Drilling Tools Q2 revenue rises  misses estimates

Overview

• Drilling Tools Q2 revenue rises 5% yr/yr but missed analyst expectations, per LSEG data

• Company reports Q2 net loss of $2.4 mln, adjusted net loss $725,000

• Eastern Hemisphere revenue grows 46% qtr/qtr, contributing 14% of total revenue

Outlook

• Drilling Tools International maintains 2025 revenue guidance at $145 mln-$165 mln

• Company expects 2025 full-year Adjusted EBITDA of $32 mln to $42 mln

• Company anticipates 2025 Adjusted Free Cash Flow of $14 mln to $19 mln

• Company expects pricing pressures to compress margins in the back half of 2025

Result Drivers

• LOWER COMMODITY PRICES - DTI attributes lower Q2 revenue to reduced rig count and customer activity, particularly on US land, due to lower commodity prices

• EASTERN HEMISPHERE GROWTH - Revenue in Eastern Hemisphere segment increased by 46% qtr/qtr, contributing 14% to total revenue

• COST CUTTING MEASURES - DTI implemented a $6 mln expense reduction program to align spending with customer activity levels, aiming to mitigate market disruptions and pricing pressures

Key Details

Analyst Coverage

• The one available analyst rating on the shares is "hold"

• The average consensus recommendation for the oil related services and equipment peer group is "buy."

• Wall Street's median 12-month price target for Drilling Tools International Corp is $3.78, about 47% above its August 12 closing price of $2.00

• The stock recently traded at 14 times the next 12-month earnings vs. a P/E of 776 three months ago

Press Release: ID:nPn5tLqPCa