Logo of jester cap with thought bubble.

Image source: The Motley Fool.

DATE

May 1, 2026

CALL PARTICIPANTS

  • President and Chief Executive Officer — Neal A. Lux
  • Chief Financial Officer — David Lyle Williams
  • Director of Investor Relations — Rob Kukla

Need a quote from a Motley Fool analyst? Email [email protected]

TAKEAWAYS

  • Revenue -- $209 million, representing an 8% increase year over year and a 3% rise from the prior quarter, led by growth in offshore and international markets.
  • Adjusted EBITDA -- $23 million, growing 14% year over year and in line with previous guidance; margin performance benefited from cost savings but was partially offset by product mix.
  • Net Income -- $6 million on an adjusted basis, marking a 300% year-over-year increase and an 11% sequential improvement driven by a favorable income tax rate.
  • Orders -- Grew 10% year over year with a consolidated book-to-bill ratio of 106% and both segments reporting ratios above 100%.
  • Backlog -- Increased to the highest level in 11 years, up 44% year over year, positioning Forum Energy Technologies (FET 6.57%) for future conversion.
  • Cost saving initiatives -- Achieved $15 million in annualized cost reductions, following completion of facility consolidation and restructuring.
  • International revenue -- Up 7%, with Canada, Europe, and Latin America each posting double-digit gains; international revenue exceeded U.S. for the third consecutive quarter.
  • Offshore revenue -- Expanded 10% sequentially, led by a 20% growth in Subsea driven by ROV and rescue submarine projects.
  • Share repurchases -- Nearly 93,000 shares bought for about $5 million at an average price of $49, roughly 20% below the closing stock price prior to the call.
  • Net debt -- Ended at $121 million, with net leverage under 1.4x; company expects to reduce net leverage below 1.0x by year-end.
  • Second quarter guidance -- Forecasting revenue of $202 million to $225 million and adjusted EBITDA of $24 million to $30 million, both at midpoints up 6% and 32%, respectively, from the prior year.
  • Full-year EBITDA guidance -- Raised the lower bound from $90 million to $95 million; midpoint now $103 million, up 20% from the prior year.

SUMMARY

Forum Energy Technologies communicated increased momentum, underpinned by backlog expansion, substantial annualized cost reductions, and share repurchases completed at a notable discount to current market price. Management affirmed that a rising backlog of innovative, higher-margin products should contribute materially to margin accretion as the year progresses, citing “about 11% was new innovations or new products.” Bookings were supported by international growth and demand for new technologies, highlighted by significant DuraLine orders for Argentina and rising activity in Venezuela. The credit facility maturity was extended to 2031, enhancing strategic flexibility for debt management, acquisitions, and organic initiatives.

  • Forum Energy Technologies maintained revenue guidance of $800 million to $880 million and full-year free cash flow guidance of $55 million to $75 million, with explicit plans to convert approximately 65% of EBITDA to free cash flow.
  • Facility consolidations drove plant utilization improvements, directly supporting a 6% EBITDA uplift in the Drilling and Completions segment, despite segment revenue staying flat sequentially.
  • "Impressively, we grew revenue per global rig 12% from a year ago, and positioned our company for future gains with strong bookings."
  • "Typically, we see our Subsea business with slightly lower contribution margins—there is a lot of pass-through material and electronics, etc, that go through on those Subsea orders—that tends to pull the average margin down. So I would say the Subsea portion of backlog, which is meaningful, is a little bit lower. But as Neal mentioned, our other products we are putting through are coming in at higher margins."
  • Bookings in Q1 benefited from strong demand in Canada (Veraperm), as well as the successful capture of a multi-system DuraLine contract in Argentina, with management maintaining a conservative outlook that does not yet factor in market volume increases.
  • Management confirmed that Q2 margin guidance fully incorporates the benefit of all cost-saving measures, with additional operational upside dependent on backlog conversion and accelerated customer deliveries.

INDUSTRY GLOSSARY

  • Book-to-bill ratio: The ratio of incoming customer orders received ('bookings') to completed sales and shipments ('billings') within a specific period, indicating demand health and future revenue visibility.
  • ROV: Remotely Operated Vehicle, underwater robotics used for subsea operations in energy and defense markets.
  • GHT (Global Heat Transfer): Forum Energy Technologies' product family of industrial cooling solutions for power generation and data center markets.
  • DuraCoil 95: A type of coiled tubing engineered for sour (hydrogen sulfide-rich) environments, designed for workover and intervention in oilfields.
  • DuraLine: Multi-well frac manifold system enabling safer and more efficient wellsite operations, typically deployed in pressure pumping and completion services.
  • FR-120 Iron Roughneck: Forum Energy Technologies' rig floor automation tool with patent-pending software that automates drill pipe make-up and breakout processes.
  • Veraperm: Canadian product line focused on well integrity and emissions detection technologies.

Full Conference Call Transcript

Operator: Good morning, ladies and gentlemen, and welcome to the Forum Energy Technologies, Inc. First Quarter 2026 Earnings Conference Call. My name is Daniel, and I will be your coordinator for today's call. There is a process for entering the question and answer queue. To ask a question during the session, you will need to press 1-1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press 1-1 again. At this time, all participants are in a listen-only mode, and all lines have been placed on mute to prevent any background noise. This conference call is being recorded for replay purposes and will be available on the company's website.

I will now turn the conference over to Rob Kukla, Director of Investor Relations. Please proceed, sir.

Rob Kukla: Thank you, Daniel. Good morning, everyone, and welcome to Forum Energy Technologies, Inc.'s First Quarter 2026 Earnings Conference Call. With me today are Neal A. Lux, our President and Chief Executive Officer, and David Lyle Williams, our Chief Financial Officer. Yesterday, we issued our earnings release, which is available on our website. Today, we are relying on federal safe harbor protections for forward-looking statements. Listeners are cautioned that our remarks today will contain information other than historical information. These remarks should be considered in the context of all factors that affect our business, including those disclosed in Forum Energy Technologies, Inc.'s Form 10-Ks and other SEC filings. Finally, management's statements may include non-GAAP financial measures.

For reconciliation of these measures, please refer to our earnings release and website. During today's call, all statements related to EBITDA refer to adjusted EBITDA. Unless otherwise noted, all comparisons are first quarter 2026 to fourth quarter 2025. I will now turn the call over to Neal.

Neal A. Lux: Thank you, Rob, and good morning, everyone. Our first quarter results reinforced our confidence in the path we presented with FET 2030. Year over year, we increased revenue 8%, EBITDA 14%, and net income 300%. The execution of our beat-the-market strategy drove these results. Impressively, we grew revenue per global rig 12% from a year ago, and positioned our company for future gains with strong bookings. Orders were up 10% year over year with a book-to-bill of 106%. We entered the year with our highest backlog in eleven years, and we grew that backlog again. Compared to the first quarter of last year, our backlog is up 44%.

Also, following the completion of our structural cost saving initiatives, we are now a more efficient organization. These efforts have achieved $15 million of annualized savings. In addition, we continued our share repurchase program and strengthened the balance sheet by extending our credit facility's maturity to 2031. Overall, this was the kind of start we wanted to see, providing momentum into the second quarter and beyond. Looking ahead, our results should increase substantially, driven by market share gains, backlog conversion, and cost savings. We are forecasting second quarter EBITDA of between $24 million and $30 million, which at the midpoint is up 32% from a year ago. These results would deliver incremental margins of 51% with EBITDA margin approaching 13%.

This sequential improvement is driven solely by the execution of our plan. Turning to the full year, we are raising the midpoint of our EBITDA guidance to $103 million, up 20% compared with 2025. Importantly, while we are seeing signs of increased activity, which is consistent with some analysts' expectations, our forecast conservatively assumes a flat market. Should the market pick up, I would expect to see further upside to our forecast. During the first quarter, we continued gaining market share through innovation and new customer adoption. This is a key part of our strategy, so let me provide an update on a few products we have recently commercialized.

First, DuraCoil 95, coil tubing for sour service environments, is continuing to gain traction and is now active on three continents. This is an ideal product for Venezuela and the Middle East, especially if workover activity accelerates to bring production back online. Another innovation I want to mention is Unity, our next-generation operating system for remote ROV operations. We recently had the opportunity to showcase this technology at a large international trade show. In a real-time demonstration, our customers were able to control an ROV positioned hundreds of miles away from a terminal in our booth. It was a powerful demonstration of Unity's capabilities and has ignited interest in our product.

The next product I want to highlight is DuraLine, our manifold system for multi-well frac applications. Compared to our competition, DuraLine is significantly safer and more efficient. Also, it is a great example of technology developed for U.S. shale applications that can be exported to international locations. In the first quarter, we received a significant order for multiple systems to be deployed in Argentina this year. Another innovative area for Forum Energy Technologies, Inc. is rig floor automation. We have developed patent-pending software for the FR-120 Iron Roughneck that automates the drill pipe makeup and breakout process with the push of a button. Our solution dramatically simplifies rig floor operations, reduces nonproductive time, and increases drilling efficiency by 30%.

This software will be packaged with new Iron Roughnecks and sold as an upgrade to existing ones. I am very excited about this development. Shifting to the power generation and data center market, we have seen increased interest in the cooling solutions offered by our Global Heat Transfer product family. Based on customer feedback, we have developed a stationary power cooling solution. This new design gives us an opportunity to address a bigger part of the market and, since its introduction, we have developed a strong commercial funnel. These innovations are great examples of how our product pipeline is supporting both near-term share gains and the long-term ambitions of FET 2030.

Shifting to the Middle East conflict and its impact, first and foremost, I am thankful all our employees in the region are safe. That is our primary concern. Also, operationally, we have not suffered any facility damage. We have experienced some disruptions that are having a slight impact on our business, particularly around logistics and freight costs. However, our teams did an excellent job finding creative solutions to these challenges, and we were able to increase revenue in the Middle East during the quarter. While uncertainty remains high, we are not forecasting any material net negative impact from the conflict. For context, Middle East revenue is only 10% of our total, limiting the company's exposure.

At the same time, this conflict is creating medium to longer-term tailwinds for our industry. A significant portion of the world's oil and gas supply has been disrupted for 62 days and counting. Even if oil shipments through the Strait of Hormuz resume quickly, global oil inventories will be meaningfully reduced. Barring a material downturn in global demand, we expect investment in oil and gas production to increase over time to replace depleted inventories and support energy security. Some analysts have suggested that our industry will experience a prolonged upcycle beginning later this year or early 2027. This upcycle aligns with the growth market scenario of our FET 2030 vision.

Under this scenario, our addressable markets grow at a rate of 9% annually and we expand our market share to 22% by 2030. The combination of market expansion and share gains doubles revenue and supports our near-term financial outlook. I will now turn the call over to Lyle for the financial results.

David Lyle Williams: Thank you, Neal. Good morning. I will begin with first quarter results and our guidance, then shift to a discussion of cash flow and our capital allocation strategy. First quarter revenue of $209 million came in near the top end of our guidance. Growth in offshore and international markets led the revenue increase of 3%, outpacing global rig count. Our international revenue was up 7%, with Canada, Europe, and Latin America each delivering double-digit gains. This is the third consecutive quarter when international exceeded U.S. revenue. And offshore revenue expanded 10%, driven by a 20% increase in our Subsea product line as the team begins to execute orders secured last year.

Adjusted EBITDA for the quarter was $23 million, in line with our guidance, as cost savings benefits were largely offset by product mix. Adjusted net income of $6 million increased 11% on a favorable income tax expense rate that benefited from geographic income mix. We grew backlog again in the first quarter, even after very strong bookings in 2025. Both segments posted a book-to-bill ratio greater than 100%. We saw higher demand for capital equipment in the Stimulation and Intervention and the Drilling product lines, and increased demand for wireline cables. Valve orders increased nicely, bouncing back from tariff-related impacts throughout 2025. Let me continue with additional color on our segment results.

Drilling and Completions revenue was $127 million, flat with the previous quarter. The Subsea product line increased 20% as we recognized revenue on ROVs and the rescue submarine project. The Stimulation and Intervention product line increased 7%, supported by power end and wireline cable demand. And to note, our Quality Wireline product family set a new record this quarter in revenue and in greaseless cable sales. Coiled tubing revenue was down 17%, coming off strong U.S. sales last quarter and due to customer-requested delivery pushouts into the second quarter. Despite flat revenue, segment EBITDA was up 6%, benefiting from cost savings and improved plant utilization related to our facility consolidations.

Artificial Lift and Downhole revenue was $82 million, up 9% with increased sales volumes across all three product lines. EBITDA was roughly flat, reflecting a combination of product mix, timing of incentive expense, and lower absorption at one facility, which we expect to improve in the coming quarters. Consolidated free cash flow was $1 million, consistent with our guidance. As a reminder, our free cash flow is typically back-half weighted; for example, roughly two-thirds of our free cash flow was generated in the second half of 2025. Despite the seasonally lower free cash flow, we still remained active on share buybacks. We repurchased almost 93 thousand shares for approximately $5 million under our share repurchase authorization.

These purchases averaged $49 per share, about 20% lower than our stock price at yesterday's close. In addition, we paid $9 million for withholding taxes associated with our stock-based compensation program, avoiding the issuance of roughly 180 thousand shares and ultimately benefiting our shareholders. These payments, along with transaction costs associated with the credit facility amendment, resulted in a modest and temporary increase in net debt. We ended the quarter with net debt of $121 million, with a net leverage ratio still at a comfortable level of under 1.4x. While this is higher than where we ended last year, we expect net leverage to decline to under 1.0x by the end of the year.

Liquidity of $91 million remains strong, with $54 million available under our revolving credit facility. During the quarter, we extended our credit facility maturity to February 2031 with improved pricing and greater letters of credit capacity. This amendment, combined with our strong balance sheet, provides significant flexibility for Forum Energy Technologies, Inc. to fund strategic initiatives, including long-term debt retirement, organic growth, and acquisitions. Now turning to our guidance. For the second quarter, as Neal mentioned earlier, our results should increase substantially, driven primarily by backlog conversion, cost savings, and market share gains.

We are forecasting revenue between $202 million and $225 million and EBITDA between $24 million and $30 million, which at the midpoints are up 6% and 32%, respectively, from a year ago. Adjusted net income expected for the second quarter is between $6 million and $11 million. Our full year guidance issued in February assumed relatively flat market activity compared to 2025. Now, with strong first quarter results and increased expectations for the second quarter, we are raising the bottom end of our EBITDA guidance range from $90 million to $95 million. We are maintaining our revenue guidance of $800 million to $880 million, and for adjusted net income we are guiding between $21 million and $38 million.

In addition, we reaffirm our full year free cash flow guidance of $55 million to $75 million, as we remain confident in our ability to convert approximately 65% of EBITDA into free cash flow. Let me conclude with our capital allocation expectations. As we discussed last quarter, our balance sheet is in great shape. We consider any further net leverage reduction as dry powder for incremental strategic investments, including acquisitions and share repurchases. With our M&A framework, we seek to acquire companies with differentiated products competing in targeted markets, at valuations that would be accretive to Forum Energy Technologies, Inc. per-share metrics. And we compare these acquisitions with repurchasing Forum Energy Technologies, Inc. shares.

This year, our bonds allow total repurchases of around $30 million as long as our net leverage remains below 1.5x. We believe Forum Energy Technologies, Inc. remains a compelling investment. With that, I will turn the call back to Neal for closing remarks.

Neal A. Lux: Thank you, Lyle. Over the last few years, we have implemented a strategy to make Forum Energy Technologies, Inc. a better and stronger company. We are gaining share through commercial excellence and innovation. We are leveraging our global footprint, delivering our solutions to customers around the world. We are creating significant value for our shareholders, and we have been successful despite market headwinds. Now we may be closer to finally having a market tailwind that can supercharge our efforts going forward. Thank you for joining us today. Daniel, please take the first question.

Operator: Star 1-1 on your telephone and wait for your name to be announced. Our first question comes from Jeffrey Woolf Robertson with Water Tower Research. Your line is open.

Jeffrey Woolf Robertson: Thank you. Good morning. Neal, with respect to the Unity ROV system and the trade show, are you seeing demand for that product outside of traditional energy? And then secondly, if we think about Unity and the cooling systems you all have, are there orders for those systems that are in the backlog, or are you working on that?

Neal A. Lux: Good question. So, starting with Unity first, Jeff, it is still a fairly new system. We are gathering more and more field data as well as understanding how much it benefits our customers, so it is early stages there. I do think it would have an application outside of oil and gas for remote control of an ROV. I think the interest is high, and we do have a number of Unity systems already in the backlog that will continue to add to what we have already delivered. As we build that field experience, we will then look at other applications outside oil and gas; defense would be a great application as well.

On our cooling systems, we did not mention in the call, but we have previously had a cooling system that is mobile for data centers that we call Powertron. The system I mentioned in the script is a new design that is stationary, so it is not mobile. This is brand new, one that we are quoting actively, and we are building up a strong opportunity queue. We do not have orders for that system yet, but all indications are we have a great product and would expect orders going forward.

Jeffrey Woolf Robertson: Can you comment, Neal or Lyle, on what the margin profile looks like in the backlog?

Neal A. Lux: With the new products and innovations, generally our innovative products have higher margins than our standard overall margin. The innovations we developed are addressing specific customer needs, and so we are able to get more value out of that. As we talked about, our backlog coming into the year, about 11% was new innovations or new products that we developed recently, so I would think overall our average margin would be higher because of that. Lyle, maybe a little color to add to that.

David Lyle Williams: Last year, we booked a large amount of orders for Subsea. Their book-to-bill was basically off the charts in a combination of defense and traditional oil and gas, ROVs, and the rescue submarine. Typically, we see our Subsea business with slightly lower contribution margins—there is a lot of pass-through material and electronics, etc., that go through on those Subsea orders—that tends to pull the average margin down. So I would say the Subsea portion of backlog, which is meaningful, is a little bit lower. But as Neal mentioned, our other products we are putting through are coming in at higher margins.

Jeffrey Woolf Robertson: And if I can have one more. With respect to the Middle East and Qatar's LNG—part of it has gone offline—are there conversations underway with customers in the Middle East that would increase demand for Forum Energy Technologies, Inc.'s business as the oil and gas producers maybe look to diversify their production capacity and maybe put a bigger emphasis on developing their own natural gas for internal consumption?

Neal A. Lux: I think it is maybe early on for that rebuilding discussion, Jeff. We are staying close with our customers. As we mentioned, we did increase revenue in the Middle East during the quarter. One area that we did not cover specifically was Venezuela. We are seeing an increase there in demand, especially for our short-cycle, activity-based products like coiled tubing and wireline. As we get farther from the conflict, there will absolutely be an opportunity in the Middle East. Interestingly, we are finding some nice opportunities already in Venezuela.

Operator: Thank you. Our next question comes from Stephen Michael Ferazani with Sidoti. Your line is open.

Stephen Michael Ferazani: Good morning, Neal. Good morning, Lyle. Appreciate all the detail on the call. In terms of the guidance raised this early in the year—obviously, you would not do it without confidence—just trying to get a better sense of the components that led you to that decision. Covered it a little bit, but to me, the surprise here was the strength in orders, given the fact that we have not seen a pickup in North America yet, given the conflict in the Middle East, and given you would assume a lot more uncertainty on behalf of customers. Were you surprised? Was that the major contributor? Were there other factors in the guidance raise?

We were certainly surprised by the strength in the order book for Q1.

Neal A. Lux: Having a book-to-bill over 100% does give you a lot of confidence when you look out a quarter. That helped. Some of the orders we booked—I mentioned DuraLine for Argentina—that is one we worked on for a long time and got to the finish line in Q1, which helps. Another area where we are seeing great strength is in Canada with the Veraperm product line; they are delivering great results. With oil prices up, that is an area where we are going to see more investments. So Veraperm being strong, as well as the visibility from our backlog coming into the quarter, gave us a lot of confidence in increasing guidance.

Again, we are not assuming yet an increase in overall activity; we are keeping our assumptions flat. But we are getting initial indications of some increase in activity. It is uneven so far, so I do not want to call it a trend. If activity does increase, we will be aggressive in following it up.

Stephen Michael Ferazani: In terms of the strength in Q1, it sounds like you were also impacted by some delivery pushouts. Given the higher Q2 guidance, fair to assume those deliveries were either completed or will be for sure completed in Q2?

Neal A. Lux: Yes. Specifically coiled tubing, where customers were a little unsure at the end of the quarter and just waited. That is an area where we are now seeing customers accelerate, which is one of the initial indications we have received.

Stephen Michael Ferazani: Have we seen the full benefit of your cost reductions now with the plant consolidation? Or can we expect more to contribute to margins as the year goes on?

Neal A. Lux: The Q2 guidance fully assumes all of our cost reductions. We still had some actions being completed in Q1, and we also had some operational challenges you always see when consolidating facilities. But going forward in Q2, we feel really good about the cost savings and our ability to execute.

Stephen Michael Ferazani: That is helpful. And, Lyle, I do have to circle around on operating cash flow. Clearly, Q1 is always the lowest and you had pointed it out going into this quarter. That being said, cash flow was lower than the previous two years. Looking through the numbers, it looks like it is a timing issue with receivables collection as the delta between the last two years. Is that fair? More timing than anything? And there is no reason to think you are not still on track for full year cash flow?

David Lyle Williams: Yes, Steve. The seasonality is driven by incentive comp payments and property tax payments that go out in Q1. That is the big drag from a working capital perspective. Beyond that, it is really timing. Quarter to quarter we see movements in DSOs based on project timing for our bigger projects and shipment timing. We did see a little bump up in DSOs in the first quarter; we think that will unwind in the second and third quarter. So there was some movement in receivables and payables, but the big driver for Q1 is those annual payments we make every year. We feel like we are on track for the full year, Steve.

Stephen Michael Ferazani: In terms of the use of it, any change to your buyback strategy?

David Lyle Williams: No. We like the buyback plan. We highlighted about $5 million bought back this year. Total capacity for the year would be about $30 million. We do expect that to be back-end weighted, keeping it somewhat in line with how our free cash flow comes in. With our free cash flow yield over 10%, it is an attractive investment for us to consider.

Stephen Michael Ferazani: Great. Thanks, Neal. Thanks, Lyle.

Operator: Thank you. Our next question comes from Daniel Ray Pickering with Pickering Energy Partners. Your line is open.

Daniel Ray Pickering: Morning, guys. I think Lyle mentioned—or maybe it was Neal, I cannot remember—you talked about FET 2030 and you threw out some numbers. Just want to confirm what I heard. I think I heard doubling of revenues to 1.6 billion and EBITDA quadrupling to, call it, 400 million. I just want to confirm that. It implies an EBITDA margin of about 25%. I was hoping you could give us some perspective. I realize that is aspirational and forward-looking, etc. How do you think about pricing improvements? And can you put that 25% margin level in context with prior strong cycle periods?

Neal A. Lux: Those numbers are based compared to 2025, when we delivered around $85 million of EBITDA. The revenue path is to 1.6 billion. We see two drivers: market growth and share gains driving revenue, and then operating leverage delivering roughly 30% incremental margins on that revenue increase. That is how we get the increase in overall margin. As you play it out, we see around 20% EBITDA margins once we have that kind of revenue growth on our fixed cost base. We also look at revenue per rig: in the U.S., we are around $700 thousand per rig annually; internationally, it is closer to $300 thousand.

The ability for us to export technology—whether DuraLine manifolds, Multi-Lift solutions, DSP life extenders or protectors going into the Middle East—is a great opportunity. If international revenue per rig gets closer to the U.S., that 1.6 billion target is aspirational but feels like a great target for us to achieve.

Daniel Ray Pickering: Thank you. Neal, you mentioned Venezuela. What are you seeing there? Is it inquiries about what you could do if companies go in there? Are you seeing companies that are already there asking for more stuff? Is this a Q2 revenue impact? Is it later in the year into 2027 revenue impact?

Neal A. Lux: It is both. We are receiving orders and delivering material for customers who are already in country looking for our products so they can get back to work. We are also in early stages looking at more infrastructure-type sales—coil line pipe, things like that—potentially valves going into Venezuela to help rebuild infrastructure. That would be longer term. Historically, Venezuela was a great market for many of our products, and getting back in there creates a lot of opportunity for us.

Daniel Ray Pickering: You talked about Argentina and the DuraLine order that you had been working on for a while. Is that going in with a pressure pumper that has equipment there already, or is it new capacity, new equipment moving in that you are going along with?

Neal A. Lux: I am not positive if the pumps are in country yet or not, but I believe that is additional fleets being added to get the work done.

Daniel Ray Pickering: As we bring it back to the U.S., can you talk a little bit about pricing behavior? Is it a flat pricing environment? Are we seeing any upward bias anywhere? Or is it kind of a steady market right now?

Neal A. Lux: I would say it is steady right now, Dan. We are getting interest; the phone is ringing; inquiries are coming. We have had a few customers ask to receive material earlier than originally planned, but it is not a boom yet. I do not see a pricing impact in Q2 beyond passing through any freight increases, diesel surcharges, or tariffs. Real pricing increases—we have not approached that yet. We have some capacity, and some of our competitors have some capacity at least initially. As we go along in the cycle, that is absolutely something we are looking for.

Operator: Thank you. Our next question comes from John Daniel with Daniel Energy Partners. Your line is open.

John Daniel: Hey, Neal. My first question is with the GHT product line. Can you speak to what you are seeing from the North American frac companies—replacement orders and inquiries?

Neal A. Lux: We have seen an uptick in inquiries. It is not a trend yet, John, but something we are monitoring. We are still seeing more demand right now for our data center cooling opportunities than for frac. That said, even going into the year, we were a little surprised with a few capital orders on the drilling side and on the pressure pumping side, where customers were pulling the trigger even before the recent oil price increase. I am cautiously optimistic that as we get farther in the cycle and activity picks up—and given how old some of the equipment is in the field—we could have an opportunity to add some new capital for our customers.

John Daniel: And my follow-up: on DuraLine, it was characterized as more efficient. Can you elaborate on what makes it more efficient?

Neal A. Lux: It is our DuraLine connection. We are able to rig up and rig down significantly faster. We also utilize high-pressure hoses and cranes to move those hoses. If you need to pull out a pump, you can do that much faster than with a traditional manifold. We are seeing a lot of interest from large pressure pumpers who want to be best in class, and uptake has been good.

John Daniel: Once you sell those systems, what type of consumables go along with it? What is the repeat revenue opportunity?

Neal A. Lux: The whole system is a pretty big order initially, but ongoing pull-through would include check valves, hose replacements, different types of bearings, and iron. Call it 80/20 on capital versus recurring.

John Daniel: Final question. I do not know how many of the bearings, valves, and fittings are sourced from international markets, but do you see any potential supply constraints as an eventual Middle East rebuild comes—supply that you thought you could get gets diverted to a higher-priced market? Is that a risk?

Neal A. Lux: We have not seen anything like that. We feel good about our supply chain, but it is something we will watch.

Operator: Thank you. Our next question comes from Eric Carlson. Your line is open.

Eric Carlson: Hey, good morning. Good quarter again. Last time we talked, oil prices were probably lower. In the 2030 plan you presented, and from a physical perspective, we are likely to lose over a billion barrels of supply from inventories. Your base case in that plan has been a no-growth scenario and then the 2030 growth scenario. Can you provide a bit more context on your confidence in outcomes given we probably need to build a lot of supply back into the market?

Neal A. Lux: We agree. Taking a billion barrels of oil out of inventory has to be replaced. Countries around the world will have to ask themselves how much inventory they should have; I would imagine it is going to be more than what they had coming into the conflict. That is even more demand on oil production. This fits really well with our growth scenario. As the buildup comes in oil—and data centers are still out there, and natural gas demand is still going to grow—that biases us up toward our growth outlook where we could double revenue because our markets are growing and we are taking share.

Our key innovations are driving growth, and adding the need to rebuild and refill creates a great opportunity for us.

Eric Carlson: In that context of headline volatility—commodity volatility has been high, your own equity volatility is relatively high too—pretty good results today, but equity market reaction is what it is. In the context of your capital returns, do you look at volatility as an opportunity to buy more of what you already own? Does that change how you think about buybacks versus acquisitions? The organic opportunity is massive if the 2030 growth scenario plays out. And on the M&A market—potential targets, size of target, and bid-ask spread today versus a quarter ago?

Neal A. Lux: Our free cash flow yield is still around 10%—higher than our peers and the average small cap—so we are a great value, especially with our growth outlook. For acquisitions, our criteria are clear: differentiated products, few competitors, great financial profile, and accretive to free cash flow per share. Lyle and his team have developed a solid pipeline. There are opportunities out there, but we will be incredibly selective, especially given our free cash flow yield.

David Lyle Williams: Because of the breadth of our product portfolio, we have a lot of shots on goal around products that could be strategically beneficial. But the criteria are the same: differentiated technology, targeted markets, and accretive to our per-share metrics. We can be conservative and take our time because we have a good alternative investment in our own shares. It is an interesting market with a lot of opportunities to evaluate, and we have a compelling base case if we cannot find something even more compelling.

Eric Carlson: On valuations, the Veraperm deal was done under 4x EBITDA with a really impressive free cash flow multiple. What does the market look like today versus a quarter ago? Seller expectations?

David Lyle Williams: Public company valuations have increased year to date pretty meaningfully—ours included—and you would expect sellers to try to take advantage of that. That said, we have seen deals getting done still in the range of where we acquired Veraperm. Our expectation is those deal values have not changed a lot in the last 90 days. Valuation volatility in public equities can be high, so we will be appropriately conservative, making sure any moves are very accretive to our story.

Eric Carlson: On target size, Veraperm was large and transformative. What is the general range you have been thinking about if you can get something at the right price?

David Lyle Williams: We do have a broad dispersion of potential targets. Key financially is to keep our balance sheet very strong. We are not going to risk the balance sheet by doing a bigger deal that stretches us. Our stock being a very good value also brackets the size of deals we might do. The range is broad, and it depends on what we can bring across the line that meets our criteria.

Eric Carlson: Seller type—privately held companies like Veraperm, carve-outs from publics, or something else?

David Lyle Williams: We are seeing it all. Quite a few private equity-held businesses that are long in the tooth, smaller family-owned businesses considering next-generation and estate planning questions, and other structures. Over our history, Forum Energy Technologies, Inc. has participated in a lot of different kinds of deals. It is definitely an interesting time.

Eric Carlson: Great. That is all I have. Thanks.

Neal A. Lux: Thanks, Eric.

Operator: Thank you. I am showing no further questions at this time. I would now like to turn it back to Neal A. Lux for closing remarks.

Neal A. Lux: Thank you for your support and participation on today's call. We look forward to our next meeting in July to discuss Forum Energy Technologies, Inc.'s second quarter 2026 results. Thank you.

Operator: This concludes today's conference call. Thank you for participating. You may now disconnect.