TechnipFMC plc (FTI) Earnings

Management highlights

- Overall Financial & Shareholder Returns * Delivered strong Q2 2026 results, with total adjusted EBITDA of $601 million (excluding a $19 million foreign exchange loss) and free cash flow of $488 million. * Returned $440 million to shareholders in Q2 2026 via $420 million in share repurchases and $20 million in dividends; 95% of first half 2026 free cash flow was returned to shareholders, meeting the company's commitment to return majority free cash flow. * Ended the quarter with $992 million in cash and a net cash position of $590 million. - Subsea Business Developments * Achieved $2.5 billion in subsea inbound orders in Q2 2026, with a book-to-bill ratio above 1. The total subsea opportunity pipeline reached a new record high, extending beyond the end of the decade. * Clients are shifting to a portfolio approach for both greenfield and brownfield subsea projects, leveraging existing infrastructure and prioritizing short-cycle, economically attractive opportunities. The company's IEPCI integrated model and standardized solutions reduce cycle times and deliver improved project economics. * Secured notable portfolio awards: VarEnergy's Ophelia and Goya Nord projects in the North Sea, and Equinor's portfolio of subsea tiebacks on the Norwegian continental shelf (Equinor plans 75 total subsea projects through 2035). * Signed a new global integrated collaboration agreement with a long-term client that brings TechnipFMC into project development up to one year earlier, enabling portfolio-level optimization and improved long-term visibility. * 80% of new subsea orders are now for Subsea 2.0 configurable seabed equipment, which represents 50% of current subsea revenue, with further upside as order conversion to revenue continues. - Surface Technologies Business Developments * Margin improvement is on track in 2026 despite lower year-over-year revenue, as the company continues its strategy of focusing on higher-return opportunities, targeted geographies, and differentiated technologies. * Received formal recognition from ADNOC as a trusted local manufacturer and partner for ADNOC's in-country value program, positioning the company well for future investment growth in the UAE. - Strategic Innovation: IEPCI 2.0 * The company's next major strategic initiative is industrializing the full IEPCI value chain (beyond the seabed equipment covered by Subsea 2.0), including water column infrastructure (umbilicals, risers, flowlines) and installation, referred to as IEPCI 2.0. This initiative is a top management priority and has delivered promising early progress, with expected industry-wide disruptive benefits.

Guidance

- Full year 2026 guidance updated upward: Total company adjusted EBITDA (excluding foreign exchange) is now expected to reach approximately $2.19 billion, an increase from prior guidance. Full year free cash flow is now tracking to the high end of the guidance range at $1.45 billion. - Subsea full year 2026 revenue and adjusted EBITDA margin are now expected to land near the top end of their prior guidance ranges. Q3 2026 subsea revenue and margin are expected to be in line with Q2 2026 levels. - Surface Technologies full year 2026 revenue is now expected to land closer to the low end of its prior guidance range, while adjusted EBITDA margin is expected to land just above the midpoint of its prior guidance range. Q3 2026 Surface Technologies revenue is expected to increase mid-to-high single digits sequentially, with an adjusted EBITDA margin of approximately 17.5%. - Corporate full year 2026 expense is still expected to total approximately $120 million, unchanged from prior guidance. - The company confirms its target of $10 billion in subsea inbound orders for full year 2026, and reaffirms expectations for a step-up in subsea inbound orders, revenue, and adjusted EBITDA margin in 2027. This growth is expected to continue through the end of the decade. - Most future growth will be driven by direct awards to TechnipFMC, supported by the company's IEPCI model and collaborative client relationships.

Segment performance

1. Subsea Segment: Revenue was $2.5 billion, a 13% sequential increase from Q1 2026. This accounts for approximately 89.3% of total Q2 2026 revenue. Adjusted EBITDA was $577 million, up 31% sequentially, with an adjusted EBITDA margin of 23.2%. 2. Surface Technologies Segment: Revenue was $276 million, a 3% sequential decrease from Q1 2026. This accounts for approximately 9.9% of total Q2 2026 revenue. Adjusted EBITDA was $15 million, a 1% sequential increase, with an adjusted EBITDA margin of 18.1%, up 70 basis points from Q1 2026. 3. Corporate & Other: Net corporate expense was $26 million for the quarter.

Risks & headwinds

- No new material risks were explicitly disclosed on the call. The company noted that forward-looking statements are subject to general risks and uncertainties that could cause actual results to differ materially from projections, as disclosed in prior SEC filings. - Specific project timing risk was acknowledged: some long-pending projects in the opportunity pipeline have taken longer to reach FID than originally anticipated due to local reservoir, regulatory, or partnership challenges. - Reduced activity in Surface Technologies in the Middle East was driven by ongoing regional conflict, which contributed to a sequential revenue decline in Q2 2026.

Analyst Q&A

• Q: How are brownfield step-out opportunities evolving, and what role does all-electric technology play in expanding this market? /

  A: Current Q2 2026 brownfield projects leverage the integrated IEPCI model and portfolio approach to deliver short-cycle, accelerated first oil, rather than relying on all-electric technology specifically. Client behavior has shifted to grouping multiple brownfield projects under single portfolio contracts, which improves schedule certainty, reduces costs, and boosts project returns for clients while benefiting TechnipFMC. All-electric technology is a future growth opportunity that will expand the addressable brownfield market by enabling tiebacks from four times the distance of traditional hydraulic solutions, opening up more marginal fields to development. /

• Q: What is the order trajectory split between 2026 and 2027, and what is the progress on industrializing the non-seabed portion of subsea projects (IEPCI 2.0)? /

  A: 2026 will see mostly smaller, short-cycle brownfield and tieback projects, with clear line of sight to hitting the $10 billion full-year subsea order target. 2027 will bring an inflection to larger greenfield projects, which have driven the recent record growth in the total opportunity pipeline, and the company remains committed to a step-up in orders next year. 80% of current subsea orders are already Subsea 2.0 (seabed equipment), representing 50% of revenue; IEPCI 2.0 will industrialize the remaining two-thirds of project scope (water column and installation), and the company has made strong, exciting progress on this initiative which will reshape the industry. /

• Q: Will the 2027 shift to larger greenfield projects reduce the share of direct awards and increase competitive pressure, and what is driving growing offshore interest? /

  A: There is no reason to expect fewer direct awards in 2027, as the company has already secured multiple large greenfield direct awards via the IEPCI model, and 80% of the company's total business is already direct awarded. For the 20% of business that goes to competitive tender, the company maintains pricing discipline and focuses on projects where its unique technology and differentiation create value. Offshore is growing in strategic importance because it enables clients to diversify their geographic supply risk, and TechnipFMC's track record of delivering project certainty has restored client confidence in offshore development, with new entrants increasingly turning exclusively to TechnipFMC for full lifecycle subsea projects. /

• Q: What growth do you expect for the subsea services business over the next several years? /

  A: Subsea services is a consistent, high-margin, accretive crown jewel for the company. Most new subsea projects include 20-30 year life-of-field service contracts, driven by the dynamic nature of downhole well conditions that require regular inspection, maintenance, and intervention. Services growth has tracked project growth to date, and as the installed base of TechnipFMC subsea equipment expands, services will become an increasingly large and stable contributor to company revenue and profits over time.