Drilling Tools International (DTI) Q4 2025 earnings summary

Executive summary

• Delivered strong Q4 and full-year 2025 results, achieving or exceeding guidance despite a 7% global rig count decline and muted U.S. activity.

• Achieved record adjusted free cash flow for the year, with continued operational efficiency, capital discipline, and innovation.

• Completed four acquisitions since IPO, fully integrating them and expanding product lines and market reach.

• Expanded global footprint, especially in the Eastern Hemisphere, nearly doubling its revenue share to 14%.

• Maintained business continuity and minimal disruption in the Middle East amid regional conflict.

Financial highlights

• FY2025 revenue reached $159.6M, with $129.6M from rentals and $30.1M from product sales, up 3% year-over-year.

• Adjusted EBITDA for 2025 was $39.3M; adjusted free cash flow was $19.2M, up 11% year-over-year.

• Adjusted net income for 2025 was $3.4M ($0.10 per diluted share); net loss was $3.8M ($0.11 per share).

• Q4 2025 revenue was $38.5M; Q4 adjusted EBITDA was $10.1M; Q4 adjusted free cash flow was $6.1M.

• Gross margin for 2025 was $118.4M on $159.6M revenue; adjusted EBITDA margin was approximately 25%.

Outlook and guidance

• 2026 revenue guidance: $155M–$170M; adjusted EBITDA: $35M–$45M; adjusted free cash flow: $17M–$22M.

• 2026 capital expenditures expected between $18M–$23M.

• Guidance assumes flat activity in H1 2026, with slight improvement in H2 and potential upside from rig reactivations and international projects.

• Eastern Hemisphere expected to contribute a growing share of total revenue in 2026.