Dril Quip : Third Quarter 2019 Supplemental Earnings Information

THIRD QUARTER 2019

SUPPLEMENTAL EARNINGS INFORMATION

dril-quip.com | NYSE: DRQ

CAUTIONARY STATEMENT

Forward-Looking Statements

The information furnished in this presentation contains "forward-looking statements" within the meaning of the federal securities laws. Forward-looking statements include goals, projections, estimates, expectations, market outlook, forecasts, plans and objectives, including revenue and new product revenue and other projections, project bookings, bidding and service activity, acquisition opportunities, forecasted supply and demand, forecasted drilling activity and subsea investment, liquidity, cost savings, and share repurchases and are based on assumptions, estimates and risk analysis made by management of Dril-Quip in light of its experience and perception of historical trends, current conditions, expected future developments and other factors. No assurance can be given that actual future results will not differ materially from those contained in the forward-looking statements in this presentation.

Although Dril-Quip believes that all such statements contained in this presentation are based on reasonable assumptions, there are numerous variables of an unpredictable nature or outside of Dril-Quip's control that could affect Dril-Quip's future results and the value of its shares. Each investor must assess and bear the risk of uncertainty inherent in the forward-looking statements contained in this presentation.

Please refer to Dril-Quip's filings with the SEC for additional discussion of risks and uncertainties that may affect Dril-Quip's actual future results. Dril-Quip undertakes no obligation to update the forward-

looking statements contained herein.

Use of Non-GAAP Financial Measures

Adjusted Net Income, Adjusted Diluted EPS, Adjusted EBITDA and Free Cash Flow are non-GAAP measures. Adjusted Net Income and Adjusted Diluted EPS are defined as net income (loss) and earnings per share, respectively, excluding the impact of foreign currency gains or losses as well as other significant non-cash items and certain charges and credits. Adjusted EBITDA is defined as net income excluding income taxes, interest income and expense, depreciation and amortization expense, non-cash gains or losses from foreign currency exchange rate changes as well as other significant non-cash items and items that can be considered non-recurring. Free Cash Flow is defined as net cash provided by operating activities less net cash used in the purchase of property, plant and equipment. We believe that these non-GAAP measures enable us to evaluate and compare more effectively the results of our operations period over period and identify operating trends by removing the effect of our capital structure from our operating structure and certain other items including those that affect the comparability of operating results. In addition, we believe that these measures are supplemental measurement tools used by analysts and investors to help evaluate overall operating performance, ability to pursue and service possible debt opportunities and make future capital expenditures. These measures do not represent funds available for our discretionary use and are not intended to represent or to be used as a substitute for net income or net cash provided by operating activities, as measured under U.S. generally accepted accounting principles. Non-GAAP financial information supplements should be read together with, and are not an alternative or substitute for, our financial results reported in accordance with GAAP. Because non-GAAP financial information is not standardized, it may not be possible to compare these financial measures with other companies' non-GAAP financial measures. Reconciliations of these non- GAAP measures to the most directly comparable GAAP measure can be found in the appendix.

Use of Website

Investors should note that Dril-Quip announces material financial information in SEC filings, press releases and public conference calls. Dril-Quip may use the Investors section of its website (www.dril- quip.com) to communicate with investors. It is possible that the financial and other information posted there could be deemed to be material information.

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DRIL-QUIP

INVESTMENT

HIGHLIGHTS

Leading Manufacturer of Highly Engineered Drilling & Production Equipment

Technically Innovative Products & First-class Service

Strong Financial Position

Historically Superior Margins to Peers

Experienced Management Team

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PRODUCTS & SERVICES

SUBSEA EQUIPMENT

SURFACE EQUIPMENT

DOWNHOLE TOOLS

OFFSHORE RIG EQUIPMENT

AFTERMARKET SERVICES

	Product & Service Revenue Segments												60% 63%
																									31%	26%		55%
	2% 2% 2%		3%	5%	4%		9%		7% 7%					24%
		Offshore Rig			Surface		Downhole	Aftermarket*		Subsea
																		Tools
													Q1 '19					Q2 '19				Q3 '19
	Geographic Revenue Segments													56%
																													51%	54%
									28%	32%		29%
	16%	17%	17%
				Asia Pacific						Eastern Hemisphere	Western Hemisphere
													Q1 '19					Q2 '19				Q3 '19

*Aftermarket revenue includes both Services and Leasing revenue	3

Q3 2019 HIGHLIGHTS

• Increased revenue to $108 million, which is at the high end of the guidance range of $100 - $110 million
• Recorded product bookings of $92 million, which is at the high end of the guidance range of $75 - $95 million
• Received several orders for new technology products amounting to ~22% of product bookings for Q3 2019
• Reported net loss of $1 million, or $0.04 loss per diluted share
• Grew Adjusted EBITDA to $15 million, a quarter-over-quarter increase of 14%
• Captured $14 million of additional annualized cost savings with approximately $11 million related to the lease of the forge facilities and equipment to AFGlobal Corp.; the full impact of the forge lease is expected to reach $13 million over the course of the lease
• Total annualized cost savings have increased to approximately $43 million since Q3 2018
• Maintained clean balance sheet with no debt and cash on hand of $413 million as of 09/30/2019

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