Key Takeaways Forum Energy enters 2026 with a $312M backlog, up 46% from 2024-end, the highest in 11 years.FET posted a 113% book-to-bill ratio, signaling rising demand and future revenue potential.The "Beat the Market" strategy drives market share gains, higher revenue per rig and diversification.Forum Energy Technologies, Inc. (FET) is primarily involved in providing highly engineered products to support the operations of oil and natural gas and renewable companies. As a global manufacturing firm, FET off ...

Financial Data and Key Metrics Changes - Fourth quarter revenue reached $202 million, exceeding the top end of guidance and increasing 3% sequentially, driven by strength in offshore and international markets [13] - Adjusted EBITDA for the quarter was $23 million, at the top end of guidance, reflecting higher revenue and cost reductions [13] - Free Cash Flow generation was strong, totaling $80 million for the year, with a fourth quarter Free Cash Flow of $22 million [10][15] Business Line Data and Key Metrics Changes - Drilling and completion revenue was $127 million, up 8%, with Subsea product line revenue increasing 25% due to ROV projects and a significant rescue submarine order [14] - Coiled tubing revenue rose 13%, supported by strong sales in North America, while drilling product line revenue increased 11% due to international demand [14] - Artificial Lift and Downhole segment revenue was $75 million, down 4% sequentially, with a book-to-bill of 107% driven by large orders for natural gas processing units [15] Market Data and Key Metrics Changes - International revenue increased by 8%, surpassing U.S. revenue, which declined by 2% due to project timing and softer demand [13] - The company reported a book-to-bill ratio of 93% for the fourth quarter, primarily reflecting order timing in the drilling and completion segment [14] Company Strategy and Development Direction - The company is focused on its "Beat the Market" strategy, which has led to a 20% increase in revenue per global rig since its inception in 2022 [5] - The strategic vision, FET 2030, aims to double revenue in five years by expanding addressable markets and gaining market share [11] - Innovation remains central to growth, with 10 new products commercialized in 2025, including the Secura Series stage collars and DURACOIL 95 [8][9] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in a bullish long-term outlook, anticipating a 6% revenue growth and a 16% increase in EBITDA for 2026 [11] - The company expects to convert 65% of EBITDA into Free Cash Flow, projecting between $55 million and $75 million for 2026 [12] - Management highlighted the importance of maintaining margin and cost discipline while navigating a challenging operating environment [10] Other Important Information - The company ended the year with a net debt of $107 million and a net leverage ratio of 1.2x, with liquidity of $108 million [16] - The credit facility maturity was extended to February 2031, providing flexibility for strategic initiatives [16] Q&A Session Summary Question: Trajectory in Subsea business for 2026 and 2027 - Management expects strong demand in the Subsea business, with a 190% book-to-bill in 2025 and plans to convert backlog in 2026 [26] Question: Areas for potential acquisitions - Management is interested in downhole type businesses that meet their criteria of being differentiated and accretive without stressing the balance sheet [30] Question: Performance in Q4 and guidance for Q1 - Management noted solid execution in Q4, with strong revenue growth in the Subsea product line and no significant end-of-year slowdown [36] Question: Free Cash Flow guidance and working capital management - Management highlighted strong working capital efficiencies and expects to maintain good cash flow despite growth challenges [40] Question: Impact of tariffs and deferred tax assets - Management discussed the ongoing impact of tariffs on steel supply and the complexities of their tax situation due to deferred tax assets [95][96]

Financial Data and Key Metrics Changes - Company achieved strong results with sequential growth in bookings, revenue, EBITDA, and free cash flow, with revenue of $200 million at the top end of guidance range [6][18] - Free cash flow for Q2 was $23 million, totaling $30 million for the first half of the year, marking a 27% year-over-year increase [7][26] - Full year 2025 free cash flow guidance raised to between $60 million and $80 million, a $20 million increase [8][27] Business Line Data and Key Metrics Changes - Subsea product lines saw significant bookings, particularly for ROVs and a large submersible rescue vehicle system [6][19] - Artificial lift and downhole segment revenue increased by 6%, driven by demand for higher margin products [26] - Drilling and Completion segment revenue increased by 1%, with growth in coiled line pipe offerings [24] Market Data and Key Metrics Changes - U.S. revenue was up 3% despite a 3% decline in rig count, while international revenue (excluding Canada) increased by 6% [19] - Bookings were up 31% from the previous quarter, with a book-to-bill ratio of 132% [20] - Company expects commodity prices to remain stable, anticipating a gradual decline in industry activity [29] Company Strategy and Development Direction - Company has refined its strategy into leadership and growth markets, with leadership markets accounting for two-thirds of revenue and a 36% market share [10][11] - Growth markets, estimated to be twice the size of leadership markets, present significant opportunities for revenue increase [12][13] - The "Beat the Market" strategy aims to grow profitable market share through targeted competition and leveraging competitive advantages [9] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in maintaining momentum despite a declining rig count, supported by a strong backlog and cost reduction efforts [29][80] - The company anticipates continued strong free cash flow and plans to reduce net leverage to 1.3 times by year-end [28][29] - Management highlighted the potential for significant growth in the defense market and the importance of their operating systems in driving sales [66][69] Other Important Information - Company repurchased approximately 5% of shares outstanding in 2025, with plans to repurchase an additional 10% based on current stock price levels [8][28] - The company aims to balance capital returns with strategic investments, focusing on organic growth opportunities while remaining open to acquisitions [106] Q&A Session Summary Question: Timeframe for Doubling Market Share in Growth Markets - Management indicated that achieving this goal would take three to five years, focusing on customer acquisition and geographic expansion [37][38] Question: Details on Offshore Defense Orders - Management noted a mix of short-term and long-term products, with some orders expected to deliver over the next two years [39][40] Question: Expectations for Shares Outstanding in Q3 and Q4 - Management expects to repurchase an additional 1.2 million shares, potentially reducing shares outstanding by nearly 15% by December [48] Question: Factors Contributing to Increased Free Cash Flow Guidance - The primary driver for increased cash flow is expected to be working capital reduction, with improvements in operational efficiency [50][90] Question: Competitive Positioning and Market Outlook - Management emphasized a strong balance sheet and the ability to invest in growth, positioning the company favorably against competitors [110][111]