福鲁姆能源科技 (FET) 2026年第三季度业绩电话会议：上调业绩指引

核心要点

• Forum Energy Technologies公布2026财年第三季度营收为2.37亿美元，环比增长5%；调整后EBITDA增长14%至3600万美元，调整后净利润增长33%至1800万美元。
• 调整后EBITDA利润率突破15%，环比扩大120个基点。自由现金流达3000万美元，超出公司指引区间。
• 订单额增至2.44亿美元，订单出货比（book-to-bill ratio）达到103%。在过去七个季度中，有六个季度的订单额超过了营收。
• 管理层上调了2026财年全年业绩预期：营收预期为9.00亿至9.20亿美元，调整后EBITDA预期为1.23亿至1.29亿美元，自由现金流预期为6600万至7100万美元。
• 今年迄今国际业务营收增长31%。管理层强调了中东、拉丁美洲和加拿大油砂领域的增长，以及数据中心发电冷却领域的业务机遇。
• FET完成了对Premiere Torque Rings价值3300万美元的收购，收购估值约为4倍EBITDA，预计将每年增加约800万美元的年化EBITDA。

关键财务数据

除非另有说明，所有EBITDA和净利润数据均为调整后数据。

钻井与完井（Drilling and Completion）业务营收环比增长6%至1.47亿美元。该板块EBITDA增长28%至约2100万美元，利润率扩大240个基点至14%。

人工气举与井下（Artificial Lift and Downhole）业务营收增长3%至9000万美元，受Premiere Torque Rings的收购以及对防砂与流量控制解决方案及阀门产品更强劲的需求支撑。由于运费和关税成本上升抵消了营收增长带来的效益，EBITDA基本持平于2100万美元。

业务与运营表现

四大因素支撑了同比增长：钻井业务表现更佳、水下积压订单的履约、加拿大油砂的需求以及国际市场份额的提升。

钻井产品线营收同比增长22%。管理层将这一改善归因于此前的重组、更低的成本基数，以及中东和拉丁美洲对差异化资本设备的需求。

水下业务继续交付此前已预订的ROV（水下机器人）系统和一艘救援潜艇。海上活动的增加也支撑了后市场需求。管理层预计，随着已安装ROV利用率的提升，后市场营收将变得更加重要，并看到了来自国防应用以及使用FET Unity操作系统升级所带来的额外潜力。

今年迄今国际业务营收增长31%，其中中东地区增长32%。单钻机国际营收同比增长26%。管理层估计，在美国单钻机年营收约为70万美元，而在国际市场约为35万美元，这为提升国际产品渗透率留下了空间。

FET还重点指出了新的增长平台。一款用于射孔枪外壳的高抗拉强度管材收到了首笔订单，使公司的可寻址市场扩大了约2.00亿美元。在数据中心发电领域，FET正在跟进处于后期阶段的询价（RFQ），提供旨在提高正常运行时间并降低总拥有成本的模块化固定式冷却产品。

在季度中期被收购后，Premiere Torque Rings为井下业务做出了贡献。管理层预计第四季度将带来约100万美元的额外环比EBITDA贡献，并看到了通过FET现有客户网络进行交叉销售和国际扩张的机遇。

管理层业绩指引

据管理层称，按中点值计算，全年指引意味着营收同比增长15%，调整后EBITDA同比增长46%，调整后净利润同比增长639%。

管理层表示，按第四季度指引的中点进行年化计算，将意味着2027财年营收增长约5%，EBITDA增长约14%。这仅作为参考，而非正式的2027财年指引。客户预算编制仍处于早期阶段，但管理层提及大宗商品价格处于高位、行业活动增加，以及更长的水平井段和更多完井层段带来的更高产品消耗。

FET针对2030年的更长期计划目标是：与2025年相比，实现营收翻倍、EBITDA翻两番、自由现金流翻三番。管理层预计增量EBITDA利润率为25%-35%，其中约60%-70%的增量EBITDA将转化为自由现金流。

风险与关注事项

• 中东地区的业务仍受地缘政治波动影响。FET受到了一定影响，但表示尚未看到与冲突相关的实质性订单取消。
• 在第三季度，运费和关税费用的增加对人工气举与井下业务的盈利能力造成了压力。
• 第三季度自由现金流包含通过营运资金管理从第四季度提前拉动的1000万美元，在评估季度现金生成能力时应将此因素考虑在内。
• FET预计第四季度将产生一次性新增股权激励费用约500万美元，这将影响GAAP净利润和每股收益。
• 管理层正通过通常以美元销售给美国客户或对较大型项目使用信用证的方式，来限制在委内瑞拉和阿根廷的国家和信用风险敞口。
• 未来的增长将需要额外的营运资金投入、持续获取市场份额以及严谨的执行力。

分析师问答精选

2027年需求：管理层预计客户将保持资本纪律。FET的机遇不仅仅取决于钻机数量的增加，更取决于更长的水平井段、更多的完井层段、更高的设备利用率以及进一步扩大的市场份额。

资本配置：在净杠杆率为0.9倍的情况下，管理层认为目前的债务水平处于舒适区间。未来的自由现金流可能会根据相对回报率用于并购、股票回购或再融资。FET在第三季度回购了140万美元的股票，自2025年启动当前回购计划以来，已回购了约13%的已发行股份。

收购策略：FET的目标是收购具备差异化产品、竞争有限、利润率理想且增长特征符合其有机增长战略的企业。管理层表示，资产负债表足以支撑进一步的补强型收购或更大规模的交易。

积压订单转化：大多数积压订单会在一年内转化为营收，但部分水下项目周期更长。救援潜艇预计将在约两年内确认相关进度。FET约80%的销售额来自于基于作业活性的耗材，这些耗材通常在同一个季度内下单并出货。

国际市场扩张：管理层预计，到2030年，国际及海上业务将在增长中贡献更大的份额。该战略的核心是出口在美国已被验证的技术，包括Multilift井下工具、连续油管、无脂电缆以及冷却产品。

业绩电话会议完整文字记录

完整财报电话会议逐字稿

管理层陈述

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.

分析师问答

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.