Drilling Tools International (DTI) investor relations material

Executive summary

• Q1 2026 revenue was $38.0 million, in line with expectations, despite softness in North America from an early Canadian spring breakup and a 19% decline in Western Hemisphere tool rental activity; international and offshore markets expanded, with ClearPath and Drill-N-Ream gaining traction.

• Net loss attributable to stockholders was $1.5 million ($0.04 per share), an 8% improvement from Q1 2025; adjusted net loss was $1.0 million ($0.03 per share).

• Adjusted EBITDA for Q1 2026 was $7.5 million, down from $10.8 million in Q1 2025, reflecting lower revenues and segment income.

• Completion of private equity sponsor share distribution increased public float to approximately 90%, marking a transition to a fully independent public company with a refreshed board.

• Focus on execution, innovation, and strategic acquisitions, with an expanded global footprint and blue chip customer base.

Financial highlights

• Q1 2026 consolidated revenue was $38.0 million; tool rental revenue $28.9 million (76%), product sales $9.0 million (24%).

• Adjusted EBITDA was $7.5 million; adjusted free cash flow was a loss of ~$160,000.

• Gross margin on tool rentals and product sales remained stable, though overall gross margin declined as costs decreased less than revenues.

• Depreciation and amortization expense increased 3% to $6.9 million.

• Interest expense, net, decreased 23% to $1.0 million due to lower net debt.

Outlook and guidance

• Full-year 2026 revenue guidance reaffirmed at $155–$170 million.

• Adjusted EBITDA expected between $35–$45 million, with margins of 23–26%; adjusted free cash flow projected at $17–$22 million (11–13% margin).

• Guidance assumes a soft first half and improvement in the second half, with potential for additional CapEx to support international growth.

• Management expects continued cost inflation and market volatility to impact profitability in the near term.

• Sufficient liquidity is anticipated for at least the next 12 months, supported by cash, operations, and available credit.