Drilling Tools International Corp.

Second-quarter revenue was $38.1 million, including $29.6 million of tool rental revenue and $8.5 million of product sales revenue. Net loss attributable to stockholders was $1.8 million, or a loss of $0.05 per share, and adjusted net loss was $575,000, or a loss of $0.02 per share. Adjusted EBITDA was $8.4 million and adjusted free cash flow was $4.1 million. Tool rental gross margin remained above 70%. CapEx was approximately $4.2 million, down from $7.7 million in Q1. As of June 30, cash and cash equivalents were $2.5 million and net debt was $51.7 million. Management reaffirmed 2026 guidance: revenue of $155 million to $170 million, adjusted EBITDA of $35 million to $45 million, and adjusted free cash flow of $17 million to $22 million. They said the ranges imply a stronger second half and substantial free cash flow, though elevated ClearPath-related CapEx could push free cash flow toward the lower end of the range.

Wayne Prejean struck an upbeat but measured tone, saying the company is building momentum across the business despite global rig count weakness and regional disruption. He emphasized that U.S. activity improved late in the quarter, Canada remains a bright spot, and international work—especially offshore and in Europe, North Africa, and parts of the Middle East—is gaining traction. He also framed ClearPath Stabilizer as a meaningful technology driver that is opening higher-value opportunities and making the back half of 2026 look meaningfully different from the first half.

David Johnson focused on the financial bridge from a tougher first half to a stronger second half. He detailed Q2 revenue of $38.1 million, adjusted EBITDA of $8.4 million, adjusted free cash flow of $4.1 million, and net debt of $51.7 million, noting that net debt rose modestly due mainly to the Norway investment. He said CapEx was about $4.2 million in Q2 and should not taper as much as usual in the back half because of planned ClearPath spending tied to long-term rental agreements, while improved cash flow later in the year is expected to go primarily toward debt reduction.

Analysts pressed for the source of the implied second-half upside in guidance, asking how much comes from North America versus international markets. Management said Canada should rebound, the U.S. is improving but with some rig shuffling, and international growth is being driven by new technology wins in offshore/high-spec markets, while Middle East disruptions have delayed some expected activity. Another question focused on why ClearPath Stabilizer has ramped quickly; Wayne said it evolved into a systems-oriented solution with repeatable data supporting its value in managed pressure drilling and complex wells. On M&A, management said it keeps a backlog of opportunities and sees technology and product-line differentiation as important acquisition criteria.