TechnipFMC PLC Q3 2025 Earnings Call Transcript

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

Question: Scott Gruber - Citigroup - Analyst : Yes, good morning.

Question: Scott Gruber - Citigroup - Analyst : Good morning. I wanted to start on the share repurchase authorization. It's going to be another good year of free cash this year, strong returns to shareholders above 70%. With the increase in the repurchase authorization and what should be a strong free cash year next year, how are you guys thinking about the right level of cash return in '26? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 23, 2025 / 12:30PM, FTI.N - Q3 2025 TechnipFMC PLC Earnings Call

Question: Scott Gruber - Citigroup - Analyst : That's great. And how to think about the kind of level of return to shareholders from the free cash flow for next year kind of what's the framework you guys are thinking about?

Question: Scott Gruber - Citigroup - Analyst : Great, I appreciate the color.

Question: Victoria McCulloch - RBC Capital Markets Inc - Analyst : Morning. Thanks very much for taking questions this morning and for the results. Just on the Subsea award intake, when we were speaking last quarter, you mentioned that there were some awards that haven't been announced to the market that we would see in the coming weeks. I think there was one from Equinor in July. Has there been anything that possibly still yet to be announced from of the order intake. Certainly, it seems your -- the order intake is obviously very strong and running ahead for -- of others in the market. It's very strong by TechnipFMC. And then as a follow-up, not totally linked, what are your working capital expectations for this year within the new free cash flow guidance? Thank you very much. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 23, 2025 / 12:30PM, FTI.N - Q3 2025 TechnipFMC PLC Earnings Call

Question: Victoria McCulloch - RBC Capital Markets Inc - Analyst : Super, thanks both for your color. Appreciate it today.

Question: David Anderson - Barclays - Analyst : Hey, good morning, Doug. How are you?

Question: David Anderson - Barclays - Analyst : Well, doing well. I was hoping you could unpack the '26 Subsea guide a little bit for us in relation to kind of what I'm hearing from the rest of the market. Recognizing the midpoint of the guide, the revenue guide on Subsea is in line of consensus. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 23, 2025 / 12:30PM, FTI.N - Q3 2025 TechnipFMC PLC Earnings Call I'm assuming the service component is up roughly cut 10%, like we've been seeing in the past years. So if as backlog conversion looks pretty steady for next year. We keep hearing about offshore picking up the late '26 building into '27. I'm just curious if that's a trend that you think should also play out in your Subsea revenue. You mentioned shortened cycle times. I guess does that imply backlog conversion should start to accelerate in the second half of next year? And does Subsea 2.0 convert faster in the mix?

Question: David Anderson - Barclays - Analyst : Pretty close, pretty close. Let's hope I don't drop out here. So my second question is just about the Subsea margin guide for next year. What percentage of revenue are you expecting to be Subsea 2.0? And can you tell us how much -- what percentage of the inbound year-to-date has been Subsea 2.0? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 23, 2025 / 12:30PM, FTI.N - Q3 2025 TechnipFMC PLC Earnings Call

Question: David Anderson - Barclays - Analyst : Great, thanks a lot, Doug.

Question: Arun Jayaram - JPMorgan Chase & Co - Analyst : Yeah, good morning. My first question is regarding your 2026 Subsea guidance. Doug, at the midpoint of the guide, it implies 175 basis point improvement in margins. I was wondering if you could help us understand how you think about the drivers of the margin expansion between Subsea 2.0 mix -- Subsea services mix and maybe pricing improvement?

Question: Arun Jayaram - JPMorgan Chase & Co - Analyst : Great. Maybe one for Alf. Your net cash position has grown to just under the $500 million, I think it's like $439 million. You highlighted plans to return at least 70% of free cash flow. I just wanted to talk about what you think about the balance sheet and future uses of free cash flow because you have a very underlevered balance sheet. And I guess the ultimate question is could we see you returning essentially all of your free cash flow, just given how strong the balance sheet sits today.

Question: Arun Jayaram - JPMorgan Chase & Co - Analyst : Great, thanks for your commentary.

Question: Derek Podhaizer - Piper Sandler - Analyst : Hey, good morning. Just to kind of keep going on Dave and Arun's comments about just the catalyst within the backlog improvement and the margin outlook. You talk about the industrialization, you have the Subsea 2.0. But Doug, can you maybe talk to us about what 2.0 could mean for the SURF side or the installation side of things? Just thinking about those continued catalysts as we work towards the year, just the continued improvement of the business. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 23, 2025 / 12:30PM, FTI.N - Q3 2025 TechnipFMC PLC Earnings Call

Question: Derek Podhaizer - Piper Sandler - Analyst : Got it. Fair enough. I appreciate that. Second on the Subsea opportunities list, it's pretty noticeable and evident that scope of over $1 billion is meaningfully increasing really since the middle. Could you talk about the drivers behind that? I'm assuming the certainty that you guys bring to the table. But where could this ultimately go from a project scope perspective as we continue to see that wedge just increase over time?

Question: Derek Podhaizer - Piper Sandler - Analyst : Great. Thank you, Doug. I'll turn it back. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 23, 2025 / 12:30PM, FTI.N - Q3 2025 TechnipFMC PLC Earnings Call

Question: Ati Modak - Goldman Sachs - Analyst : Hey, good morning, Doug. How are you?

Question: Ati Modak - Goldman Sachs - Analyst : Good. Can you talk directionally about the outlook for Surface Technologies for '26 given the Saudi activity potential? And then you also raised the margin guide for '25. So maybe help us understand the drivers there as well.

Question: Ati Modak - Goldman Sachs - Analyst : Got it. That's helpful. And then can you give us an update on the electric Subsea infrastructure opportunity, where that stands as of now, I've seen some announcements from some of your peers earlier this year as well. Just wondering if that is starting to become a little bit more topical and what that could mean in terms of orders and margins for 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. OCTOBER 23, 2025 / 12:30PM, FTI.N - Q3 2025 TechnipFMC PLC Earnings Call

Question: Ati Modak - Goldman Sachs - Analyst : Thank you, Doug. I appreciate that.

Question: Sebastian Erskine - Rothschild - Analyst : Can you hear me now? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 23, 2025 / 12:30PM, FTI.N - Q3 2025 TechnipFMC PLC Earnings Call

Question: Sebastian Erskine - Rothschild - Analyst : Can you hear me? Yes, thanks very much. Apologies about that. Yeah, thanks for taking my question. The first one, just a bolt-on, it's a very strong year for TechnipFMC on order intake. But I think a theme that has emerged perhaps is that some operators have kind of chosen a bit, they're going to slow walk deepwater FIDs. Some competitors have called Sub-Saharan Africa is a good example of that. And I also saw an estimate that was putting company tree awards down mid-teens percentage year-over-year in '25. So it would be great to kind of get your perspective on how the cycles evolve year-to-date versus your expectations at the beginning of the year? And I guess, looking forward, perhaps, what are the specific key basins that are going to drive '26 for you?

Question: Sebastian Erskine - Rothschild - Analyst : Really appreciate that. And a follow-up on that. I mean, looking at your backlog at a very large level, I'd like to get your perspective on kind of resourcing to execute that level of work. And I read somewhere that had increased staffing at your manufacturing facilities in Brazil, Malaysia and the UK by some 20% to 40% in 2024 versus a kind of base of '21, so post-pandemic. Are you happy with the resourcing at the moment? I guess looking at it, given the tightness is, are there some concerns in the industry around potential bottlenecks or capacity constraints? And how are you positioning to execute that work? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 23, 2025 / 12:30PM, FTI.N - Q3 2025 TechnipFMC PLC Earnings Call

Question: Sebastian Erskine - Rothschild - Analyst : I really appreciate that. You can see that in the material improvements in project economics. Appreciate the color. I'll turn it back now. Thank you.

Question: Marc Bianchi - TD Cowen - Analyst : Hey, thanks. I wanted to start with some more questions on services. So Doug, can you remind us what the mix of services between like installation versus servicing your installed base is in the business like roughly? And the reason I ask is the comments earlier about kind of '26 and a service growth rate looking like the overall Subsea, I would have thought that services could be doing a better growth rate than sort of decelerating, so maybe you could unpack that a little bit for us? And then the second part of it is like if you look longer term, is there anything we should be thinking about how the integrated awards that you've taken in the past several years affect the servicing opportunity and then anything with like the vintaging of your installed base as we come up on maybe some anniversaries of more service opportunity?

Question: Marc Bianchi - TD Cowen - Analyst : Got it. Great, thanks for that. And my second question is just around fourth quarter. And if I sort of look at what the revenue guide is here for Subsea, it would look like you're highly covered with backlog like more than usual. But I think there were some conversations during the quarter about some extra vessel downtime beyond normal seasonality. Maybe you could just unpack a little bit what's going on there, and maybe how we should think about how that progresses through the -- into the first quarter?

Question: Saurabh Pant - Bank of America - Analyst : Hi, good morning, Doug.

Question: Saurabh Pant - Bank of America - Analyst : Doug, you gave some good color on 2026, and you gave that color early, a lot of good questions, but your revenue is still below the orders you have been booking for several years now, right? So there should be upside going forward. What I want to focus on bags as you enter deeper into the execution phase of this backlog, right? What are you focused on? What are you looking at, especially among wondering both the installation, the side of things, the vessel side of the market, especially given some consolidation out there. Just maybe talk to the execution side of things as you execute on the backlog and orders you're booking.

Question: Saurabh Pant - Bank of America - Analyst : Right, right. No, that makes sense, Doug. As maybe a quick one for you or maybe correct me if I'm wrong on this. I think I heard you talk about 55% normalized free cash flow conversion, right? And I think you were assuming neutral working capital in that, correct me if I'm wrong. And then how does the order exceeding your revenue dynamic play into it, right, as long as orders are above your revenue, should we think that working capital should continue to be a tailwind? Maybe just spend a couple of minutes on that, Alf, please.

Question: Saurabh Pant - Bank of America - Analyst : I got it. I got it. No, that's good. Okay, yeah guys, thank you. I'll send it back.

Question: Mark Wilson - Jefferies LLC - Analyst : Thank you all for your patience, for getting to me. Obviously, the adoption and the resilience of what you put in place here just jumps off the page yet again. And I'd say the ExxonMobil Hammerhead Subsea 2.0 awards seems to be the ultimate validation of that. However, one part, Doug, I'd say that we haven't touched on is the question about installation capacity out there in the market, still essential for all clients. And obviously, you work with Saipem in Guyana at Hammerhead as well. So could you just update us on TechnipFMC's view on that merger that's going on to Saipem7 in the market, and whether you see any impact from that regarding the vessel infrastructure you've spoken to in the past and indeed, if anything, worth commenting on your submissions regarding that process? Thank you.

Question: Mark Wilson - Jefferies LLC - Analyst : Appreciate the color, Doug. Thank you. I'll hand it back.