
And the promise of the combination rather than focusing on on field.
Your next question comes from the line of Jeff Robertson with water tower research, your line is open.
Consolidations, where we're going to realize most of the benefits from the complementary nature of each of the firms.
If you looked at the combined company, Dave are you seeing or do you expect that with <unk>.
Less exposure to upstream then detail Standalone has do you see that as a.
Is this mostly related to corporate costs? Are you seeing opportunities at this early stage that you can, um, drive some synergies?
Increased visibility in the future earnings power of the company is less tied to the.
With vendors and with customers that excuse me, ultimately add to those costs and accretion over time.
Drilling and completion capital cycles.
It will make the combined company less less.
Less.
Focused on upstream.
In particular, but we see as still see that as important part of our business, we want to grow our position in upstream, but I think that diversification is the real opportunity here.
Marci is built very strong end markets, where we play such a small role.
Can you use our complementary locations sales teams.
Non crossover customer access to grow both sides of the businesses. So.
I think the real opportunity there is to rely on cross selling to grow the company.
Okay.
And then lastly, do you anticipate a lot of that coming from.
In terms of.
And just other buildout of the grid.
That's part of the Street Marci was our exposure to the gas gas utilities.
Yeah, we, you know, we we spend a good deal of time on estimating those, those synergies and I'm not going to, I'm not going to raise the number. It's going to take a lot of work to get there, you know? We we've we've just kicked off a joint, MRC Global Dino team. Um, with you know how high caliber Talent from both organizations, both groups having deep understanding understanding of the respective organizations and the focus is on people and talent and growth. Um you know tomorrow you know once once once we close the deal we want to be focused on growing our business and being a better distributor to our customers. Like I said, so so my focus is on growth and and the promise of what this combination can mean, really not from combining locations? Um, it's certainly not for, you know, considering how that will will transpire as we go through this integration process. So, the focus remains on growth. And, and the promise of the
Products markets.
Yes, Brad do you want to hit that a little bit.
Hey, good morning, Jeff.
Yeah, I think Dave in his prepared remarks identified a number of.
Rather than focusing on on field. Uh uh, consolidations, where we're going to realize, most of the benefits from the complimentary nature of of each of the firms.
Yes.
Growing.
Industrial markets electrification of courses we've seen.
You look at the combined company. Dave, are you seeing or do you expect that with...
Many of.
Oss sector as well as other providers work to move away from <unk>.
Fossil fuels on the electrification side of course.
Less exposure to, uh, upstream than D. Now, Standalone has, do you see that as an increased visibility in the future earnings power of the company? Is it less time to the...
The data centers is a very exciting space I think the combination.
Our company is going forward.
Uh, drilling and completion capital cycles. Well, it certainly will make the combined company less, less.
Yeah.
Bring more capabilities around that area I know, we highlighted successful win selling some balance to a data center project I think the prior quarter, we highlighted winning.
Winning feed gas pipe valves and fittings on our feed gas line to a power plant that's feeding a data center so.
We're starting to see more and more opportunities.
Our quotations and our business development efforts.
Really focusing on those growing and markets that we identified.
Certainly midstream had.
Less, uh, you know, focused on Upstream in particular, but we see is still see that as important. Part of our business, we want to grow our position in Upstream. But I think that diversification is the real opportunity here. Um, MRC has built very strong end markets, where we play such a small role. Um, we can use our complimentary locations sales teams, uh, uh, non- crossover customer access to grow both sides of the businesses. So, um, I think the real opportunity there is to, you know, rely on cross-selling to grow the company.
Tremendous growth there approximating 27% of deep now revenue this quarter and then as you look out further downstream with opportunities with LNG export we're seeing opportunities. There, we're seeing as I mentioned opportunities with data Center data center construction.
And then lastly, do you anticipate a lot of that coming from electrification in terms of AI and just other build out of the grid? I think that's part of the strength of Marcy was a exposure to the gas, gas utilities and and products markets.
And then the power generation side on that too and what that means for the future of natural gas demand.
Yeah, Brad. You want to hit that a little bit.
<unk> has some analysts are projecting.
Natural gas operating rigs to grow potentially here second half certainly into 2026, so that certainly helps us on the upstream side as well so.
Yeah, good morning Jeff. Um yeah I think Dave and his prepared remarks identified, a number of of growing
We're excited about the future and what these what the combination of these two companies could bring.
Industrial markets, uh, electrification, of course, is—you know, we've seen the, um, many of the OFS sector as well as other, uh, providers work to move away from...
Too many of these diversified industrial markets.
Thank you Brett.
Yeah.
Fossil fuels on the electrification side, of course, AI data centers is a very exciting space. I think the combination
Again, if you would like to ask a question Press Star then the number one on your telephone keypad.
And your next question comes from the line of Blake Mclean with Daniel Energy Partners. Please go ahead.
Of our companies going forward would just um uh bring uh more capabilities around that area. I know we highlighted uh
Hey, good morning, Joe.
Good morning, Good morning, Brian.
Hey, I appreciate all the color this morning.
I appreciate really that last here.
Series of question and answers around kind of the total end market portfolio and the opportunities and threats. There maybe just like expanding on that a little bit how do you think about how the mix of newco sort of evolves over the next one to three years.
Successful when selling some valves to Data Center project, I think the prior quarter we highlighted uh you know winning feed gas uh 5,000 fittings on a feed gas line to a power plant, that's feeding the data center. So you know, we're starting to see more and more opportunities in our uh, quotations and our business development efforts. Uh, you know, really focusing on, you know, those growing and markets that we identified, uh,
As it relates to those sort of total end market.
That portfolio, a total end markets.
Okay.
Yeah.
Well. Thank you for the question, Yes, I think.
Our previous merger call announcement, we talked about what combined co end market would look like.
From an upstream.
Roughly about $5 $3 billion of revenue about 41% upstream.
Upstream.
21% of that.
Midstream.
About 70% gas utilities are 21% and gas utilities.
Certainly Midstream, we've had tremendous growth there, you know, approximating 27% of of the now Revenue this quarter. And then, as as you look down, you know, further Downstream with opportunities, with LNG, export, we're seeing opportunities there. We're seeing as I mentioned opportunities with data center data center construction. Um, and then the power generation side on that too and what that means for the future of natural gas demand, as as uh, you know, some analysts are projecting, you know, natural gas operating rigs to grow potentially here. Second half certainly in the 2026. So you know, that certain helps us on the Upstream side as well. So um, you know, we're excited about the future and what these uh what the combination of these 2 companies could bring uh to many of these Diversified industrial markets.
And the balanced downstream industrial so we're excited about certainly increased diversification there I think to offset some of the cyclicality in the upstream market.
Thank you, bro.
Again, if you would like to ask a question, press star, then the number 1 on your telephone keypad,
Certainly.
We're accustomed to over the many years here security now.
I would say moving forward.
On your next question, it comes from the line of Blake Mlan with Daniel Energy Partners. Please go ahead.
Hey, good morning, y'all.
Any of those.
Industrial markets.
Morning morning. Hi Blake.
Our projected to grow with various degrees of CAGR.
Certainly the gas utilities sector I believe is increasingly.
hey um I appreciate all the color this morning and I I um I appreciate really that last
Going through modernization and replacement.
Population grows.
And demand increases there.
AI.
The demand for.
More gigawatts tied to.
AI development and data center construction.
Series of questions and answers around, kind of the total End Market portfolio and, and the opportunities and threats there, maybe just like expanding on that a little bit. How do you think about how the mix of new Co? Sort of evolves over the next 1, 2, 3 years. Um, as it relates to those sort of total End Market, um, you know that portfolio of total land markets.
It's an exciting area I think for <unk>.
<unk> co.
Really with the exposure that both companies have traditionally had and are gaining because it's a new growth area. Both on the on the power Gen side on the general contractor side with the construction with the operators in some of these hyperscale or as like.
Well, well, thank you for the question. Yeah, I I think, you know, in our previous merger call announcement, we, we talked about
What combined Co and Market would look like?
um, you know, from an upstream um,
Microsoft and others were <unk>.
We're going to see.
More activity and build relationships there.
And then also continue to build out our midstream infrastructure to to really satisfy that.
And call it.
Five nines of reliability for.
Power demand for those for those data centers and then now really exciting.
You know roughly about 5.3 billion dollars in Revenue about 41% of that Upstream about 21% of that. Um Midstream uh um about 17% Gas, Utilities or 21%, Gas Utilities um you know, in the balance Downstream industrial. So, you know, we're excited about certainly, you know, increased diversification there I I think offset some of the cyclicality in the Upstream Market.
LNG.
And we commented on a couple of wins there.
You know, certainly that that uh, we're we're accustomed to over the many years here here at D now.
We've seen our.
Our quote backlog tied to LNG continually increase here quarter over quarter.
You know, I would say, you know, moving forward, you know, many of those.
We hope to get some of those across the finish line over the next four to six quarters here they are long cycle projects.
U S and Western Canada Canadian companies look to expand their export.
Liquefaction terminals and to be able to capture demand from Europe, and Asia to help feed those markets on a global LNG basis. So those are some of the exciting opportunities we have looking forward and I think newco.
Uh, industrial markets, um, are projected to grow uh with various degrees of of keggers. Um, you know, certainly the Gas Utilities uh, sector, uh I believe is is increasingly, um, you know, going through modernization and replacement uh, as population grows and and and demand increases their um, you know, AI um,
And its combination with our.
The combined sales force are.
<unk> success.
Our success with customers and and our.
You know, the, the demand for, um, you know, more gigawatts tied to, uh, AI development and data center construction, you know, that's an exciting area. I think for, um, you know, new co, uh, you know, really with with the exposure that both companies, uh, have, you know, traditionally had and are gaming, because it's a new growth area. Both on the
Supplier relationships.
Can.
Exciting opportunity going forward in the market.
Okay I appreciate that color I mean, we would agree with that.
The growth profile and a lot of those places just feels different right.
One more just kind of maybe.
Quick follow up.
Uh, on the power gen side on the general, contractor side with the construction with the operators and some of these, you know, hyperscalers, like, you know, meta, Microsoft, and others, you know, we're starting to see, uh, you know, more activity and build relationships there. Uh, and and then also, you know, continue build out a Midstream infrastructure to to Really satisfy that, uh,
Could you talk a little bit about impact.
From tariffs in the back half of the year and how you guys are sort of thinking about that.
Have a great in those challenges in this environment.
Yes, I'll take that one so we've seen some positive impact from tariffs from a product cost perspective, so we've seen product costs go up a little bit.
We've seen that from tariffs. We've also seen it from general inflation, which we began to experience before the tariff impacts.
We're seeing.
Most of our sales growth coming through volume not price so about 80% of our sales growth sales growth has come from.
Selling more products versus the increase in price. So we haven't really seen much price impact.
The tariffs quite yet.
And then there has been it's been a kind of a governor on.
We call it, uh, you know, 59s of reliability for um, uh, you know, power demand for the, for those data centers. And then, you know, really exciting, um, is LNG. Um, you know, we we commented on a couple of wins there. Um, you know, we've seen, you know, our quote backlog tied to LNG, continually increase, your quarter over quarter. Uh, you know, we hope to get some of those across the finish line or the next, you know, 4, to 6 Quarters here. They are long cycle projects as um, you know, us and Western can Canadian companies. You know, look to expand their export, um, um, liquefaction Terminals. And to be able to capture demand from from Europe, and Asia to help feed those markets so on the global LG basis. So those are some of the exciting opportunities we have, uh, you know, looking forward. And I think new Co
On margin impacts due to tariffs because there is hyper intensive competition out there, especially as we are in.
Kind of a slower market and some of the end markets.
and it's combination with our, um, combined sales force or, um, success, uh, prior success with customers and, and our
But one thing I want to say about that is despite the tariffs despite supply chain uncertainty despite some political.
supplier relationships, um, you know, can, um, present a exciting opportunity, uh, going forward in the market
Events that complicate management supply chain, we we.
Expect in our forecast suggest this will be our fifth consecutive year of growth.
Okay, I appreciate that color. I mean, we would agree that the growth profile in a lot of those places just feels different, right?
In an environment, where the market has contracted three consecutive years.
Um, what what more just kind of maybe.
So we're making gains in energy evolution in the adjacent markets, where we've been pursuing growth, we're able to fill some of those.
Quick follow-up. Um, could you talk a little bit about impact, uh, from tariffs in the back half of the year, and how you guys are sort of thinking about that and, and, and navigating those challenges in this environment?
Market activity declines by expanding our focus often with the same customers.
That we're doing upstream and midstream business with so we're growing our business organically, we're making smart acquisitions, we're integrating those businesses smartly.
And we want to grow all the end markets.
In the Standalone Gienow and Mitten Newco, we wanted we want to grow our business and we've been very successful in doing so we talked about the second quarter, having the highest EBITDA second quarter in our history that has something to say up to three years of market decline. So we're excited about where we are.
Pack from tariffs from an electronic cost perspective. So we've seen product costs go up a little bit. We've seen that from tariffs; we’ve also seen it from general inflation, which we began to experience before the tariff impacts. Um, we’re seeing, uh,
You know, most of our sales growth coming through through volume not price. So about 80% of our sales, grow sales, growth has come from, um, you know, selling more products versus the increase in price. So we haven't really seen much price impact.
<unk> started about.
How.
The strength of the product offerings are so complementary in this merger, we will have more locations with access to more customers with a better rate of products services customers. So we start off strong.
From the tariffs quite yet. Um, and then there's been, you know, there's been a kind of a, a governor on
We have to lean organizations, who are focused on the customer are.
Our cultures are similar and we see coming together as a real opportunity both organizations see that so so we're very excited about where were at how we've been able to weather slower times.
on margin impacts through the tariffs because there's, you know, hyper intensive competition out there especially as we're in, you know, kind of a slower Market in in, in some of the end markets. Um, but but 1 thing, I want to say about that is, you know, despite the tariffs despite supply chain uncertainty, despite, you know, some political uh,
events that that complicate managing the supply chain. You know, we we we expect and our forecasts suggest this will be our fifth consecutive year of growth.
And produce record earnings and reliably generate free cash flow I just wanted to mentioned once one statistic at the end of 2023, we had $299 million in cash.
18 months later, we have $232 million of cash in that timeframe, we spent $357 million on M&A and share repurchases.
So we are in active growing organization.
And we're going to be we're going to be even more so as to be combined together pharmacy global. So we're excited about where we're at we want to grow all of our end markets, we generate cash and can grow inorganically.
And an environment where the market has contracted 3 consecutive years. So you know, we're we're making gains in energy evolution in the adjacent markets where we've been pursuing growth, we're able to fill some of those um Market activity declines by expanding our Focus uh often with the same customers um that we're doing, you know, upstream and Midstream business with. So we're growing our business organically, we're making smart Acquisitions, we're integrating those businesses, smartly
Um, and we want to grow all the in markets.
<unk> <unk> excited about that.
<unk>.
As they settle can be a very positive impact to growth going forward and we just haven't seen much of it yet.
Gross margins remained strong and my final comment to your to your question, where I kind of deviate a little bit in the answer but very excited about where we're at Mclean. Thanks.
Yes, thanks, very much Greg Cowan.
Okay.
Your next question comes from the line of Jeff Robertson with water Tower Research. Your line is open.
Uh, in the Standalone, Dino and then, and in new Co we want to, we want to grow our business and we've been very successful at doing so. Uh, we talked about the SEC. The second quarter having the highest, EBA second quarter in our history. That's something to say after 3 years of Market declined. So we're excited about where we are. Uh, we're excited about um, how you know, uh, this the strengths of the product offerings are so complimentary in this merger, we'll have more locations with access to more customers with the better array of products, and services customers. So we're we start off strong.
Thanks, Dave just as a follow up in mix in the second quarter I think you said thats the highest adjusted EBITDA.
Uh, we have 2, lean organizations, who are focused on the customer. Our um,
I think just maybe a sense of being a public company.
The EBITDA margin was eight 1%, which is the best it's been since the <unk>.
First quarter of 2023.
Our cultures are similar and we see coming together as a real opportunity both organizations, see that. So so we're very excited about where we're at. How we've been been able to weather slower times
I know that was above expectations were there some things in the quarter that drove that outperformance.
Well.
Yes, I think the biggest driver was growth in midstream.
And produce record earnings and reliably generate free cash flow. I just want to mention once 1 statistics, at the end of 2023, we had 299 million in cash.
<unk>.
Now we've talked about this with you Jeff.
These public calls before.
18 months later. We have 232 million in cash in that time frame.
Midstream business tends to have lower gross margins because you order sizes tend to be much larger, but the cost to service that activity is lower as well.
We spent 357 million on m&a and share repurchases.
So we're an active growing organization.
In fact, you can see midstream activity with greater fall through.
At the earnings line. So I think the biggest driver in improved earnings and for US able to have our best second quarter, EBITDA and a high and above 8% EBITDA performance in the quarter was largely driven by growth in midstream.
And we're very excited about midstream for for this second half of the year or for third quarter for sure and then we will see some some tailing off in the fourth quarter likely discussed.
And we're going to be, we're going to be even more so as we combine together with Pharmercy Global. We're excited about where we're at. We want to grow all our end markets, we generate cash, and can grow inorganically and organically. We're excited about that. Tariffs, as they settle, can have a very positive impact on growth going forward, and we just haven't seen that much of it yet.
Um, gross margins remain strong. My final comment to your question where I kind of deviate a little bit in the answer, but I'm excited about where we're at, MLAN. Thanks.
Thank you Omar.
Yeah. Thanks very much. Great color.
Thank you.
Yeah.
Thank you for your questions that concludes the question and answer session of today's call. Mr. Brad Why don't I turn the call back over to you for final remarks.
Your next question comes from the line of Jeff Robertson with water tower research, your line is open.
Thank you everyone for joining us today and your interest in <unk> now.
thanks Dave just as a follow-up in the in the D now second quarter I think you said that's the highest uh Justin ebata
Look forward to discussing our third quarter 2025 results on our next earnings conference call in November.
Hope everyone has a wonderful Wednesday, and with that I'll turn it back to the operator to conclude the call.
Uh, I think maybe since being a public company but the ebita margin was 8.1% which is the best it's been since uh the first quarter of 2023.
Thank you for joining today's conference call you may now disconnect.
And I know that was above expectations. Were there some things in the quarter that drove that outperformance.
Well, um, I think the biggest driver was growth in midstream.
and, um, now now we've talked about this with you Jeff and I, and then on these public calls before,
Driver and improved earnings and for us, able to have our best second quarter. But, uh, in a in above 8%, ebita performance in the quarter was largely driven by growth in Midstream. Um, and and we're very excited about Midstream for, for this, you know, second half of the year, or for third quarter, for sure. And then we'll see some some tailing off in the fourth quarter. Like we discussed
Thank you for the call, Mark.
Thank you.
Thank you for your questions. That concludes the question and answer session of today's call Mr. Brad Weise, I turn the call back over to you for final remarks.
Well, thank you everyone for joining us today and your interest in D. Now, we'll look forward to discussing our third quarter 2025 results on our next earnings conference call November.
Hope everyone has a wonderful Wednesday and with that, we'll turn it back to the operator to conclude the call.
Thank you for joining today's conference call. You may now disconnect