Drilling Tools International (DTI) investor relations material

Executive summary

• Q3 revenue was $40.645M, up 5% YoY and 7% QoQ; Adjusted EBITDA was $9.503M, up 14% QoQ, with a ~23% margin. September was the strongest month, with Adjusted EBITDA near $4M.

• 9M revenue declined to $116.676M from $121.118M and Adjusted EBITDA to $25.389M from $29.202M, as Eastern Hemisphere growth partly offset Western Hemisphere weakness.

• Pending Saltire acquisition is expected to lift the Eastern Hemisphere to ~40% of pro forma revenue and add more than 100,000 tools to the rental fleet.

Financial highlights

• Q3 tool rental revenue was $31.969M versus $31.859M a year earlier; product sales were $8.676M versus $6.958M.

• Q3 net loss was $2.632M, or $(0.07) per diluted share, versus $0.903M and $(0.03); Adjusted Net Loss was $0.433M, or $(0.01) per diluted share.

• Q3 Adjusted Free Cash Flow was $3.776M versus $5.573M; 9M Adjusted Free Cash Flow was $7.746M versus $13.066M.

• 9M net loss was $5.962M versus $4.978M; diluted EPS was $(0.17) versus $(0.14).

Outlook and guidance

• FY2026 revenue guidance remains $155M–$170M and Adjusted EBITDA $35M–$45M, with results expected near the low ends; the Adjusted EBITDA margin range is 23%–26%.

• FY2026 CapEx outlook increased to $22M–$23M; Adjusted Free Cash Flow guidance was revised to $13M–$22M from $17M–$22M, with results expected near the low end.

• ~$4M of targeted growth investment supports long-term rental agreements already generating revenue; excluding this investment, Adjusted Free Cash Flow would have remained within prior guidance.

• Q4 revenue and Adjusted EBITDA are expected to increase in both hemispheres, with Eastern Hemisphere revenue above 20% on a year-end run-rate basis; activity is expected to remain firm into Q1 and Q2 2027.

• Saltire pro forma estimates are revenue of $205M–$220M, Adjusted EBITDA of $58M–$68M and Adjusted Free Cash Flow of $29M–$38M, excluding synergies and transaction costs.