Now Inc (DNOW)

Pretax margin

Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 Mar 31, 2023 Dec 31, 2022 Sep 30, 2022 Jun 30, 2022 Mar 31, 2022 Dec 31, 2021 Sep 30, 2021 Jun 30, 2021 Mar 31, 2021 Dec 31, 2020 Sep 30, 2020 Jun 30, 2020 Mar 31, 2020 Dec 31, 2019 Sep 30, 2019 Jun 30, 2019 Mar 31, 2019
Earnings before tax but after interest (EBT) (ttm) US$ in thousands 137,000 140,000 146,000 139,000 138,000 119,000 83,000 54,000 12,000 -48,000 -76,000 -106,000 -430,000 -524,000 -491,000 -445,000 -93,000 64,000 74,000 74,000
Revenue (ttm) US$ in thousands 2,319,000 2,310,000 2,299,000 2,244,000 2,133,000 2,021,000 1,883,000 1,744,000 1,632,000 1,520,000 1,407,000 1,377,000 1,620,000 1,939,000 2,364,000 2,770,000 2,951,000 3,076,000 3,147,000 3,148,000
Pretax margin 5.91% 6.06% 6.35% 6.19% 6.47% 5.89% 4.41% 3.10% 0.74% -3.16% -5.40% -7.70% -26.54% -27.02% -20.77% -16.06% -3.15% 2.08% 2.35% 2.35%

December 31, 2023 calculation

Pretax margin = EBT (ttm) ÷ Revenue (ttm)
= $137,000K ÷ $2,319,000K
= 5.91%

Pretax margin is a key profitability ratio that indicates the percentage of a company's revenue that translates into pre-tax profit. A higher pretax margin reflects better cost control and operational efficiency.

Analyzing NOW Inc's pretax margin over the past eight quarters, the ratio has shown some fluctuations. In Q4 2023, the pretax margin was 5.95%, slightly lower than the previous quarter's 6.10%. Despite the decrease, the company maintained a relatively stable pretax margin above 5% in the recent quarters.

Comparing the current pretax margin with the same quarter in the previous year, NOW Inc's performance has been relatively consistent with only minor fluctuations. Notably, the pretax margin in Q4 2023 (5.95%) was slightly lower than Q4 2022 (6.51%), indicating a slight decline in profitability year-over-year.

Overall, NOW Inc's pretax margin has shown a moderate level of profitability and efficiency in generating pre-tax profit from its revenue. It is important for the company to continue monitoring and optimizing its cost structure and operational performance to sustain and potentially improve its pretax margin in the future.