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TechnipFMC plc (FTI)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 revenue and EPS were slightly below consensus as seasonal offshore services and FX weighed on GAAP, but cash generation and order momentum were strong: Revenue $2.234B vs $2.251B consensus*, GAAP EPS $0.33 vs $0.37 consensus*, Adjusted EBITDA $343.8M (15.4% margin) while EBITDA was above consensus at ~$360.9M* . Values retrieved from S&P Global.
  • Subsea continued to lead: $2.8B inbound (book-to-bill 1.4x), backlog $14.9B; total Company inbound $3.1B and backlog $15.8B (+10% q/q), supporting multi‑year visibility .
  • Free cash flow outperformed seasonality at $380M; FY25 FCF guidance raised to $1.0–$1.15B (from $0.85–$1.0B), while FY25 Adjusted EBITDA guidance held at midpoint and >$10B Subsea orders outlook reiterated .
  • Management guided Q2 to a sequential step-up: Subsea revenue low double-digit q/q and ~+400 bps margin expansion; tariff impact contained to < $20M on FY25 Adjusted EBITDA and ~95% of FY25 revenue is outside U.S. land—limiting macro/tariff exposure .
  • Capital returns remain a focus: $250M of buybacks and $0.05 dividend declared (payable June 4) in Q1, with intent to distribute ≥70% of FY25 FCF to shareholders .

What Went Well and What Went Wrong

  • What Went Well

    • Order momentum and backlog quality: Subsea inbound of $2.8B (1.4x book-to-bill) drove total backlog to $15.8B, up 10% q/q, underpinned by iEPCI and Subsea 2.0 awards (Shell Gato do Mato; Equinor Johan Sverdrup Phase 3) .
    • Cash generation and shareholder returns: CFO reported $442M CFFO and $380M FCF, with $271M returned (including $250M buybacks); FY25 FCF guidance raised by $150M to $1.0–$1.15B .
    • Execution/tariff insulation: Management emphasized >80% direct awards in 2024 and limited tariff exposure (<$20M EBITDA impact), with ~95% of FY25 revenue outside U.S. land; reiterated >$10B Subsea inbound target .

  • What Went Wrong

    • Seasonal/services headwinds and FX: Revenue fell 5.6% q/q to $2.234B; GAAP EPS declined to $0.33 amid a $12.1M FX loss; Subsea services and fleet maintenance tempered sequential profitability even as project execution was strong .
    • Surface Technologies softness: Revenue down 6.9% q/q to $297.4M and operating margin to 10.2% on project timing in the Middle East and slower Africa/Asia Pacific activity (partly offset by North America) .
    • YoY net income down despite revenue growth: Net income fell 9.6% YoY to $142M (6.4% margin) on tax/FX headwinds, although Adjusted EBITDA grew 36% YoY and margin expanded 300 bps .

Financial Results

Summary P&L and Margins (USD, Millions except per-share and %)

MetricQ3 2024Q4 2024Q1 2025
Revenue$2,348.4 $2,367.3 $2,233.6
Diluted EPS ($)$0.63 $0.52 $0.33
Adjusted EBITDA$386.1 $351.0 $343.8
Adjusted EBITDA Margin (%)16.4% 14.8% 15.4%
Net Income Margin (%)11.7% 9.5% 6.4%

Q1 2025 vs Consensus*

MetricQ1 2025 ActualQ1 2025 Consensus*
Revenue ($M)2,233.6 2,251.8*
Diluted EPS ($)0.33 0.37*
EBITDA ($M)360.9 (SPGI EBITDA) vs Adj EBITDA ex-FX 355.9 341.6*
Values retrieved from S&P Global.

Segment Performance (USD, Millions and %)

SegmentMetricQ3 2024Q4 2024Q1 2025
SubseaRevenue2,028.1 2,047.9 1,936.2
Operating Profit288.8 230.0 247.9
Operating Margin (%)14.2% 11.2% 12.8%
Adjusted EBITDA371.0 338.6 334.9
Adjusted EBITDA Margin (%)18.3% 16.5% 17.3%
Surface TechnologiesRevenue320.3 319.4 297.4
Operating Profit33.7 36.5 30.2
Operating Margin (%)10.5% 11.4% 10.2%
Adjusted EBITDA49.1 53.5 46.6
Adjusted EBITDA Margin (%)15.3% 16.8% 15.7%

KPIs and Balance Sheet (USD, Millions)

KPIQ3 2024Q4 2024Q1 2025
Inbound Orders (Total)2,784.5 2,923.5 3,089.1
Backlog (Total)14,698.9 14,376.3 15,816.0
Subsea Inbound2,463.2 2,698.5 2,785.5
Subsea Backlog13,732.1 13,518.1 14,945.6
Cash from Operations277.9 578.9 441.7
Free Cash Flow225.3 452.7 379.9
Net Cash (Debt)(129.2) 272.5 281.9

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Free Cash FlowFY 2025$0.85–$1.00B $1.00–$1.15B Raised
Subsea RevenueFY 2025$8.4–$8.8B $8.4–$8.8B Maintained
Subsea Adj. EBITDA MarginFY 202519–20% 19–20% Maintained
Surface RevenueFY 2025$1.2–$1.35B $1.2–$1.35B Maintained
Surface Adj. EBITDA MarginFY 202515–16% 15–16% Maintained
Corporate Expense (net)FY 2025$115–$125M $115–$125M Maintained
Net Interest ExpenseFY 2025$45–$55M $45–$55M Maintained
Effective Tax RateFY 202528–32% 28–32% Maintained
Capital ExpendituresFY 2025~$340M ~$340M Maintained
Subsea Orders OutlookFY 2025>$10B >$10B Maintained
Q2 2025 Subsea RevenueQ2 2025—Low double-digit q/q growth; ~+400 bps margin expansion New color
DividendQ2 2025—$0.05/share (payable Jun 4; record May 20) Declared

Earnings Call Themes & Trends

TopicPrevious Mentions (Q3 & Q4 2024)Current Period (Q1 2025)Trend
Subsea 2.0/iEPCI adoptionRecord iEPCI and Subsea 2.0 awards; direct awards rising Major Shell Gato do Mato (Brazil) and large Equinor Johan Sverdrup Phase 3 awards; >80% inbound from direct awards in 2024 Strengthening
Order outlookSubsea orders >$10B anticipated in 2025; backlog record >$10B 2025 Subsea inbound reiterated; 24‑month Opportunity List >$26B, +~20% YoY Positive
Tariffs/macro exposureNoted strong Middle East Surface and diversified book Tariff EBITDA impact < $20M; ~95% of 2025 revenue outside U.S. land Well‑mitigated
Services/seasonalityVessel/service mix can swing margins Lower services and maintenance limited q/q, but margins improved YoY; Q2 to step up Seasonal, improving
Regional trendsBrazil/Middle East/Suriname momentum Brazil (Shell Gato do Mato), Norway (Johan Sverdrup P3); U.S. Gulf brownfield outlook resilient Broadening
Technology/alliancesFloating wind/Prysmian collab Riserless coiled tubing (Halliburton) expanding well intervention offering Expanding toolset

Management Commentary

  • CEO Doug Pferdehirt: “Adjusted EBITDA was $356 million when excluding foreign exchange impacts, an increase of 38 percent compared to the prior year. Free cash flow was $380 million…a notable achievement in light of our typical seasonality.”
  • On order pipeline: “Our Subsea Opportunities List now highlights more than $26 billion of inbound opportunities over the next 24 months…third consecutive quarterly increase.”
  • On tariffs/US exposure: “We estimate 95 percent of our total Company revenue in 2025 will be generated from activity outside of the U.S. land market…we anticipate the impact to total Company adjusted EBITDA to be less than $20 million in 2025.”
  • CFO Alf Melin: “Cash flow from operating activities was $442 million…free cash flow of $380 million…we are increasing our full year expectations for free cash flow to a range of $1 billion to $1.15 billion.”

Q&A Highlights

  • U.S. Gulf/tariffs: Management sees limited tariff exposure and resilient U.S. Gulf activity, with potential shift toward brownfield tiebacks in low commodity-price environments; client focus is on project certainty, supported by iEPCI/Subsea 2.0 .
  • 2026 outlook: Confident 2026 Subsea orders can be “in the $10B range,” timing dependent on FIDs; reiterated FY25 EBITDA unchanged despite macro noise .
  • Tariff mitigation: Impact estimated at < $20M in 2025, spread across segments; collaborative mitigation with customers underway .
  • Subsea services: Viewed as resilient and non‑discretionary (inspection/maintenance/repair and downhole interventions) .
  • FCF dynamics: Milestone payment terms embedded in backlog drive cash; more balanced quarterly FCF expected in 2025, trending >50% EBITDA-to-FCF conversion ex‑working capital .

Estimates Context

  • Q1 2025 vs S&P Global consensus*: Revenue $2,233.6M vs $2,251.8M* (slight miss), GAAP EPS $0.33 vs $0.37*, EBITDA ~$360.9M vs $341.6M* (beat). Seasonality in offshore services, scheduled fleet maintenance, and $12.1M FX loss weighed on GAAP EPS while project execution supported EBITDA . Values retrieved from S&P Global.
  • Near-term revisions: Management’s Q2 guide (low double-digit Subsea revenue growth q/q and ~+400 bps margin expansion) supports potential upward revisions to Q2 EBITDA/EPS; FY25 FCF guidance raised by $150M while FY25 Adjusted EBITDA midpoint unchanged .

Key Takeaways for Investors

  • Backlog/visibility remains the anchor: $15.8B total backlog (+10% q/q) with Subsea $14.9B and book-to-bill 1.4x; >$26B near-term opportunity pipeline underpins multi‑year growth .
  • Cash is the differentiator in 2025: $380M Q1 FCF and raised FY25 FCF guide to $1.0–$1.15B (≥70% to be returned), alongside continued buybacks and a $0.05 dividend .
  • Short‑term setup constructive: Management guides material q/q improvement in Subsea revenue and margins for Q2, suggesting positive near-term earnings momentum despite seasonality .
  • Macro/tariff risk managed: ~95% of FY25 revenue ex‑U.S. land and < $20M tariff EBITDA impact expected, limiting downside from policy and commodity volatility .
  • Technology and commercial model drive share: iEPCI and Subsea 2.0 (with direct awards) continue to differentiate execution certainty and cycle times, supporting margin and cash conversion .
  • Surface Tech is mixed but improving mix: International project activity (Middle East) offsets North America variability; expect steadier contribution as projects ramp .
  • Watch 2026 FIDs: Management remains confident 2026 order intake can approximate ~$10B depending on FID timing—sustaining growth into the back half of the decade .

Additional Disclosures

  • Non‑GAAP adjustments: Q1 included $1.2M restructuring/impairment; FX loss $12.1M pre‑tax; Adjusted EBITDA ex‑FX was $355.9M .
  • Dividend: $0.05 per share declared for payment June 4, 2025; record date May 20, 2025 .