UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2025 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ____ to ____ Commission File Number: 001-41103 DRILLING TOOLS INTERNATIONAL CORPORATION (Exact Name of Registrant as Specified in its Charter) Delaware 87-24887 ...

Drilling Tools International (DTI) Q1 2025 Earnings Call May 14, 2025 10:00 AM ET Speaker0 Greetings, and welcome to the Drilling Tools International First Quarter twenty twenty five Earnings Conference Call. At this time, all participants are in a listen only mode. A question and answer session will follow the formal presentation. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Mr. Ken Dennard. Thank you. You may begin. Speaker1 Thank you, operator, and good ...

NASDAQ: DTI INVESTOR PRESENTATION SUMMER 2025 DRILLINGTOOLS.COM FORWARD LOOKING STATEMENTS General: Drilling Tools International Corporation ("DTI") is making this presentation available in connection with the release of its financial results for the three months and full year ended December 31, 2024. The information contained in this presentation does not purport to be all-inclusive or to contain all information that prospective investors may require. Prospective investors are encouraged to conduct their o ...

Drilling Tools International Corp. (DTI) came out with quarterly earnings of $0.02 per share, missing the Zacks Consensus Estimate of $0.04 per share. This compares to earnings of $0.13 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of -50%. A quarter ago, it was expected that this company would post earnings of $0.01 per share when it actually produced earnings of $0.02, delivering a surprise of 100%.Over the last four quarters ...

Exhibit 99.1 NEWS RELEASE Drilling Tools International Corp. Reports 2025 First Quarter Results Board Authorizes a $10 Million Share Repurchase Program HOUSTON — May 13, 2025 — 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 ac ...

Board Authorizes a $10 Million Share Repurchase ProgramHOUSTON, May 13, 2025 /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 three months ended Marc ...

HOUSTON, April 23, 2025 /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 announced that it plans to report 2025 first quarter financial results prior to the Company's live confer ...

Financial Data and Key Metrics Changes - In 2024, the company achieved consolidated revenue of $154.4 million, with tool rental revenues of $117.9 million and product sales of $36.5 million, reflecting strong revenue growth despite industry challenges [12][11] - Adjusted net income for 2024 was $10.1 million, with adjusted diluted EPS at $0.31 per share, exceeding guidance [12][11] - Adjusted EBITDA for 2024 was $40.1 million, and adjusted free cash flow was $17.2 million, more than double the previous year's figure [12][11] Business Line Data and Key Metrics Changes - Fourth quarter consolidated revenue was $39.8 million, with tool rental revenue at approximately $31.5 million and product sales revenue at $8.3 million [24] - Tool rental activity saw a surge due to new technologies gaining traction, while product sales were impacted by reduced activity in Saudi Arabia and PEMEX [62][64] - The company experienced a 13% year-over-year increase in fourth quarter revenue despite a 4% global rig count decline [25] Market Data and Key Metrics Changes - The company noted softness in rig counts in the US land, US Gulf, and Middle Eastern markets, impacting overall performance [11] - Despite the challenges, the company maintained a diversified geographic footprint, which contributed to revenue resilience [25] Company Strategy and Development Direction - The company aims to be the premier drilling tools rental solutions provider, focusing on international expansion and technology ownership through acquisitions [14][15] - In 2024, the company acquired three companies and closed a fourth acquisition in early 2025, enhancing its geographical footprint and technological capabilities [15][37] - The company plans to report results in two segments, Eastern Hemisphere and Western Hemisphere, starting in 2025 to better align operations with growth objectives [33][35] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the medium to long-term natural gas demand outlook, particularly with new LNG capacity expected to come online in 2025 and 2026 [19] - The company is well-positioned to capitalize on energy market recoveries and believes there are meaningful consolidation opportunities in the sector [18][39] - Management highlighted a commitment to safety, achieving a 6.5% improvement year-over-year in safety metrics [20][21] Other Important Information - The company plans to maintain a focus on M&A opportunities while managing its balance sheet effectively, with a net debt of approximately $47 million at year-end [50][52] - The company expects 2025 revenue to range between $163 million and $183 million, with adjusted EBITDA projected between $40 million and $50 million [32] Q&A Session Summary Question: Current trends in the M&A market - Management indicated a steady pipeline of opportunities and expressed optimism about the number of potential deals in the market [46][48] Question: Importance of deleveraging this year - Management stated that while they are mindful of the balance sheet, there is no immediate urgency to pay down debt at the expense of M&A opportunities [50][56] Question: Tool rental growth despite flat US land drilling - Management attributed the growth in tool rentals to new technologies gaining traction and a general increase in activity, despite challenges in specific markets [61][64] Question: Higher CapEx expectations for 2025 - Management explained that the increase in CapEx is primarily related to growth initiatives in the Eastern Hemisphere following recent acquisitions [65][67] Question: M&A opportunities in Eastern vs. Western Hemisphere - Management confirmed that they are actively pursuing opportunities in both hemispheres and are evaluating potential deals as they arise [79][81] Question: Impact of tariffs on international operations - Management noted that a diversified supplier and manufacturing base are effective strategies to mitigate tariff risks, and they are monitoring the situation closely [84][86]

Revenue Growth and Financial Performance - Revenue growth of 340% from $35 million in 2012 to $154 million in 2024[17] - For the years ended December 31, 2024 and 2023, the company generated revenue from tool rentals and product sales of $154.4 million and $152.0 million, respectively, with a net income of $3.0 million and $14.7 million[187] - The accumulated deficit as of December 31, 2024 and 2023 was $3.6 million and $6.3 million, respectively[187] - The company anticipates total costs of tool rental and product sales revenue to increase in absolute dollars, corresponding to revenue growth and headcount increases[211] Business Segments and Contributions - Directional Tool Rentals (DTR) division accounted for approximately 50% of 2024 revenue, with a fleet of over 23,000 tools[17] - Premium Tools Division (PTD) contributed approximately 17% to 2024 revenue, with a fleet of about 1,000,000 feet of drill pipe[19] - Wellbore Optimization Tools (WOT) division represented approximately 21% of 2024 revenue, focusing on tools that enhance drilling efficiency[19] - New acquisitions, including Casing Technologies Group Limited and Superior Drilling Products, accounted for approximately 10% of total revenue in 2024[20] Market Position and Customer Base - Market share in North American land drilling significantly increased, with active tool rentals on more than 50% of working locations[17] - Percentage of revenue from exploration and production (E&P) operators grew from less than 10% in 2014 to over 45% in 2024[26] - The customer base includes diversified OSCs (46% of 2024 revenue), E&P operators (48% of 2024 revenue), and oil and gas equipment manufacturers (6% of 2024 revenue)[31] Operational Expansion and Strategy - Company expanded service and support centers from 3 to 16 in North America and established 11 additional international centers[17] - The company expanded its international operations from 4 to 11 service and support centers through 2 acquisitions in 2024, aiming to increase revenue from outside North America[28] - The company aims to maximize profitability through strategic acquisitions and partnerships with leading drilling tool producers[25] Safety and Compliance - The total recordable incident rate improved from 2.3 in 2018 to 1.15 in 2024, indicating a strong commitment to employee safety[34] - Compliance with various domestic and international regulations poses risks that could adversely impact business operations and financial condition[106] Risks and Challenges - The company faces risks related to dependence on a small number of customers and potential challenges in obtaining necessary permits for operations[41] - The company experienced a significant reliance on a small number of customers, with 28% and 39% of total revenue coming from its two largest customers in 2024 and 2023, respectively[61] - The company is dependent on the oil and gas industry, which is influenced by crude oil and natural gas prices, and any downturn in this sector could adversely affect demand for its products and services[56] - The company may face challenges in sourcing tools and equipment due to supply chain disruptions and rising costs, which could impact its operational efficiency[74] Financial Management and Capital Structure - The company has broad discretion over its cash usage, which may not align with shareholder interests, and there are no current plans to pay cash dividends[53] - The company may incur additional indebtedness to execute its long-term growth strategy, which could reduce profitability[98] - Future capital needs may require the sale of additional equity or debt securities, potentially diluting existing shareholders[140] Market and Economic Conditions - The cyclical nature of the oil and gas industry may lead to periodic downturns, negatively impacting the company's business and financial condition[58] - Rising international tariffs could materially and adversely affect the company's business and results of operations, particularly in trade with China, Mexico, and Canada[112] - Increased regulatory scrutiny regarding greenhouse gas emissions and climate change could negatively impact demand for the company's products and services[116] Cybersecurity and IT Risks - The company relies on its IT systems, particularly COMPASS, for efficient operations, making it vulnerable to cyberattacks and IT failures[101] - Cybersecurity incidents could damage the company's reputation, disrupt operations, and impact revenues[173] - The company has a cybersecurity Risk Management Policy in place to identify and manage cybersecurity risks[162] Management and Governance - The management team has significant industry experience, with the CEO having a career in the oil and gas sector since 1979, contributing to the company's competitive advantage[29] - Past performance of the management team is not indicative of future performance, and historical results should not be relied upon for future investment decisions[149]

Core Insights - Drilling Tools International Corp. (DTI) reported quarterly earnings of $0.02 per share, exceeding the Zacks Consensus Estimate of $0.01 per share, but down from $0.13 per share a year ago, indicating a 84.6% year-over-year decline [1] - The company achieved an earnings surprise of 100% for the quarter, following a previous surprise of 133.33% when it reported earnings of $0.14 per share against an expectation of $0.06 per share [1][2] - DTI's revenues for the quarter ended December 2024 were $39.85 million, surpassing the Zacks Consensus Estimate by 0.63% and reflecting a year-over-year increase from $35.19 million [2] Earnings Performance - Over the last four quarters, DTI has surpassed consensus EPS estimates two times [2] - The current consensus EPS estimate for the upcoming quarter is $0.08, with expected revenues of $40.95 million, while the estimate for the current fiscal year is $0.41 on revenues of $171.79 million [7] Market Position - DTI shares have declined approximately 13.2% since the beginning of the year, contrasting with the S&P 500's decline of 4.8% [3] - The Zacks Industry Rank for Oil and Gas - Field Services, to which DTI belongs, is currently in the top 31% of over 250 Zacks industries, indicating a favorable industry outlook [8] Future Outlook - The sustainability of DTI's stock price movement will largely depend on management's commentary during the earnings call and the trends in earnings estimate revisions [3][4] - The current estimate revisions trend for DTI is mixed, resulting in a Zacks Rank 3 (Hold), suggesting that the shares are expected to perform in line with the market in the near future [6]