Forum Energy Technologies (NYSE:FET) executives pointed to market share gains, an 11-year high backlog, and strong Free Cash Flow generation as key takeaways from the company’s fourth-quarter and full-year 2025 earnings call. Management also issued 2026 guidance calling for higher revenue, EBITDA growth, and continued cash generation, despite what the company described as a relatively flat industry activity outlook.
2025 highlights: share gains, innovation, and backlog growth
President and CEO Neal Lux said 2025 results showed the company’s ability to execute amid “lower global drilling activity, tariffs, and geopolitical uncertainty.” He credited FET’s “Beat the Market” strategy—focused on customer engagement, product innovation, and geographic expansion—for market share gains, noting that since the strategy began in 2022, revenue per global rig has grown 20% and increased again in 2025 despite a “sizable decline” in global rig count.
Management said the company ended 2025 with its highest year-end backlog in 11 years, up 46% since the start of the year, which Lux said provides “visibility and resilience” entering 2026.
Lux also detailed new product development efforts, stating the company commercialized 10 new products during 2025. Examples cited included:
- Secura Series stage collars, which Lux said helped the company rapidly grow share in the Middle East; he also introduced Secura Slim, described as the smallest diameter stage collar in the industry designed for complex wells.
- DURACOIL 95, a coiled tubing solution aimed at performance in corrosive environments, developed with Middle East applications in mind.
- DuraLine manifold system, which Lux said enables faster and safer rig-up with fewer man-hours; he noted a recent commission for shale development in Argentina and “line of sight for additional sales.”
Cost actions and capital allocation in 2025
Lux and CFO Lyle Williams said the company mitigated tariff and trade policy impacts through pricing actions, supply chain optimization, and use of its global manufacturing footprint. Lux added that the company executed structural cost reductions, including consolidating four manufacturing plants into two, which management said will deliver about $15 million of ongoing annualized savings.
Free Cash Flow was a central theme. Lux said FET generated $80 million of Free Cash Flow in 2025, which he called the top end of the company’s increased guidance range. He said that performance supported a capital returns framework that reduced net debt by 28% and repurchased about 11% of shares outstanding.
Williams provided additional detail, saying fourth-quarter Free Cash Flow totaled $22 million and that the full-year $80 million figure included nearly $34 million from net working capital efficiencies. He also said the company completed two real estate sale-leaseback transactions that generated $15 million in net cash proceeds. Excluding the $15 million, Williams said 2025 Free Cash Flow conversion would have been 76%.
The company ended the year with net debt of $107 million, a net leverage ratio of 1.2x, and liquidity of $108 million, including $73 million available under its revolving credit facility. Williams also said that after quarter-end, the company extended its credit facility maturity to February 2031 and increased letters of credit capacity, describing the structure as providing flexibility for strategic initiatives including debt retirement, organic growth, and acquisitions.
Fourth-quarter results: revenue above guidance, segment performance
Williams said fourth-quarter revenue was $202 million, above the top end of guidance and up 3% sequentially. He said results outpaced a flat global rig count and reflected continued strength in offshore and international markets, with revenue up 7% and 8%, respectively. He noted this was the second consecutive quarter that international revenue exceeded U.S. revenue, with U.S. down 2% due to project timing and softer demand for valves and artificial lift products.
Adjusted EBITDA reached $23 million, the top end of guidance. Williams said higher revenue and cost reductions offset a less favorable product mix and modest increases in healthcare costs and professional fees. He also noted income tax expense included $3 million from a foreign tax settlement related to tax years 2017 through 2020, with the majority tied to a non-cash reduction in deferred tax assets.
Fourth-quarter book-to-bill was 93%, which Williams attributed mainly to order timing in the drilling and completion segment following two “exceptionally strong” quarters for Subsea and international drilling-related equipment.
By segment, management highlighted:
- Drilling and completion: Revenue of $127 million, up 8%. Subsea revenue rose 25% due to ROV project revenue recognition and work on a rescue submarine order announced in June. Coiled tubing revenue increased 13% on strong North America tubing sales and momentum in coiled line pipe. Drilling products revenue increased 11% on international capital equipment demand. Segment EBITDA was essentially flat due to mix impacts offset by cost savings.
- Artificial Lift and Downhole: Book-to-bill of 107% driven by large orders for natural gas processing units. Revenue of $75 million, down 4% on lower shipments by the production equipment product line. Williams said EBITDA was flat, with margin improvement of about 90 basis points due to favorable mix and cost reductions.
2026 outlook: guidance for revenue, EBITDA, and Free Cash Flow
Lux said that while many expect relatively flat industry activity, the company expects to “beat the market” through share gains, backlog conversion, and cost reduction benefits. For full-year 2026, management guided:
- Revenue: $800 million to $880 million
- EBITDA: $90 million to $110 million
- Adjusted net income: $18 million to $38 million
- Free Cash Flow: conversion of 65% of EBITDA, or $55 million to $75 million
For the first quarter of 2026, Williams guided revenue of $190 million to $210 million and EBITDA of $21 million to $25 million, along with adjusted net income of $5 million to $9 million. He said the company expects positive Free Cash Flow in the quarter, while also noting the first quarter is seasonally lower due to annual incentive compensation and property tax payments.
Q&A: Subsea conversion, international unconventional, acquisitions, and tariffs
During the Q&A, Lux said 2026 would be a year of converting Subsea backlog while also adding bookings for 2027 and beyond, citing continued demand in both energy and defense. On international unconventionals, he referenced the DuraLine system delivered to Argentina and also pointed to Saudi Arabia’s unconventional gas projects as another area where the company is exporting technology.
On acquisitions, management reiterated criteria focused on differentiated products in targeted markets that are accretive on a per-share basis. Williams said the number of companies being marketed for sale has increased, although he noted seller expectations have risen alongside higher public company multiples. He added that deals have been getting done at somewhat higher enterprise value-to-EBITDA multiples than previously, but the company remains focused on balance sheet discipline. Executives also said the company’s bonds allow around $30 million of repurchases as long as net leverage remains below 1.5x.
Lux also addressed the U.S. market, saying revenue per rig is higher domestically than internationally and that a rebound in U.S. rig count would provide “tremendous torque.” He added that increased service intensity—such as longer wells and more stages completed—drives demand for activity-based consumables. He also said the company is seeing customer interest in upgrading aging U.S. equipment, which could increase demand for FET components.
On tariffs, Lux discussed three categories—Section 232, Section 301, and IEEPA tariffs—saying a Supreme Court decision struck down IEEPA tariffs, while 232 and 301 remain in place and are more impactful to the company, particularly on steel supply. On taxes, Williams said higher profitability outside the U.S. is increasing taxes paid in foreign jurisdictions, while many deferred tax assets are in the U.S., contributing to what he described as a “wonky” tax rate.
Management closed the call by emphasizing confidence supported by backlog, market share gains, and structural cost savings as the company enters 2026.
About Forum Energy Technologies (NYSE:FET)
Forum Energy Technologies Inc is a global provider of advanced products and services to the oil and gas industry. The company’s offerings span the full lifecycle of exploration and production, including drilling, well construction, completion and production, and subsea operations. Key product lines include premium drill bits, downhole drilling motors, directional drilling tools, subsea umbilicals, and pressure control equipment, complemented by field service support and engineered solutions for complex projects.
Established through the merger of Forum Oilfield Technologies, Triton Group, Global Energy Group, and Allen International in 2010, Forum Energy Technologies has built a diversified technology portfolio designed to meet evolving industry requirements.
