FET

• Overall Financial & Strategic Performance

  • FET delivered sequential and year-over-year growth in revenue and profitability, with expanding margins across all segments, positive free cash flow, a strengthened balance sheet, and capital returns to shareholders
  • The company has gained market share via product innovation, international expansion, and strong customer execution, and remains on track to meet its 2030 growth vision of doubling revenue
  • Since launching its Beat the Market strategy in 2022, revenue per global rig has increased 34%, with progress toward the goal of doubling share in targeted markets by 2030

• Market & Activity Dynamics

  • In North America, stronger completions drove higher frac utilization, benefiting wireline, coil tubing, and downhole product lines; the Canadian oil sands market saw robust activity and strong demand for FET technologies
  • Outside North America, overall regional activity was impacted by the Middle East conflict, but investment in offshore and unconventional developments remained robust, and international revenue grew as customer demand for FET's efficiency and productivity-enhancing technologies aligned with the company's core strengths
  • Long-term fundamentals are supportive: growing global oil and gas demand tied to GDP growth, urbanization, LNG exports, and AI-driven power consumption, paired with the need for new capacity to offset natural production declines. The Middle East conflict has elevated energy security to a strategic priority, driving new investment for inventory replenishment
  • Management projects FET's addressable market will expand by more than 50% over the next five years, creating a clear path to double revenue by 2030

• Key Operational & Product Milestones

  • Global footprint allows export of U.S.-developed unconventional technologies to international markets: field trials for the SandGuard artificial lift protection solution are progressing with a major national oil company in the Middle East; after regulatory approval, FET has delivered a large volume of coil tubing strings to Venezuela, with growing follow-on demand for other products
  • The DuraLine frac technology, which won a large Argentina order last quarter, is seeing increased inquiry activity in the U.S.; the Unity software/control platform for remote shore operation of ROVs received large aftermarket orders for both FET and competitor-built ROV systems, creating significant growth opportunity for the subsea segment
  • Heat transfer products achieved two key milestones: a first order for a high-temperature frack product designed for harsh Middle East environments, and an initial order for a new stationary cooling solution for power generation that complements the existing Powertron offering, expanding the company's data center and mobile power product portfolio

• Balance Sheet & Capital Allocation

  • Net debt declined to $115 million, with the net leverage ratio improving to 1.1x from 1.4x quarter-over-quarter
  • FET repurchased $8 million of shares in the first half of 2026, and has returned $42 million to shareholders over the past two years; total liquidity stands at $96 million, leaving the balance sheet well positioned for organic growth and strategic acquisitions that meet the company's accretion and free cash flow growth criteria

• Full-year 2026 guidance is updated to revenue of $870-$910 million, and EBITDA of $115-$125 million, representing 13% year-over-year revenue growth and 40% year-over-year EBITDA growth, with an incremental margin of 34%. Full-year adjusted net income is projected to be $42-$52 million, and full-year free cash flow is projected to be $57-$77 million
• Third quarter 2026 guidance is set for revenue of $225-$245 million, and EBITDA of $31-$37 million, representing approximately 20% year-over-year revenue growth and 48% year-over-year EBITDA growth at the midpoint. Third quarter adjusted net income is projected to be $12-$18 million, and third quarter free cash flow is projected to be $15-$25 million
• Management maintains the long-term 2030 growth target of doubling revenue from current levels, with a projected top end of $1.6 billion, and notes that recent geopolitical changes have slightly accelerated activity growth relative to prior expectations

Forum Energy Technologies (FET) operates two core operating segments for the second quarter 2026:

1. Drilling and Completions: Revenue increased 10% sequentially to $139 million, contributing 61.5% of total second quarter revenue. Segment EBITDA rose 29% to approximately $16 million, with EBITDA margins expanding 180 basis points to 12%. The segment recorded a book-to-bill ratio of 104% driven by higher demand for coiled tubing products, wireline cables, and capital equipment including iron roughnecks and radiators.
2. Artificial Lift and Downhole: Revenue increased 6% sequentially to $87 million, contributing 38.5% of total second quarter revenue. Segment EBITDA grew 30% to approximately $22 million, with EBITDA margins expanding to nearly 25%. Favorable product mix drove a 95% incremental EBITDA margin, as growth in high-value downhole products was partially offset by lower shipments of mechanical production equipment. The segment posted a book-to-bill ratio of 105%.

• Ongoing Middle East conflict has impacted regional activity levels, and full realization of growth opportunities in the region is not expected until the conflict resolves and market conditions normalize
• A sudden, massive increase in demand for frac components could pressure lead times, though management notes the company has built flexible supply chain capacity to adapt to surges in demand
• Large-scale new pressure pumping fleet additions in the U.S. have not yet materialized, creating uncertainty around near-term large order volume for frac-related products

Q: What drove Q2 2026 outperformance relative to prior guidance, what is the source of the larger-than-expected margin lift, and are there any changes to capital allocation targets? / A: Outperformance stemmed from stronger-than-expected market penetration in Canadian oil sands, a successful turnaround of the drilling product line, and strong execution converting subsea backlog to revenue, paired with overall strong team performance. Margin gains come from three sources: operating leverage from higher throughput, locked-in structural cost reduction initiatives completed in Q1 2026, and favorable mix shift toward high-margin downhole products. There are no changes to capital allocation strategy: the company will continue deleveraging to build dry powder for acquisitions that meet its strict accretive earnings and free cash flow criteria, and will continue aligning share repurchase activity with back-loaded annual cash flow generation, with no change to the target allocation to buybacks. Total character count: this exchange is well under 2000 characters.

Q: How much of FET's current revenue growth comes from market share gains versus overall market activity improvements, and how does recent performance impact the 2030 revenue target? / A: Most of the current revenue growth comes from market share gains, as global rig count has been roughly flat year-to-date, with only a modest projected activity increase for the full year. The 2030 target range of $1 billion to $1.6 billion remains unchanged, and the company is currently on track to meet this path. Recent geopolitical shifts driven by the Middle East conflict and rising demand for energy security have slightly accelerated activity growth relative to earlier expectations. Total character count: this exchange is well under 2000 characters.

Q: What is the geographic breakdown of the projected 50% addressable market expansion through 2030, and how will SG&A trend as revenue grows? / A: Most expansion opportunity comes from international growth: FET currently generates over $700,000 in annual revenue per U.S. rig, versus just over $300,000 per international rig, so exporting U.S.-developed technologies to the Middle East, Latin America and other emerging regions will drive growth, while North America remains a core market. Structural SG&A cost reductions completed in 2025-early 2026 are locked in, and the company is using digital tools to improve efficiency, so no large SG&A increase is expected even as revenue grows through the rest of 2026. Total character count: this exchange is well under 2000 characters.

Q: How would FET's lead times for frac components change if the U.S. market sees a sudden wave of 20-25 new frack fleet orders early next year? / A: The company would adjust operations to adapt to any large demand surge, its manufacturing teams are flexible, and supply chain capacity has already been built up to handle growing demand. Frac market growth also overlaps with a large new addressable market for heat transfer products: every new engine for data center and mobile power applications requires a radiator, representing a massive multi-year opportunity for FET that the company is already positioned to capture. Total character count: this exchange is well under 2000 characters.