Financial Data and Key Metrics Changes - Fourth quarter revenue reached $202 million, exceeding the top end of guidance and increasing 3% sequentially, despite a flat global rig count [13] - Adjusted EBITDA for the quarter was $23 million, at the top end of guidance, driven by higher revenue and cost reductions [13] - Free cash flow generation was strong, totaling $80 million for the full year, with a free cash flow conversion rate of 76% when excluding sale-leaseback proceeds [16][19] Business Line Data and Key Metrics Changes - Drilling and completion revenue increased by 8% to $127 million, while subsea product line revenue rose by 25% due to ROV projects and a significant rescue submarine order [14] - Coiled tubing revenue was up 13%, supported by strong sales in North America [14] - The artificial lift and downhole segment had a book-to-bill ratio of 107%, with revenue of $75 million, down 4% sequentially [15] Market Data and Key Metrics Changes - International revenue increased by 8%, marking the second consecutive quarter where international revenue exceeded U.S. revenue, which declined by 2% [13] - The company reported a full year book-to-bill ratio of 113%, with a nearly 190% book-to-bill for the subsea product line [6][10] Company Strategy and Development Direction - The company is focused on its strategic vision, FET 2030, aiming for market share gains through customer engagement, product innovation, and geographic expansion [5] - New product development is central to the company's strategy, with 10 new products commercialized in 2025, including the Secura Series stage collars and DuraCoil 95 [8][9] - The company expects to double revenue in five years, driven by an expanding addressable market and targeted market share gains [11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in a bullish long-term outlook, anticipating increased oil and natural gas demand over the next five years [10] - The company expects revenue growth of 6% and EBITDA to increase by 16% for the full year 2026, with guidance for revenue between $800 million and $880 million [11][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 significant flexibility for strategic initiatives [16] Q&A Session Summary Question: Can you talk about the trajectory in the subsea business for 2026 and 2027? - Management indicated strong demand in energy and defense, with expectations to convert backlog in 2026 and add for 2027 and beyond [26] Question: Where do you see the biggest benefit for FET in unconventional oil or gas development globally? - Management highlighted opportunities in Argentina and Saudi Arabia, focusing on adopting advanced technology [27] Question: What were the pluses and minuses in the quarter that led to exceeding guidance? - Management noted solid execution and no significant end-of-year slowdown, particularly in the subsea product line [33][36] Question: How do you achieve strong free cash flow guidance in a growth market? - Management explained that cash flow guidance is based on effective working capital management and revenue growth [41][42] Question: What is the impact of the recent tariff ruling? - Management stated that while some tariffs were struck down, others remain in place and have impacted steel supply [95] Question: What are the expectations for M&A opportunities? - Management noted an increase in companies being marketed for sale, with a focus on finding businesses that fit their strategic criteria [63][64]

Forum Energy Technologies (NYSE:FET) Q4 2025 Earnings call February 20, 2026 11:00 AM ET Company ParticipantsJeff Robertson - Managing DirectorJohn Daniel - Founder and PresidentKeith Beckmann - VP of Equity ResearchLyle Williams - CFONeal Lux - President and CEORob Kukla - Director of Investor RelationsConference Call ParticipantsEric Carlson - AnalystSteve Ferazani - Senior Equity AnalystOperatorMorning, ladies and gentlemen, and welcome to the Forum Energy Technologies' Fourth Quarter and Full Year 2025 ...

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]