Forum Energy Technologies (NYSE: FET) has demonstrated strategic financial maneuvering in the fourth quarter of 2024, reporting revenues of $201.0 million and implementing key initiatives to maintain market competitiveness in the energy technology sector.
The company's financial performance revealed nuanced results across its two primary segments. The Drilling and Completions segment experienced a 10.1% sequential revenue decline, attributed to reduced U.S. completions activity. Despite this challenge, the segment reported orders of $103.0 million, maintaining a book-to-bill ratio of 93.0%.
Conversely, the Artificial Lift and Downhole segment showed resilience, with revenue increasing 6.8% sequentially to $89.9 million. This growth was driven by heightened demand for artificial lift products and processing equipment technologies, with total orders climbing 14.0% to $87.0 million.
A significant strategic move for FET was its debt refinancing initiative in fiscal year 2024, which strengthened the company's balance sheet and enhanced financial flexibility. The company also initiated a $75.0 million share repurchase program and committed to allocating 50% of free cash flow toward net debt reduction, signaling a disciplined approach to capital management.
Free cash flow performance was particularly noteworthy, reaching $56.9 million in the fourth quarter—a $32.4 million sequential increase. This represents the company's strongest cash flow performance since 2015, credited to successful Variperm integration and effective working capital management.
Looking forward, FET has projected an adjusted EBITDA range of $85.0 million to $105.0 million for 2025, anticipating market share gains despite an expected 2% to 5% decline in global drilling and completion activity. The company's free cash flow guidance ranges from $40.0 million to $60.0 million.
The strategic acquisition of Variperm in 2024 has already demonstrated tangible benefits, boosting market share by approximately 15% as measured by revenue per global rig. This 'Beat the Market' strategy positions FET to potentially outperform broader industry trends.
Financial analysts using discounted cash flow and enterprise value-to-EBITDA comparative analysis have valued the company between $25.37 and $31.04 per share, with midpoint estimates around $27.03 to $29.00, suggesting potential upside for investors.
