Summary of TechnipFMC Conference Call Company Overview - **Company**: TechnipFMC - **Industry**: Offshore oil and gas services Key Points Strategic Focus and Growth Outlook - TechnipFMC has demonstrated strong performance in 2025, with guidance for 2026 indicating further growth in revenue and EBITDA margin in the subsea business, reflecting confidence in continued compounding growth in EBITDA dollars [2][6] - The company has undergone a significant redesign to enhance its offshore segment, focusing on reducing cycle times and improving project returns, which has led to increased economic value shared with customers [3][5] Subsea 2.0 and Operational Efficiency - Subsea 2.0 architecture has been pivotal, with over 50% of orders now coming from this model, which allows for faster assembly and testing, akin to automotive industry practices [21][5] - The company is in the early stages of a long-term trend of capital flow shifting towards offshore projects, benefiting from improved project economics and reduced cycle times [6][5] Market Position and Customer Relationships - 80% of TechnipFMC's business is awarded directly, indicating strong customer relationships and differentiation in the market [7][9] - The company is positioned to capitalize on the growing offshore market, with a focus on regions like Brazil, Guyana, and emerging markets in West Africa and East Africa [13][16] Regional Insights - Brazil's Equatorial Margin is highlighted as a significant growth opportunity, with Petrobras expressing excitement about potential discoveries [14] - Guyana is recognized for its rapid development, with TechnipFMC being a key service provider for ExxonMobil [15] - Other regions such as Mozambique and the Eastern Mediterranean are also expected to see increased activity [17][16] Financial Performance and Capital Allocation - TechnipFMC has a strong balance sheet, classified as investment grade, and is a net cash company, with a commitment to distribute 70% of free cash flow to shareholders through buybacks and dividends [42][44] - The company maintains a disciplined approach to capital expenditures, spending below 3.5% of revenue while still achieving growth [44][45] Innovation and Future Opportunities - The company is exploring electric subsea infrastructure to replace hydraulic systems, which could enhance operational efficiency and expand the range of projects [38][39] - TechnipFMC is also focused on life of field services, which are expected to grow alongside the overall subsea segment, driven by the aging of installed assets [33][34] Conclusion - TechnipFMC is well-positioned for future growth with a proven business model, strong customer relationships, and a commitment to operational efficiency and innovation. The company anticipates continued success in the offshore market, supported by strategic investments and a focus on enhancing project economics [6][24]

Financial Data and Key Metrics Changes - Revenues in Q3 2025 were $377 million, a significant increase from $302 million in Q2 2025, with gross profit rising to $66 million from $15 million, and net income improving to $22 million from a net loss of $3 million [8][9] - Year-to-date revenues reached $957 million, with gross profits of $109 million and net income of $23 million, alongside adjusted EBITDA of $198 million [8][9] - Cash and cash equivalents increased to $338 million, with total liquidity at $430 million at the end of the quarter [8][17] Business Line Data and Key Metrics Changes - The well intervention segment saw high utilization of the Q4000, which is currently engaged in a multi-well program for Shell [10] - Robotics had a strong quarter, operating seven vessels with high utilization across trenching, ROV support, and site survey work [12] - The shallow water abandonment business experienced increased activity levels, with 100% utilization for the Hedron heavy lift barge [14] Market Data and Key Metrics Changes - Brazil operations reported strong utilization with three vessels operating effectively, while the Gulf of Mexico shelf showed improved results following a later start to the season [9][10] - The UK North Sea market faced challenges due to government tax and regulatory policies, leading to a slowdown in spending [26] - The robotics segment is expected to maintain strong performance in 2026, with robust trenching and site clearance markets anticipated [60] Company Strategy and Development Direction - The company is positioned to benefit from the upcoming production enhancement cycle as the market transitions from drilling to development [25] - Plans to hedge utilization risk for the Q4000 by considering a West Africa campaign in 2026 [27] - The company aims to manage rising supply chain and labor costs while focusing on operational efficiency and cost savings [30] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenges faced in 2025 but highlighted the potential for earnings growth and strong free cash flow generation [29] - The outlook for 2026 includes expectations of increased activity in shallow water abandonment, albeit at reduced rates due to competitive pressures [41] - The company remains optimistic about the Brazilian market, which is currently buoyant and expected to sustain high utilization levels [70] Other Important Information - The company executed a three-year contract with a minimum 150-day commitment for the Q units in the Gulf of Mexico [9] - The balance sheet remains strong with funded debt at $315 million and negative net debt of $31 million [17] Q&A Session Summary Question: Outlook for Q4000 and potential work deferrals - Management indicated that while there is always a risk of work deferrals, visibility for 2026 is stronger than in 2025, and they are exploring additional campaigns to mitigate risks [34][36] Question: Expectations for shallow water abandonment market - Management expects a pickup in activity in 2026, but at reduced rates due to increased competition and capacity in the market [40][41] Question: Update on subsea robotics for Q4 - The company anticipates a drop in utilization for trenchers in Q4 due to seasonal weather impacts, but overall vessel utilization should remain steady [48][50] Question: Rising supply chain costs and mitigation strategies - Management noted rising costs across labor and materials, emphasizing efforts to consolidate suppliers and achieve margin gains [65][66] Question: Market conditions in Brazil - The Brazilian market is described as buoyant, with strong contracts in place for the CM Helix 1 and 2, and ongoing work for the Q7000 [70]

Financial Data and Key Metrics Changes - Revenues in Q3 2025 were $377 million, up from $302 million in Q2 2025, with a gross profit of $66 million compared to $15 million in Q2 [6][7] - Net income for Q3 2025 was $22 million, a significant improvement from a net loss of $3 million in Q2 2025 [6] - Adjusted EBITDA for Q3 2025 was $104 million, with positive operating cash flow of $24 million and free cash flow of $23 million [6][7] - Year-to-date revenues reached $957 million, with gross profits of $109 million and net income of $23 million [7] Business Line Data and Key Metrics Changes - The well intervention segment saw high utilization of the Q4000 in the Gulf of Mexico, with a multi-well program for Shell [9] - Robotics had a strong quarter, operating seven vessels and achieving high utilization across trenching and site survey work [11] - The shallow water abandonment business experienced increased activity levels, with 790 days of utilization compared to 614 days in Q2 [12] Market Data and Key Metrics Changes - Brazil operations showed strong utilization with three vessels operating effectively [8] - The Gulf of Mexico shelf experienced improved results following a later start to the season [8] - The UK North Sea faced market turmoil, leading to the Seawell remaining warm stacked [10] Company Strategy and Development Direction - The company is positioned in a cyclical oil and gas market, currently in the early development cycle, with expectations of moving into a production enhancement cycle [21][22] - Plans to hedge utilization risk for the Q4000 by considering a West Africa campaign in 2026 [24] - The company aims to manage rising supply chain and labor costs while maintaining focus on operational efficiency [26] Management's Comments on Operating Environment and Future Outlook - Management acknowledged challenges in 2025 but highlighted strong Q3 results as a glimpse of earnings potential [16][22] - Seasonal impacts are expected in Q4, particularly in the North Sea and Gulf of Mexico [16] - The outlook for 2026 is cautiously optimistic, with expectations of increased activity in shallow water abandonment and robotics [25][26] Other Important Information - The company reported a strong balance sheet with $338 million in cash and negative net debt of $31 million [15] - Year-to-date share repurchase spend was $30 million, aligning with the target of at least 25% of expected free cash flow [20] Q&A Session Summary Question: Outlook for Q4000 and potential work deferrals - Management indicated that while there is always a risk of deferrals, visibility for 2026 is stronger than in 2025, with plans to hedge risks through potential West Africa campaigns [31][33] Question: Expectations for shallow water abandonment in 2026 - Management expects increased activity in 2026 but at reduced rates due to competitive pressures and added capacity in the market [36][37] Question: Update on subsea robotics for Q4 - The company anticipates a drop in trenchers utilized in Q4 due to seasonal weather, but expects strong utilization in the North Sea [42][43] Question: Rising supply chain costs and mitigation strategies - Management noted rising costs across labor and materials, with plans to consolidate suppliers and manage costs effectively [54] Question: Market conditions in Brazil - Brazil remains a buoyant market with strong contracts in place for the CM Helix 1 and 2, and the Q7000 [58]

Financial Data and Key Metrics Changes - Revenues for Q3 2025 were $377 million, a significant increase from $302 million in Q2 2025, with gross profit rising to $66 million from $15 million and net income improving to $22 million from a net loss of $3 million [7][8] - Year-to-date revenues reached $957 million, with gross profits of $109 million and net income of $23 million, alongside adjusted EBITDA of $198 million [8] - The company reported positive operating cash flow of $24 million and free cash flow of $23 million for the quarter [7] Business Line Data and Key Metrics Changes - The Well Intervention segment saw high utilization of the Q5000 in the Gulf of America, while the Q4000 faced gaps in its schedule due to lower revenue ROV decommissioning projects [10][11] - Robotics had a strong quarter, operating seven vessels with high utilization across trenching, ROV support, and site survey work [13] - The shallow water abandonment business experienced increased activity levels, with 100% utilization for the Hedron heavy lift barge [15] Market Data and Key Metrics Changes - Brazil operations reported strong utilization with three vessels operating effectively, while the North Sea faced challenges with the Seawell remaining warm stacked [9][11] - The Gulf of America market is expected to experience seasonal impacts, particularly affecting operations in Q4 [19][22] Company Strategy and Development Direction - The company is focusing on maintaining a strong balance sheet with negative net debt and significant cash reserves, allowing for potential growth through acquisitions [38] - The strategy includes hedging utilization risks by considering campaigns in West Africa and exploring opportunities in Guyana [32][48] - The company anticipates a gradual recovery in the shallow water abandonment market, with expectations for increased activity in 2026 and beyond [33][54] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the cyclical nature of the oil and gas market, indicating a transition into a strong development cycle with elevated vessel charter rates [28][29] - The company expects challenges in 2026 due to rising supply chain and labor costs, but remains optimistic about maintaining strong performance in the Robotics segment [36][74] - Management highlighted the importance of managing costs and maintaining operational efficiency in a competitive environment [36][77] Other Important Information - The company has a strong liquidity position with $430 million available at quarter-end, and minimal debt obligations until 2029 [18] - Year-to-date share repurchase spend was $30 million, aligning with the company's target of repurchasing at least 25% of expected free cash flow [26] Q&A Session Summary Question: Outlook for Q4000 and potential delays in 2026 - Management indicated that while there is optimism for 2026, there remains a risk of customers deferring work due to budgetary decisions [43][46] Question: Expectations for shallow water abandonment market in 2026 - Management expects increased activity in 2026 but at reduced rates due to competitive pressures and excess supply [50][52] Question: Update on subsea robotics for Q4 - The company anticipates a drop in vessel utilization in Q4 due to seasonal weather impacts, with a reduction in the number of operational trenchers [58][60] Question: Rising supply chain costs and mitigation strategies - Management noted rising costs across labor and materials, emphasizing efforts to consolidate suppliers and achieve margin gains [74][75] Question: Market conditions in Brazil - Brazil remains a buoyant market with strong utilization expected for contracts with Petrobras and Shell [80]

Financial Data and Key Metrics Changes - Revenues for Q1 2025 were $278 million, with a gross profit of $28 million and a net income of $3 million. Adjusted EBITDA was $52 million, and free cash flow was $12 million [6][8][18] - The company reported strong cash and liquidity with cash and cash equivalents of $370 million and total liquidity of $405 million [6][18] Business Line Data and Key Metrics Changes - The Well Intervention segment saw strong utilization in West Africa, the Gulf of America, and Brazil, while North Sea vessels experienced lower utilization due to seasonal factors [11][12] - Robotics had a strong quarter with high operational standards, working on trenching, ROV support, and site survey projects globally [15][16] - The shallow water abandonment business is expected to improve in Q2 and Q3 as seasonal activity levels increase [17] Market Data and Key Metrics Changes - The company faced challenges due to geopolitical factors, including tariff hikes and OPEC production increases, leading to oil prices dropping to the low $60s [7][20] - The UK North Sea market is experiencing a downturn due to regulatory issues, low oil prices, and M&A activity, impacting the company's outlook [20][36] Company Strategy and Development Direction - The company is focusing on cost reduction measures, including stacking several vessels and adjusting capital spending in response to market conditions [8][30] - Long-term demand for services remains strong, with multi-year contracts in place providing resilience against near-term volatility [35][39] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the current dynamic and uncertain market environment but expressed confidence in the company's ability to navigate these challenges [7][9] - The outlook for 2025 has been adjusted, with expected revenues of approximately $1.3 billion, reflecting a decrease due to the stacking of the Seawell and overall negative market conditions [21][37] Other Important Information - The company has a backlog of approximately $1.4 billion and a strong balance sheet with negative net debt [8][18] - The capital expenditure forecast for 2025 is between $65 million and $75 million, primarily for regulatory maintenance and fleet renewal [22][31] Q&A Session Summary Question: Confirmation on revenue change in Well Intervention - The revenue change in Well Intervention is primarily attributed to the North Sea market [42][43] Question: Long-term view on North Sea market - There are large P&A project tenders expected to start in 2026, with ongoing engineering and tendering processes [43] Question: Free cash flow options - The priority is on share repurchase due to market uncertainty, with M&A opportunities being more challenging to close [45] Question: Breakdown of lowered EBITDA guidance - The primary driver for the guidance reduction is the North Sea market, particularly the stacking of the Seawell [50][52] Question: Outlook for North Sea operations - The work has been paused rather than lost, with significant tenders expected in the future [59] Question: Opportunities for North Sea vessels in other regions - Redeployment of vessels like the Seawell would require capital upgrades due to depth limitations [72] Question: Pricing pressure in the US Gulf market - Currently, there is no significant pricing pressure in the US Gulf market, with stable pricing observed [75][76] Question: Impact of UK market on robotics and shallow water abandonment - The negative macro backdrop has slightly impacted robotics and shallow water abandonment, but the North Sea remains the primary concern [81][82]