Executives from Forum Energy Technologies NYSE: FET highlighted the company’s product portfolio, financial performance, and capital allocation priorities during a conference presentation, emphasizing a strategy aimed at gaining market share and generating free cash flow across multiple oilfield equipment categories.
Business overview and segment mix
President and CEO Neal Lux said Forum Energy Technologies operates as a global manufacturer serving oil and gas as well as select defense and renewable-related applications. The company reports two segments: Artificial Lift and Downhole, which Lux said represents about 40% of revenue, and Drilling and Completions, which makes up the remainder.
Lux said Artificial Lift and Downhole primarily serves oil and gas operators, naming ExxonMobil, Canadian Natural Resources, and Saudi Aramco as examples of customers. Products in this segment are designed to increase production via artificial lift mechanisms while avoiding contamination in the production stream and extending pump life, he said.
In Drilling and Completions, Lux said Forum’s customers are generally large oilfield service companies including Baker Hughes, Halliburton, SLB, and DOF Subsea. He said the segment provides equipment that helps customers drill longer laterals, frack more stages per day, use tools such as coiled tubing and wireline to increase production, and deploy subsea robotics to install deepwater infrastructure.
Lux added that Forum’s revenue is geographically balanced, with about half of sales generated outside the U.S. The company’s revenue is also largely “activity-driven,” with “about 80%” tied to consumables that rise with customer drilling and completion activity, while the remainder comes from capital equipment, he said.
Recent performance, backlog, and 2026 outlook
Lux pointed to growth over the past several years, noting revenue increased to “just under $800 million” last year from $541 million in 2021. He also said EBITDA expanded significantly over that period. Looking ahead, Lux said Forum has guided “a pretty substantial increase” in revenue and EBITDA into 2026, and added that the company entered 2026 with its “highest backlog in many years.” Lux said the company expects market activity to be relatively flat year over year and described Forum as being positioned to deliver on its guidance.
Investment pillars: outperformance, valuation, and capital returns
Lux framed Forum’s investor message around four pillars: track record, valuation, capital returns, and growth. On outperformance, he said Forum’s revenue grew at a 10% compound annual growth rate from 2021 through 2025, compared with 7% for the Russell 2000. He also cited adjusted cash flow growth of 46% over the same period, versus 9% for the index, attributing the performance to market share gains, acquisitions, operating leverage, and a capital-light model.
He also discussed share-price performance, saying Forum delivered a 25% annual return over the last five years versus 5% for the Russell 2000, and that returns accelerated over the past year to about 139% versus 11% for the index.
In the valuation discussion, management compared Forum to the Russell 2000 across multiple metrics. The company said its free cash flow yield is higher than the average Russell 2000 stock and that it trades “two to three times less expensive” on traditional valuation metrics. Management also said Forum uses less leverage than the average Russell 2000 constituent, estimating it at about one-third of the index average.
On capital returns, the company described a free cash flow allocation framework focused on debt reduction and buybacks. The presentation stated that in 2025, Forum reduced shares outstanding by 10% by repurchasing 1.4 million shares below $25 per share. Management also said debt was reduced by 69% over the past few years, and that net leverage declined from 3.9x to 1.2x at the end of last year, with no debt maturities until 2029.
Growth strategy and market positioning
Lux said the company’s “beat the market” strategy focuses on targeted markets with few competitors, differentiated products, and leveraging manufacturing know-how, intellectual property, brands, and field-experienced personnel to drive innovation. Since implementing the strategy in 2022, Lux said annualized revenue per global rig has increased by over 20%.
Forum now categorizes its portfolio into “leadership” and “growth” markets. Lux said leadership markets represent about two-thirds of revenue and collectively address a $1.5 billion market where Forum has 36% share. He listed coiled tubing, cased hole wireline specialty cable, remotely operated vehicles (ROVs), and sand and flow control as examples, noting in multiple cases Forum is “one of three” global manufacturers.
In growth markets, Lux said Forum sees opportunities for new customer acquisition in a roughly $3 billion addressable market where the company has about 8% share. He cited defense as a growth platform, pointing to a “very large order for a rescue submarine for the Indonesian Navy” booked last year. He also discussed coiled line pipe, pump protection, and casing hardware, including an effort to expand pump protection internationally, which he said represents a market believed to be four times larger than the U.S.
Lux said Forum’s goal is to double share in growth markets from 8% to 16% by 2030. He outlined two scenarios: a “flat market” case where the company believes revenue could reach $1 billion through execution and share gains, and a growth market scenario where management believes revenue could double to $1.6 billion over five years, supported by an assumed 9% annual market growth rate and additional share gains. Lux said Forum expects 25% to 35% of incremental revenue to convert to EBITDA and that 60% to 70% of incremental EBITDA could convert to free cash flow due to the company’s capital-light model.
Q&A: product differentiation, cash flow, cyclicality, and M&A
During Q&A, Lux said Forum’s downhole product line is the largest, representing about 25% of sales, and described it as “a high margin, high value area.” He said products are “mission critical,” adding that the company’s positioning with few competitors helps it avoid commoditization. Lux cited an example in which the company said it passed through increased costs to customers after tariffs rose, arguing the products are necessary for customers to complete work.
CFO Lyle Williams addressed free cash flow sustainability, saying the company generated nearly $200 million of free cash flow over the last couple of years versus a market capitalization “around $700 million.” Williams said some cash flow was supported by working capital monetization and liquidation of underutilized assets. He said the company’s free cash flow guidance midpoint for the year is $65 million, including about $10 million of net working capital reduction, and reiterated management’s expectation that 60% to 70% of incremental EBITDA converts to cash. Lux added that incentive structures for leadership were shifted to emphasize cash flow, which he said improved working capital efficiency.
On cyclicality, Lux said Forum tracks global rig count as a key activity driver, describing a price band in which activity tends to be “fairly consistent.” He said the company aims to grow revenue per rig faster when activity rises and to see less severe declines by gaining share during downturns.
On capital deployment between buybacks and acquisitions, Lux and Williams said the company evaluates M&A candidates based on product differentiation, accretion, and balance sheet considerations. Williams said net leverage of 1.2x is viewed as a reasonable level and that additional net debt reductions could provide “dry powder” for repurchases or acquisitions, with a focus on comparing Forum’s free cash flow yield to that of potential targets.
Asked what success looks like over the next two to three years, Lux said it would involve executing the growth strategy and continuing to gain share, adding that three years would be “a good check-in point” on execution and that management believes the company can deliver based on its track record.
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.
Featured Stories
This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to contact@marketbeat.com.
Before you consider Forum Energy Technologies, you'll want to hear this.
MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and Forum Energy Technologies wasn't on the list.
While Forum Energy Technologies currently has a Reduce rating among analysts, top-rated analysts believe these five stocks are better buys.
View The Five Stocks Here
MarketBeat just released its list of the 7 hottest IPOs expected to hit Wall Street in 2026. See which companies are preparing to go public and why investors are watching closely.
Get This Free Report
