DTI

This article first appeared on GuruFocus. Release Date: August 07, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Drilling Tools International Corp (NASDAQ:DTI) generated strong adjusted free cash flow of $4.1 million in Q2 2026, a notable step up from both the first quarter of 2026 and the second quarter a year ago. The company is seeing early signs of recovery in the U.S., with the rig count adding more than 20 rigs in June and nearly 19 rigs in July, indicating improved utilization and commercial terms for the second half of 2026. Drilling Tools International Corp (NASDAQ:DTI) is gaining market share and winning new business on stronger commercial terms, with pricing pressure stabilizing after several quarters of compression. The ClearPath stabilizer technology is gaining real traction in offshore markets, with new awards expected to drive a material step up in European contribution in the second half of the year. The company reaffirmed its 2026 guidance ranges, implying a stronger second half with substantial free cash flow generation, supported by activity increases in major operating areas and rising international utilization. Following the HHEP distribution, approximately 90% of Drilling Tools International Corp (NASDAQ:DTI)'s shares are now held in the public float, positioning the company as a fully independent public entity with significantly improving trade liquidity. Global rig count declined nearly 4% sequentially and remains down year-over-year, with considerable disruption in the Middle East where the rig count fell almost 7% in the quarter. The company reported a net loss attributable to stockholders of approximately $1.8 million, or a loss of $0.05 per share, for the second quarter of 2026. Tool rental revenue declined year-over-year due to softer North American land activity, a lengthy spring breakup in Canada, and continued pricing pressure in certain areas of the rental business. The ongoing regional conflict in the Middle East created operational disruption with intermittent starts and stops and rig moves, tempering what would otherwise have been a stronger contribution from the region. Net debt increased modestly during the second quarter, primarily reflecting the Norway investment, and elevated CapEx plans may bring full-year adjusted free cash flow toward the lower end of the guidance range. The recovery from the Canadian breakup has been flatter than anticipated, with July activations at 193 rigs signaling that softness has only largely abated, not fully recovered. Warning! GuruFocus has detected 8 Warning Signs with DTI. Is DTI fairly valued? Test your thesis with our free DCF calculator. Q: How much of the second-half growth implied by the reaffirmed guidance is expected to come from North America versus international, and what is the outlook for US drilling activity? A: Wayne Prejean, Chairman and CEO: We are relying on Canada rebounding, which has been a bright spot, and the US is rebounding nicely with rig additions, though there is some shuffling between operators. Higher commodity prices and market confidence should support more activity in the second half. Internationally, we are making big strides with new technology in high-spec offshore markets, and despite Middle East volatility, we are gaining momentum in Oman, Kuwait, and the UAE, while Saudi Arabia remains an opportunity with some disruptions. Q: Can you elaborate on the success of the ClearPath stabilizer technology and how it has ramped so quickly? A: Wayne Prejean, Chairman and CEO: ClearPath started as a geometric design and evolved into a systems approach for high-value applications. It took time to develop confidence and repeatable data results to prove the value proposition. The technology enhances operators' ability to use managed pressure drilling (MPD), lowers equivalent circulating density, and improves hydraulic profiles, which is critical for deepwater and complex wells. This contribution to drilling efficiency is rewarded with strong commercial terms. Q: Given the elevated CapEx for new value-add equipment in the Eastern Hemisphere, can you provide a range or guidance for CapEx and how we should think about it? A: David Johnson, CFO: We don't expect the typical ramp-down in CapEx spending in the second half of the year due to investments in ClearPath technology. This will likely put us on the higher end of our CapEx plan and the lower end of our free cash flow guidance. However, with improvements across both hemispheres, we should trend toward the midpoint of our revenue and EBITDA guidance, with benefits flowing into 2027. Q: Does the success of acquisitions like ClearPath change your approach to M&A, and are you seeing attractive valuations? A: Wayne Prejean, Chairman and CEO: We always have a backlog of opportunities we are evaluating, whether they are technological advantages, clever product lines, or larger companies. We continue to incubate opportunities because our growth strategy is through M&A layered with organic technology initiatives. We remain disciplined and focused on opportunities that strengthen our platform and create shareholder value. Q: Are you sensing momentum in Canada given the more pro-oil and gas government and fast-tracked infrastructure projects, and could this drive activity into 2027? A: Wayne Prejean, Chairman and CEO: Yes, the Alberta and provincial governments are focused on takeaway capacity and midstream, which supports operators' ability to increase production. We are seeing higher rig counts in Canada year-over-year, and we will see if this plays out in the peak winter drilling season. The momentum is encouraging for continued activity. Q: Can you provide more color on the revenue decline and margin performance in the tool rental business? A: David Johnson, CFO: The year-over-year decline reflects softer North American land activity, with the US land rig count averaging 541 rigs in Q2, down 3% year-over-year, a lengthy Canadian spring breakup, and continued pricing pressure. Despite this, tool rental gross margin remained above 70%, validating the quality of the business. Activity improved late in the quarter, with the US rig count adding over 20 rigs in June and nearly 19 more in July, which should benefit the second half. Q: How is the Middle East conflict impacting operations, and what is the outlook for the Eastern Hemisphere segment? A: Wayne Prejean, Chairman and CEO: The conflict has caused operational disruptions with intermittent starts and stops, but our lean operations and specialized product focus have kept demand steady. We are gaining momentum in Oman, Kuwait, and the UAE, while Saudi Arabia remains an opportunity with some delays. The Eastern Hemisphere is our most transformative segment, with activity building and utilization improving, and we expect it to play an increasingly meaningful role. Q: What is the status of the HHEP share distribution and its impact on the company's public float? A: David Johnson, CFO: HHEP completed its share distribution to limited partners during Q2, and following this, approximately 90% of outstanding shares are now held in the public float. This positions DTI as a fully independent public company with a broad ownership profile and significantly improved trade liquidity. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Performance was resilient despite a 4% sequential decline in global rig counts, driven by geographic diversification and a lean operating model in the Middle East. North American activity was shaped by a seasonal Canadian breakup trough and a brief U.S. operator pause following initial Middle East conflicts, which has since transitioned into a steady rig count build. The company is successfully harvesting capital from mature markets to redeploy into higher-return international opportunities, specifically targeting the Eastern Hemisphere. Market share gains are being achieved while holding firm on pricing, as operators prioritize tool reliability and specialized equipment to lower total well costs. Management notes that pricing compression has stabilized after several quarters of pressure, with commercial terms beginning to firm up late in the second quarter. The Eastern Hemisphere is described as the most transformative segment, where specialized product focus allows DTI to remain steady despite volatility that impacts larger diversified peers. Management anticipates a material step-up in results for the second half of 2026, driven by a step change in activity across Europe and North Africa. Guidance assumes a continued recovery in the U.S. land market and a strong rebound in Canada following the spring breakup trough. Strategic investments in ClearPath Stabilizer technology are expected to drive growth in the Norwegian offshore market through long-term rental agreements. The company expects to return to an improved leverage ratio year-over-year by directing improved second-half cash flow toward debt reduction. The growth trajectory is expected to build steadily throughout the third and fourth quarters of 2026, providing a runway that extends well into 2027. Ongoing regional conflict in the Middle East continues to cause operational disruptions, including intermittent rig suspensions and delays in offshore operations. The company transitioned to a fully independent public company following the HHEP share distribution, which increased the public float to approximately 90%. Capital expenditures will remain elevated in the second half of the year as the company redeploys capital into higher-return international opportunities and targeted spending on ClearPath Stabilizer technology to support growth in Norway. Maintenance CapEx remains largely self-funded through tool recovery revenue, insulating the fleet's sustainability from broader market trends. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Growth is predicated on a Canadian rebound and a U.S. market where rig additions are currently outpacing occasional operator drops. International momentum is building in Oman and Kuwait, though Saudi Arabian operations face ongoing disruptions due to regional conflict. The technology enables managed pressure drilling (MPD) by lowering equivalent circulating density, a critical factor for deepwater and complex well hydraulics. Adoption has accelerated as the company provided repeatable data results that demonstrate a clear value proposition to high-spec operators. DTI remains a disciplined consolidator, maintaining a backlog of potential targets ranging from niche product lines to more significant corporate acquisitions. Management emphasized that growth will be a mix of M&A and organic initiatives driven by technological differentiation.

Interested in Drilling Tools International Corp.? Here are five stocks we like better. DTI reported resilient second-quarter results despite a nearly 4% sequential decline in global rig activity, with revenue of $38.1 million, adjusted EBITDA of $8.4 million and adjusted free cash flow of $4.1 million. Tool rental revenue was $29.6 million, while net loss attributable to stockholders was $1.8 million. North American activity improved late in the quarter, with the July rig count reaching 777—about 10% above the second-quarter average—although softer land activity and pricing pressure reduced rental revenue. International operations faced Middle East disruptions, while demand for specialized ClearPath offshore technology remained strong. Management reaffirmed full-year 2026 guidance for revenue of $155 million–$170 million, adjusted EBITDA of $35 million–$45 million and adjusted free cash flow of $17 million–$22 million. DTI expects a stronger second half driven by international and U.S. activity, though elevated ClearPath-related capital spending may push free cash flow toward the low end of its range. Drilling Tools International (NASDAQ:DTI) reported second-quarter 2026 revenue of $38.1 million, adjusted EBITDA of $8.4 million and adjusted free cash flow of $4.1 million, as the company navigated lower global drilling activity and operational disruptions in the Middle East. Net loss attributable to stockholders was approximately $1.8 million, or $0.05 per share, during the quarter. Adjusted net loss was $575,000, or $0.02 per share. Tool rental revenue totaled $29.6 million, while product sales revenue was $8.5 million. → Meta’s Earnings Drop Shows Wall Street Wants More Than Ad Growth Chairman and Chief Executive Officer Wayne Prejean said the company generated resilient results despite a nearly 4% sequential decline in the global rig count. He said Middle Eastern rig activity declined almost 7% during the quarter and represented about half of the global decline affecting activity levels. Prejean said North American activity was affected early in the quarter by Canada’s seasonal breakup period, which removed roughly 50 rigs from the regional count in April. U.S. operators also broadly held activity flat while assessing the impact and duration of the Iran conflict, he said. → 4 Oil and Gas ETF Plays as Prices Stay Sky-High Activity strengthened later in the quarter, according to management. Prejean said the North American rig count reached 777 rigs in July, more than 70 rigs, or 10%, above the second-quarter average. The company also said additions of bottom-hole assembly rigs on U.S. land were outpacing the broader rig-count increase, which it views as a favorable indicator for its largest business line. Chief Financial Officer David Johnson said the U.S. land rig count averaged about 541 rigs in the second quarter, down roughly 3% from the prior-year period. Tool rental revenue declined year over year due to softer North American land activity, an extended Canadian breakup period and pricing pressure in certain rental markets. → Sandisk Just Delivered a Blowout Quarter—Here's Why the Stock Is Falling Still, tool rental gross margin remained above 70%, Johnson said. He added that commercial terms and activity improved toward the end of the second quarter, with the U.S. land rig count increasing by more than 20 rigs in June and nearly 19 additional rigs in July. In Canada, Prejean said activity exceeded prior-year levels throughout the quarter, although the recovery after breakup was flatter than management expected. July activations reached 193 rigs, the highest level since February, which he said indicated much of the softness had subsided. The company’s Eastern Hemisphere segment contributed about 18% of total revenue in the second quarter. Management said ongoing regional conflict created intermittent operating disruptions and rig moves in the Middle East, though demand for DTI’s specialized tools remained steady. Prejean said the company is seeing momentum in Oman, Kuwait and other markets, along with some traction with ADNOC in the United Arab Emirates. Saudi Arabia remained an opportunity, he said, but offshore operational suspensions related to the conflict delayed activity expectations. Management highlighted demand for its ClearPath stabilizer technology in offshore, high-specification drilling markets. Prejean said the technology is gaining traction because it can help operators use managed pressure drilling and lower equivalent circulating density, supporting drilling operations in deepwater and other complex wells. The company expects new offshore awards to produce a material increase in European contribution during the second half of 2026. Prejean also cited expected growth in the U.S. Gulf of Mexico. DTI is reallocating capital from more mature markets to international opportunities, with Norway representing a key investment area. Capital expenditures were approximately $4.2 million in the second quarter, down from $7.7 million in the first quarter. Johnson said spending will not decline as sharply as usual during the second half because of ClearPath investments supporting Norwegian and other offshore opportunities. He said the investments are tied to long-term rental agreements and are expected to support revenue growth into 2027. DTI reaffirmed its full-year 2026 outlook, projecting: Revenue of $155 million to $170 million; Adjusted EBITDA of $35 million to $45 million; and Adjusted free cash flow of $17 million to $22 million. Johnson said the outlook implies a stronger second half, including substantial free cash flow generation, though elevated capital spending could place full-year adjusted free cash flow toward the lower end of the company’s range. Management expects activity gains in Europe, North Africa and the U.S., as well as improving international utilization, to build through the third and fourth quarters. As of June 30, DTI had $2.5 million in cash and cash equivalents and net debt of $51.7 million. Net debt increased modestly during the quarter, primarily due to the Norway investment. Johnson said improved cash flow in the remainder of the year is expected to be directed primarily toward debt reduction. Management also noted that former sponsor HHEP completed the distribution of its shares to limited partners during the quarter. Following the distribution, approximately 90% of DTI’s outstanding shares are held in the public float, according to the company. Prejean said DTI continues to pursue profitable growth through technology, operational execution and potential acquisitions, describing the company as a disciplined consolidator in a fragmented industry. Drilling Tools International Corporation provides oilfield equipment and services to oil and natural gas sectors in North America, Europe, and the Middle East. It offers downhole tool rentals, machining, and inspection services to support the global drilling and wellbore construction industry. The company also provides products are bottom hole assembly components, such as stabilizers, subs, non-magnetic and steel drill collars, hole openers, and roller reamers, as well as drill pipe and drill pipe accessories; ancillary equipment and handling tools to support its rental platform, including float valves, ring gauges, tool baskets, lift bail, lift subs, mud magnets, elevators, bracket and bail assemblies, slips, tongs, stabbing guides and safety clamps; and blowout preventers, and pressure control accessory equipment. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Drilling Tools International Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for August 2026.

Reaffirms 2026 Outlook HOUSTON, Aug. 6, 2026 /PRNewswire/ -- Drilling Tools International Corp. (NASDAQ: DTI) ("DTI" or the "Company"), a global oilfield services company that designs, engineers, manufactures and provides a differentiated, rental-focused offering of tools for use in onshore and offshore horizontal and directional drilling operations, as well as other cutting-edge solutions across the well life cycle, today reported its results for the three months ended June 30, 2026. For the second quarter of 2026, DTI generated total consolidated revenue of $38.1 million. Second quarter Tool Rental revenue was $29.6 million, and Product Sales revenue totaled approximately $8.5 million. Net Loss attributable to common stockholders for the second quarter was approximately $1.8 million, or a loss of $0.05 per share. Adjusted Net Loss(1) was $575,000 and Adjusted EPS(1) for the second quarter was a loss of $0.02 per share. Second quarter Adjusted EBITDA(1) was $8.4 million and Adjusted Free Cash Flow(1)(2) was $4.1 million. As of June 30, 2026, DTI had $2.5 million of cash and cash equivalents, and Net Debt(1) of $51.7 million. Wayne Prejean, Chairman of the Board and Chief Executive Officer, stated, "I'm pleased with our performance in the second quarter, which reflects the resilience of our operations, the benefits of our geographic diversification and the durability of our unique platform. Despite softer North American land activity and disruption in the Middle East, we delivered strong results, most notably our Adjusted Free Cash Flow, which improved considerably on both a sequential and year-over-year basis. We are building solid momentum, and it's evident that the strength of our differentiated business model and disciplined execution is creating earnings power that will only grow as activity improves. "As we look forward, we are encouraged by early signs of recovery in several of the key regions in which we operate. The U.S. land rig count built steadily through the second quarter, adding more than 20 rigs in June alone to finish above the prior-year June level, and added nearly 19 more in July, with additions of bottom-hole assembly rigs, the largest part of our business, outpacing that broader market growth. In Canada, the softness that weighed on activity early in the quarter has abated, with the rig count building through June to finish the quarter above prior-year levels and pointing to a firming market as the year progresses. In Europe and the Gulf of America, our ClearPath stabilizer technology is gaining real traction in offshore markets, where the highest-spec operators are placing a premium on its performance. New awards related to this cutting-edge technology are expected to drive a material step-up in our European contribution in the second half of the year, and we expect these awards to represent the first of many wins to come. In the Middle East, our targeted footprint and specialized product lines have kept demand for our tools steady through a disruptive period, leaving substantial opportunities still ahead of us. Given our confidence in a strong second half to 2026, we are reaffirming our full-year guidance ranges, which represent growth at the midpoint compared to our 2025 results. "We are excited about the future and believe we are well positioned to benefit from recent activity trends. We have built a solid foundation, further strengthened by our recent acquisitions, as we continue to penetrate new markets and grow throughout the Eastern Hemisphere. Our differentiated technology portfolio is enabling us to win new business on improving commercial terms, and price-focused customers are returning to DTI as they come to appreciate the value we deliver in the field. As we have done successfully in the past, we will continue to strategically evaluate growth opportunities, including accretive acquisitions that meet our stringent return profile, but always with a disciplined focus on profitable growth and lasting value creation for our shareholders," concluded Prejean. 2026 Full Year Outlook 2026 Second Quarter Conference Call Information DTI's 2026 second quarter conference call can be accessed live via dial-in or webcast on Friday, August 7, 2026 at 10:00 a.m. Eastern Time (9:00 a.m. Central Time) by dialing 201-389-0869 and asking for the DTI call at least 10 minutes prior to the start time, or via live webcast by logging onto the webcast at this URL address: https://investors.drillingtools.com/news-events/events. An audio replay will be available through August 14, 2026 by dialing 201-612-7415 and using passcode 13761577#. Also, an archive of the webcast will be available shortly after the call at https://investors.drillingtools.com/news-events/events for 90 days. Please submit any questions for management prior to the call via email to [email protected]. About Drilling Tools International Corp. DTI is a Houston, Texas based leading oilfield services company that manufactures and rents downhole drilling tools used in horizontal and directional drilling of oil and natural gas wells. With roots dating back to 1984, DTI operates from 15 service and support centers across North America and maintains 11 international service and support centers across the EMEA and APAC regions. To learn more about DTI, please visit: www.drillingtools.com. Contact:DTI Investor RelationsKen Dennard / Natalie [email protected] Forward-Looking Statements This press release may include, and oral statements made from time to time by representatives of the Company may include, "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, including Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Statements other than statements of historical fact included in this press release are forward-looking statements. The words "anticipate," "believe," "continue," "could," "estimate," "expect," "intends," "may," "might," "plan," "possible," "potential," "predict," "project," "should," "will," "would" and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward looking. These forward-looking statements include, but are not limited to, statements regarding DTI and its management team's expectations, hopes, beliefs, intentions or strategies regarding the future. In addition, any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. Forward-looking statements in this press release may include, for example, statements about: (1) the demand for DTI's products and services, which is influenced by the general level activity in the oil and gas industry; (2) DTI's ability to retain its customers, particularly those that contribute to a large portion of its revenue; (3) DTI's ability to employ and retain a sufficient number of skilled and qualified workers, including its key personnel; (4) DTI's ability to source tools and raw materials at a reasonable cost; (5) DTI's ability to market its services in a competitive industry; (6) DTI's ability to execute, integrate and realize the benefits of acquisitions, and manage the resulting growth of its business; (7) potential liability for claims arising from damage or harm caused by the operation of DTI's tools, or otherwise arising from the dangerous activities that are inherent in the oil and gas industry; (8) DTI's ability to obtain additional capital; (9) potential political, regulatory, economic and social disruptions in the countries in which DTI conducts business, including changes in tax laws or tax rates; (10) DTI's dependence on its information technology systems, in particular Customer Order Management Portal and Support System, for the efficient operation of DTI's business; (11) DTI's ability to comply with applicable laws, regulations and rules, including those related to the environment, greenhouse gases and climate change; (12) DTI's ability to maintain an effective system of disclosure controls and internal control over financial reporting; (13) the potential for volatility in the market price of DTI's common stock; (14) the impact of increased legal, accounting, administrative and other costs incurred as a public company, including the impact of possible shareholder litigation; (15) the potential for issuance of additional shares of DTI's common stock or other equity securities; (16) DTI's ability to maintain the listing of its common stock on Nasdaq; and (17) other risks and uncertainties described from time to time in DTI's most recent Forms 10-K, 10-Q and 8-K filed with or furnished to the Securities and Exchange Commission (the "SEC"). You should carefully consider the risks and uncertainties including those described in Part I, Item 1A – "Risk Factors" of our Annual Report on Form 10-K filed on March 6, 2026 and in comparable "Risk Factor" sections of our Quarterly Reports on Form 10-Q filed after such Form 10-K. Such forward-looking statements are based on the beliefs of management of DTI, as well as assumptions made by, and information currently available to DTI's management and are subject to numerous conditions, many of which are beyond the control of DTI. Actual results could differ materially from those contemplated by the forward-looking statements as a result of certain factors detailed in DTI's most recent Forms 10-K, 10-Q and 8-K filed with or furnished to the SEC. All subsequent written or oral forward-looking statements attributable to the Company or persons acting on its behalf are qualified in their entirety by this paragraph. The Company undertakes no obligation to update these statements for revisions or changes after the date of this release, except as required by law. Non-GAAP Financial Measures This release includes Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Free Cash Flow, Adjusted Free Cash Flow Margin, Net Debt, Adjusted Basic Earnings (Loss) Per Share, Adjusted Diluted Earnings (Loss) Per Share and Adjusted Net Income (Loss) measures. Each of these metrics is a "non-GAAP financial measure" as defined in Regulation G of the Securities Exchange Act of 1934. Adjusted EBITDA is a supplemental non-GAAP financial measure that is used by management and external users of our financial statements, such as industry analysts, investors, lenders and rating agencies. Adjusted EBITDA is not a measure of net earnings or cash flows as determined by GAAP. We define Adjusted EBITDA as net earnings (loss) before interest, taxes, depreciation and amortization, further adjusted for (i) goodwill and/or long-lived asset impairment charges, (ii) stock-based compensation expense, (iii) restructuring charges, (iv) transaction and integration costs related to acquisitions and (v) other expenses or charges to exclude certain items that we believe are not reflective of ongoing performance of our business. We believe Adjusted EBITDA and Adjusted EBITDA Margin are useful because they allow us to supplement the GAAP measures in order to more effectively evaluate our operating performance and compare the results of our operations from period to period without regard to our financing methods or capital structure. We exclude the items listed above in arriving at Adjusted EBITDA because these amounts can vary substantially from company to company within our industry depending upon accounting methods and book values of assets, capital structures and the method by which the assets were acquired. Adjusted EBITDA should not be considered as an alternative to, or more meaningful than, net income as determined in accordance with GAAP, or as an indicator of our operating performance or liquidity. Certain items excluded from Adjusted EBITDA are significant components in understanding and assessing a company's financial performance, such as a company's cost of capital and tax structure, as well as the historic costs of depreciable assets, none of which are components of Adjusted EBITDA. Our computations of Adjusted EBITDA may not be comparable to other similarly titled measures of other companies. Adjusted Free Cash Flow is a supplemental non-GAAP financial measure, and we define Adjusted Free Cash Flow as Adjusted EBITDA less Gross Capital Expenditures. We use Adjusted Free Cash Flow as a financial performance measure for planning, forecasting, and evaluating our performance. We believe that Adjusted Free Cash Flow is useful to enable investors and others to perform comparisons of current and historical performance of the Company. As a performance measure, rather than a liquidity measure, the most closely comparable GAAP measure is net income (loss). Net Debt is a supplemental non-GAAP financial measure, and we define Net Debt as total debt less cash and cash equivalents. We use Net Debt to determine our outstanding debt obligations that would not be readily satisfied by our cash and cash equivalents on hand. We believe this metric is useful to analysts and investors in determining our leverage position since we have the ability to, and may decide to, use a portion of our cash and cash equivalents to reduce debt. As of June 30, 2026, Net Debt was $51.7 million, calculated as current maturities of long-term debt of $5.9 million, revolving line of credit of $39.3 million and long-term debt, less current portion of $9.0 million, less cash and cash equivalents of $2.5 million. We define Adjusted Net Income (Loss) as consolidated net income (loss) adjusted for (i) goodwill and/or long-lived asset impairment charges, (ii) restructuring charges, (iii) transaction and integration costs related to acquisitions, (iv) income tax expense (or loss) which is calculated by applying a 25% effective tax rate to adjusted pre-tax income (or loss), and (v) other expenses or charges to exclude certain items that we believe are not reflective of the ongoing performance of our business. We believe Adjusted Net Income (Loss) is useful because it allows us to exclude certain items in evaluating our operating performance. We define Adjusted Basic Earnings (Loss) and Adjusted Diluted Earnings (Loss) per share as the quotient of adjusted net income (loss) and diluted weighted average common shares. We believe that Adjusted Diluted Earnings (Loss) per share provides useful information to investors because it allows us to exclude non-recurring items in evaluating our operating performance on a diluted per share basis. This release also includes certain projections of non-GAAP financial measures. The reconciliations of estimated Adjusted EBITDA and estimated Adjusted Free Cash Flow to estimated net income (loss) include estimates of interest expense, income tax expense, depreciation and amortization, management fees, other expense, stock option exercise, goodwill impairment, transaction expense, and capital expenditures, which are difficult to predict and estimate and are primarily dependent on future events. The following tables and narrative reconciliations of the non-GAAP financial measures of Adjusted EBITDA, Adjusted Free Cash Flow, Net Debt, and Adjusted Net Income to the most directly comparable GAAP financial measures for the periods indicated: View original content:https://www.prnewswire.com/news-releases/drilling-tools-international-corp-reports-2026-second-quarter-results-302845086.html

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Performance in Q1 was shaped by a seasonally soft North American land market and an earlier-than-expected spring breakup in Canada, which pulled typical Q2 seasonality into Q1. Management attributes the resilience of the Middle East segment to a targeted footprint and specialized product focus, which has allowed DTI to see rising demand despite regional geopolitical volatility. The company is transitioning from a product-based to a system-based approach in offshore markets, specifically leveraging ClearPath stabilizer technology to gain traction in high-value projects. Operational recovery in the Deep Casing Tools product line is being driven by international customers depleting their owned inventories and returning to the market for new purchase orders. The completion of the HHEP share distribution marks a strategic pivot to a fully independent public company, increasing public float to approximately 90% and enhancing trading liquidity. Management believes a higher forward oil price environment will eventually relieve the pricing compression that has impacted the rental fleet over the last several quarters. Full year 2026 guidance is reaffirmed, assuming a relatively soft first half with momentum building in the second half driven by technology adoption and international utilization. The company expects a post-breakup rebound in Canada to begin earlier than usual, providing a tailwind for the second quarter. Management is evaluating additional targeted CapEx for international growth; if these customer-sponsored initiatives are accelerated, adjusted free cash flow may land at the lower end of the $17 million to $22 million range. Strategic focus remains on consolidating the fragmented downhole drilling tool industry, utilizing the 'One DTI' platform to integrate future acquisitions on shorter timelines. Near-term North American recovery expectations are tempered by a disconnect between available rig capacity and the fracturing horsepower needed to convert wells to production. The distribution of remaining shares by private equity sponsor HHEP to its limited partners has shifted the ownership profile to a low double-digit minority for insiders and former sponsors. Maintenance CapEx was approximately 13% of total revenue in Q1, which management notes is primarily funded by tool recovery revenue from lost-in-hole events. Ongoing Middle East conflict remains a fluid risk factor that has caused operational disruptions, though it has not yet reversed the trend of rising demand for DTI's specialized tools. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Margins were impacted by soft U.S. conditions and the early Canadian breakup, alongside a strategic decision to push back on pricing in certain areas. Management expects margins to recover as they layer new, higher-margin technologies on top of the existing rental fleet. ClearPath is gaining solid traction in the North Sea, Asia, and the Gulf of Mexico as a system-based solution for high-value offshore operations. The Drill-N-Ream and Deep Casing product lines are seeing resurging utilization in Saudi Arabia and the UAE as rig counts increase. Investment is being prioritized for the highest return opportunities, specifically targeting Norway, the Middle East, and deepwater Africa. Management is navigating the international expansion carefully, focusing on solving complex wellbore problems where their high-value products have a competitive edge.

Completes Transition to Fully Independent, Broadly Held Public Company with Refreshed Board Reaffirms 2026 Outlook HOUSTON, May 7, 2026 /PRNewswire/ -- Drilling Tools International Corp. (NASDAQ: DTI) ("DTI" or the "Company"), a global oilfield services company that designs, engineers, manufactures and provides a differentiated, rental-focused offering of tools for use in onshore and offshore horizontal and directional drilling operations, as well as other cutting-edge solutions across the well life cycle, today reported its results for the three months ended March 31, 2026. For the first quarter of 2026, DTI generated total consolidated revenue of $38.0 million. First quarter Tool Rental revenue was $28.9 million, and Product Sales revenue totaled approximately $9.0 million. Net Loss attributable to common stockholders for the first quarter was $1.5 million, or a loss of $0.04 per share. Adjusted Net Loss(1) was $1.0 million and Adjusted Diluted EPS(1) for the first quarter was a loss of $0.03 per diluted share. First quarter Adjusted EBITDA(1) was $7.5 million and Adjusted Free Cash Flow(1)(2) was a loss of $160,000. As of March 31, 2026, DTI had $2.8 million of cash and cash equivalents, and net debt of $48.9 million. Wayne Prejean, Chairman of the Board and Chief Executive Officer, stated, "Our first quarter results came in largely in-line with our expectations minus some softness in Canada due to the spring breakup arriving earlier this year. While we continue to operate in a complicated market environment, including uncertainty in the Middle East and volatile commodity prices, we are leveraging our differentiated, specialized product suite to capture international market share and preserve our leading position in downhole drilling tools worldwide. I'm also pleased that, despite a 4% year-over-year decline in global rig count, we remain confident in our ability to achieve and reaffirm our full year guidance, which constitutes growth at the midpoint when compared to our 2025 results. Our ClearPath and Drill-N-Ream product lines are gaining significant traction with international offshore operators as well as customers managing complex well configurations, enhancing our mix toward higher-margin, technology-enabled solutions to deliver improved returns for DTI. "During the first quarter, we reached another important milestone. Our primary private equity sponsor, HHEP, completed the distribution of its remaining DTI shares to its limited partners. This materially increases our public float and trading liquidity. This distribution, together with the recent refreshment to the composition of our Board of Directors, marks a significant transition for DTI into a fully independent public company with broader ownership and a governance framework tailored to our next phase of growth. "Looking ahead, we continue to expect activity in the first half of 2026 to remain relatively flat, but we see tangible catalysts emerging that should drive improvement later in the year. To capitalize on these opportunities, we plan to make targeted investments in select international markets to capture incremental demand and deploy our specialized technologies more efficiently into regions with complex well requirements. Near term, we expect our second quarter results to benefit from the earlier-than-expected spring break up in Canada, which should translate into an earlier post-breakup rebound. We are excited about the opportunities in front of us, both organic and inorganic, and I look forward to sharing updates on our growth plans in the coming quarters as we build on this solid foundation," concluded Prejean. 2026 Full Year Outlook 2026 First Quarter Conference Call Information DTI's 2026 first quarter conference call can be accessed live via dial-in or webcast on Friday, May 8, 2026 at 10:00 a.m. Eastern Time (9:00 a.m. Central Time) by dialing 201-389-0869 and asking for the DTI call at least 10 minutes prior to the start time, or via live webcast by logging onto the webcast at this URL address: https://investors.drillingtools.com/news-events/events. An audio replay will be available through May 15, 2026 by dialing 201-612-7415 and using passcode 13759566#. Also, an archive of the webcast will be available shortly after the call at https://investors.drillingtools.com/news-events/events for 90 days. Please submit any questions for management prior to the call via email to [email protected]. About Drilling Tools International Corp. DTI is a Houston, Texas based leading oilfield services company that manufactures and rents downhole drilling tools used in horizontal and directional drilling of oil and natural gas wells. With roots dating back to 1984, DTI operates from 15 service and support centers across North America and maintains 11 international service and support centers across the EMEA and APAC regions. To learn more about DTI, please visit: www.drillingtools.com. Contact: DTI Investor Relations Ken Dennard / Natalie Hairston [email protected] Forward-Looking Statements This press release may include, and oral statements made from time to time by representatives of the Company may include, "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Statements other than statements of historical fact included in this press release are forward-looking statements. The words "anticipate," "believe," "continue," "could," "estimate," "expect," "intends," "may," "might," "plan," "possible," "potential," "predict," "project," "should," "will," "would" and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward looking. These forward-looking statements include, but are not limited to, statements regarding DTI and its management team's expectations, hopes, beliefs, intentions or strategies regarding the future. In addition, any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. Forward-looking statements in this press release may include, for example, statements about: (1) the demand for DTI's products and services, which is influenced by the general level activity in the oil and gas industry; (2) DTI's ability to retain its customers, particularly those that contribute to a large portion of its revenue; (3) DTI's ability to employ and retain a sufficient number of skilled and qualified workers, including its key personnel; (4) DTI's ability to source tools and raw materials at a reasonable cost; (5) DTI's ability to market its services in a competitive industry; (6) DTI's ability to execute, integrate and realize the benefits of acquisitions, and manage the resulting growth of its business; (7) potential liability for claims arising from damage or harm caused by the operation of DTI's tools, or otherwise arising from the dangerous activities that are inherent in the oil and gas industry; (8) DTI's ability to obtain additional capital; (9) potential political, regulatory, economic and social disruptions in the countries in which DTI conducts business, including changes in tax laws or tax rates; (10) DTI's dependence on its information technology systems, in particular Customer Order Management Portal and Support System, for the efficient operation of DTI's business; (11) DTI's ability to comply with applicable laws, regulations and rules, including those related to the environment, greenhouse gases and climate change; (12) DTI's ability to maintain an effective system of disclosure controls and internal control over financial reporting; (13) the potential for volatility in the market price of DTI's common stock; (14) the impact of increased legal, accounting, administrative and other costs incurred as a public company, including the impact of possible shareholder litigation; (15) the potential for issuance of additional shares of DTI's common stock or other equity securities; (16) DTI's ability to maintain the listing of its common stock on Nasdaq; and (17) other risks and uncertainties separately provided to you and indicated from time to time described in DTI's most recent Forms 10-K, 10-Q and 8-K filed with or furnished to the Securities and Exchange Commission (the "SEC"). You should carefully consider the risks and uncertainties including those described in Part I, Item 1A – "Risk Factors" of our Annual Report on Form 10-K filed on March 6, 2026 and in comparable "Risk Factor" sections of our Quarterly Reports on Form 10-Q filed after such Form 10-K. Such forward-looking statements are based on the beliefs of management of DTI, as well as assumptions made by, and information currently available to DTI's management and are subject to numerous conditions, many of which are beyond the control of DTI. Actual results could differ materially from those contemplated by the forward-looking statements as a result of certain factors detailed in DTI's most recent Forms 10-K, 10-Q and 8-K filed with or furnished to the SEC. All subsequent written or oral forward-looking statements attributable to the Company or persons acting on its behalf are qualified in their entirety by this paragraph. The Company undertakes no obligation to update these statements for revisions or changes after the date of this release, except as required by law. Non-GAAP Financial Measures This release includes Adjusted EBITDA, Adjusted Free Cash Flow, Net Debt, Adjusted Basic Earnings (Loss) Per Share, Adjusted Diluted Earnings (Loss) Per Share and Adjusted Net Income (Loss) measures. Each of the metrics are "non-GAAP financial measures" as defined in Regulation G of the Securities Exchange Act of 1934. Adjusted EBITDA is a supplemental non-GAAP financial measure that is used by management and external users of our financial statements, such as industry analysts, investors, lenders and rating agencies. Adjusted EBITDA is not a measure of net earnings or cash flows as determined by GAAP. We define Adjusted EBITDA as net earnings (loss) before interest, taxes, depreciation and amortization, further adjusted for (i) goodwill and/or long-lived asset impairment charges, (ii) stock-based compensation expense, (iii) restructuring charges, (iv) transaction and integration costs related to acquisitions and (v) other expenses or charges to exclude certain items that we believe are not reflective of ongoing performance of our business. We believe Adjusted EBITDA and Adjusted EBITDA Margin are useful because it allows us to supplement the GAAP measures in order to more effectively evaluate our operating performance and compare the results of our operations from period to period without regard to our financing methods or capital structure. We exclude the items listed above in arriving at Adjusted EBITDA because these amounts can vary substantially from company to company within our industry depending upon accounting methods and book values of assets, capital structures and the method by which the assets were acquired. Adjusted EBITDA should not be considered as an alternative to, or more meaningful than, net income as determined in accordance with GAAP, or as an indicator of our operating performance or liquidity. Certain items excluded from Adjusted EBITDA are significant components in understanding and assessing a company's financial performance, such as a company's cost of capital and tax structure, as well as the historic costs of depreciable assets, none of which are components of Adjusted EBITDA. Our computations of Adjusted EBITDA may not be comparable to other similarly titled measures of other companies. Adjusted Free Cash Flow is a supplemental non-GAAP financial measure, and we define Adjusted Free Cash Flow as Adjusted EBITDA less Gross Capital Expenditures. We use Adjusted Free Cash Flow as a financial performance measure used for planning, forecasting, and evaluating our performance. We believe that Adjusted Free Cash Flow is useful to enable investors and others to perform comparisons of current and historical performance of the Company. As a performance measure, rather than a liquidity measure, the most closely comparable GAAP measure is net income (loss). Net Debt is a supplemental non-GAAP financial measure, and we define Net Debt as total debt less cash and cash equivalents. We use Net Debt to determine our outstanding debt obligations that would not be readily satisfied by our cash and cash equivalents on hand. We believe this metric is useful to analysts and investors in determining our leverage position since we have the ability to, and may decide to, use a portion of our cash and cash equivalents to reduce debt. We define Adjusted Net Income (Loss) as consolidated net income (loss) adjusted for (i) goodwill and/or long-lived asset impairment charges, (ii) restructuring charges, (iii) transaction and integration costs related to acquisitions, (iv) income tax expense which is calculated by applying a 25% effective tax rate to adjusted pre-tax income, and (v) other expenses or charges to exclude certain items that we believe are not reflective of the ongoing performance of our business. We believe Adjusted Net Income (Loss) is useful because it allows us to exclude non-recurring items in evaluating our operating performance. We define Adjusted Basic Earnings (Loss) and Adjusted Diluted Earnings (Loss) per share as the quotient of adjusted net income (loss) and diluted weighted average common shares. We believe that Adjusted Diluted Earnings (Loss) per share provides useful information to investors because it allows us to exclude non-recurring items in evaluating our operating performance on a diluted per share basis. This release also includes certain projections of non-GAAP financial measures. Reconciliation of these items to net income include gains or losses on sale or consolidation transactions, accelerated depreciation, impairment charges, gains or losses on retirement of debt, variations in effective tax rate and fluctuations in net working capital, which are difficult to predict and estimate and are primarily dependent on future events. The following tables present a reconciliation of the non-GAAP financial measures of Adjusted EBITDA, Adjusted Free Cash Flow and Adjusted Net Income to the most directly comparable GAAP financial measures for the periods indicated: View original content:https://www.prnewswire.com/news-releases/drilling-tools-international-corp-reports-2026-first-quarter-results-302766018.html

Interested in Drilling Tools International Corp.? Here are five stocks we like better. DTI reported Q1 revenue of $38.0 million, a net loss of $1.5 million (adjusted loss $1.0 million), adjusted EBITDA of $7.5 million and adjusted free cash flow of about -$0.16 million, and management reaffirmed 2026 guidance of Revenue $155–170M, Adjusted EBITDA $35–45M and Adjusted FCF $17–22M. North American land activity was soft and an earlier-than-expected Canadian spring breakup shifted seasonality into Q1, while international offshore momentum and adoption of technologies like ClearPath, Drill‑N‑Ream and Deep Casing Tools are driving improvement; tool rental gross margin remained above 70% despite pricing pressure. Capital deployment included $7.7 million of Q1 CapEx, cash of $2.8 million and net debt of $48.9 million (plus ~$700k of share repurchases), and the primary sponsor HHEP completed distribution of its remaining shares, boosting public float to about 90% and marking a move to a fully independent public company. Drilling Tools International (NASDAQ:DTI) reported first-quarter 2026 results that management said came in “largely as anticipated,” reflecting a seasonally softer start to the year and continued uneven activity conditions across key markets. On the company’s earnings call, Chairman and CEO Wayne Prejean and CFO David Johnson reaffirmed full-year 2026 guidance and pointed to improving momentum in international offshore markets and continued adoption of the company’s technology-led product lines. DTI posted total consolidated revenue of $38.0 million for the first quarter. Tool rental revenue was $28.9 million and product sales revenue totaled $9.0 million. The company reported a net loss attributable to stockholders of $1.5 million, or a loss of $0.04 per share. Adjusted net loss was $1.0 million, or an adjusted loss of $0.03 per share. → Insider Sales: Top AST SpaceMobile Insider Cuts Postion Over 30% Adjusted EBITDA was $7.5 million, while Adjusted Free Cash Flow was a loss of approximately $160,000. Prejean said the quarter tracked with the framework management discussed on its year-end call, when DTI anticipated relatively soft activity through the first half of 2026, with potential improvement in the second half driven by “several potential catalysts across multiple geographies.” → Light Speed Returns: Corning Cashes In on NVIDIA Growth Management highlighted several factors shaping the quarter: North American land activity was “flat to slightly down,” according to Prejean. Canada seasonality shifted earlier due to an earlier-than-expected spring breakup, which “pulled some typical second quarter seasonality into the first quarter,” Prejean said. Middle East disruption tied to ongoing regional conflict muted what would have been a stronger contribution, though Prejean emphasized DTI’s “more targeted footprint and specialized product focus” has allowed it to see “rising demand” even amid volatility. International offshore momentum continued, which management said is being supported by adoption of ClearPath stabilizers and progress with Drill-N-Ream and Deep Casing Tools. Johnson said the year-over-year decline in tool rental revenue reflected softer North American land activity, the earlier Canadian spring breakup, and “continued pricing pressure in certain segments of our rental fleet.” Even with that compression, he said tool rental gross margin “remained above 70%,” which the company views as a baseline that “validates the underlying quality of our rental business.” → Years in the Making, AMD’s Upside Movement Has Just Begun During the Q&A, Sidoti & Company analyst Steve Ferazani asked about the factors impacting tool rental margins and how much was utilization versus mix, pricing, and costs. Prejean attributed pressure to “soft market conditions in the U.S.” and the “muted or an early breakup in Canada,” adding that pricing dynamics and customer mix also play a role as the company “push[es] back on pricing” and tries to be “the price maker instead of the price taker.” Prejean said he expects conditions to improve as the year progresses, stating there will be “an uptick in the North America market” that should help relieve compression. He added that new products can carry higher margins and help offset weaker areas. When asked to quantify the impact of the early spring breakup, Prejean said he could not “really quantify that exactly,” but noted that the softness typically shows up in the second quarter and instead occurred more in the first quarter. Management repeatedly pointed to adoption of DTI’s differentiated tool portfolio as a key contributor to its outlook, particularly outside North America. Prejean said ClearPath stabilizer technology is “gaining traction as customers adopt it for high-value offshore and land projects around the world,” and that DTI has shifted “more from a product approach to a system approach.” In the Q&A, he cited traction in the North Sea and “high-value operations” in parts of Asia and the Gulf of America. Prejean also discussed the Drill-N-Ream’s progress in the Middle East, describing it as a solution for “complex wellbore challenges, including micro doglegs, tortuosity, and getting casing to bottom.” On Deep Casing Tools, Prejean said utilization bottomed in 2024 and has continued to recover, with a “notable rebound” in product sale purchase orders. Johnson added that Deep Casing Tools product sales had “bottomed out much earlier” and have started picking up as customers depleted inventories. Ferazani pointed to the product sales line being higher than expected, and Johnson said the company expects “continued improvement” through the rest of 2026, referencing increased opportunity as customers work through inventories and activity rises. DTI reported capital expenditures of approximately $7.7 million in the first quarter. Johnson said the level was elevated versus the company’s typical first-quarter run rate, but “not unexpected as we prepare for the year ahead,” and he expects CapEx to trend downward as the year progresses. At the same time, Johnson said DTI is evaluating incremental, targeted investments to support early adoption of ClearPath and other international opportunities. He characterized these as “attractive project-based opportunities with sticky revenue characteristics,” though he noted that if the company accelerates investment, it “may land at the lower end” of its Adjusted Free Cash Flow guidance range. Maintenance CapEx was about 13% of total revenue, which Johnson said was “primarily fueled by higher-than-average tool recovery revenue.” He emphasized that maintenance spending is “primarily funded by tool recovery revenue,” which helps keep the rental fleet “relevant and sustainable regardless of market trends.” On the balance sheet, Johnson said that as of March 31, 2026, DTI had $2.8 million of cash and cash equivalents and net debt of $48.9 million. He said net debt increased modestly due to typical first-quarter seasonal working capital patterns, including incentive compensation payouts and elevated first-quarter CapEx. Johnson said the company expects improved cash flow through the remainder of the year and intends to reduce leverage “consistent with how we have managed the business historically.” DTI also repurchased approximately $700,000 of shares during the quarter. Management reaffirmed 2026 guidance ranges, reflecting its view of a softer first half with improvement building in the second half: Revenue: $155 million to $170 million Adjusted EBITDA: $35 million to $45 million Adjusted Free Cash Flow: $17 million to $22 million Prejean said the company’s full-year outlook remains intact, and Johnson said the ranges reflect the company’s previously communicated assumptions on the cadence of improvement. Prejean also said DTI is seeing steady traction in offshore markets, including the Gulf of America and the North Sea. Beyond operations, management highlighted a corporate milestone: DTI’s primary private equity sponsor, HHEP, completed the distribution of its remaining DTI shares to limited partners. Prejean said the event “materially increases our public float and our trading liquidity,” and, together with a board refresh, marks a transition into a “fully independent public company.” Johnson said that following the distribution, about 90% of outstanding shares are held in the public float, with the former sponsor and insiders holding a “low double-digit minority.” Drilling Tools International Corporation provides oilfield equipment and services to oil and natural gas sectors in North America, Europe, and the Middle East. It offers downhole tool rentals, machining, and inspection services to support the global drilling and wellbore construction industry. The company also provides products are bottom hole assembly components, such as stabilizers, subs, non-magnetic and steel drill collars, hole openers, and roller reamers, as well as drill pipe and drill pipe accessories; ancillary equipment and handling tools to support its rental platform, including float valves, ring gauges, tool baskets, lift bail, lift subs, mud magnets, elevators, bracket and bail assemblies, slips, tongs, stabbing guides and safety clamps; and blowout preventers, and pressure control accessory equipment. The article "Drilling Tools International Q1 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for May 2026.