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    FET
    Earnings call· Jun 2026(Q2 FY26)

    FORUM ENERGY TECHNOLOGIES Q2 FY26 earnings call FET

    Jul 31, 2026 Source

    Executive summary

    Forum Energy Technologies Q2 FY26 — Strong Performance, Raised Guidance, and Market Share Gains

    Forum Energy Technologies delivered exceptional Q2 FY26 results, driven by strong execution, market share gains, and technology adoption, particularly in Canadian oil sands and subsea. The company significantly raised its full-year guidance for revenue, EBITDA, net income, and free cash flow, demonstrating confidence in its "Beat the Market" strategy and progress towards its FET 2030 vision. The balance sheet was strengthened through deleveraging, while capital was returned to shareholders.

    Highlights

    6

    • Revenue increased 8% sequentially to $226 million, exceeding the high end of guidance.

    • Adjusted EBITDA increased 39% sequentially to $32 million, exceeding the high end of guidance.

    • Adjusted Net Income increased 148% sequentially to $14 million, exceeding the high end of guidance.

    • Generated $10 million of free cash flow during the quarter, consistent with expectations.

    • Net leverage ratio improved dramatically from 1.4x to 1.1x, strengthening the balance sheet.

    • Orders totaled $236 million, resulting in an overall book-to-bill of 104% and exceeding revenue for 5 of the last 6 quarters.

    Concerns

    2

    • Regional activity was impacted by the Middle East conflict.

    • A decrease in shipments of mechanical production equipment partially offset growth in the Artificial Lift and Downhole segment.

    Guidance & targets

    10
    CategoryTargetConfidence
    Full-year 2026 Revenue
    $870 million to $910 million
    high materiality
    High
    Full-year 2026 Adjusted EBITDA
    $115 million to $125 million
    high materiality
    High
    Full-year 2026 Adjusted Net Income
    $42 million to $52 million
    medium materiality
    High
    Full-year 2026 Free Cash Flow
    $57 million to $77 million
    high materiality
    High
    Q3 2026 Revenue
    $225 million to $245 million
    medium materiality
    High
    Q3 2026 Adjusted EBITDA
    $33 million to $37 million
    medium materiality
    High
    Q3 2026 Adjusted Net Income
    $12 million to $18 million
    low materiality
    High
    Q3 2026 Free Cash Flow
    $15 million to $25 million
    medium materiality
    High
    Revenue Doubling Target
    Doubling our revenue
    high materiality
    High
    Addressable Markets Expansion
    Expand by more than 50%
    high materiality
    High

    Segment performance

    2
    SegmentRevenueYoYQoQMargin
    Drilling and Completions
    Growth was driven by higher demand for coiled tubing products, wireline cables, and capital equipment, particularly iron roughnecks and radiators. The segment saw improved margins and stronger operating leverage due to operational restructuring and cost reduction actions.
    EBITDA: ~$16 millionEBITDA margin expansion: 180 basis pointsBook-to-bill ratio: 104%
    		$139 million10%—12% EBITDA margin
    Artificial Lift and Downhole
    Revenue increased primarily due to high demand for sand and flow control products, artificial lift products, and casing hardware. Favorable mix from high-value downhole products drove an outsized incremental EBITDA margin, partially offset by a decrease in mechanical production equipment shipments.
    EBITDA: ~$22 millionIncremental EBITDA margin: 95%Book-to-bill ratio: 105%
    		$87 million6%—~25% EBITDA margin

    Operational metrics

    19
    Adjusted EBITDA
    $32 million39% sequential increase
    Q2 FY26

    Exceeded the high end of guidance.

    Adjusted Net Income
    $14 million148% sequential increase
    Q2 FY26

    Exceeded the high end of guidance.

    Net Debt
    $115 milliondeclined
    Q2 FY26

    Significant accomplishment during the quarter was the continuing deleveraging of our balance sheet.

    Net Leverage Ratio
    1.1ximproved from 1.4x
    Q2 FY26

    Improved dramatically due to higher earnings and reduced net debt.

    Trailing 12-month EBITDA
    $189 millionincreased
    TTM Q2 FY26

    Contributed to the improvement in net leverage ratio.

    Share Repurchases
    ~$8 million
    H1 FY26

    Consistent with capital allocation framework.

    Total Shareholder Distributions
    $42 million
    past 2 years

    Returned to shareholders.

    Total Liquidity
    $96 million
    Q2 FY26

    Balance sheet remains well positioned to support growth and strategic opportunities.

    SG&A
    —down nicely year-over-year
    Q2 FY26

    Was about 1.5% below Q2 estimate on a percentage basis. Not expected to increase significantly through the year due to structural cost reductions and leveraging technology.

    Revenue per global rig
    34%
    since 2022

    Increased since launching 'Beat the Market' strategy.

    Revenue per global rig
    $700,000
    annually

    Comparison to international revenue per rig.

    Revenue per global rig
    $300,000 and change
    annually

    Lower than U.S. revenue per rig, indicating growth opportunity.

    Full-year 2026 Revenue Growth
    13%
    FY26 vs. FY25

    Compared to last year, based on midpoint of raised guidance.

    Full-year 2026 EBITDA Growth
    40%
    FY26 vs. FY25

    Compared to last year, based on midpoint of raised guidance.

    Full-year 2026 Incremental Margins
    34%
    FY26

    Based on raised guidance.

    Q3 2026 Revenue Growth
    approximately 20%
    Q3 FY26 vs. Q3 FY25

    At the midpoint of Q3 guidance, compared to Q3 2025.

    Q3 2026 EBITDA Growth
    48%
    Q3 FY26 vs. Q3 FY25

    At the midpoint of Q3 guidance, compared to Q3 2025.

    International Revenue Mix
    roughly 10% to 11%
    Q2 FY26

    Still active in the Middle East despite conflict.

    Engine Deliveries for Data Center/Mobile Power
    5,000 or 6,000
    next 5 or 6 years

    Each engine needs a radiator, representing a massive opportunity for FET.

    Industry KPIs

    7
    MetricValueDetails
    Rpo backlogelevated backlog
    Book to bill ratio104%%
    FCF CAPEX leverage1.1xx
    Aftermarket installed basesubstantial aftermarket orders
    Orders bookings by segment$236 millionUSD
    Segment adjusted EBITDA margin12%%
    Data center new energy revenue capacityinitial order for stationary cooling solution; meaningful order for Powertron

    Orderbook & backlog

    3
    Orders$236 millionQ2 FY26

    Resulted in an overall book-to-bill of 104%.

    Book-to-bill ratio104%Q2 FY26

    Exceeded revenue for 5 of the last 6 quarters.

    BacklogelevatedQ2 FY26

    Gives confidence to meaningfully raise financial guidance for the remainder of 2026. Subsea business executed exceptionally well converting backlog into revenue.

    Deals & partnerships

    7
    Major service companyOrder for high-temperature frac application product

    Product operates at 140 degrees Fahrenheit, ideally suited for harsh Middle East environments.

    Major oil companyField trials for SandGuard artificial lift protection solution

    SandGuard has been remarkably successful in the U.S.

    VenezuelaDelivery of coil tubing strings and other productssignificant number

    Deliveries made after receiving regulatory approval.

    ArgentinaDuraLine order

    Order for a brand new DuraLine manifold, probably the highest spec.

    Competitors' ROVsAftermarket orders to upgrade ROVs with Unity softwaresubstantial

    Orders received for ROVs built by FET, as well as systems built by competitors.

    UnnamedInitial order for stationary cooling solution

    Quickly progressed from commercial interest to an initial order in power generation.

    UnnamedMeaningful order for Powertron offering

    Received this quarter, complementing the new stationary cooling solution.

    Risks & headwinds

    2
    Middle East conflictQ2 FY26

    Regional activity impacted

    Mitigation: Company remains active in the region, with Middle East still roughly 10-11% of overall revenue. Expects opportunities to kick in once conflict normalizes.

    Decrease in mechanical production equipment shipmentsQ2 FY26

    Partially offset growth in Artificial Lift and Downhole segment

    Mitigation: Attributed to timing of shipment, not a fundamental demand issue.

    What to watch in Q3 FY26

    5

    Full-year Revenue Guidance

    Next quarter (Q3 FY26 earnings call)
    Current$870M-$910M
    TargetConfirmation or further revision of full-year revenue guidance

    Why it matters

    Indicates continued business momentum and market share gains, crucial for the FET 2030 vision.

    We now expect full-year revenue between $870 million and $910 million and EBITDA between $115 million and $125 million.

    Q&A highlights

    7

    What factors contributed to exceeding the high end of guidance in Q2?

    The outperformance was driven by strong execution, market penetration in Canadian oil sands, the successful turnaround of the drilling product line, and effective conversion of the subsea backlog into revenue.

    “Canadian oil sands, market penetration, adoption of our new technology there. The turnaround in our drilling product line has been really fantastic. And then we have a lot of big projects in our subsea product line, and that team there is executing and delivering and converting that backlog into revenue really well.”

    asked by Steve Ferrazani · answered by Neal Lux

    2 min read5 chapters

    Detailed Narrative

    01

    Strategic Execution and Market Share Gains

    FET's "Beat the Market" strategy, launched in 2022, has successfully driven a 34% increase in revenue per global rig. This growth is attributed to differentiated technology and commercial execution, with the company aiming to double its market share in targeted markets by 2030. Management noted that a significant portion of current revenue growth stems from these share gains rather than broad market activity improvements, as global rig count has remained relatively flat.

    02

    International Expansion and Product Innovation

    The company is actively expanding its international footprint by exporting technologies developed for U.S. unconventional basins to global markets. Key examples include successful field trials for SandGuard, an artificial lift protection solution, in the Middle East, and the delivery of coil tubing strings and other products to Venezuela following regulatory approval. Additionally, the DuraLine manifold, a new technology, saw increased inquiries in the U.S. after an order from Argentina, and the Unity software for ROV operations is gaining traction with aftermarket upgrade orders.

    03

    New Product Development and Data Center Opportunity

    Innovation continues to drive growth, particularly in the heat transfer product family. FET received an order for a high-temperature frac application product designed for harsh Middle East environments. A stationary cooling solution for power generation, first mentioned last quarter, quickly progressed to an initial order, complementing the existing Powertron offering. The company sees a "massive opportunity" in the data center and mobile power product portfolio, with an estimated 5,000 to 6,000 engines needing radiators over the next 5-6 years.

    04

    Operational Discipline and Cost Reduction

    The drilling product line achieved a significant turnaround, benefiting from operational restructuring and cost reduction actions implemented previously. These efforts have resulted in improved margins, stronger operating leverage, and increased competitiveness. Management emphasized that these cost savings are now "locked in," contributing to the sustainability of the improved margin profile observed in Q2.

    05

    Balance Sheet Strength and Capital Allocation

    FET generated $10 million in free cash flow during the quarter, contributing to a reduction in net debt to $115 million and an improvement in the net leverage ratio from 1.4x to 1.1x. The company repurchased approximately $8 million of shares in the first half of 2026 and has returned $42 million to shareholders over the past two years. With $96 million in total liquidity, the balance sheet is well-positioned to support organic growth and strategic acquisitions, with a focus on accretive targets that grow free cash flow per share without increasing leverage.

    AI-generated summary of the company’s earnings call. Not investment advice.