Drilling Tools International Posts $38.5M Q4 Revenue, Pays Down $11M Debt
Drilling Tools International posted Q4 revenue of $38.5 million, generated $6.1 million in adjusted free cash flow and paid down $11 million of debt in H2 2025. Full-year 2025 revenue hit $159.6 million with adjusted EBITDA of $39.3 million and guidance forecasts $155 million–$170 million in 2026 revenue, plus $17 million–$22 million in free cash flow.
1. Q4 Results and Capital Management
In Q4, the company generated $38.5 million in consolidated revenue, with $30.4 million from tool rentals and $8.1 million from product sales. Adjusted free cash flow reached $6.1 million as management employed flexible capex to harvest cash, enabling $5.5 million in debt reduction in the quarter and $11 million in H2 2025, alongside share repurchases.
2. Full-year 2025 Performance
For full-year 2025, consolidated revenue totaled $159.6 million with adjusted EBITDA of $39.3 million and adjusted net income of $3.4 million. Net leverage improved to 1.1× with net debt of $42.2 million, and executives noted ongoing evaluation of M&A opportunities as part of capital allocation plans.
3. Eastern Hemisphere Expansion
Eastern Hemisphere revenue surged 78% year-over-year to represent 14% of total sales, driven by increased use of drilling ream tools and ClearPath stabilizer technology. Expansion into Malaysia, Europe and the Middle East under the COMPASS platform is expected to sustain demand as rig counts stabilize.
4. 2026 Guidance and Upside Catalysts
Guidance for 2026 forecasts revenue of $155 million to $170 million, adjusted EBITDA of $35 million to $45 million, capex of $18 million to $23 million, and free cash flow of $17 million to $22 million. Management flagged upside catalysts in Saudi Arabia rig reactivations and regional tenders but noted assumptions are based on flat activity in H1.