Drilling Tools International Corporation

What they do

DTI designs, engineers, manufactures and rents tools used in bottom hole assemblies, wellbore optimization and tubular goods for drilling, workover and completion operations. It also sells target depth technologies and manufactures and repairs tools for external customers. The company operates from 15 locations in North America and 11 international service and support centers in Europe, the Middle East and Asia-Pacific, and reports in two geographic segments: Western Hemisphere and Eastern Hemisphere.

Revenue drivers

• Tool rental — Rental of BHA tools, wellbore optimization tools and tubular goods, plus repair and inspection; 78% of Q2 2026 revenue at $29.6 million.
• Product sales — Sales of target depth technologies, manufacturing and repair for external customers, and tool recovery revenue; 22% of Q2 2026 revenue at approximately $8.5 million.
• Western Hemisphere segment — One of two geographic reporting segments; tied to North American land and Gulf of America activity, where softer land drilling weighed on results.
• Eastern Hemisphere segment — Second geographic reporting segment covering Europe, the Middle East and Asia-Pacific; management cited Middle East disruption but steady tool demand.

Recent performance

Q2 2026 consolidated revenue was $38.1 million, with tool rental at $29.6 million and product sales at approximately $8.5 million. Net loss attributable to common stockholders was approximately $1.8 million, or $0.05 per share, while Adjusted Net Loss was $575,000 and Adjusted EPS was a loss of $0.02. Adjusted EBITDA was $8.4 million and Adjusted Free Cash Flow was $4.1 million. Full-year revenue has been roughly flat across recent quarters: $38.8 million in Q3 2025, $38.5 million in Q4 2025, $38.0 million in Q1 2026 and $38.1 million in Q2 2026. Annual net income fell from $21.1 million in 2022 to a loss of $3.8 million in 2025.

Strategy

Management is emphasizing geographic diversification, a rental-focused differentiated tool portfolio, and disciplined execution. Recent acquisitions, including Deep Casing Tools, added tool sales to end users for well construction. The company is pushing its ClearPath stabilizer technology into offshore markets, particularly Europe and the Gulf of America, where it expects new awards to drive a material step-up in European contribution in the second half. DTI says it will continue evaluating accretive acquisitions with a disciplined focus on profitable growth and return profile.

Risks

• Drilling activity dependence — Revenue depends on oil and gas industry activity levels, including active rig counts, which declined in both hemispheres in the first half of 2026.
• Customer concentration — The company's own risk factors flag the need to retain customers, particularly those contributing a large portion of revenue.
• Commodity price volatility — Oil and gas prices are historically volatile, and demand for DTI's tools is driven by customer capital spending tied to those prices.
• Acquisition integration — The company cites ability to execute, integrate and realize benefits of acquisitions and manage resulting growth as a risk factor.

Outlook

Management reaffirmed full-year 2026 guidance of $155–$170 million in revenue, $35–$45 million in Adjusted EBITDA, 23%–26% Adjusted EBITDA margin, and $17–$22 million in Adjusted Free Cash Flow. It cited U.S. land rig count additions in June and July, stabilization in Canada, and expected new ClearPath awards in Europe as signs of recovery. Middle East demand is described as steady through a disruptive period with opportunities still ahead.