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      Drilling Tools International Corp. Reports 2025 Year End and Fourth Quarter Results


      News provided by

      Drilling Tools International Corp.

      Mar 05, 2026, 16:15 ET

      Share this article

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      Expects Continued Growth in 2026 Consolidated Revenue, Adjusted EBITDA and Adjusted Free Cash Flow

      HOUSTON, March 5, 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 twelve months and fourth quarter ended December 31, 2025.

      For the twelve months of 2025, DTI generated total consolidated revenue of $159.6 million. 2025 Tool Rental revenue was $129.6 million and Product Sale revenue totaled approximately $30.1 million. Net Loss attributable to shareholders for 2025 was a loss of approximately $3.8 million or a loss of $0.11 per share. Adjusted Net Income(1) and Adjusted Diluted EPS(1) for 2025 were $3.4 million and $0.10 per diluted share, respectively. Adjusted EBITDA(1) was $39.3 million and Adjusted Free Cash Flow(1)(2) was $19.2 million. As of December 31, 2025, DTI had $3.6 million of cash and cash equivalents, and net debt of $42.2 million.

      For the fourth quarter of 2025, DTI generated total consolidated revenue of $38.5 million. Fourth quarter Tool Rental revenue was $30.4 million, and Product Sales revenue totaled approximately $8.1 million. Net Income attributable to common stockholders for the fourth quarter was $1.2 million or $0.03 per share. Adjusted Net Income(1) was $1.5 million and Adjusted Diluted EPS(1) for the fourth quarter was $0.04 per diluted share, respectively. Fourth quarter Adjusted EBITDA(1) was $10.1 million and Adjusted Free Cash Flow(1)(2) was $6.1 million.

      Wayne Prejean, President, Chief Executive Officer, and interim Chairman of the Board of Directors of DTI, stated, "Our strong fourth quarter results demonstrate our ability to consistently deliver favorable returns in the face of muted industry-wide activity levels. With the help of more moderate seasonality and budget exhaustion than historical trends would have indicated, we exceeded our internal expectations for the quarter and again generated meaningful free cash flow. Despite global rig count declining nearly 7% in 2025, we are pleased that our consistent operational performance and our team's ability to adapt to the ever-changing market environment enabled us to achieve the high-end of our guidance ranges. In addition, we have now grown annual free cash flow every year since going public, an achievement we take great pride in. This is a testament to the organization that we have built, the efficiency with which we operate and the significant demand for our tools.

      "We also demonstrated prudent capital discipline in 2025 by simultaneously reducing debt and returning capital to shareholders through share buybacks. When the market softened mid-year, we were able to shift our focus away from growth capital expenditures and prioritize harvesting our cash flow. Leveraging this flexibility allowed us to pay down over $11 million of debt in the second half of the year and buy back, approximately, an additional $660,000 of common shares over the same period. This strategic decision brought down our net debt to trailing twelve-month Adjusted EBITDA multiple to a conservative 1.1x, even after recently completing four acquisitions," added Prejean.

      "Throughout 2025, our Eastern Hemisphere operations experienced immense growth. This segment nearly doubled its revenue contribution to 14% of our total revenue, and we aim to build on this momentum in 2026. We continue to believe that the downhole drilling tool industry remains fragmented, is in need of consolidation, and we intend to continue being part of the solution. The energy landscape is constantly evolving, and we plan to actively pursue deals that improve our standing within the market.

      "Looking forward, we expect overall activity, particularly in the first half of 2026, to remain relatively soft. However, we have identified several potential catalysts across multiple geographies that offer upside potential in the back half of the year. We have completed four acquisitions within the last 24 months and have added industry leading tools and technological solutions while penetrating new markets. This positions us well to generate resilient results despite the subdued US Land market conditions, and as anticipated activity levels improve, we expect that the work we have done to strengthen DTI will deliver meaningful financial improvement. As an indication of the solid foundation we have built, we are introducing our 2026 outlook ranges that reflect year-over-year growth at the midpoint," concluded Prejean.

      2026 Full Year Outlook

      Revenue


      $155 million



      —



      $170 million

      Adjusted EBITDA(1)


      $35 million



      —



      $45 million

      Adjusted EBITDA Margin(1)


      23 %



      —



      26 %

      Adjusted Free Cash Flow(1)(2)


      $17 million



      —



      $22 million










      (1)

      Adjusted Net Income (Loss), Adjusted Diluted EPS, Adjusted EBITDA, Adjusted EBITDA Margin, Net Debt, and Adjusted Free Cash Flow are non-GAAP financial measures. See "Non-GAAP Financial Measures" at the end of this release for a discussion of reconciliations to the most directly comparable financial measures calculated and presented in accordance with U.S. generally accepted accounting principles ("GAAP").



      (2)

      Adjusted Free Cash Flow is defined as Adjusted EBITDA less Gross Capital Expenditures.

      2025 Fourth Quarter Conference Call Information

      DTI's 2025 fourth quarter conference call can be accessed live via dial-in or webcast on Friday, March 6, 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 March 13, 2026 by dialing 201-612-7415 and using passcode 13758213#. 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 14, 2025 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.

      Drilling Tools International Corp

      Consolidated Statements of Comprehensive Income (Loss)

      (In thousands of U.S. dollars and rounded)








      Year Ended December 31,



      2025


      2024

      Revenue, net:





      Tool rental


      $              129,562


      $              117,926

      Product sale


      30,064


      36,520

      Total revenue, net


      159,626


      154,446

      Costs and other deductions:





      Cost of tool rental revenue, exclusive of depreciation and amortization


      28,911


      24,110

      Cost of product sale revenue, exclusive of depreciation and amortization


      12,369


      14,381

      Selling, general, and administrative expense


      82,239


      78,695

      Depreciation and amortization expense


      27,290


      23,832

      Interest expense, net


      5,053


      3,369

      Loss (gain) on asset disposal


      65


      (60)

      Loss (gain) on remeasurement of previously held equity interest


      —


      (368)

      Goodwill impairment


      1,901


      —

      Other operating and non-operating expense, net


      4,654


      7,503

      Total costs and other deductions


      162,482


      151,462

      Income (loss) before income tax expense


      (2,856)


      2,984

      Income tax benefit (expense)


      (905)


      30

      Net income (loss)


      $                 (3,761)


      $                   3,014

      Less: Net income (loss) attributable to non-controlling interest


      —


      —

      Net income (loss) attributable to Drilling Tools International
      stockholders


      $                 (3,761)


      $                   3,014

      Basic earnings (loss) per share


      $                   (0.11)


      $                     0.09

      Diluted earnings (loss) per share


      $                   (0.11)


      $                     0.09

      Basic weighted-average common shares outstanding


      35,533,268


      31,938,847

      Diluted weighted-average common shares outstanding


      35,533,268


      32,308,179

      Comprehensive income (loss):


      0



      Net income (loss)


      $                 (3,761)


      $                   3,014

      Foreign currency translation adjustment, net of tax


      2,541


      (1,652)

      Net income (loss) attributable to non-controlling interest


      —


      —

      Net comprehensive income (loss)


      $                 (1,220)


      $                   1,362

      Drilling Tools International Corp

      Consolidated Statements of Comprehensive Income (Loss) (Unaudited)

      (In thousands of U.S. dollars and rounded)








      Three Months Ended December 31,



      2025


      2024

      Revenue, net:





      Tool rental


      $                 30,414


      $                 31,516

      Product sale


      8,094


      8,330

      Total revenue, net


      38,508


      39,846

      Costs and other deductions:





      Cost of tool rental revenue, exclusive of depreciation and amortization


      6,735


      6,552

      Cost of product sale revenue, exclusive of depreciation and amortization


      3,291


      3,602

      Selling, general, and administrative expense


      19,193


      21,280

      Depreciation and amortization expense


      6,904


      6,600

      Interest expense, net


      1,072


      1,339

      Loss (gain) on asset disposal


      (5)


      1

      Loss (gain) on remeasurement of previously held equity interest


      —


      —

      Goodwill impairment


      —


      —

      Other operating and non-operating expense, net


      220


      2,262

      Total costs and other deductions


      37,410


      41,636

      Income (loss) before income tax expense


      1,098


      (1,790)

      Income tax benefit (expense)


      119


      445

      Net income (loss)


      $                   1,217


      $                 (1,345)

      Less: Net income (loss) attributable to non-controlling interest


      1


      —

      Net income (loss) attributable to Drilling Tools International
      stockholders


      $                   1,216


      $                 (1,345)

      Basic earnings (loss) per share


      $                     0.03


      $                   (0.04)

      Diluted earnings (loss) per share


      $                     0.03


      $                   (0.04)

      Basic weighted-average common shares outstanding


      35,196,495


      34,704,696

      Diluted weighted-average common shares outstanding


      35,257,536


      34,704,696

      Comprehensive income (loss):





      Net income (loss)


      $                   1,217


      $                 (1,345)

      Foreign currency translation adjustment, net of tax


      5


      (2,405)

      Net income (loss) attributable to non-controlling interest


      1


      —

      Net comprehensive income (loss)


      $                   1,223


      $                 (3,750)

      Drilling Tools International Corp

      Consolidated Balance Sheets (Unaudited)

      (In thousands of U.S. dollars and rounded)




      December 31,


      December 31,



      2025


      2024

      ASSETS





      Current assets





      Cash


      $                   3,648


      $                   6,185

      Accounts receivable, net


      37,683


      39,606

      Related party note receivable, current


      1,541


      909

      Inventories


      18,149


      17,502

      Prepaid expenses and other current assets


      3,866


      3,874

      Total current assets


      64,887


      68,076

      Property, plant and equipment, net


      72,602


      75,571

      Operating lease right-of-use asset


      25,181


      22,718

      Intangible assets, net


      39,674


      37,232

      Goodwill


      14,616


      12,147

      Deferred financing costs, net


      468


      817

      Related party note receivable, less current portion


      3,836


      4,262

      Deposits and other long-term assets


      917


      1,608

      Total assets


      $              222,181


      $              222,431

      LIABILITIES AND SHAREHOLDERS' EQUITY





      Current liabilities





      Accounts payable


      $                   9,785


      $                 11,983

      Accrued expenses and other current liabilities


      10,711


      7,864

      Current portion of operating lease liabilities


      4,335


      4,121

      Current maturities of long-term debt


      5,989


      6,995

      Total current liabilities


      30,820


      30,963

      Operating lease liabilities, less current portion


      21,494


      18,765

      Revolving line of credit


      25,000


      27,142

      Long-term debt, less current portion


      14,827


      19,676

      Deferred tax liabilities, net


      7,167


      5,926

      Total liabilities


      99,308


      102,472

      Commitments and contingencies (See Note 14)





      Shareholders' equity





      Common stock, $0.0001 par value, shares authorized 500,000,000
      as of December 31, 2025 and December 31, 2024, 35,661,297 issued and
      outstanding as of December 31, 2025 and 34,704,696 shares issued and
      outstanding as of December 31, 2024


      4


      3

      Less: Treasury stock at cost, 505,169 and 0 shares as of December
      31, 2025 and December 31, 2024, respectively


      (1,265)


      —

      Additional paid-in-capital


      130,801


      125,415

      Accumulated deficit


      (7,343)


      (3,582)

      Accumulated other comprehensive income (loss)


      664


      (1,877)

      Total Drilling Tools International stockholder's equity


      122,861


      119,959

      Non-controlling interest


      12


      —

      Total Equity


      122,873


      119,959

      Total liabilities and shareholders' equity


      $              222,181


      $              222,431

      Drilling Tools International Corp

      Consolidated Statements of Cash Flows (Unaudited)

      (In thousands of U.S. dollars and rounded)








      Year Ended December 31,



      2025


      2024

      Cash flows from operating activities:





      Net income (loss)


      $                       (3,761)


      $                         3,014

      Adjustments to reconcile net income (loss) to net cash from
      operating activities:





      Depreciation and amortization


      27,290


      23,832

      Amortization of deferred financing costs


      349


      313

      Non-cash lease expense


      5,519


      5,121

      Unrealized loss on currency remeasurement


      194


      225

      Write off of excess and obsolete inventory


      797


      —

      Write off of property and equipment


      720


      —

      Provision (recovery) for credit losses


      584


      424

      Deferred tax expense/(benefit)


      (539)


      (778)

      Loss (gain) on sale of property


      59


      (60)

      Realized loss on equity securities


      —


      12

      Unrealized (gain) loss on equity securities


      —


      (368)

      Gain on sale of lost-in-hole equipment


      (11,591)


      (10,027)

      Stock-based compensation expense


      2,464


      2,092

      Interest income on related party note receivable


      (207)


      (151)

      Goodwill impairment


      1,901



      Changes in operating assets and liabilities:





      Accounts receivable, net


      4,026


      (4,015)

      Prepaid expenses and other current assets


      1,993


      874

      Inventories, net


      953


      (4,320)

      Operating lease liabilities


      (4,871)


      (4,832)

      Accounts payable


      (4,755)


      (78)

      Accrued expenses and other current liabilities


      (1,202)


      (5,220)

      Net cash flows from operating activities


      19,923


      6,058

      Cash flows from investing activities:





      Acquisition of a business, net of cash acquired


      (5,622)


      (47,258)

      Proceeds from sale of property and equipment


      38


      79

      Purchase of property, plant and equipment


      (20,147)


      (22,892)

      Proceeds from sale of lost-in-hole equipment


      14,154


      15,253

      Proceeds from sale of equity securities


      —


      1,244

      Purchases of intangible assets


      (1,693)


      (12)

      Net cash flows from investing activities


      (13,270)


      (53,586)

      Cash flows from financing activities:





      Investment from non-controlling interest into VIE


      12


      —

      Purchase of treasury stock


      (1,265)


      —

      Payment of deferred financing costs


      —


      (722)

      Proceeds from revolving line of credit


      53,341


      38,618

      Payments on revolving line of credit


      (55,483)


      (11,476)

      Repayment of promissory note


      (903)


      —

      Proceeds from term loan


      —


      25,000

      Payments on term loan


      (5,000)


      (3,535)

      Net cash flows from financing activities


      (9,298)


      47,885

      Effect of Changes in Foreign Exchange Rate


      108


      (175)

      Net change in cash


      (2,537)


      182

      Cash at beginning of period


      6,185


      6,003

      Cash at end of period


      $                         3,648


      $                         6,185

      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 is 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 taxes expense which is calculated by applying our effective tax rate on unadjusted net income 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:

      Drilling Tools International Corp

      Reconciliation of GAAP to Non-GAAP Measures (Unaudited)

      (In thousands of U.S. dollars and rounded)




      Year Ended December 31,



      2025


      2024

      Net income (loss)


      $                            (3,761)


      $                              3,014

      Add (deduct):





      Income tax expense (benefit)


      905


      (30)

      Depreciation and amortization


      27,290


      23,832

      Interest expense, net


      5,053


      3,369

      Stock option expense


      2,464


      2,092

      Management fees


      750


      750

      Loss (gain) on sale of property


      65


      (60)

      Loss (gain) on remeasurement of previously held equity interest


      —


      (368)

      Goodwill impairment


      1,901


      —

      Transaction expense


      1,155


      7,036

      Other operating and non-operating expense, net


      3,499


      467

      Adjusted EBITDA


      $                            39,321


      $                            40,102











      Drilling Tools International Corp

      Reconciliation of GAAP to Non-GAAP Measures (Unaudited)

      (In thousands of U.S. dollars and rounded)








      Three months ended December 31,



      2025


      2024

      Net income (loss)


      $                              1,217


      $                            (1,345)

      Add (deduct):





      Income tax expense (benefit)


      (119)


      (445)

      Depreciation and amortization


      6,904


      6,600

      Interest expense, net


      1,072


      1,339

      Stock option expense


      644


      520

      Management fees


      187


      187

      Loss (gain) on sale of property


      (5)


      1

      Loss (gain) on remeasurement of previously held equity interest


      —


      —

      Goodwill impairment


      —


      —

      Transaction expense


      37


      2,270

      Other operating and non-operating expense, net


      182


      (7)

      Adjusted EBITDA


      $                            10,119


      $                              9,120

      Drilling Tools International Corp

      Reconciliation of GAAP to Non-GAAP Measures (Unaudited)

      (In thousands of U.S. dollars and rounded)








      Year Ended December 31,



      2025


      2024

      Net income (loss)


      $                            (3,761)


      $                              3,014

      Add (deduct):





      Income tax expense (benefit)


      905


      (30)

      Depreciation and amortization


      27,290


      23,832

      Interest expense, net


      5,053


      3,369

      Stock option expense


      2,464


      2,092

      Management fees


      750


      750

      Loss (gain) on sale of property


      65


      (60)

      Loss (gain) on remeasurement of previously held
      equity interest


      —


      (368)

      Goodwill impairment


      1,901


      —

      Transaction expense


      1,155


      7,036

      Other operating and non-operating expense, net


      3,499


      467

      Capital expenditures


      (20,147)


      (22,892)

      Adjusted Free Cash Flow


      $                            19,174


      $                            17,210








      Three Months Ended December 31,



      2025


      2024

      Net income (loss)


      $                              1,217


      $                            (1,345)

      Add (deduct):





      Income tax expense (benefit)


      (119)


      (445)

      Depreciation and amortization


      6,904


      6,600

      Interest expense, net


      1,072


      1,339

      Stock option expense


      644


      520

      Management fees


      187


      187

      Loss (gain) on sale of property


      (5)


      1

      Loss (gain) on remeasurement of previously held
      equity interest


      —


      —

      Goodwill impairment


      —


      —

      Transaction expense


      37


      2,270

      Other operating and non-operating expense, net


      182


      (7)

      Capital expenditures


      (4,011)


      (3,214)

      Adjusted Free Cash Flow


      $                              6,108


      $                              5,906

      Drilling Tools International Corp

      Reconciliation of GAAP to Non-GAAP Measures (Unaudited)

      (In thousands of U.S. dollars and rounded)




      Year Ended December 31,



      2025


      2024

      Net income (loss)


      $                            (3,761)


      $                              3,014

      Transaction expense


      1,155


      7,036

      Goodwill impairment


      1,901


      —

      Restructuring charges


      1,814


      —

      Software implementation


      568


      —

      Income tax expense (benefit)


      905


      (30)

      Adjusted Income Before Tax


      $                              2,582


      $                            10,020

      Adjusted Income tax expense (benefit)


      (818)


      (101)

      Adjusted Net Income (loss)


      $                              3,400


      $                            10,121

      Adjusted Basic earnings (loss) per share


      $                                0.10


      $                                0.32

      Adjusted Diluted earnings (loss) per share


      $                                0.10


      $                                0.31

      Basic weighted-average common shares outstanding


      35,533,268


      31,938,847

      Diluted weighted-average common shares outstanding


      35,617,481


      32,308,179






      Drilling Tools International Corp

      Reconciliation of GAAP to Non-GAAP Measures (Unaudited)

      (In thousands of U.S. dollars and rounded)








      Three Months Ended December 31,



      2025


      2024

      Net income (loss)


      $                              1,217


      $                            (1,345)

      Transaction expense


      37


      2,270

      Goodwill impairment


      —


      —

      Restructuring charges


      325


      —

      Software implementation


      (73)


      —

      Income tax expense (benefit)


      (119)


      (445)

      Adjusted Income Before Tax


      $                              1,387


      $                                 480

      Adjusted Income tax expense (benefit)


      (150)


      119

      Adjusted Net Income (loss)


      $                              1,537


      $                                 361

      Adjusted Basic earnings (loss) per share


      $                                0.04


      $                                0.01

      Adjusted Diluted earnings (loss) per share


      $                                0.04


      $                                0.01

      Basic weighted-average common shares outstanding


      35,196,495


      34,704,696

      Diluted weighted-average common shares outstanding


      35,257,536


      34,704,696

      Drilling Tools International Corp

      Reconciliation of Estimated Consolidated Net
      Income (Loss) to Adjusted EBITDA

      (In thousands of U.S. dollars and rounded)

      (Unaudited)




       Twelve Months Ended December 31, 2026

       




      Low


      High

      Net income (loss)



      $            (500)


      $           3,000

      Add (deduct)






      Interest expense, net



      3,000


      4,500

      Income tax expense (benefit)


      -


      1,200

      Depreciation and amortization


      28,000


      30,000

      Management fees



      700


      800

      Other expense



      800


      1,500

      Stock option expense



      3,000


      4,000

      Goodwill impairment



      -


      -

      Transaction expense



      -


      -

      Adjusted EBITDA



      $         35,000


      $        45,000

      Revenue



      155,000


      170,000

      Adjusted EBITDA Margin



      23 %


      26 %

      Drilling Tools International Corp.
      Reconciliation of Estimated Consolidated Net Income (Loss) to Adjusted Free Cash Flow
      (In thousands of U.S. dollars and rounded)
      (Unaudited)




      Twelve Months Ended December 31, 2026

       




      Low


      High

      Net income (loss)



      $         (500)


      $           3,000

      Add (deduct)






      Interest expense, net



      3,000


      4,500

      Income tax expense (benefit)


      -


      1,200

      Depreciation and amortization


      28,000


      30,000

      Management fees



      700


      800

      Other expense



      800


      1,500

      Stock option expense



      3,000


      4,000

      Goodwill impairment



      -


      -

      Transaction expense



      -


      -

      Capital expenditures



      (18,000)


      (23,000)

      Adjusted Free Cash Flow



      $         17,000


      $         22,000

      Adjusted Free Cash Flow Margin


      11 %


      13 %

      SOURCE Drilling Tools International Corp.

      Modal title

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