TechnipFMC PLC Q2 2025 Earnings Call Transcript

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

Question: J. David Anderson - Barclays Services Corp - Analyst : Thank you. Good morning, Doug. How are you?

Question: J. David Anderson - Barclays Services Corp - Analyst : I'm doing great. So another strong subsea order book this quarter. Clearly, you're confident beating the $10 billion target this year. I was hoping you could break down sort of the composition a bit more and kind of how you see it changing this year. I'm first curious about the services. You called about services being very strong this quarter. I'm curious it was kind of a one-off where this is a new trend. And secondarily, as you're expecting more awards in the second half, I'm curious if you're expecting more awards in the second half to come from the Subsea opportunities list or is that more like the iEPCI direct awards.

Question: J. David Anderson - Barclays Services Corp - Analyst : I was just sort of asking, You have your Subsea opportunities list, which you update. I'm just curious. You're talking about the direct awards, which are different from that. I was just curious. Are more -- in the second half, are more awards kind of shifting more towards the Subsea opportunities list? Is it more the direct awards side? Just kind of curious how that's shaping up.

Question: J. David Anderson - Barclays Services Corp - Analyst : And Doug, if I could sneak one more in here, I know it's early, but I was wondering if you could just kind of give us an early look at how you think orders are starting to shape up for 2026. Based upon what you were just saying there, is another $10 billion in 2026 a reasonable assumption at this time?

Question: J. David Anderson - Barclays Services Corp - Analyst : Thank you. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JULY 24, 2025 / 12:30PM, FTI.N - Q2 2025 TechnipFMC PLC Earnings Call

Question: Marc Bianchi - Cowen and Company LLC - Analyst : Hey, thank you. I wanted to drill down a little bit more into the services success that you had this quarter. And specifically, it sounds like the services orders were quite strong. I'm curious if the revenue was also strong because historically this was like a book and ship type of business, but I think more recently some of that's been going into backlog. So maybe you could talk a little bit about that and how we should think about the growth of services for 2025 and beyond?

Question: Marc Bianchi - Cowen and Company LLC - Analyst : Doug, I think previously the outlook was for services revenue to grow in line with all of Subsea for this year. Is that still the case or are we seeing an acceleration of that?

Question: Marc Bianchi - Cowen and Company LLC - Analyst : Super. And if I could just ask one really quick from Alf. The corporate has been running quite a bit below the mid or right quite a bit below the guidance range here. But you'd frame the guidance, the updated guidance with kind of solving for the corporate at [$120 million]. What's going on there? And how should we think about that once we get past the back half of this year?

Question: Marc Bianchi - Cowen and Company LLC - Analyst : Got it. Okay. Thank you very much. I'll turn it back.

Question: Scott Gruber - Citi Infrastructure Investments LLC - Analyst : Yes. Good morning. I want to come back to the inbound details that you mentioned, Doug. You mentioned that we'll hear more about some greenfield projects in the coming weeks. Will those be included in your 3Q volume? Or are we going to get the details on some projects that were included in 2Q?

Question: Scott Gruber - Citi Infrastructure Investments LLC - Analyst : I appreciate that. I'm just trying to get a sense for the brownfield and the small projects because just contemplating history, usually when crude prices moderate, the elevated returns and lower capital intensity of the brownfield projects kind of drive a mix shift toward tiebacks and brownfield. But this cycle, it seems like the appetite for greenfield remains robust. You see it in your project list, but it also seems robust on the brownfield side. Can you just kind of discuss the appetite for brownfield and large greenfield kind of both sustaining even in light of more moderate crude prices? Does that just reflect the volume of capital dollars kind of shifting towards deepwater? Some color there would be great.

Question: Scott Gruber - Citi Infrastructure Investments LLC - Analyst : I appreciate the color. Thank you, Doug.

Question: Arun Jayaram - JPMorgan Chase & Co - Analyst : Hey, good morning. Doug, I wondering if you could highlight what you're seeing outside of the Golden Triangle across the globe and perhaps some emerging areas where we could see some FID activity over the next, call it, 12 to 24 months as well as maybe address some of the recent question marks around Namibia.

Question: Arun Jayaram - JPMorgan Chase & Co - Analyst : Great. Thanks for the fulsome answer there. Really appreciate it. Doug, my follow-up is regarding Surface. You announced some business transformation, some self-help activities, I think concentrated in North America. I was wondering if you could address maybe some near term changes in the competitive dynamics with Cactus planning to enter the Middle East surface market through the transaction with Baker. Talk to us about they're pretty capable player looking at what they've done in North America. But how does that change? Does that impact FTI in any way as you think about that transaction?

Question: Arun Jayaram - JPMorgan Chase & Co - Analyst : Thanks, Doug.

Question: Sebastian Erskine - Rothschild & Co - Analyst : Yes. Hi, good morning, Doug. Good morning, Alf. Thanks for taking my questions. I'd like to start on Brazil and you kind of touched on it in a bit of detail there on the response to Arun. I mean, historically with some of the Brazilian tenders, you kind of haven't been happy with the kind of non-integrated nature of those scopes' kind of SURF only or SPS only. It didn't make sense to kind of pull vessels away from integrated work to do that. We're obviously seeing kind of a top two come out that looks like it's gone to all these quite a low bid and there are some other activities. How do you view Brazil specifically evolving? You've got a great relationship with Petrobras, but just specifically on the prospects, how many of those realistically would you hope to convert?

Question: Sebastian Erskine - Rothschild & Co - Analyst : Appreciate that, Doug. And just a quick follow-up on the opportunities list. I noticed there could be a couple in changes in scope value on Vsr Energi, kind of post the exclusive agreement with them and you. And then on Eni is kind of Coral Norte. Is that clearly like a tree count increase or anything specific you can flag there? And kind of going forward, is this kind of typical in terms of a developer might look to change kind of quite like notice a scope and hence that increase in the value of project?

Question: Sebastian Erskine - Rothschild & Co - Analyst : Appreciate that. Thanks very much for taking the time. And congrats on a strong quarter. Thank you.

Question: Victoria McCulloch - RBC Capital Markets Inc - Analyst : Hi. Thanks very much for taking questions this morning. So just firstly, tends well to carry on. Vsr Energi's CEO commented about cost depreciation that he's seeing in the market. Obviously, that doesn't appear to be aligned particularly with the upsizing of the scope that you mentioned for their projects in Norway. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JULY 24, 2025 / 12:30PM, FTI.N - Q2 2025 TechnipFMC PLC Earnings Call Now, I appreciate you're not responsible for the entirety of the project, so it's not maybe this is, you know, out with your scope, but maybe you that helps us to kind of get your view on where pricing is in the market, and you talked to the competitive environment, but your views on that would be interesting. Thanks.

Question: Victoria McCulloch - RBC Capital Markets Inc - Analyst : Thanks. That's really helpful, Doug. And I think that aligns with sort of maybe the comments being misconstrued in that it wasn't necessarily deflationary on the sort of Subsea side of pricing. That's interesting to hear that you're aligning with my views on that one. And if I can ask a follow-up, not really connected, but interesting comments on the hybrid flexible pipe. Ex-Brazil, where would this be most like, what markets would be this must be attractive to sell into?

Question: Victoria McCulloch - RBC Capital Markets Inc - Analyst : Thanks very much. Really appreciate the color you provided.

Question: Saurabh Pant - Bofa Merrill Lynch Asset Holdings Inc - Analyst : Hi. Good morning, Doug.

Question: Saurabh Pant - Bofa Merrill Lynch Asset Holdings Inc - Analyst : Doug, I think at the top of the Q&A, I heard a short and sweet yes to Dave's question on $10 billion for Subsea 2026 potential. So that was fantastic. And maybe I'll ask another question on life beyond '25. But this time, maybe on the margin front. I know it's hard to guide numerically. But, Doug, how should we think about where Subsea margins can go? Because there are a ton of moving pieces, Subsea 2.0. Just more integrated work, more backlogs roll off. Just maybe help us think about potential margins and what are the moving pieces for us there, please. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JULY 24, 2025 / 12:30PM, FTI.N - Q2 2025 TechnipFMC PLC Earnings Call

Question: Saurabh Pant - Bofa Merrill Lynch Asset Holdings Inc - Analyst : Right. That's fantastic. That makes a ton of sense. And then maybe one follow-up question on what you said in your prepared remarks, Doug, on the all-electric side of things, especially the opportunity to replace hydraulics on current projects. That sounds like a pretty big opportunity over a longer duration of time. Maybe just talk to that, Doug. How big could that opportunity be? How quickly could that manifest? And in what regions?

Question: Saurabh Pant - Bofa Merrill Lynch Asset Holdings Inc - Analyst : Right. We need to start flying by wire subsea, Doug. (laughter) That makes a ton of sense. Thank you, Doug. I'll turn it back.