Financial Data and Key Metrics Changes - For Q4 2025, the company reported revenues of $2.28 billion, a sequential increase of 5% but a year-over-year decrease of 1% [3][5] - The net loss for Q4 was $78 million, or $0.21 per fully diluted share, impacted by a higher effective tax rate and impairment charges [3][28] - Full-year revenues for 2025 were $8.74 billion, with net income of $145 million, or $0.39 per fully diluted share [3][5] - Adjusted EBITDA for Q4 was $267 million, representing 11.7% of sales, with a full-year EBITDA exceeding $1 billion for the third consecutive year [3][5][29] - Free cash flow for 2025 totaled $876 million, with a cash conversion rate of over 85% [8][29] Business Line Data and Key Metrics Changes - The energy equipment segment reported Q4 revenue of $1.33 billion, up 7% sequentially and 4% year-over-year, with adjusted EBITDA of $180 million [32][33] - Capital equipment sales accounted for 63% of the energy equipment segment's revenues, increasing 8% sequentially and 15% year-over-year [33] - The energy products and services segment generated revenue of $989 million in Q4, a 2% sequential increase but a 7% year-over-year decline [42][48] Market Data and Key Metrics Changes - The company ended 2025 with a total backlog of $4.34 billion, with a book-to-bill ratio of approximately 91% [6][34] - Offshore production technologies led 2025 orders, with a more than 10% growth in offshore-related backlog [7] - The company expects U.S. activity to decline mid-single digits year-over-year in 2026, primarily due to lower oil-directed activity [17][18] Company Strategy and Development Direction - The company aims to drive operational efficiencies and explore growth avenues, focusing on a $100 million cost-out program and exiting underperforming product lines [9][10][13] - The company is disciplined in capital allocation, raising the criteria for acquisitions and focusing on core business technology [13][14] - The company plans to leverage its strong market positions and technology leadership to drive value creation and maintain competitive advantages [15][14] Management's Comments on Operating Environment and Future Outlook - Management acknowledges a challenging near-term market environment but expects a recovery in oil markets in the second half of 2026 [17][50] - The company anticipates a modest recovery in U.S. short-cycle activity by late 2026 and early 2027 [18] - Management highlights the importance of fiscal discipline among operators, which may constrain activity growth but also create opportunities for the company [18] Other Important Information - The company achieved a cash conversion cycle of 119 days, down from 143 days in 2023, freeing up around $630 million of cash [12] - The company has returned $842 million to shareholders over the past two years while increasing its cash balance by $736 million [29] - The company expects overall upstream spending to contract slightly in 2026, with revenue weighted more towards the second half of the year [31] Q&A Session Summary Question: Offshore rig expected ramp late this year into 2027 - Management is optimistic about the offshore space, expecting significant demand for offshore production-related equipment and a potential increase in FPSO deliveries [56][59] Question: Status of passing tariff costs through pricing - Management is having some success passing on costs but acknowledges the difficulty in the current market environment [62] Question: Intentions around M&A - The company is shifting focus from internal efficiencies to pursuing growth opportunities, while remaining disciplined in capital allocation for acquisitions [70]