Forum Energy Technologies (FET) Q3 2026 Earnings Call: Guidance Raised

Key Takeaways

• Forum Energy Technologies reported Q3 2026 revenue of $237 million, up 5% sequentially, while adjusted EBITDA rose 14% to $36 million and adjusted net income increased 33% to $18 million.
• Adjusted EBITDA margin exceeded 15%, expanding 120 basis points sequentially. Free cash flow reached $30 million, above the company’s guidance range.
• Orders increased to $244 million, producing a 103% book-to-bill ratio. Orders have exceeded revenue in six of the past seven quarters.
• Management raised its full-year 2026 outlook to revenue of $900 million-$920 million, adjusted EBITDA of $123 million-$129 million and free cash flow of $66 million-$71 million.
• International revenue increased 31% year to date. Management highlighted growth in the Middle East, Latin America and Canadian oil sands, alongside opportunities in data center power-generation cooling.
• FET completed the $33 million acquisition of Premiere Torque Rings at approximately 4x EBITDA, adding an estimated annual EBITDA run rate of about $8 million.

Key Financial Data

All EBITDA and net income figures are adjusted unless otherwise stated.

Drilling and Completion revenue increased 6% sequentially to $147 million. Segment EBITDA rose 28% to approximately $21 million, with margin expanding 240 basis points to 14%.

Artificial Lift and Downhole revenue increased 3% to $90 million, supported by Premiere Torque Rings and stronger demand for sand and flow-control solutions and valve products. EBITDA remained approximately flat at $21 million as higher freight and tariff costs offset the benefit of revenue growth.

Business and Operating Performance

Four factors supported year-over-year growth: stronger drilling results, execution of the subsea backlog, Canadian oil sands demand and international market-share gains.

Drilling product-line revenue increased 22% year over year. Management attributed the improvement to prior restructuring, a lower cost base and demand for differentiated capital equipment in the Middle East and Latin America.

Subsea continued to deliver previously booked ROV systems and a rescue submarine. Higher offshore activity also supported aftermarket demand. Management expects aftermarket revenue to become more important as installed ROV utilization rises and sees additional potential from defense applications and upgrades using FET’s Unity operating system.

International revenue increased 31% year to date, including 32% growth in the Middle East. International revenue per rig rose 26% year over year. Management estimated annual revenue per rig at approximately $700,000 in the U.S. and $350,000 internationally, leaving room to expand international product penetration.

FET also highlighted new growth platforms. A high-tensile-strength tube for perforating gun housings received its first order and expands the company’s addressable market by approximately $200 million. In data center power generation, FET is pursuing advanced-stage RFQs for modular stationary cooling products designed to improve uptime and reduce total ownership costs.

Premiere Torque Rings contributed to the Downhole business following its mid-quarter acquisition. Management expects approximately $1 million of additional sequential EBITDA contribution in Q4 and sees cross-selling and international expansion opportunities through FET’s existing customer network.

Management Guidance

At the midpoint, full-year guidance implies year-over-year growth of 15% in revenue, 46% in adjusted EBITDA and 639% in adjusted net income, according to management.

Management said annualizing the midpoint of its Q4 guidance would indicate approximately 5% revenue growth and 14% EBITDA growth in 2027. This was presented as a reference point rather than formal 2027 guidance. Customer budgeting remains at an early stage, although management cited higher commodity prices, rising activity and greater product consumption from longer laterals and more completion stages.

FET’s longer-term 2030 plan targets doubling revenue, quadrupling EBITDA and tripling free cash flow relative to 2025. Management expects incremental EBITDA margins of 25%-35%, with roughly 60%-70% of incremental EBITDA converting to free cash flow.

Risks and Watch Items

• Middle East operations remain exposed to geopolitical volatility. FET has experienced some disruption but said it had not seen meaningful order cancellations related to the conflict.
• Higher freight and tariff expenses pressured Artificial Lift and Downhole profitability during Q3.
• Q3 free cash flow included $10 million pulled forward from Q4 through working-capital management, which should be considered when evaluating quarterly cash generation.
• FET expects a one-time incremental stock-based compensation charge of approximately $5 million in Q4, affecting GAAP net income and earnings per share.
• Management is limiting country and credit exposure in Venezuela and Argentina by generally selling to U.S. customers in U.S. dollars or using letters of credit for larger projects.
• Future growth will require additional working-capital investment, continued market-share gains and disciplined execution.

Analyst Q&A Highlights

2027 demand: Management expects customer capital discipline to continue. FET’s opportunity is tied less to rig additions alone and more to longer laterals, additional stages, higher equipment utilization and further market-share gains.

Capital allocation: With net leverage at 0.9x, management considers current debt levels comfortable. Future free cash flow may support acquisitions, share repurchases or refinancing, depending on relative returns. FET repurchased $1.4 million of shares during Q3 and has repurchased approximately 13% of the share count outstanding when the current program began in 2025.

Acquisition strategy: FET is targeting businesses with differentiated products, limited competition, attractive margins and growth profiles aligned with its organic strategy. Management said the balance sheet could support either further bolt-on deals or a larger transaction.

Backlog conversion: Most backlog converts to revenue within one year, although some subsea projects extend longer. The rescue submarine is expected to generate recognized progress over approximately two years. Around 80% of FET sales are activity-based consumables that are generally booked and shipped within the same quarter.

International expansion: Management expects international and offshore operations to contribute a larger share of growth through 2030. The strategy centers on exporting U.S.-proven technologies, including Multilift downhole tools, coiled tubing, greaseless wireline cable and cooling products.

Full Earnings Call Transcript

Complete Earnings Call Transcript

Management Remarks

Operator

Good morning, ladies and gentlemen, and welcome to the Forum Energy Technologies Third Quarter 2026 Earnings Conference Call. My name is Dilem, and I'll be your coordinator for today's call. [Operator Instructions] This conference call is being recorded for replay purposes and will be available on the company's website. I'll now turn the conference over to Rob Kukla, Director of Investor Relations. Please proceed, sir.

Rob Kukla

Thank you, Dilem. Good morning, everyone, and welcome to FET's Third Quarter 2026 Earnings Conference Call. With me today are Neal Lux, our President and Chief Executive Officer; and Lyle Williams, our Chief Financial Officer. Yesterday, we issued our earnings release, which is available on our website. 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 FET's Form 10-K and other SEC filings. Finally, management's statements may include non-GAAP financial measures. For a reconciliation of these measures, please refer to our earnings release and our website. During today's call, all statements related to EBITDA refer to adjusted EBITDA and net income refers to adjusted net income. And unless otherwise noted, all comparisons are third quarter 2026 to second quarter 2026. I will now turn the call over to Neal.

Neal Lux

Thank you, Rob, and good morning, everyone. Our third quarter results demonstrate another period of strong execution. Expectations entering the quarter were high given our substantial increase in guidance and our team delivered. We generated sequential and year-over-year growth in revenue, EBITDA, net income and free cash flow.

That performance improved our balance sheet and allowed us to complete a highly accretive acquisition. Our momentum through the first 9 months, together with strong execution and healthy backlog levels gives us confidence to raise our full year 2026 outlook. We now expect revenue between $900 million and $920 million, EBITDA between $123 million and $129 million and net income between $52 million and $58 million. At the midpoint, revenue would be up 15%, EBITDA up 46% and net income up 639%, all compared with 2025.

Also, up from prior guidance, we expect full year free cash flow between $66 million and $71 million. Our outlook is not only the result of an improving market. We believe it is disciplined execution of our Beat the Market strategy. Our strategy is straightforward: compete in targeted markets, use competitive advantages, innovate continuously and leverage our global footprint. Each pillar reinforces the others and creates a repeatable framework for profitable growth.

This strategy is critical to our investment thesis, so let me spend a few moments on each. As a starting point, we focus on mission-critical applications where customers value differentiated performance, reliability and technical expertise. We choose to compete in targeted markets where we have limited competition and competitive advantages. These advantages include advanced manufacturing capabilities, intellectual property and brands that have served customers for decades. Just as important, our industry experts work closely with customers to understand how our products are used in the field and how they can be improved. The combination of product expertise and customer relationships turn specific operating needs into durable commercial opportunities. Continuous innovation is the next pillar.

It fuels our growth engine. We develop differentiated technology that separates FET from the competition, improves customer outcomes and expands our addressable markets. Our innovation machine is making significant progress on a wide range of applications, including hydraulic fracturing, the Canadian oil sands and power generation. For hydraulic fracturing, we introduced a new high-tensile strength tube used in perforating gun housings and received our first order this month.

This consumable product utilizes our pipe milling expertise to efficiently manufacture a cost-effective solution. The introduction of this product expands our addressable market by approximately $200 million. The Canadian oil sands is a resource play with significant long-term growth potential. We are penetrating this market with our innovative flow control technology. Our products reduce steam and sand penetration in thermal oil wells and most importantly, increase oil production. This is a winning value proposition. In power generation for data centers, we continue to build momentum for our stationary cooling products. Our teams are utilizing patented technology to provide customized solutions that increase uptime and lower the total cost of ownership.

Ongoing collaboration with key customers is resulting in several advanced stage RFQs. This addressable market has significant growth potential. These are a few examples of how we translate engineering capability into market share gains, new revenue streams and profitable growth. Finally, our global footprint allows us to take technologies developed for U.S. unconventional basins and bring them to customers around the world. International revenue year-to-date is up 31% compared to last year, reflecting both healthy customer demand and strong execution by our regional teams.

In the Middle East, we navigated ongoing volatility and increased revenue 32%. Importantly, while we have experienced some disruptions, we have not had meaningful order cancellations related to the conflict. Customer priorities remain centered on uptime, efficiency and production performance, which align closely with FET's capabilities. The opening of Venezuela for U.S. companies is another developing opportunity. Historically, this country has been a good market for our products. It is encouraging to see our customers making capital commitments and entering into contracts. The opportunity remains in its early stages, but the level of activity is moving in a constructive direction.

FET has already delivered coiled tubing, pressure control equipment and coiled line pipe into the country. Staying in Latin America, Argentina is emerging as an attractive international growth market, where operators are applying technologies proven in the North America shale. Major oilfield service companies have established significant positions in the basin to support multiyear unconventional development programs. FET's differentiated products like quench and tempered coiled tubing and greaseless wireline cables enable efficient drilling and completion operations.

As activity scales, this should drive additional demand for our portfolio of consumable products. Now that we have reviewed the pillars of our strategy, let me touch on how we measure its effectiveness. The success of our beat the market strategy is measured by revenue per global rig. This metric evaluates whether FET is truly outperforming the broader market. And on this measure, we are winning. Since the beginning of 2022, our revenue per global rig has increased 35%, and we have accelerated our outperformance through the first 9 months of 2026. Not only have we beat the market, but we believe FET remains a compelling investment.

We have a proven track record and attractive valuation, meaningful capital returns and a clear growth path we call FET 2030. Our results demonstrate a consistent record of outperformance compared to the Russell 2000. Year-to-date, we have grown revenue 75% faster, and our operating leverage translates top line growth into significantly greater earnings with EBITDA increasing by over 4x the index. Finally, that performance is even more pronounced on the bottom line with adjusted net income increasing by more than 400x the Russell.

That strong financial performance is translating into significant equity appreciation. Through yesterday's close, FET shares are up 140% year-to-date compared to a 15% increase for the Russell 2000. Even after this appreciation, we believe FET continues to offer attractive relative value, especially compared to other small-cap industrial companies. Across several valuation and balance sheet metrics, including free cash flow yield, price to sales, enterprise value to EBITDA and net leverage, we believe FET comes out ahead. Our cash generation gives us flexibility to deploy capital for the benefit of shareholders. We generated $41 million of free cash flow through the first 9 months of 2026, returning $9 million through share repurchases and reducing net debt by almost 10%.

During the quarter, we completed the acquisition of Premiere Torque Rings, a highly accretive deal within our downhole product line. The acquisition met our investment criteria with strong industrial logic, differentiated products, attractive EBITDA margins and strong free cash flow conversion. As wells become longer and more complex, torque rings become an increasingly important solution, further supporting our FET 2030 growth plan. We are excited to add this established brand to the portfolio, and I would like to welcome the employees of Premiere Torque Rings to the FET family.

Looking ahead to 2027 and beyond, our FET 2030 plan targets doubling revenue, quadrupling EBITDA and tripling free cash flow versus 2025. Those goals reflect a combination of addressable market growth, targeted share gains, operating leverage and our capital-light business model. And thinking about next year, market indications favor a growth year. Elevated commodity prices are driving activity higher. Large service companies are expecting broad-based growth. For FET specifically, annualizing the midpoints of our fourth quarter guidance would result in revenue and EBITDA growth of 5% and 14% in 2027.

I believe we will continue to perform at this level or higher. Putting it all together, we are on the path towards FET 2030. Now to provide more detail on our third quarter results and near-term financial outlook, I will turn the call over to Lyle.

David Williams

Thank you, Neal. In the third quarter, our teams built on momentum from market share gains, customer technology adoption and increasing contribution from international markets to deliver meaningful growth and profit enhancement. Sequentially, consolidated revenue increased 5% to $237 million, right at the midpoint of guidance. EBITDA increased 14% to $36 million and EBITDA margins improved by 120 basis points to just over 15% with strong incremental margins of 40%. Net income increased 33% to $18 million. Both EBITDA and net income met the top end of our guidance. Impressively, on a year-over-year basis, EBITDA increased 56% and net income was up nearly 5x.

Our book-to-bill was 103% as orders increased to $244 million, exceeding revenue for 6 of the last 7 quarters. Four primary drivers propelled our year-over-year third quarter performance. We continue to see good results in our drilling product line, where revenue increased 22%. The changes made last year to streamline the business and lower its cost base are showing up in improved margins and operating leverage. Internationally, we are delivering differentiated drilling capital equipment, particularly in the Middle East and Latin America, providing additional opportunities to build on this success. Subsea continues to deliver its backlog, driving improved financial performance. We are executing orders booked last year, including ROV systems and the rescue submarine. With the offshore market strengthening, we are also seeing a pickup in aftermarket activity.

The Canadian oil sands market continues to be a strong contributor to our results. In addition to activity levels remaining durable, we have also seen the increased adoption of our flow control technology that Neal referenced earlier. Finally, revenue increased across each of our international regions as we gained market share through differentiated product delivery. International revenue per rig is up 26% compared with the prior year. These results reinforce the strength of our competitive position, utilization of our global footprint and the opportunities we are seeing across international markets.

Before I review segment results, I would like to touch on the adjusting items from our GAAP net income in the third quarter. We recorded a $3 million charge associated with resolving a previously disclosed litigation matter, plus $500,000 of related legal fees. We also recorded approximately $1 million in conjunction with the sublease of one of the manufacturing facilities we closed earlier this year. There was also roughly $1 million of transaction fees for the Premier acquisition. Now turning to our segment results. Drilling and completion revenue increased 6% to $147 million, attributable to increases in all 4 product lines.

EBITDA increased 28% to approximately $21 million and margins expanded 240 basis points to 14%. Strong operating leverage and cost management enabled a robust incremental EBITDA margin of 56%. Artificial lift and downhole revenue increased 3% to $90 million due to the addition of Premiere Torque Rings and higher demand for sand and flow control solutions and our valve products. EBITDA of $21 million was relatively flat. Contributions from revenue growth were offset by higher freight and tariff costs.

Orders remained strong, resulting in a book-to-bill ratio of 113%, primarily from large gas processing equipment and technology orders. With that segment context, I'll turn to our outlook for the fourth quarter. We expect fourth quarter results to be stronger than we had implied on our second quarter call. Higher oil prices have supported increases in drilling and completion activity around the world. Specifically, global drilling rig count is up 6% year-over-year. This activity tailwind, combined with our recent acquisition supports the increase in our outlook. We expect fourth quarter revenue between $230 million and $250 million and EBITDA between $33 million and $39 million. At the midpoint, these represent approximately 19% revenue growth and 59% EBITDA growth compared to the fourth quarter of last year.

In line with this profitability guidance, we expect net income between $15 million and $21 million and free cash flow between $25 million and $30 million for the fourth quarter. I would like to call out one thing for fourth quarter modeling purposes that will impact GAAP net income and earnings per share. Earlier this month, to comply with our long-term incentive plan, we modified approximately 128,000 outstanding equity awards to allow for cash settlement and are electing to settle another 15,000 equity awards in cash.

Therefore, we expect to recognize a onetime incremental stock-based compensation charge of approximately $5 million in the fourth quarter. While our third quarter income statement demonstrates the success of our Beat the Market strategy, our capital-light operating model continues to deliver even more value. Over the past 2 years, improved free cash flow generation has allowed us to favorably deploy capital for the benefit of FET and its shareholders. During the third quarter, we continued that trend, taking advantage of our strong free cash flow and balance sheet to reduce net debt, repurchase shares and complete an accretive acquisition.

In the third quarter, effective working capital management pulled forward $10 million of cash flow from the fourth quarter. Accounts receivable increased with revenue, while inventory remained well controlled as we actively managed inbound materials to align the business with our outlook. With this focus, free cash flow of $30 million was well above the high end of our guidance range. We reduced net debt by $13 million (sic) [ $18 million ] to $97 million, improved our net leverage ratio dramatically from 1.1x to 0.9x and returned capital to shareholders.

We repurchased approximately $1.4 million of shares during the quarter at an average price of $51, over 40% below our recent trading values. Since initiating our current program in 2025, we have repurchased a total of 1.6 million shares or approximately 13% of the then outstanding share count. In addition to debt reduction and share repurchases, we also completed the acquisition of Premiere Torque Rings. Total guaranteed consideration of $33 million or about 4x EBITDA consisted of $16 million of common stock, $12 million of cash and $5 million of deferred cash consideration. Management will remain with the business and is motivated to continue profitable growth through a self-funding earnout.

Acquisitions have been and continue to be an important part of our capital allocation framework and can enhance our FET 2030 vision. We have a solid balance sheet and believe our stock is an attractive currency today. Using a combination of cash and equity allowed us to complete the Premiere acquisition while preserving balance sheet capacity to pursue additional strategic investments. With that, I'll turn the call back to Neal for closing remarks.

Neal Lux

Thank you, Lyle. Our third quarter results reinforce FET's track record of delivering on our commitments and a clear example of executing at a high level. We delivered strong growth, generated substantial free cash flow and used that cash to strengthen the balance sheet, return capital to shareholders and complete an accretive acquisition. These results reflect the progress we are making across the business. Looking ahead, we remain confident in our increased 2026 outlook and the path towards FET 2030. With continued execution of our Beat the Market strategy, we expect to gain share, improve profitability and build a stronger company.

We believe FET is well positioned to deliver continued outperformance and long-term shareholder value. Thank you for joining us today. Dilem, please take the first question.

Operator

And I show our first question in the queue comes from the line of Jeff Robertson from Water Tower Research.

Question-and-Answer Session

Jeffrey Robertson

Neal, you talked a little bit about 2027. Can you share any color on the type of conversations that you're having with customers that support your -- that underpin your view that people might be leaning into 2027 a little bit just based on where the market is right now?

Neal Lux

Yes. I think it's definitely early in the budget season, right? So I don't want to get too far ahead. But I think if you take what you hear from large service companies publicly saying broad-based, let's call it, mid-to-high single-digit activity, we do have a higher commodity strip as well. Our customers are going to be disciplined. But I do think for us, it will continue to be the intensity, right? It will be longer laterals, more stages, and that's just going to consume more of our products.

So I think the other way to think about it is what we -- I think we're at a good operating level where we are today. So if you think about our third and fourth -- third quarter results and fourth quarter guidance, we feel like that's a good level that we're operating at. And then if we see further activity and further share gains, we feel good about next year.

Jeffrey Robertson

On the Premiere Torque Ring acquisition, can you share anything about the contribution to fourth quarter '26? And is that a technology that falls into some of your others that you can extend the market opportunity to other markets under the FET umbrella?

Neal Lux

Yes. I'll start with the second part of your question, Jeff, because I think that's really the key part. Premiere Torque Rings has a lot of synergy with our downhole product line. We have shared customers, very similar target accounts. So a lot of cross-selling opportunities. So that part to me is really exciting again. International expansion is one part of that. Also, when we started looking at this acquisition, what got us really excited is how useful the product is, but how field-friendly it is. Just to give a quick anecdote, when we started looking at the company, Lyle and I were actually able to install these rings on the casing. And quite honestly, we would make terrible field hands, like we would be fired day 1.

But we were able to install these torque rings. So I think it's field friendly. But as wells continue to get more complex, the torque rings are going to be a great solution for our customers. It gives them a lot of flexibility in their threat designs. And then importantly, we were able to retain the management team, right? They're talented, they're passionate and they're customer-focused. So I think all that is just really exciting about the acquisition.

David Williams

And Jeff, I'll add in on the fourth quarter results, really excited about that. We talked about on the call. The guaranteed consideration for the acquisition is about $33 million, and we acquired that for roughly 4x EBITDA. So think about an $8 million or $2 million a quarter kind of a run rate. We did close that acquisition in the middle of Q3. So sequentially, probably think another $1 million or so of contribution from Torque Rings. And as Neal mentioned, long term, we're excited about the ability to leverage our footprint to help that business grow. So we look for more contribution in the coming quarters and years.

Jeffrey Robertson

Lyle, is their current business more of a North American focus? Or they -- do they already have global relationships?

David Williams

They are very U.S. focused. But before our acquisition, they were also international. They were doing business in Latin America and the Middle East. So already a great starting point around the world and something that we can help them grow.

Jeffrey Robertson

Last question or last comment, I guess. So like a lot of your other businesses, that basically dovetails into increased demand for unconventional resource development around the world. Is that right?

Neal Lux

That's right. I think also these tools can be used in even conventional casing designs. So ones that it just -- really the good use of this -- of our our Premiere Torque Rings is if the casing needs to be rotated while lining the hole. So if it's more complex or the hole isn't drilled perfectly. Premiere Torque Rings is a great tool to increase that capability and allow that casing to be installed. So unconventional, yes, but I think well complexity is really what drives it.

Operator

And I show our next question in the queue comes from the line of Steve Ferazani from Sidoti.

Peter Sidoti

Actually, I have the second team here. It's Peter Sidoti. Quick question. Can you just talk about where you're comfortable with debt levels as well as your priorities on the cash flow between buying back stock, debt repayment and acquisitions at this point?

Neal Lux

Yes. Maybe I'll start and then let Lyle jump in, Steve, but -- excuse me, Peter. As we think about our priorities, we feel like we're comfortable with our debt levels now. We kind of mentioned that as we entered the year. So we want to look at different opportunities and acquisitions would be one of them as well as share buybacks would be strategic as well. And we think there's a lot of acquisition opportunities out there. We're continuing to look, and I think there's a good pipeline that we've built. But we'll also be very disciplined in whether we make an acquisition or we buy back our own shares. And one way to look at that is our free cash flow yield and then what's the price of the acquisition we're buying.

David Williams

Yes, Peter, the really -- thanks for the question. We've done a great job over the last several years of lowering our net debt. One thing I want to correct comment on the call actually said we reduced our net debt by $13 million. The right number is $18 million. So sorry for that misspeak. But I think Neal is right as we continue to drive that down, we really think of debt reduction levels or where our debt is now is a very comfortable level of leverage. As we continue to drive that down, it really looks like more dry powder for strategic investments.

Peter Sidoti

Do you have a target return when you look at acquisitions?

Neal Lux

We have a criteria. Maybe stepping back big picture, our criteria is we want to acquire companies that have differentiated products that have limited competition that have similar growth outlook over the next 5 years that we do, right? So they can augment our organic growth strategy. I think that's the key is we love our internal plans. We love what we have in front of us. We think our FET 2030 plan, so far, we're executing on that brilliantly. I think that will continue.

But if we can augment that with acquisitions that follow that same path, we're excited. Premiere, which we completed here in the third quarter, that was one as well. And if we can find others that have similar framework, we'll do that as well.

Operator

And I show our next question comes from the line of Gowshi Sri from Singular Research.

Gowshihan Sriharan

My first question is, as growth kind of picks up, how should we think about free cash flow conversion? So how much kind of working capital requirements does the extra -- the next $100 million of revenue need?

David Williams

Yes, Gowshi, that's a really good question. One of our biggest assets, obviously, is our working capital. It's a capital-light business. We don't need a lot of CapEx to grow our business. The last few years, we've been able to monetize a lot of working capital. It's been a good change. I think going forward with growth, you're right, we will need to reinvest I think the right framework that we would say to you is think about our long-term FET 2030 strategy and the outline we've given there, which is incremental EBITDA margins on revenue should be between 25% and 35%, kind of roughly in line with our gross margins and that 65% to 75% or 60% to 70% of every incremental dollar of EBITDA would be free cash flow. So still quite a light capital model, but that gives an idea of what we would be thinking about as far as incremental working capital to grow top line.

Gowshihan Sriharan

And on the backlog, I know you started the year around $300 million, kind of the highest in 11 years. Where does that backlog sit right now as opposed to the at the start of the year? And how much of that can we kind of model that converts over the next 2 or 3 quarters?

Neal Lux

Yes. I think our book-to-bill has continued to be above 100 for the last few quarters. I think that's been good. So I think generally, our backlog, we convert in less than a year. So I think that's a good rule. We do have a few exceptions in Subsea in that product line. Occasionally, we can have orders that will extend out. A good example is our rescue submarine that will deliver or will recognize, excuse me, progress over the next 2 years or so. So that would be one exception. But I think in general, as we book, we convert that to revenue. Maybe another thing to think about is roughly 80% of our sales are activity-based consumables. So those are typically booked and shipped within the quarter even. So I think that's to us more important. So as we think about '27 and we look out beyond, it's what's activity going to be what's -- how much share are we going to take and then how quickly can we turn that to revenue.

Gowshihan Sriharan

Okay. And I know kind of you alluded to that. Does the aftermarket and the defense become a bigger share of Subsea next year? Or is the subsea pipeline looking for refilling backlogs as those ROV deliveries kind of roll off?

Neal Lux

Yes. We've continued to have good progress. But yes, I think as we ship ROVs, we'll be adding more and more aftermarket. Again, we think we have one of the highest market positions in world-class ROVs. So as those ROVs continue to have higher utilization, they're going to need more and more aftermarket. We have made defense a focus of our growth market. So we've continued to add. And then finally, with our innovation, we've added our Unity operating system.

And with Unity, we have the opportunity to put that operating system on new ROVs. But more excitingly, it can be an upgrade to existing. So I think as we continue to see adoption of Unity, we'll continue to have opportunities to upgrade existing ROVs.

Gowshihan Sriharan

And I'll just make this my last question. I know you mentioned the global rig count up 8% quarter-on-quarter. Where are these rigs being added? How much of that -- how much of FET content do you typically have on them? And how long does the rig addition usually take to show up as in your consumables revenue?

Neal Lux

Yes. Good question. So year-to-date, if you think about the big geographies, so U.S. is roughly flat, but sequentially over the quarter, it's up 6%, but year-over-year, up 9%. But I think Canada is up a bit. But I think more importantly, as you think about our revenue per rig. So if you split it out in the U.S., we have about $700,000 of annual revenue per U.S. rig. And internationally, that number is about $350,000, so about half. So I think as we continue to execute on our strategy of taking the technologies that have been really successful in the U.S. and exporting those internationally, the big goal for us is to bring up that international revenue per international rig. And so I think it's a rig count story. But more importantly, it's how do we increase our revenue per rig. And so I think international is a great opportunity there for us.

Operator

And I show next question comes from the line of James Rollyson from Raymond James.

James Rollyson

Neal, you've covered a lot of things I was going to ask, and you kind of just alluded to it, but international revenue is up 31% year-to-date. I think your full year revenue guide is up 15% corporate-wide, which obviously puts international on track to outperform. As you think through your outlook through 2030, the targets on growth, is international and offshore going to be the bigger relative share of that growth to get to those targets, do you think?

Neal Lux

I think it will be. And again, just maybe to add on that prior comment of revenue per rig. As we think about the technologies that have been really successful, and again, the example I give because I just -- I love it is our Multilift solution that we provide downhole tools that extend the life of downhole pumps. In the U.S., we have strong share. Internationally, the applications or that market is about 4x larger, and our share is really low. So the opportunity for us to take that solution that is really successful, that has proven itself and sell that internationally is huge. And so yes, I think we'll continue to see an acceleration of revenue outside the U.S.

Operator

And I show our next question comes from the line of Dan Pickering from Pickering Energy Partners.

Daniel Pickering

First, I guess I'd make a comment, which is it wasn't that long ago when the Q&A queue was pretty lonely. So congratulations on identifying incremental investors and finding folks that appreciate the story, well done there. Let's talk a little bit, if you don't mind, Neal, you spent some time on the call talking about the Middle East. You show us your revenue numbers by geographic region. That was a kind of $40 million revenue number year-to-date. Tell us what you're -- I mean, kind of give us an idea of what you're doing over there? Are you shipping things in? Are you performing any kind of services? You said you've been somewhat uninterrupted. Do you think the next 6 months looks similar to that? Is there a risk that things get dicier just as this conflict plays out?

Neal Lux

I think there's always that that risk, Dan. It's some we're concerned about. We have local manufacturing as well as distribution and sales offices in Saudi as well as in the UAE. So we're always concerned that things can change. But for us, it's -- we ship our product, right? So most of our sales will be, let's call it, product sales, so whether it's new products or aftermarket, that's what's driving it. And it's -- a lot of times, though, it's taking the applications that whether it's radiators for frac equipment or pumps or quench and tempered coiled tubing or greaseless wireline cable, things that have been the workhorse of U.S. unconventional and exporting those to the Middle East, that's been successful or exporting them to Argentina, for example.

So anywhere that service companies and operators are looking to become more efficient, we found a good market opportunity for our products and solutions.

Daniel Pickering

Yes. You mentioned Venezuela and Argentina. Those are countries that have in the past for upstream companies been tough to get paid or they've seen assets expropriated, et cetera. How -- if you think about Venezuela specifically, is that a ship to a U.S. customer, get paid in U.S. dollars in the U.S.? Or does it happen locally? How are you handling the kind of the currency and country risk?

Neal Lux

Yes. No, we're being very, very cautious, right? We're not going to try to grow but take on a lot of credit risk there. So absolutely, we're being -- we're generally shipping to a U.S. company and receiving U.S. dollars. Another way we could do it, let's say, on larger projects, I think coil line pipe would be a good example. We may have an LC in place. But again, that would be on delivery of that product ex works. So our focus is products. We're not going to have assets in country. We're going to ship our products from the U.S. and have them delivered into Venezuela and Argentina, and we're highly focused on getting paid.

Daniel Pickering

And you mentioned it, but I wasn't writing quickly enough. What are kind of your key opportunities there in Venezuela just from a product line perspective?

Neal Lux

Yes. It's really starting off with equipment or products that service companies would utilize, so coiled tubing, pressure control. We're also seeing some infrastructure rebuild, and that would be like coil line pipe. So I can remember a time when I was there probably over 20 years ago and looking at Lake Maracaibo and the opportunities to install coil line pipe there. So we've seen some of that. So I think as the country continues to grow and stabilize, I think more infrastructure type products will be there. But initially, we're selling consumables.

Daniel Pickering

Got you. And the last question for me. You've -- you did an acquisition this quarter. Your balance sheet clearly lets you do more if you find the right ones. Can you just talk a little bit about your BD process? You mentioned in your discussion, you and Lyle out kicking the tires at Premiere. Is there -- are you guys the BD guys for Forum? Do you have an organization that's focused on that? Just kind of curious what the velocity of acquisitions might be now that the balance sheet is really ready to go.

Neal Lux

Yes, I'll hand that to Lyle because his team leads that kind of talk through the process.

David Williams

Yes. Thanks, Dan. We do have a team that works on identifying opportunities. I think one of the ways that we do that, though, as we've talked before, we have a really broad product reach. One way to think about M&A is we have lots of shots on goal, lots of technologies that could be adjacent or additive to our story. So our BD teams do work with our individual product lines and businesses to identify what technologies are out in the space, what could be interesting, tangential to us, something where 1 plus 1 is more than 2. So it's a company-wide effort, I would say, to identify those targets and then a specific team that helps that those are the right targets for us.

Operator

And I show our next question comes from the line of Joshua Jayne from Daniel Energy Partners.

Joshua Jayne

First one is on Lower 48. So we've heard a number of increasing anecdotes around underinvestment across a number of product lines, signaling that sort of if we have an activity move up further into 2027, the industry could be short equipment across a number of product lines. Do you agree with this take first? And for those who maybe have underinvested, do you sense sort of a coiled spring coming in the Lower 48 equipment market? Or do you think -- you view it as sort of just steady as she goes for now?

Neal Lux

Josh, good to hear from you. We get out and see -- visit our customers a lot and see our equipment. And I know at the operating level in the field, a lot of them would love to have new equipment. They would love to have that investment. I think our customers, especially the U.S. Lower 48 have been extremely resourceful in extending the life and utilizing their equipment to the fullest. So as I think about next year, I'd hate to say it's a coiled spring because I think they're going to continue to be resourceful.

For us, though, it's the higher utilization of that equipment that is there's less downtime. There's more wells, more stages. And so that's where we're seeing the benefit is really on the consumables. That said, if we get examples for upgrades, where we are seeing it is with like key tools. So our FR120 Iron Roughneck, that's a capital item, right? That will be a CapEx item. But what we're seeing is our customers wanting to upgrade their rigs to handle larger drill pipe and be more efficient, Well, they're making that investment. Another good example is our radiators from GHT.

Again, having the latest and the best radiator can increase the uptime of your engine and transmission. So they do make that upgrade. So I think we may see an upgrade cycle of key components, and I feel like that's really good for us. If there is an underinvestment in coiled spring, I'd love to be a part of it, and we're well positioned to take advantage of that, too.

Joshua Jayne

And then I did want to talk about -- you highlighted the potential for data center revenue and just there's been a lot of opportunity, but also a lot of regulatory noise with respect to project start times. Has this pushed your expectations out a little? Or maybe you could just go into some more detail about the opportunity set for Forum and the size, scale as it relates to the opportunity for your business today?

Neal Lux

Yes. So we're excited. And if you think about the place where we play, we're on the shorter cycle, right? So if you go back to the regulatory challenges that you mentioned, those will happen on the front end. And once the EPCs or the data center or the customers, they get over that, that's when they come to us. So when we have RFQs that are in the hopper, those are quotes and deliveries that have kind of passed that hurdle. So if they're talking to us, it means that it's right in front of us. So what's exciting that we're seeing is we are seeing increased activity, increased RFQs that are out there. We think we have a great solution. We have some IP around it. Our coolers are, let's call them, a little bit more modular.

So when they are operating, and again, as I envision these data centers, the engine should be running a lot, right, even more than frac. They should be roughly 365 24/7. Well, if you need to have maintenance or you need to have an issue, you can't have a cooler down. So our modular technology would allow replacement of coolers very quickly. So when I mentioned that we have solutions that prioritize uptime, that's what we're talking about. It's going to lower the total cost of ownership. So we're excited about what we have. We have a good history there. We've progressed from from really strenuous applications to now the stationary ones. So I think we're really well positioned.

Operator

And I show our next question comes from the line of Eric Carlson.

Unknown Analyst

Another good quarter. I think maybe just thinking a little bit longer term here. I mean, I think you guys started presenting the 2030 plan 3 or 4 quarters ago. And kind of if you look at results the past few quarters and even if you hold those steady to modestly higher I mean, within 5, 6 months or 2 quarters here, we're looking at somewhere around $140 million of trailing EBITDA. I mean if I would have told you this is kind of where we stand and the tailwinds that exist when you started thinking about the 2030 plan, I mean, what would be your scorecard? Does it feel like you're ahead of schedule, behind schedule? And just some comments on when you think about where we've come from to where we are now and then kind of progress along the way here.

Neal Lux

Yes. We do feel really good about the progress we've made. I think the -- when we rolled out the FET 2030 plan, it wasn't a top-down exercise, but one that we've built for the bottoms up with our teams and have a shared commitment to delivering there. So the results we've had to date, I'm proud of our teams and what they've done. When we first started it as well, we kind of laid out a flat and a growth scenario. So I think where we benefited is we've had more of that growth scenario.

And I think about the inventory of oil over the next few years that I think that growth scenario is a more likely scenario than flat. And I think that's a little bit different than maybe just 3 or 4 quarters ago. That said, it still requires us to take share. It still requires disciplined working capital management in order to turn that share growth into free cash. And then the teams have done it. So yes, I would -- here, I would give ourselves an A, but the next quarter has already started, and we need to be focused on our grades going forward. So we'll give ourselves a pat in the back, but we're already moving forward.

Unknown Analyst

Great. And then Lyle, can you remind me, I think -- so the debt that you guys issued a few years ago, that comes due in 2029, it's callable next year. Obviously, there's some balance sheet or return of capital restrictions on that, that probably aren't as big of an issue as they were in the past. But when you guys think about those notes due 2029, maybe just walk through, is that something that looks interesting to call once that gets here in the middle of 2027 or refinance those into something less restrictive? Maybe just thoughts on the debt side.

David Williams

Yes. Great question, Eric, and thanks for let me remind everybody where that stands. On our balance sheet, we do have the $100 million bond that's traded in the Nordic market. We issued it a couple of years ago. And as you mentioned, it matures in 2029. The first call date for us would be about May of 2027. So definitely something that we've thought about. I think importantly from where we stand today, our net debt as of the end of Q3 was $97 million. So below the value of that bond and our expectation is to continue generating free cash flow. So we can get our leverage down, net debt on an absolute basis down quite a bit and leverage is low -- that bond would be callable in May. So it's definitely something we've thought about as an option. We've got a very well-funded revolver, about a $250 million total facility, $180 million worth of borrowing base and very little drawn on that here at the end of the quarter.

So really in great shape from that perspective. So now I think it's a capital allocation question. In the past, our capital allocation has been aimed at debt reduction and share repurchases. And I would say checkmark, checkmark. We've been able to achieve both of those. Now I think we can add in the flexibility of M&A, which we just completed here in the third quarter and balance where do we want to deploy our capital for where do we get the best return. That could be in some sort of refinancing of those bonds, but it could also be -- we got plenty of time left on those bonds. So I think we've got flexibility to think about where are the best returns and what actions do we want to take for the balance sheet.

Unknown Analyst

Great. And then last one for me would be, when you think -- so the recent acquisition, $8 million in EBITDA, is that kind of in the wheelhouse of what you'd like to see going forward? Maybe not something transformative like you did with Variperm. But if you can bolt on 4, 5, 6 of these $8 million or $5 million to $15 million EBITDA businesses, and that has a meaningful impact over the next 2, 3, 4 years. Maybe just like range of targets in the pipeline, like what do they look like from an EBITDA perspective? And obviously become even more interesting as the public markets, the multiples have kind of increased, while it seems like the private valuations from what I've heard are still pretty subdued just because there's not a lot of buyers. So maybe just talk through kind of target size and pipeline and where you guys see you're competing or who you're competing with for some of these acquisitions?

Neal Lux

Maybe we'll do a little back and forth on that question, Eric. But I think what's really important is and exciting for us is we have the opportunity to do a bigger acquisition if we wanted to, right? I think we have the balance sheet in the right spot. We -- again, we feel good about our access to capital markets. So if we wanted to do a larger one, that's available. But as you mentioned, Premiere was a great add-on. I think there could be other ones like that. We spend a lot of time looking.

And again, it's important to understand what's out there. And I think as Lyle mentioned earlier on an earlier question, we get a lot of the information from our teams and see where does it fit, what technologies are out there. So we'll continue to do that. But as you mentioned, public company multiples have moved up. I would imagine over time, you may see private as well. So I don't think there's just deals out there, you can't steal a company, but I think there's a lot of other opportunities, too.

Operator

That concludes the Q&A session. At this time, I'd like to turn the call back over to Neal Lux, President and CEO, for closing remarks.

Neal Lux

All right. Well, thank you for your support and participation on today's call. We look forward to our next one in February to discuss our fourth quarter and full year 2026 results.

Operator

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