Core Insights - Forum Energy Technologies (FET) has experienced a significant stock price increase of 106% this year, outperforming the broader stock market [1] Company Performance - FET is recognized as one of the top-performing stocks in the entire stock market for the current year [1]

Core Insights - Forum Energy Technologies (FET) has emerged as one of the top-performing stocks in the market this year, with a remarkable surge of 106% [1] Company Performance - FET's stock performance significantly outpaces the broader market, indicating strong investor interest and confidence in the company's prospects [1]

Summary of Forum Energy Technologies (NYSE:FET) FY Conference Company Overview - **Company Name**: Forum Energy Technologies (FET) - **Ticker**: NYSE:FET - **Industry**: Oil and Gas Equipment and Services - **Segments**: - Artificial Lift and Downhole - Drilling and Completions - **Global Reach**: Approximately 50% of sales are international, with a focus on high-value consumables and capital equipment [4][6][7] Financial Performance - **Revenue Growth**: Revenue increased by approximately 15% from 2021 to 2024 [8] - **EBITDA Growth**: EBITDA grew from $20 million to $100 million from 2021 to 2024, with margins increasing from 4% to 12% [8] - **Stock Performance**: - 5-year annualized stock price return of 19% compared to Russell 2000's 10% [9] - 1-year return of 73% versus Russell 2000's 9% [9] - **Cash Flow Growth**: Compound annual growth rate of cash flow at 73% compared to Russell's negative growth [10] Investment Value - **Valuation Metrics**: - Adjusted cash flow yield is nearly four times higher than Russell 2000 [10] - Enterprise value to EBITDA and price to sales ratios are significantly lower than Russell 2000 [10][11] - **Debt Reduction**: Net debt reduced from $344 million in 2019 to $114 million, with a net leverage ratio decrease from 3.9 to 1.3 times [11][12] - **Share Repurchase**: 7% of shares retired since the start of the year [12] Growth Strategy - **Market Strategy**: Focus on targeted markets with limited competition and differentiated product offerings [13][14] - **Leadership Markets**: Represent about two-thirds of revenue with a 36% market share in a $1.5 billion addressable market [17] - **Growth Markets**: Addressable market of approximately $3 billion with lower current market share [20][22] - **Product Innovations**: New applications in defense and coiled line pipe, enhancing existing assets [20][21] Market Outlook - **Industry Growth**: Anticipated market growth of 9% annually, with potential revenue doubling to $1.6 billion by 2030 [25][26] - **Operating Leverage**: 25-35% of incremental revenue expected to convert to EBITDA, with a potential tripling of free cash flow by 2030 [26] - **Service Intensity**: Increased efficiency in drilling operations expected to drive demand for FET's products [24][25] Key Takeaways - **Competitive Position**: FET aims to maintain a leadership position in niche markets with few competitors [30] - **Geographic Expansion**: Opportunities for growth in international markets, particularly in the Middle East [31] - **Oil Price Sensitivity**: Company performance is linked to oil price thresholds that influence spending decisions [32] This summary encapsulates the key points discussed during the Forum Energy Technologies FY Conference, highlighting the company's financial performance, investment value, growth strategy, and market outlook.

Core Viewpoint - Forum Energy Technologies, Inc. will present at the 17th Annual Southwest IDEAS Investor Conference on November 19, 2025, at 10:35 a.m. Central Time, indicating the company's engagement with investors and the market [1]. Company Information - Neal Lux, the President and CEO of Forum Energy Technologies, will be the presenter at the conference, highlighting the leadership's involvement in investor relations [1]. - The event is open access, allowing interested parties to register, which reflects the company's commitment to transparency and accessibility for investors [1]. Event Details - The conference will take place on November 19, 2025, at 10:35 a.m. Central Time, providing a specific timeframe for stakeholders to tune in [1]. - A live webcast and presentation slides will be available on the company's website, ensuring that the information is readily accessible to a wider audience [1].

Revenue Performance - For the three months ended September 30, 2025, total revenue was $196.2 million, a decrease of $11.6 million, or 5.6%, compared to the same period in 2024[105]. - The Drilling and Completions segment generated revenue of $117.5 million, down $6.1 million, or 5.0%, from the prior year, primarily due to a decline in global drilling activity[105]. - The Artificial Lift and Downhole segment reported revenue of $79.0 million, a decrease of $5.2 million, or 6.2%, attributed to tariff impacts and lower market activity[106]. - Revenue for the nine months ended September 30, 2025 was $589.3 million, a decrease of $26.1 million, or 4.2%, compared to $615.4 million for the same period in 2024[115]. - Drilling and Completions segment revenue was $350.3 million for the nine months ended September 30, 2025, a decrease of $9.4 million, or 2.6%, compared to $359.7 million for the same period in 2024[115]. - Artificial Lift and Downhole segment revenue was $239.3 million for the nine months ended September 30, 2025, a decrease of $16.4 million, or 6.4%, compared to $255.7 million for the same period in 2024[116]. Operating Performance - The operating loss for the Drilling and Completions segment was $13.55 million, compared to an operating income of $7.03 million in Q3 2024, reflecting a significant decline[104]. - Segment operating loss for the three months ended September 30, 2025 was $10.2 million, a decrease of $19.6 million compared to income of $9.4 million for the same period in 2024, resulting in an operating margin percentage of (5.2)% compared to 4.5%[107]. - Segment operating income for the nine months ended September 30, 2025 was $6.9 million, a decrease of $20.9 million compared to $27.9 million for the same period in 2024, with an operating margin percentage of 1.2% compared to 4.5%[117]. Net Loss and Financial Position - The company reported a net loss of $20.55 million for the three months ended September 30, 2025, compared to a net loss of $14.82 million in the same period last year, representing a 38.7% increase in losses[104]. - Net cash provided by operating activities decreased to $48.0 million for the nine months ended September 30, 2025, down from $53.7 million in the same period of 2024, reflecting a decline of approximately 13%[130]. - Net working capital provided cash of $18.6 million in 2025, compared to $30.8 million in 2024, indicating a decrease of about 40%[130]. - The net decrease in cash, cash equivalents, and restricted cash was $12.97 million in 2025, slightly higher than the decrease of $12.85 million in 2024[129]. Orders and Market Activity - Total inbound orders for the three months ended September 30, 2025, were $239.99 million, a decrease from $263.13 million in the previous quarter[103]. - The global active rig count decreased by 7.7% in Q3 2025 compared to Q3 2024, driven by lower oil prices and increased production efficiencies[99]. - The average number of active drilling rigs in the U.S. was 540 in Q3 2025, down from 586 in Q3 2024[103]. - Average global oil prices for WTI were $65.78 per barrel in Q3 2025, down from $76.43 in Q3 2024, while average natural gas prices at Henry Hub increased to $3.03 per Mcf from $2.11[100]. Capital Expenditures and Share Repurchase - The company expects total capital expenditures for 2025 to be below $10.0 million, primarily for replacement of end-of-life machinery and equipment[126]. - The company repurchased 966 thousand shares of common stock for approximately $21.3 million during the nine months ended September 30, 2025, with remaining authorization under the repurchase program of $53.7 million[128]. - The company repurchased $21.1 million in stock during the nine months ended September 30, 2025, compared to $73.0 million in repurchases of 9.00% Senior Convertible Secured Notes in 2024[132]. Tax and Interest Expenses - Interest expense for the nine months ended September 30, 2025 was $14.1 million, a decrease of $11.0 million compared to $25.1 million for the same period in 2024, due to decreased borrowings[121]. - Tax expense for the nine months ended September 30, 2025 was $20.1 million, an increase of $9.4 million compared to $10.6 million for the same period in 2024[123]. Cash Flow Activities - Net cash provided by investing activities was $10.3 million in 2025, primarily from $14.6 million in sale-leaseback transactions, contrasting sharply with a net cash outflow of $155.9 million in 2024 due to the Variperm acquisition[131]. - Net cash used in financing activities was $72.4 million in 2025, a significant change from the $89.4 million cash inflow in 2024, primarily due to $47.6 million in net repayments of the revolving Credit Facility[132]. Accounting and Controls - There were no material changes in critical accounting policies and estimates during the nine months ended September 30, 2025[133]. - The company's disclosure controls and procedures were evaluated as effective at the reasonable assurance level as of September 30, 2025[135]. - No changes in internal control over financial reporting were reported that materially affected the company's financial reporting during the quarter ended September 30, 2025[136].

Core Insights - Forum Energy Technologies, Inc. demonstrated strong performance in Q3 2025, achieving significant capital returns and maintaining a positive outlook for long-term growth [1][5][28] - The company outperformed the 2,000 small cap index in revenue and free cash flow growth over the past three years, with a notable increase in backlog by 21%, the highest since 2015 [1][5][6] - The "beat the market" strategy, focusing on new product development and targeted commercial efforts, has driven strong bookings and backlog growth [1][7] Financial Performance - Q3 2025 revenue reached $196 million, nearing the top end of guidance, with offshore revenue contributing 22% of total revenue [16][19] - Free cash flow increased by 23% to $28 million, marking the ninth consecutive quarter of positive free cash flow, with a year-to-date increase of 21% [5][24] - The company raised its full-year free cash flow guidance to between $70 million and $80 million, with net debt reduced by nearly 10% to $114 million [6][25] Market Strategy - Forum Energy Technologies, Inc. categorizes its markets into leadership and growth markets, with leadership markets valued at $1.5 billion and a 36% market share [8][10] - The growth markets, approximately $3 billion in size, present opportunities for rapid revenue increase, with a current market share of around 8% [10][12] - The company aims to double its market share in growth markets from 8% to 16%, potentially increasing revenue by $250 million in a flat market scenario [13] Product Development and Innovation - Key products such as coiled line pipe and artificial lift technologies are expected to drive future growth, with coiled line pipe revenue growing 28% sequentially [11][12] - The company is focused on expanding its product offerings, including advancements in artificial lift applications and new technologies for ROVs [43][48] - Forum Energy Technologies, Inc. is also exploring adjacent markets, including defense, to further diversify its revenue streams [48][49] Operational Efficiency - The company is consolidating manufacturing facilities to reduce overhead costs and improve efficiency, with expected annualized cost savings of approximately $15 million by 2026 [23][24] - Ongoing cost reduction initiatives and favorable product mix contributed to an increase in EBITDA margins, which improved by 150 basis points to nearly 12% [19][21] - The company is actively managing tariff impacts through pricing adjustments and leveraging its global footprint to maintain competitiveness [22][21]

Financial Data and Key Metrics Changes - Company reported revenue of $196 million for Q3 2025, approaching the top end of guidance, with a 13% increase in consolidated EBITDA to $23 million, exceeding expectations [13][16] - Free cash flow increased by 23% to $28 million, enabling significant shareholder returns and raising full-year guidance to $70 million to $80 million [19][20] - Net leverage ratio improved to 1.3 times, one quarter ahead of schedule, with net debt reduced by nearly 10% to $114 million [20] Business Line Data and Key Metrics Changes - Offshore revenue grew to 22% of total revenue, driven by increases in drilling and subsea product lines, while U.S. revenue declined by 10% due to a 5% drop in rig count [13][14] - Coiled Line Pipe sales increased by 28%, contributing to market share gains, while the subsea product line revenue rose by 5% [16][9] - Artificial lift and down-hole segment revenue decreased by 4%, but EBITDA increased by 2% due to favorable product mix and cost savings [17] Market Data and Key Metrics Changes - International revenue surpassed U.S. sales, with Middle East and Canadian revenue each increasing by over 10% [13] - Book-to-bill ratio was 122%, indicating strong demand across segments, with subsea bookings exceeding 200% [14][15] - U.S. rig count decline impacted overall revenue, but international markets showed resilience [13] Company Strategy and Development Direction - Company aims to double revenue by 2030 through a "beat-the-market" strategy, focusing on targeted markets and differentiated technologies [10][11] - Leadership markets estimated at $1.5 billion with a 36% market share, while growth markets are approximately $3 billion with an 8% market share [7][8] - Strategic consolidation of manufacturing facilities is expected to enhance efficiency and reduce costs, with anticipated annualized savings of $15 million [18][19] Management's Comments on Operating Environment and Future Outlook - Management remains optimistic about long-term growth despite current market challenges, emphasizing the need for efficiency in a potentially lower oil price environment [60][62] - The company is well-positioned for 2026 with a strong backlog and ongoing market share gains [12][46] - Management highlighted the importance of new product development to drive future growth, particularly in artificial lift and subsea technologies [49][56] Other Important Information - Company repurchased 635,000 shares for $15 million in Q3, totaling 8% of shares outstanding for the year [20] - Increased tariffs on steel imports have been a challenge, but the company is implementing strategies to mitigate these impacts [17][18] Q&A Session Summary Question: Changes in sales incentive systems - Management indicated ongoing improvements in sales processes and alignment with the beat-the-market strategy have contributed to increased bookings [30] Question: Margins in backlog and new orders - Management noted that the mix of bookings, particularly from subsea, may exert downward pressure on margins, but cost-saving initiatives will provide benefits [31] Question: Revenue-generating potential of manufacturing base post-consolidation - Management expressed confidence in the ability to grow revenue significantly despite facility consolidations, maintaining capacity for a 50% revenue increase [32] Question: Share repurchase capacity - Management confirmed that share repurchase capacity is limited by net leverage and free cash flow, with approximately $15 million available for Q4 [34] Question: Cycle status in different geographies - Management emphasized opportunities exist across all markets, with a focus on leveraging successful products globally [43] Question: Growth potential of Coiled Line Pipe - Management acknowledged the potential for significant growth in Coiled Line Pipe, with a goal to double market share over time [47] Question: New product introductions for 2026 - Management highlighted ongoing development in artificial lift and subsea technologies, with promising new products expected to drive growth [49] Question: Impact of lower oil prices on technology adoption - Management indicated that lower oil prices could increase demand for efficiency-enhancing products, positioning the company favorably [53] Question: Backlog timing and revenue recognition - Management noted that a significant portion of the backlog will be recognized over the next few quarters, with some projects extending into 2027 [63]

Financial Performance - Third quarter 2025 revenue was $196 million, a 2% decrease sequentially, with a net loss of $21 million or $1.76 per diluted share[2][4] - Adjusted net income for the quarter was $3 million, approximately $0.27 per diluted share, after accounting for $22 million in asset impairments and restructuring costs[4] - Adjusted EBITDA for the quarter was $23 million, reflecting a 13% increase sequentially[4] - Total revenue for the three months ended September 30, 2025, was $196,231,000, a decrease of 5.6% compared to $207,806,000 for the same period in 2024[23] - EBITDA for the total company was $1,748,000 for the three months ended September 30, 2025, significantly lower than $11,133,000 for the same period in 2024[23] - The operating margin for the total company was -3.1% for the three months ended September 30, 2025, compared to 4.3% in the same period of 2024[23] - Total revenue for the nine months ended September 30, 2025, was $589,274,000, a decrease of 4.3% from $615,407,000 in the same period of 2024[25] - The total EBITDA margin for the nine months ended September 30, 2025, was 8.2%, compared to 7.4% in the same period of 2024[25] - The net income (loss) for the nine months ended September 30, 2025, was $(11,732,000), an improvement from $(31,826,000) for the same period in 2024[31] Revenue Segments - The Drilling and Completions segment generated revenue of $117 million, remaining flat sequentially, with a book-to-bill ratio of 129%[6] - The Artificial Lift and Downhole segment reported revenue of $79 million, a 4% decrease, with a book-to-bill ratio of 112%[7] - Revenue from the Artificial Lift and Downhole segment was $78,981,000 for the three months ended September 30, 2025, down from $84,226,000 in the same period of 2024[23] - Drilling revenue was $32,234,000, representing 16.4% of total revenue, down from $35,741,000 (17.2%) in the prior year[44] - Subsea revenue increased to $23,582,000, accounting for 12.0% of total revenue, compared to $20,903,000 (10.1%) in the same quarter last year[44] - Stimulation and Intervention revenue was $34,271,000, or 17.5% of total revenue, down from $38,037,000 (18.3%) year-over-year[44] - Downhole revenue was $48,073,000, making up 24.5% of total revenue, compared to $50,562,000 (24.3%) in the same quarter last year[44] - Production Equipment revenue increased to $18,647,000, representing 9.5% of total revenue, up from $17,968,000 (8.6%) year-over-year[44] - Valve Solutions revenue decreased to $12,261,000, accounting for 6.2% of total revenue, down from $15,696,000 (7.6%) in the prior year[44] Orders and Backlog - The company reported a book-to-bill ratio of 122% with orders totaling $240 million, marking the highest backlog in over ten years[4] - Total orders for the three months ended September 30, 2025, reached $239,990,000, representing an increase of 16.5% from $205,839,000 in the prior year[27] - The book-to-bill ratio for total orders was 1.22 for the three months ended September 30, 2025, indicating improving market demand compared to 0.99 in the same period last year[27] - Backlog increased by 21% due to strong bookings in offshore and international markets, with anticipated market share gains expected to provide a tailwind in 2026[5] Cash Flow and Capital Management - Free cash flow for the quarter was $28 million, and the full year 2025 free cash flow guidance was raised to between $70 million and $80 million[3][4] - The company achieved a year-end net leverage ratio of 1.3 times ahead of schedule, having repurchased 8% of its outstanding shares year-to-date[6] - The company achieved free cash flow before acquisitions of $28,126,000 for the three months ended September 30, 2025, compared to $24,493,000 for the same period in 2024[38] - The free cash flow yield as of October 29, 2025, was 20%, calculated using the midpoint of $75 million of guided full-year free cash flow[38] - The company incurred restructuring and other costs of $1,501,000 for the three months ended September 30, 2025, compared to $342,000 for the same period in 2024[29] - The company reported capital expenditures for property and equipment of $(1,392,000) for the three months ended September 30, 2025[38] - The company recognized a gain on sale-leaseback transactions of $(4,279,000) for the three months ended September 30, 2025[29] Operational Efficiency - The company accelerated cost savings efforts, extending the annualized target by 50% to $15 million[5] - The trailing twelve months adjusted EBITDA was $85,936,000, indicating the company's operational performance[42] - The company continues to focus on market expansion and new product development strategies to enhance revenue streams[44]

Core Insights - Forum Energy Technologies, Inc. reported third quarter 2025 revenue of $196 million and a net loss of $21 million, equating to $1.76 per diluted share [1] - After adjustments for $22 million in asset impairments, restructuring costs, and a $5 million tax valuation allowance reserve, the adjusted net income was $3 million, or approximately $0.27 per diluted share [1] Financial Performance - Revenue for the third quarter of 2025 was $196 million [1] - The company experienced a net loss of $21 million, translating to a loss of $1.76 per diluted share [1] - Adjusted net income, after accounting for impairments and other costs, was $3 million, or about $0.27 per diluted share [1]

Summary of FET Conference Call Company Overview - **Company**: Forum Energy Technologies (FET) - **Industry**: Oil, natural gas, industrial, and renewable energy sectors - **Segments**: - Drilling and completions - Artificial lift and downhole [1][2] Core Points and Arguments - **Market Share**: FET holds a **36% market share** in leadership markets, which include coil tubing, cased hole wireline, subsea, and sand and flow control systems for thermal oil sands [4][5] - **Innovation**: FET emphasizes innovation as a key driver for growth, with recent product introductions such as high-strength coil tubing suitable for corrosive environments and the Unity operating system for remotely operated vehicles (ROVs) [6][9] - **Operational Efficiency**: The company focuses on enhancing operational efficiency for customers, which has led to increased demand for its products. For instance, the number of frac stages per rig in the U.S. has increased by **9% annually** [9][10] - **International Growth**: FET sees significant growth potential in international markets, particularly in the Middle East and Argentina, where unconventional resource development is gaining traction [12][13] - **Vision 2030 Strategy**: The company aims to grow its market share in growth markets from **8% to 16%** over the next five years, potentially increasing revenue by nearly **$250 million** [27][28] Financial Performance - **Adjusted EBITDA Guidance**: FET's full-year 2025 adjusted EBITDA guidance is set at **$85 million**, reflecting a decrease from earlier projections due to reduced industry activity [43][44] - **Free Cash Flow**: The free cash flow outlook was raised to **$60 to $80 million**, attributed to improved working capital management and cost-saving initiatives [53][54] - **Share Repurchase Program**: The company has authorized a **$75 million share repurchase plan**, with approximately **579,000 shares** repurchased for about **$11 million** [55][56] Market Dynamics - **Pricing Sensitivity**: FET has faced challenges with pricing due to tariffs impacting raw materials, but has successfully passed some costs onto customers [22][49] - **Customer Demand**: There is a growing demand for FET's products as service companies seek to enhance efficiency and reduce costs, particularly in a constrained capital expenditure environment [21][23] Additional Insights - **Coil Line Pipe**: FET is optimistic about the growth potential of coil line pipe, which offers significant installation time savings compared to traditional steel pipe [32][33] - **Defense Market**: The company has a long history of supplying military and naval applications, with recent contracts indicating a growing interest in underwater technology [39][41] - **Incremental Margin Opportunities**: FET's leadership revenue constitutes about two-thirds of total revenue, providing strong incremental margin opportunities through innovation and market growth [7][36] Conclusion FET is strategically positioned to leverage its innovative products and strong market presence to capture growth opportunities in both leadership and growth markets. The company's Vision 2030 strategy aims to double revenue by 2030, supported by a capital-light business model and a focus on free cash flow generation.