Forum Energy Technologies, Inc. Q4 FY2025 earnings call

Highlights include market share gains with revenue per global rig growing 20% since 2022, full year book to bill of 113%, Subsea product line with nearly 190% book to bill. Innovation with 10 new products commercialized, including Secura Series stage collars, DuraCoil 95, DuraLine manifold system. Cost discipline with $15,000,000 annualized savings from consolidating manufacturing plants. Free cash flow generation a defining strength in 2025, delivering $80,000,000, reducing net debt by 28% and repurchasing shares.

Drilling and Completion revenue was $127,000,000, up 8%. Subsea product line increased 25% with ROV projects and rescue submarine order. Coiled tubing revenue up 13% with strong tubing sales in North America. Drilling product line revenue up 11% supported by international capital equipment demand. Segment EBITDA essentially flat. Artificial Lift and Downhole had fourth quarter book to bill of 107%, segment revenue $75,000,000, down 4% sequentially. Segment EBITDA flat with margin improvement. Fourth quarter revenue $202,000,000 exceeded guidance range, up 3% sequentially. Adjusted EBITDA reached top end of guidance range at $23,000,000. Full year free cash flow $80,000,000, top end of increased guidance range.

2026 revenue guidance $808,880,000 to $110,000,000. EBITDA guidance $90,000,000 to $110,000,000. Adjusted net income guidance $18,000,000 to $38,000,000. First quarter revenue guidance $190,000,000 to $210,000,000, EBITDA $21,000,000 to $25,000,000, adjusted net income $5,000,000 to $9,000,000. 2026 free cash flow guidance $55,000,000 to $75,000,000, consistent with FET 2030 target and capital-light model.

Challenging backdrop including lower global drilling activity, tariffs and geopolitical uncertainty. Impact of tariffs on steel supply and costs. Uncertainty around international market conditions and demand for certain products.

Q: Talk about trajectory of Subsea business and benefits from unconventional oil/gas development.

A: Subsea had 190% book to bill in 2025, expect strong demand in energy and defense. Unconventional areas like Argentina and Saudi Arabia benefit from Forum's technology.

Q: Acquisitions, product lines to target.

A: Look for businesses with differentiated solutions, targeted markets, accretive to Forum. Last acquisition Veraperm, interested in downhole-type businesses.

Q: Q4 pluses and minuses, Q1 guide outperformance.

A: No end-of-year slowdown, strong Subsea revenue growth, good flow-through in Artificial Lift and Downhole. Q1 guide strong due to beat the market strategy, backlog, and structural cost savings.

Q: Free cash flow guidance, working capital, buyback timing.

A: Free cash flow from EBITDA minus cash taxes/interest, CapEx, and working capital. Buybacks may be back-end loaded due to net leverage ratio constraint.

Q: Growth avenues in D&C, artificial lift, downhole tools.

A: Subsea with defense bookings, artificial lift with international adoption, growth markets with doubling share.

Q: M&A opportunities, valuation expectations.

A: Larger opportunity set, sellers' expectations increased due to public company stock multiples.

Q: U.S. rig count rebound impact, non-oil-gas markets.

A: U.S. rig count rebound would be torque, non-oil-gas markets like data center mobile power have early growth opportunities.

Q: Tariff ruling impact, tax aspects.

A: IEPA tariffs struck down, 232s and 301s remain, tax focus on optimizing taxable income in different countries.