Drilling Tools International Corp Q2 FY26 Results

I’m pleased with our performance in the second quarter, which reflects the resilience of our operations, the benefits of our geographic diversification and the durability of our unique platform. Despite softer North American land activity and disruption in the Middle East, we delivered strong results, most notably our Adjusted Free Cash Flow, which improved considerably on both a sequential and year-over-year basis. We are building solid momentum, and it’s evident that the strength of our differentiated business model and disciplined execution is creating earnings power that will only grow as activity improves. As we look forward, we are encouraged by early signs of recovery in several of the key regions in which we operate. The U.S. land rig count built steadily through the second quarter, adding more than 20 rigs in June alone to finish above the prior-year June level, and added nearly 19 more in July, with additions of bottom-hole assembly rigs, the largest part of our business, outpacing that broader market growth. In Canada, the softness that weighed on activity early in the quarter has abated, with the rig count building through June to finish the quarter above prior-year levels and pointing to a firming market as the year progresses. In Europe and the Gulf of America, our ClearPath stabilizer technology is gaining real traction in offshore markets, where the highest-spec operators are placing a premium on its performance. New awards related to this cutting-edge technology are expected to drive a material step-up in our European contribution in the second half of the year, and we expect these awards to represent the first of many wins to come. In the Middle East, our targeted footprint and specialized product lines have kept demand for our tools steady through a disruptive period, leaving substantial opportunities still ahead of us. Given our confidence in a strong second half to 2026, we are reaffirming our full-year guidance ranges, which represent growth at the midpoint compared to our 2025 results. We are excited about the future and believe we are well positioned to benefit from recent activity trends. We have built a solid foundation, further strengthened by our recent acquisitions, as we continue to penetrate new markets and grow throughout the Eastern Hemisphere. Our differentiated technology portfolio is enabling us to win new business on improving commercial terms, and price-focused customers are returning to DTI as they come to appreciate the value we deliver in the field. As we have done successfully in the past, we will continue to strategically evaluate growth opportunities, including accretive acquisitions that meet our stringent return profile, but always with a disciplined focus on profitable growth and lasting value creation for our shareholders.