Forum Energy Technologies Inc Q2 2025 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Joshua Jayne - Daniel Energy Partners - Analyst : Thanks. Good morning. First question, just in the prepared remarks, you talked about the opportunity to double the market share in your growth markets, which could potentially add to $240 million in revenue and $70 million-plus of EBITDA. What's the time frame that you would hope to do that in? And how would you view sort of -- what would you view as sort of a success with respect to timing on that?

Question: Joshua Jayne - Daniel Energy Partners - Analyst : Okay. Thanks. And then could you go into a little bit more detail on -- you highlighted some orders for offshore defense in the commentary. Are those longer lead time or maybe just some additional color around there and how we should be thinking about the timing of them ultimately hitting your P&L?

Question: Joshua Jayne - Daniel Energy Partners - Analyst : Okay, thanks. I'll hop back in queue.

Question: Daniel Pickering - Pickering Energy Partners - Analyst : Morning. I always hate getting on earnings calls and hearing everybody say good quarter and congratulate the company on doing a good job when sometimes the results are mediocre. But I do have to say you guys are really executing quite well and above expectations. So tried and true, good quarter. When I -- just kind of a couple of mechanical things and talk a little bit about kind of some of these growth markets and your targets. Lyle, you talked about the share repurchase. What's your expectation for shares outstanding in Q3 and Q4, if we didn't do anything from here? I'm just thinking about how the math rolls through on the share repurchase side.

Question: Daniel Pickering - Pickering Energy Partners - Analyst : Okay. And on a net basis, I know there are typically shares issued for employee plans, et cetera. What's the -- what's your expectation there? How many shares are we going to issue given we're offsetting -- that we will be offsetting with repo?

Question: Daniel Pickering - Pickering Energy Partners - Analyst : Got you. On the free cash side, you highlighted a $20 million increase in your range and sort of for the second half of the year, that's a $30 million to $50 million number. You did $30 million in the first half, I follow. So second half equal to the first half, I get to $30 million. An incremental $20 million, what would be the gears? Are there more sale leasebacks to do? Is it a lot of working capital that you'd pull out? Would it be revenue upside? What's the kind of variability getting us from that $30 million number to the upside $50 million number?

Question: Daniel Pickering - Pickering Energy Partners - Analyst : Well done. I'm going to sneak a couple more in here, if I could. You talked about in your growth strategies, the new markets. I'm just wondering how do you do that with spending as little capital as you're doing? Or do we have to think about more CapEx to attack some of the growth market opportunities?

Question: Daniel Pickering - Pickering Energy Partners - Analyst : So saleable agrees basically?

Question: Daniel Pickering - Pickering Energy Partners - Analyst : Final question for me, Vision 2030, I like that. I mean, we can talk about that for the next five years. But when you discussed that earlier, you basically -- it sounded to me like put M&A, strategic acquisitions, things like what I would call Variperm, the last big one that you did. It sounded like you were putting those toward the end of the queue. Are they -- or can you talk about how tactical acquisitions fit in with your strategy as you look ahead?

Question: Daniel Pickering - Pickering Energy Partners - Analyst : Thank you.

Question: Jeff Robertson - Water Tower Research - Analyst : Good morning. Neal, can you talk a little bit about the defense market globally and what kind of opportunity that presents for FET?

Question: Jeff Robertson - Water Tower Research - Analyst : Is the revenue stream from that both selling or contracting ROVs, but also servicing them over their useful lives?

Question: Jeff Robertson - Water Tower Research - Analyst : Does the operating system that you all have developed that allows someone to operate them remotely, is that a big selling point for that market?

Question: Jeff Robertson - Water Tower Research - Analyst : And if I could ask one on the growth markets that you have highlighted. Are those -- is that growth actually kind of chunky? In other words, does an NOC approve a product for use and then there's a quick adoption to create some earnings growth or revenue growth? And then can you talk about the margin mix in your growth markets compared to your leadership markets?

Question: Jeff Robertson - Water Tower Research - Analyst : Thank you.

Question: Joshua Jayne - Daniel Energy Partners - Analyst : I just had one final follow-up, which was, how do you -- or how close are we to a bottom, do you think in your stimulation and intervention business on a quarterly run rate basis based on where we are in the cycle today?

Question: Joshua Jayne - Daniel Energy Partners - Analyst : Great. Thanks for taking my questions. Appreciate it.