Forum Energy Technologies NYSE: FET reported second-quarter results that exceeded its guidance, citing market-share gains, higher-margin product mix, cost actions and execution across its operating segments. The company also raised its full-year 2026 outlook for revenue, EBITDA, net income and free cash flow.
Revenue rose 8% sequentially to $226 million in the second quarter, while adjusted EBITDA increased 39% to $32 million and adjusted net income increased 148% to $14 million, according to Chief Financial Officer Lyle Williams. Quarterly orders totaled $236 million, producing a book-to-bill ratio of 104%. Orders have exceeded revenue in five of the past six quarters, Williams said.
“Revenue, EBITDA, and net income all exceeded the high end of guidance as our Beat the Market strategy continued to deliver,” Williams said.
Segment performance and margin expansion
Forum said both operating segments contributed to its quarterly performance. Drilling and Completions revenue increased 10% to $139 million, driven by demand for coiled tubing products, wireline cables and capital equipment, including Iron Roughnecks and radiators. Segment EBITDA rose 29% to about $16 million, while its EBITDA margin expanded 180 basis points to 12%.
Artificial Lift and Downhole revenue increased 6% to $87 million, fueled by demand for sand and flow-control products, artificial-lift products and casing hardware. EBITDA for the segment increased 30% to approximately $22 million, and its EBITDA margin approached 25%.
Williams said the segment’s favorable product mix generated an incremental EBITDA margin of 95%, as higher sales of high-value downhole products were partly offset by lower shipments of mechanical production equipment due to shipment timing.
Management identified three principal contributors to the company’s performance: continued growth in Canadian oil sands markets, a turnaround in drilling products after operational restructuring and cost reductions, and the conversion of subsea backlog into revenue through deliveries of remotely operated vehicle systems, aftermarket products and related technologies.
CEO Neal Lux said stronger North American completions supported frack utilization and demand for the company’s wireline, coiled tubing and downhole offerings. The company also cited robust Canadian oil sands activity. Outside North America, activity was affected by conflict in the Middle East, although Lux said investment in offshore and unconventional developments remained strong.
International products and growth initiatives
Lux said Forum is pursuing growth through technology development, geographic expansion and market-share gains. Since launching its Beat the Market strategy in 2022, the company has increased revenue per global rig by 34%, he said.
Among its international initiatives, Forum said field trials of its SandGuard artificial-lift protection solution are progressing with a large Middle Eastern oil company. The company also said it had received regulatory approval to deliver a significant number of coiled tubing strings into Venezuela, creating potential demand for pressure-control products and Coiled Line Pipe.
Forum also reported increased U.S. inquiries for its DuraLine technology following a substantial Argentina order announced in the prior quarter. In subsea, it received aftermarket orders to upgrade remotely operated vehicles built by both Forum and competitors using its Unity software and control platform.
In its heat-transfer business, the company received an order from a major service company for a high-temperature frac application designed to operate at 140 degrees Fahrenheit. It also received an initial stationary cooling order for power generation and a “meaningful” order for its existing Powertron offering. Lux said the developments support the company’s expansion into data-center and mobile-power markets.
During the question-and-answer session, Lux said international revenue per rig remains below the U.S. level, describing U.S. revenue per rig as more than $700,000 annually compared with “$300,000 and change” internationally. He said the company sees an opportunity to export technologies developed for U.S. unconventional operations to the Middle East, Latin America and other regions.
Cash flow, leverage and capital allocation
Forum generated $10 million in free cash flow during the quarter. Net debt declined to $115 million, while trailing 12-month EBITDA increased to $100 million from $89 million. As a result, net leverage improved to 1.1 times from 1.4 times, Williams said.
The company ended the quarter with $96 million in total liquidity. It repurchased approximately 8 million shares during the first half of 2026 and said it has returned $42 million to shareholders over the past two years.
Lux said further debt reduction is intended to build financial flexibility for potential acquisitions and other strategic objectives. The company will continue to evaluate acquisition opportunities based on earnings accretion, free-cash-flow potential and alignment with its strategy, management said.
Forum does not expect a large increase in selling, general and administrative expenses for the remainder of the year after taking structural costs out of the business and deploying technology and software tools to improve efficiency, Lux said.
Raised 2026 outlook
Forum raised its full-year guidance and now expects:
- Revenue of $870 million to $910 million;
- Adjusted EBITDA of $115 million to $125 million;
- Adjusted net income of $42 million to $52 million; and
- Free cash flow of $57 million to $77 million.
At the midpoint of the new revenue and EBITDA ranges, the company expects year-over-year growth of 13% and 40%, respectively, with an incremental margin of 34%.
For the third quarter, Forum forecast revenue of $225 million to $245 million, adjusted EBITDA of $31 million to $37 million, net income of $12 million to $18 million and free cash flow of $15 million to $25 million. At the midpoint, management said the revenue and EBITDA outlook would represent approximately 20% and 48% growth, respectively, from the third quarter of 2025.
Lux said Forum expects industry activity to remain broadly stable, with modest improvement in selected markets during the second half. He added that the company expects to outperform through market-share gains, product innovation, geographic expansion and operating discipline as it pursues its 2030 growth plan.
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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