Drilling Tools International (DTI) EnerCom Denver – The Energy Investment Conference summary

Business Model and Operations

• Focuses on rental, repair, and recovery of downhole tools, with maintenance CapEx funded by recovery events.

• Customer base is evenly split between E&P operators and oilfield service companies, supporting global directional and horizontal drilling.

• Offers a wide range of proprietary technologies and comprehensive tool inventory for drilling, completion, and plug and abandonment.

• COMPASS software/order management system tracks tool lifecycle, utilization, and enhances customer experience and fleet management.

• Modern manufacturing and repair facilities in North America and Canada support cost control and product quality.

Growth Strategy, M&A, and Expansion

• Completed and integrated four acquisitions since 2023, focusing on technology, geographic expansion, and industry consolidation.

• M&A targets must offer intellectual property, EBITDA/free cash flow accretion, and geographic diversification, with a robust pipeline of over 100 active targets.

• Growth CapEx has decreased as focus shifts to M&A, debt paydown, and selective investment in new tools.

• Eastern Hemisphere expansion leverages acquired technology and customer pull-through, especially in deepwater and Asia-Pacific markets.

• Investments in new technologies, such as ClearPath stabilizer, target rising offshore demand in Europe.

Financial Performance and Capital Allocation

• Q2 2026 revenue reached $38.1 million, with adjusted EBITDA of $8.4 million, and 2026 guidance projects revenue of $155–$170 million, adjusted EBITDA of $35–$45 million, and adjusted free cash flow of $17–$22 million.

• Adjusted free cash flow margin improved to 12% in 2025 and is expected to remain strong in 2026.

• Maintenance CapEx is fully customer funded and modeled conservatively, typically 8–13% of revenue.

• Capital allocation prioritizes debt reduction, organic growth, strategic acquisitions, and shareholder returns, including a $2 million share repurchase to date.

• Debt aversion guides strategy, aiming for net debt to EBITDA of one turn or less.