TechnipFMC(US:FTI)2025-07-24 20:02PART I - Financial Information Item 1. Financial Statements (Unaudited) For the six months ended June 30, 2025, TechnipFMC reported a 9.2% increase in total revenue to $4.77 billion and a 19.8% rise in net income attributable to the company to $411.5 million compared to the prior year, with total assets growing to $10.08 billion and operating cash flow significantly improving to $785.9 million Condensed Consolidated Statements of Income The company reported significant year-over-year growth in both the second quarter and first half of 2025, with total revenue for the six months ended June 30, 2025, increasing to $4.77 billion and net income attributable to TechnipFMC rising to $411.5 million Consolidated Income Statement Highlights (Unaudited) | Indicator (In millions, except EPS) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | YoY Change | | :--- | :--- | :--- | :--- | | Total Revenue | $4,768.3 | $4,367.6 | +9.2% | | Income Before Income Taxes | $605.1 | $456.1 | +32.7% | | Net Income Attributable to TechnipFMC | $411.5 | $343.6 | +19.8% | | Diluted EPS | $0.97 | $0.78 | +24.4% | Q2 Consolidated Income Statement Highlights (Unaudited) | Indicator (In millions, except EPS) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | YoY Change | | :--- | :--- | :--- | :--- | | Total Revenue | $2,534.7 | $2,325.6 | +9.0% | | Income Before Income Taxes | $374.8 | $245.5 | +52.7% | | Net Income Attributable to TechnipFMC | $269.5 | $186.5 | +44.5% | | Diluted EPS | $0.64 | $0.42 | +52.4% | Condensed Consolidated Balance Sheets As of June 30, 2025, total assets increased to $10.08 billion from $9.87 billion at year-end 2024, driven by higher contract assets and inventories, while total liabilities remained stable at $6.79 billion and total stockholders' equity grew to $3.30 billion Condensed Consolidated Balance Sheet Highlights (Unaudited) | Indicator (In millions) | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $950.0 | $1,157.7 | | Total Assets | $10,081.9 | $9,869.2 | | Total current liabilities | $5,091.0 | $4,864.8 | | Long-term debt | $425.1 | $607.3 | | Total Liabilities | $6,785.3 | $6,730.8 | | Total Equity | $3,296.6 | $3,138.4 | Condensed Consolidated Statements of Cash Flows For the first six months of 2025, cash provided by operating activities significantly increased to $785.9 million from $104.2 million in the prior-year period, though a sharp rise in cash used in financing activities, including $500.2 million in share repurchases, resulted in a net decrease in cash and cash equivalents of $207.7 million Six-Month Cash Flow Summary (Unaudited) | Cash Flow Activity (In millions) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Cash provided by operating activities | $785.9 | $104.2 | | Cash provided (required) by investing activities | $(140.8) | $87.1 | | Cash required by financing activities | $(880.8) | $(417.9) | | Change in cash and cash equivalents | $(207.7) | $(243.5) | - Key financing activities in H1 2025 included $500.2 million in share repurchases and $241.6 million in debt repayments, significantly increasing cash used in financing compared to H1 202420 Notes to Condensed Consolidated Financial Statements The notes detail the company's financial performance, highlighting strong revenue growth in the Subsea segment, particularly in Latin America, with the order backlog growing to $16.6 billion, an improved debt profile due to repayments and investment-grade credit rating upgrades, and continued shareholder returns through dividends and an accelerated share repurchase program - The Subsea segment is the primary revenue driver, with Latin America being the largest geographical market, contributing $1.48 billion in the first six months of 202538 - Total order backlog stood at $16.6 billion as of June 30, 2025, with the Subsea segment accounting for $15.8 billion4849 - The company's credit ratings were upgraded to investment grade by S&P and Fitch, and to 'Baa3' by Moody's, leading to the release of collateral on its credit facilities8081 - In the first six months of 2025, the company repurchased $500.2 million of its ordinary shares and paid $41.6 million in dividends8485 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management maintains a positive long-term outlook, driven by strong demand in offshore and Middle East markets and technological leadership in iEPCI™ and Subsea 2.0®, with consolidated revenue for H1 2025 growing 9.2% to $4.8 billion led by a 10.9% increase in the Subsea segment, and the company's order backlog growing to $16.6 billion providing strong future visibility and robust liquidity Business Outlook The company has a positive long-term outlook for oil and natural gas, with offshore and Middle East markets being preferred for investment, and is positioned to leverage its technology, such as iEPCI™ and Subsea 2.0®, to capture growth in both conventional energy and new energy areas, with Subsea inbound orders expected to exceed $10 billion for the year - The company maintains a positive long-term outlook for oil and gas, anticipating growth in energy demand, with a focus on offshore and Middle East markets124125 - Technological differentiation through iEPCI™ and Subsea 2.0® is a key strategy to improve project economics and reduce cycle times128129 - The company is actively expanding into New Energy, focusing on greenhouse gas removal, offshore floating renewables, and hydrogen solutions126127 - Subsea inbound orders are expected to exceed $10 billion in the current year, contributing to a three-year total of over $30 billion by the end of 2025134 Consolidated Results of Operations For the second quarter of 2025, revenue increased 9.0% year-over-year to $2.53 billion, and net income grew 44.0% to $268.3 million, while for the first six months, revenue rose 9.2% to $4.77 billion, and net income increased 18.5% to $411.6 million, primarily driven by higher activity and favorable project mix in the Subsea segment Q2 2025 vs Q2 2024 Consolidated Results | Indicator (In millions) | Q2 2025 | Q2 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | $2,534.7 | $2,325.6 | +9.0% | | Gross Profit | $593.3 | $500.9 | +18.4% | | Net Income | $268.3 | $186.3 | +44.0% | H1 2025 vs H1 2024 Consolidated Results | Indicator (In millions) | H1 2025 | H1 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | $4,768.3 | $4,367.6 | +9.2% | | Gross Profit | $1,058.2 | $842.3 | +25.6% | | Net Income | $411.6 | $347.2 | +18.5% | - Revenue growth in both Q2 and H1 2025 was primarily driven by the Subsea segment's conversion of a higher backlog and increased activity in key regions like Brazil, Israel, Norway, and Nigeria140150 Segment Results of Operations The Subsea segment demonstrated strong performance, with H1 2025 revenue increasing 10.9% to $4.15 billion and operating profit surging 44.6% to $628.2 million, while the Surface Technologies segment's H1 revenue decreased slightly by 1.3% to $615.8 million, and its operating profit fell to $53.6 million primarily due to a $75.2 million gain on an asset sale in the prior year and higher restructuring costs in the current year Subsea Segment Performance (H1 2025 vs H1 2024) | Indicator (In millions) | H1 2025 | H1 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | $4,152.5 | $3,743.9 | +10.9% | | Operating Profit | $628.2 | $434.3 | +44.6% | | Operating Margin | 15.1% | 11.6% | +3.5 pts | Surface Technologies Segment Performance (H1 2025 vs H1 2024) | Indicator (In millions) | H1 2025 | H1 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | $615.8 | $623.7 | -1.3% | | Operating Profit | $53.6 | $134.0 | -60.0% | | Operating Margin | 8.7% | 21.5% | -12.8 pts | - The significant decrease in Surface Technologies' operating profit was primarily due to a $75.2 million gain on the sale of the Measurement Solutions business in Q1 2024 and $16.4 million in restructuring costs in H1 2025169 Inbound Orders and Order Backlog Total inbound orders for the first six months of 2025 were strong at $5.92 billion, comparable to the prior year, and the total order backlog increased significantly to $16.65 billion as of June 30, 2025, up from $14.38 billion at the end of 2024, driven by the Subsea segment whose backlog rose by $2.3 billion to $15.81 billion Inbound Orders (In millions) | Segment | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Subsea | $5,338.6 | $5,241.8 | | Surface Technologies | $581.5 | $624.8 | | Total | $5,920.1 | $5,866.6 | Order Backlog (In millions) | Segment | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Subsea | $15,810.0 | $13,518.1 | | Surface Technologies | $835.9 | $858.2 | | Total | $16,645.9 | $14,376.3 | Liquidity and Capital Resources The company's financial position remains strong, with net cash of $253.7 million at the end of Q2 2025, robust operating cash flow of $785.9 million for the first half, ample liquidity with $1.25 billion available under its revolving credit facility, and key capital allocation activities including $500.2 million in share repurchases and $41.6 million in dividends during the first six months of 2025, further enhanced by recent investment-grade credit rating upgrades Net Cash Reconciliation (In millions) | Component | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $950.0 | $1,157.7 | | Total Debt | $(696.3) | $(885.2) | | Net Cash | $253.7 | $272.5 | - The company received investment-grade credit rating upgrades from S&P ('BBB-') and Fitch ('BBB-'), and an upgrade from Moody's ('Baa3'), which resulted in the release of collateral securing its credit agreements184185186 - The company repurchased $500.2 million of ordinary shares in H1 2025 and has $594.4 million remaining under its current authorization189 - A quarterly cash dividend of $0.05 per share was declared, continuing the company's commitment to shareholder returns187188 Item 3. Quantitative and Qualitative Disclosures About Market Risk The company states that its exposure to market risk has not materially changed since the disclosures made in its Annual Report on Form 10-K for the year ended December 31, 2024 - There have been no material changes in the company's market risk exposure since December 31, 2024195 Item 4. Controls and Procedures Based on an evaluation as of June 30, 2025, the CEO and CFO concluded that the company's disclosure controls and procedures were effective, with no material changes in internal control over financial reporting during the quarter - The CEO and CFO concluded that as of June 30, 2025, the company's disclosure controls and procedures were effective196 - No changes occurred in internal control over financial reporting during Q2 2025 that have materially affected, or are reasonably likely to materially affect, these controls197 PART II - Other Information Item 1. Legal Proceedings The company is involved in various legal actions in the ordinary course of business but does not anticipate that their ultimate resolution will have a material adverse effect on its financial condition, results of operations, or cash flows - Management believes that the most probable outcome of pending legal matters will not have a material adverse effect on the company's financial position198 Item 1A. Risk Factors There have been no material changes or updates to the risk factors previously disclosed in the company's Annual Report on Form 10-K for the year ended December 31, 2024 - No material changes to the company's risk factors have occurred since the filing of the 2024 Annual Report on Form 10-K199 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds During the second quarter of 2025, the company repurchased a total of 8,275,628 ordinary shares for $250.1 million at an average price of $30.21 per share as part of its publicly announced share repurchase program Issuer Purchases of Equity Securities (Q2 2025) | Period (2025) | Total Shares Purchased | Average Price Paid per Share | | :--- | :--- | :--- | | April | 2,825,600 | $28.31 | | May | 3,988,600 | $30.08 | | June | 1,461,428 | $34.25 | | Total | 8,275,628 | $30.21 | Item 5. Other Information During the second quarter of 2025, several of the company's executive officers, including the CEO and CFO, adopted Rule 10b5-1 trading arrangements for the future sale and gifting of company shares - Key executives, including CEO Douglas J. Pferdehirt and CFO Alf Melin, adopted Rule 10b5-1 trading plans on June 23, 2025, for future transactions in company stock205206