Drilling Tools International Corp Segments Disclosure
NOTE 17 – SEGMENT INFORMATION
Prior to the acquisition of Titan, we operated as a single operating segment which reflected how our business was managed. Upon completion of the acquisition, the Company split into two operating segments based on geography, Western Hemisphere and Eastern Hemisphere. Operating segments are identified as components of an enterprise about which discrete financial information is available for evaluation by the CODM in deciding resource allocation and assessing performance. The Company’s serves as the CODM. The Company’s CODM reviews financial information disaggregated by hemisphere for the purposes of making operational decisions, allocating resources, and evaluating financial performance.
The Company’s two operating segments derives revenues from customers by providing oilfield equipment and services to operators in wellbore construction and casing installation. The CODM assesses performance for each segment individually and decides how to allocate resources by using Segment EBITDA, which is defined as net income (loss) excluding interest income, interest expense, other operating and non-operating expense, net, income tax benefit (expense), depreciation and amortization, and unallocated corporate general and administrative expenses, including stock-based compensation and monitoring fees. Additionally, the Company’s CODM total segment assets and capital expenditures by segment regularly in making operational decisions. The CODM uses these metrics in the annual budget and forecasting process. The CODM considers budget-to-actual variances on a quarterly basis to forecast future performance, adjust the budget, and make decisions about the allocation of operating and capital resources to the segment.
Financial information by segment for the years ended December 31, 2025 and 2024 is summarized below:
|
|
For the Year Ended December 31, 2025 |
|
|||||||||
|
|
Western Hemisphere |
|
|
Eastern Hemisphere |
|
|
Total |
|
|||
Tool Rental |
|
|
117,670 |
|
|
|
20,525 |
|
|
|
138,194 |
|
Product Sales |
|
|
30,899 |
|
|
|
2,952 |
|
|
|
33,851 |
|
Total Revenue |
|
|
148,569 |
|
|
|
23,476 |
|
|
|
172,045 |
|
Reconciliation of revenue |
|
|
|
|
|
|
|
|
|
|||
Elimination of intersegment revenue |
|
|
|
|
|
|
|
|
(12,420 |
) |
||
Total consolidated revenue |
|
|
|
|
|
|
|
|
159,626 |
|
||
Less:(1) |
|
|
|
|
|
|
|
|
|
|||
Cost of Tool Rental |
|
|
28,971 |
|
|
|
8,573 |
|
|
|
37,544 |
|
Cost of Product Sales |
|
|
13,723 |
|
|
|
2,432 |
|
|
|
16,156 |
|
Total Cost of Sales |
|
|
42,694 |
|
|
|
11,005 |
|
|
|
53,700 |
|
Reconciliation of cost of revenue |
|
|
|
|
|
|
|
|
|
|||
Elimination of intersegment cost of revenue |
|
|
|
|
|
|
|
|
(12,420 |
) |
||
Total consolidated cost of revenue |
|
|
|
|
|
|
|
|
41,280 |
|
||
Selling, general, administrative expenses |
|
|
56,380 |
|
|
|
11,938 |
|
|
|
68,319 |
|
Segment EBITDA |
|
|
49,494 |
|
|
|
533 |
|
|
|
50,027 |
|
Reconciliation of segment profit |
|
|
|
|
|
|
|
|
|
|||
Corporate expenses(2) |
|
|
|
|
|
|
|
|
10,706 |
|
||
Depreciation and amortization |
|
|
|
|
|
|
|
|
27,290 |
|
||
Stock-based compensation |
|
|
|
|
|
|
|
|
2,464 |
|
||
Monitoring fees |
|
|
|
|
|
|
|
|
750 |
|
||
Transaction expenses |
|
|
|
|
|
|
|
|
1,155 |
|
||
Goodwill impairment |
|
|
|
|
|
|
|
|
1,901 |
|
||
Other expenses |
|
|
|
|
|
|
|
|
8,616 |
|
||
Consolidated loss before taxes |
|
|
|
|
|
|
|
|
(2,856 |
) |
||
|
|
For the Year Ended December 31, 2024 |
|
|||||||||
|
|
Western Hemisphere |
|
|
Eastern Hemisphere |
|
|
Total |
|
|||
Tool Rental |
|
|
125,291 |
|
|
|
3,537 |
|
|
|
128,828 |
|
Product Sales |
|
|
27,118 |
|
|
|
9,669 |
|
|
|
36,787 |
|
Total Revenue |
|
|
152,409 |
|
|
|
13,206 |
|
|
|
165,615 |
|
Reconciliation of revenue |
|
|
|
|
|
|
|
|
|
|||
Elimination of intersegment revenue |
|
|
|
|
|
|
|
|
(11,169 |
) |
||
Total consolidated revenue |
|
|
|
|
|
|
|
|
154,446 |
|
||
Less:(1) |
|
|
|
|
|
|
|
|
|
|||
Cost of Tool Rental |
|
|
34,132 |
|
|
|
1,113 |
|
|
|
35,245 |
|
Cost of Product Sales |
|
|
9,710 |
|
|
|
4,705 |
|
|
|
14,415 |
|
Total Cost of Sales |
|
|
43,842 |
|
|
|
5,818 |
|
|
|
49,660 |
|
Reconciliation of cost of revenue |
|
|
|
|
|
|
|
|
|
|||
Elimination of intersegment cost of revenue |
|
|
|
|
|
|
|
|
(11,169 |
) |
||
Total consolidated cost of revenue |
|
|
|
|
|
|
|
|
38,491 |
|
||
Selling, general, administrative expenses |
|
|
57,109 |
|
|
|
6,082 |
|
|
|
63,191 |
|
Segment EBITDA |
|
|
51,458 |
|
|
|
1,306 |
|
|
|
52,764 |
|
Reconciliation of segment profit |
|
|
|
|
|
|
|
|
|
|||
Corporate expenses(2) |
|
|
|
|
|
|
|
|
12,662 |
|
||
Depreciation and amortization |
|
|
|
|
|
|
|
|
23,832 |
|
||
Stock-based compensation |
|
|
|
|
|
|
|
|
2,092 |
|
||
Monitoring fees |
|
|
|
|
|
|
|
|
750 |
|
||
Transaction expenses |
|
|
|
|
|
|
|
|
7,036 |
|
||
Goodwill impairment |
|
|
|
|
|
|
|
|
— |
|
||
Other expenses |
|
|
|
|
|
|
|
|
3,407 |
|
||
Consolidated loss before taxes |
|
|
|
|
|
|
|
|
2,984 |
|
||
(1) The significant expense categories and amounts align with the segment-level information that is regularly provided to the chief operating decision maker
(2) Comprised primarily of expenses not allocated to our geographical segments.
Additional financial information by operating segment as of December 31, 2025 and 2024 is summarized below:
|
|
December 31, |
|
|||||
|
|
2025 |
|
|
2024 |
|
||
Capital Expenditures |
|
|
|
|
|
|
||
Western Hemisphere |
|
$ |
14,921 |
|
|
$ |
21,945 |
|
Eastern Hemisphere |
|
|
5,225 |
|
|
|
947 |
|
Total capital expenditures |
|
|
20,147 |
|
|
|
22,892 |
|
Segment Assets(1): |
|
|
|
|
|
|
||
Western Hemisphere |
|
$ |
154,932 |
|
|
$ |
171,857 |
|
Eastern Hemisphere |
|
|
57,756 |
|
|
|
40,761 |
|
Total segment assets |
|
|
212,687 |
|
|
|
212,618 |
|
Corporate and other(2) |
|
|
9,494 |
|
|
|
9,813 |
|
Total assets |
|
$ |
222,181 |
|
|
$ |
222,431 |
|
(1) The goodwill allocated to the four reporting units is included within their respective segment asset totals. The goodwill amount included in segment assets is net of impairment losses of $0.9 million and $1.0 million at the Western Hemisphere and Eastern Hemisphere segments, respectively. Refer to Note 7 - Goodwill for further details.
(2) Corporate assets consists of cash, related party notes receivables, and deferred financing costs.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 6, 2026 | Showing above |
| 2024 | Mar 14, 2025 | |
About Segments Disclosures
Segment disclosures break a company into its reportable operating units, revealing revenue, profit, and asset allocation that consolidated financial statements obscure. Under ASC 280, segments must match how the chief operating decision maker views the business, providing a window into internal management structure and resource allocation priorities.
Key signals: compare segment margins to identify which units drive profitability and which destroy value. Watch for changes in the number of reportable segments — segment aggregation or disaggregation often coincides with strategic shifts or attempts to obscure declining performance. Intersegment elimination patterns reveal internal pricing practices. The reconciliation between segment totals and consolidated figures exposes corporate overhead allocation and unallocated items. Geographic revenue concentration highlights regulatory and currency exposure. Compare segment-level capital expenditure against segment revenue to assess where management is investing for future growth versus harvesting existing assets.