Basic earnings per share is computed using the weighted-average number of common shares outstanding for the period. Diluted earnings per share is computed using the weighted-average number of common shares outstanding for the period plus dilutive potential common shares, including performance share awards, using the treasury stock method. Performance share awards are included based on the number of shares that would be issued as if the end of the reporting period was the end of the performance period and the result was dilutive.

The following table sets forth the computation of the Company’s basic and diluted net earnings per share for the three and six months ended June 30, 2026 and 2025 (in thousands except share and per share data):


	Three months ended June 30,						Six months ended June 30,
	2026			2025			2026			2025
Numerator:
Net income (loss) attributable to Drilling Tools International shareholders	$	(1,788	)	$	(2,407	)	$	(3,328	)	$	(4,076	)
Denominator
Weighted-average common shares outsanding — basic		35,276,155			35,573,749			35,202,327			35,583,139
Weighted-average effect of potentially dilutive securities:
Effect of potentially dilutive time-based stock options		—			—			—			—
Effect of potentially dilutive performance-based stock options		—			—			—			—
Effect of potentially dilutive restricted stock units		—			—			—			—
Weighted-average common shares outstanding — diluted		35,276,155			35,573,749			35,202,327			35,583,139
Earnings (loss) per share — basic	$	(0.05	)	$	(0.07	)	$	(0.09	)	$	(0.11	)
Earnings (loss) per share — diluted	$	(0.05	)	$	(0.07	)	$	(0.09	)	$	(0.11	)

As of June 30, 2026, the Company’s potentially dilutive securities consisted of options to purchase common stock, time-based restricted stock, and performance-based restricted stock units. Based on the amounts outstanding as of the three and six months ended June 30, 2026 and 2025, the Company excluded the following potential common shares from the computation of diluted net income per share because including them would have had an anti-dilutive effect:


	Three months ended June 30,				Six Months Ended June 30,
	2026		2025		2026		2025
Performance-based options outstanding		534,064		534,063		534,064		534,063
Time-based options outstanding		4,366,236		4,429,563		4,366,236		4,396,855
Time-based restricted stock units outstanding		1,111,113		1,052,451		1,111,113		1,052,451
Total		6,011,413		6,016,077		6,011,413		5,983,369

NOTE 16 – EARNINGS PER SHARE