Forum Energy Technologies Q1 Earnings Call Highlights

Key Points

• Strong Q1 operational results: Revenue rose 8% YoY to $209M, adjusted EBITDA increased 14% to $23M and net income climbed 300%, while orders were up 10%, backlog was the highest in 11 years (up 44% YoY) and book-to-bill was 106%, with $15M of annualized cost savings realized.
• Raised near-term outlook: Q2 EBITDA is guided to $24–30M (midpoint ~32% above last year) and the full-year EBITDA midpoint was raised to $103M (up ~20% vs. 2025) while revenue guidance remains $800–880M and free cash flow guidance is $55–75M.
• Product wins and capital allocation: New offerings (Unity ROV OS, DuraLine manifold, DuraCoil 95 and rig-floor automation) are driving international orders, management repurchased ~$5M of shares, ended the quarter with $121M net debt (net leverage <1.4x) and expects leverage <1.0x by year-end with buybacks and targeted M&A as options.

Forum Energy Technologies NYSE: FET said its first-quarter 2026 results reinforced confidence in the company’s “FET 2030” plan, pointing to year-over-year gains in revenue, EBITDA and net income, as well as continued market-share wins driven by new products and international and offshore demand.

President and CEO Neal Lux said revenue rose 8% year-over-year, EBITDA increased 14%, and net income climbed 300%. Lux also highlighted higher revenue per global rig and “strong bookings,” with orders up 10% year-over-year and a book-to-bill ratio of 106%.

“We entered the year with our highest backlog in 11 years, and we grew that backlog again,” Lux said, adding that backlog was up 44% compared to the first quarter of last year. He said structural cost-saving initiatives have delivered $15 million of annualized savings.

First-quarter results and segment performance

Executive Vice President and CFO Lyle Williams reported first-quarter revenue of $209 million, near the top end of guidance. Compared to the prior quarter, he said revenue increased 3% on growth in offshore and international markets that “outpaced global rig count.”

Williams said international revenue rose 7%, with Canada, Europe and Latin America each posting double-digit gains, marking the third consecutive quarter in which international revenue exceeded U.S. revenue. Offshore revenue expanded 10%, driven by a 20% increase in the subsea product line as the company began executing orders secured last year.

Adjusted EBITDA was $23 million, in line with guidance. Williams said cost savings were “largely offset by product mix.” Adjusted net income was $6 million, up 11%, which Williams attributed to a favorable income tax expense rate tied to geographic income mix.

On segment performance:

• Drilling and Completions: Revenue was $127 million, flat sequentially. Williams said subsea rose 20% on revenue recognition for remotely operated vehicles (ROVs) and the Submarine Rescue Vehicle project, while stimulation and intervention rose 7% on demand for power ends and wireline cable. Coiled tubing revenue fell 17% due to “customer-requested delivery push outs” into the second quarter after strong U.S. sales in the prior quarter. Segment EBITDA rose 6% on cost savings and improved plant utilization tied to facility consolidations.
• Artificial Lift and Downhole: Revenue was $82 million, up 9% on increased sales volumes across all three product lines. Segment EBITDA was roughly flat due to product mix, timing of incentive expense and lower absorption at one facility, which Williams said should improve in coming quarters.

Williams also said the company grew backlog again in the quarter, with both segments posting book-to-bill ratios above 100%. He cited higher demand for capital equipment in stimulation and intervention and drilling product lines, increased demand for wireline cables, and improving valve orders after tariff-related impacts in 2025.

Guidance raised; second-quarter outlook calls for improvement

Lux forecast second-quarter EBITDA of $24 million to $30 million, saying results should “increase substantially” on market-share gains, backlog conversion and cost savings. At the midpoint, Lux said that would be up 32% from a year ago, with “incremental margins of 51%” and an EBITDA margin “approaching 13%.”

Williams guided second-quarter revenue of $200 million to $225 million and adjusted net income of $6 million to $11 million. For the full year, the company maintained revenue guidance of $800 million to $880 million but raised the bottom end of its EBITDA outlook, resulting in an updated adjusted EBITDA range of $90 million to $95 million at the low end, and Lux said the midpoint of EBITDA guidance was raised to $103 million, up 20% versus 2025. The company guided full-year adjusted net income of $21 million to $38 million and reaffirmed free cash flow guidance of $55 million to $75 million.

Lux and Williams both emphasized the outlook assumes a flat market, despite “initial indications of some increase in activity,” which Lux described as “uneven so far.”

Innovation pipeline and orders: Unity, DuraLine, automation and cooling

Management highlighted several recently commercialized products and initiatives. Lux said DuraCoil 95 coiled tubing for sour-service environments is “continuing to gain traction” and is active on three continents, with potential benefits in Venezuela and the Middle East if workover activity accelerates.

Lux also discussed Unity, the company’s next-generation operating system for remote ROV operations, which was demonstrated at an international trade show. In the question-and-answer session, Lux said Unity is still in the early stages as the company builds field data, but interest is high and “we do have a number of Unity systems already in the backlog.” He added the platform could have applications outside oil and gas, including defense.

On DuraLine, a manifold system designed for multi-well frac applications, Lux said it is “significantly safer and more efficient” than competitors and can be exported internationally. He said the company received “a significant order” for multiple systems to be deployed in Argentina this year. Asked about efficiency, Lux said the DuraLine connection enables faster rig-up and rig-down, and allows quicker pump swaps than traditional manifolds. He characterized the pull-through opportunity as roughly “80/20 on capital versus recurring,” citing items such as check valves and hose replacements.

Lux also highlighted patent-pending rig floor automation software for the FR120 Iron Roughneck to automate drill pipe make-up and break-out. Lux said the software can reduce non-productive time and “increase drilling efficiency by 30%,” and will be packaged with new units and sold as upgrades.

In power generation and data center markets, Lux said the company has seen increased interest in Global Heat Transfer cooling solutions and has developed a new stationary power cooling solution. Responding to questions, Lux said the company is actively quoting the new permanent system and building an opportunity queue but “do[es]n’t have orders for that system yet.” He also noted the company previously offered a mobile data-center cooling system called Powertron.

Middle East conflict, Venezuela activity, and capital allocation

Lux said employees in the Middle East were safe and there was no facility damage, though the company experienced disruptions that slightly affected logistics and freight costs. He said the company was still able to increase revenue in the Middle East during the quarter, and management was not forecasting a material negative impact. Lux noted Middle East revenue represents about 10% of total revenue.

Lux also described the conflict as a potential medium- to longer-term tailwind for the industry, citing disrupted oil and gas supply for “62 days and counting,” which could reduce global inventories and spur investment. He referenced analyst suggestions of a prolonged upcycle beginning later in 2026 or early 2027 and connected that to the “growth market scenario” in the FET 2030 vision.

On Venezuela, Lux told analysts the company is seeing increased demand for short-cycle activity products such as coiled tubing and wireline, and is also exploring longer-term infrastructure-related opportunities including “Coiled Line Pipe” and potentially valves.

Williams said first-quarter free cash flow was $1 million, consistent with guidance, and reiterated that cash flow is typically back-half weighted. He said the company repurchased nearly 93,000 shares for about $5 million at an average price of $49 per share. The company also paid $9 million for withholding taxes tied to stock-based compensation to avoid issuing roughly 180,000 shares, which Williams said benefited shareholders.

The company ended the quarter with net debt of $121 million and net leverage “under 1.4 times,” with Williams expecting net leverage to decline to under 1.0x by year-end. Liquidity was $91 million, including $54 million available under the revolving credit facility. Williams said Forum extended its credit facility maturity to February 2031 with improved pricing and greater letters-of-credit capacity.

On capital allocation, Williams said the company views additional net leverage reduction as “dry powder” for strategic investments, including acquisitions and share repurchases. He said bonds allow total repurchases of around $30 million this year, and that buybacks are expected to be back-end weighted in line with free cash flow. Management reiterated an M&A framework focused on differentiated products in targeted markets and transactions that are accretive to per-share metrics, while noting share repurchases remain an alternative use of capital.

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.

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