Sign in

You're signed outSign in or to get full access.

TP

TechnipFMC plc (FTI)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 revenue $2.65B (+4.4% q/q, +12.7% y/y) and diluted EPS $0.75 both beat S&P Global consensus; adjusted EBITDA was $518.9M (19.6% margin), or $531.4M excluding FX . Consensus for Q3: revenue $2.61B*, EPS $0.66*, EBITDA $519.1M*; Q4 consensus: revenue $2.53B*, EPS $0.51*, EBITDA $434.4M*.
  • Subsea continued to drive results: revenue $2.32B (+4.6% q/q), operating margin 17.3%, with $2.4B orders (book-to-bill ~1.0x) and backlog $16.04B .
  • Guidance raised: 2025 FCF to $1.3–$1.45B and Surface Technologies adjusted EBITDA margin to 16–16.5%; 2026 Subsea guidance introduced at $9.1–$9.5B revenue and 20.5–22% adjusted EBITDA margin .
  • Capital return stepped up: new $2B buyback authorization (total authorized $2.3B) and $0.05 dividend; Q3 shareholder distributions $270.5M. Net cash rose to $439M with debt reduced by $258M .

Values marked with * are retrieved from S&P Global.

What Went Well and What Went Wrong

What Went Well

  • Commercial momentum: 15 of the past 16 quarters with book-to-bill >1x; $2.4B Subsea awards including Petrobras flexible pipe and ExxonMobil Hammerhead (Guyana) Subsea 2.0 systems .
  • Operational execution: Subsea revenue up 5% q/q across Africa, Americas, Australia; Subsea adjusted EBITDA margin steady at 21.8% .
  • Cash generation and capital returns: CFO $525M, FCF $448M; $271M returned (buybacks + dividend); debt reduction and net cash improved . CEO: “We generated free cash flow of $448 million and distributed $271 million…” .

What Went Wrong

  • FX headwind: $12.5M loss (after-tax $13.1M) reduced reported EBITDA and net income; excluding FX, adjusted EBITDA was $531.4M and net income $322.8M .
  • Surface inbound softness: orders $266.6M (-4% q/q, -17% y/y); backlog -7% q/q to $775.4M despite margin improvement .
  • Seasonal vessel utilization headwinds expected in Q4: management guides Subsea revenue down mid-single-digit q/q and margin down ~300 bps to ~18.8% .

Financial Results

Consolidated Summary (USD Millions, unless noted)

MetricQ3 2024Q1 2025Q2 2025Q3 2025
Revenue$2,348.4 $2,233.6 $2,534.7 $2,647.3
Net Income$274.6 $142.0 $269.5 $309.7
Net Income Margin11.7% 6.4% 10.6% 11.7%
Diluted EPS ($)$0.63 $0.33 $0.64 $0.75
Adjusted EBITDA$386.1 $343.8 $520.8 $518.9
Adjusted EBITDA Margin16.4% 15.4% 20.5% 19.6%
Operating Profit Margin (as reported)12.3% 10.8% 15.4% 15.0%

Segment Breakdown (USD Millions)

Segment MetricQ3 2024Q2 2025Q3 2025
Subsea Revenue$2,028.1 $2,216.3 $2,319.2
Subsea Operating Profit$288.8 $380.3 $401.3
Subsea Adjusted EBITDA$371.0 $482.9 $505.6
Subsea Adj. EBITDA Margin18.3% 21.8% 21.8%
Surface Revenue$320.3 $318.4 $328.1
Surface Operating Profit$33.7 $23.4 $36.8
Surface Adjusted EBITDA$49.1 $52.3 $53.8
Surface Adj. EBITDA Margin15.3% 16.4% 16.4%

KPIs and Balance Sheet

KPIQ1 2025Q2 2025Q3 2025
Inbound Orders (Total)$3,089.1 $2,831.0 $2,648.1
Backlog (Total)$15,816.0 $16,645.9 $16,813.6
Cash from Operations$441.7 $344.2 $525.1
Free Cash Flow$379.9 $260.6 $447.8
Net Cash (Debt)$281.9 $253.7 $438.6
Share Repurchases$250.1 $250.1 $250.0

Consensus vs Actual

MetricQ3 2025 ActualQ3 2025 ConsensusSurprise
Revenue ($)$2,647.3 $2,612,460,140*+$34.8M / +1.3pp*
Diluted EPS ($)$0.75 $0.659*+$0.091*
Adjusted EBITDA ($)$518.9 $519.1M*-$0.2M*
Forward ConsensusQ4 2025 Consensus
Revenue ($)$2,527,340,740*
Diluted EPS ($)$0.5085*
EBITDA ($)$434,360,760*

Values marked with * are retrieved from S&P Global.

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Free Cash FlowFY 2025$1.0–$1.15B $1.3–$1.45B Raised
Surface Adj. EBITDA MarginFY 202515–16% 16–16.5% Raised
Subsea RevenueFY 2025$8.4–$8.8B $8.4–$8.8B Maintained
Subsea Adj. EBITDA MarginFY 202519–20% 19–20% 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 RevenueFY 2026—$9.1–$9.5B Initiated
Subsea Adj. EBITDA MarginFY 2026—20.5–22% Initiated
Q4 2025 Subsea RevenueQ4 2025—Down mid-single-digit q/q Seasonal decline
Q4 2025 Subsea Adj. EBITDA MarginQ4 2025—~18.8% (~300 bps down q/q) Seasonal decline

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 & Q2 2025)Current Period (Q3 2025)Trend
Direct awards & iEPCI™Emphasis on direct award share and iEPCI alliances (e.g., Vår Energi, Equinor Johan Sverdrup; Shell Gato do Mato) Continued direct awards; Hammerhead (Guyana) Subsea 2.0; confidence in >$10B Subsea inbound 2025 Strengthening
Subsea 2.0 mix and industrializationConfigured-to-order 2.0 and cycle-time focus Subsea 2.0 >50% inbound; ~40% capacity on 2.0 exiting 2025; broader industrialization across iEPCI™ Mix improving, margin leverage
Services growthSeasonal increases; strong services inbound in Q2 Services to grow in line with Subsea overall; ~$1.8B run-rate discussed; multiple service buckets (IMR, intervention) Durable growth
Supply chain/installation capacityQ1 noted scheduled maintenance impacting fleet Seasonal vessel utilization to weigh on Q4 margins; commentary on market consolidation and regulators Seasonally softer Q4
Tariffs/macro exposure2025 tariff impact < $20M adj. EBITDA; 95% revenue ex U.S. land No change; continued offshore tilt and resilience Neutral
Technology: All-electric subsea & CCSFirst all-electric award (BP Northern Endurance), potential applications Electric favored for CCS, brownfield tiebacks; novel in-situ hydraulic-to-electric retrofit; fewer greenfield all-electric than initially expected Focused deployment, realistic outlook

Management Commentary

  • CEO on execution and orders: “15 of the past 16 quarters achieving a book-to-bill above one… cornerstone of our ability to deliver growth in both revenue and profitability.”
  • CEO on Subsea awards: “Our seventh award from ExxonMobil in Guyana—the Hammerhead project… awarded all of the operator’s subsea production systems in Guyana since the first award in 2017.”
  • CEO on offshore cycle-time: “Relentless pursuit of cycle time reduction… Subsea 2.0 and iEPCI™… provide customers with greater schedule certainty.”
  • CFO on Q4 view: “Revenue declining mid-single digit sequentially… adjusted EBITDA margin… decline approximately 300 basis points to 18.8%.”
  • CFO on capital returns: “At least 70% of free cash flow returned to shareholders… increased share repurchase authorization by an additional $2 billion.”

Q&A Highlights

  • Capital return framework: Maintain ≥70% FCF return; potential to return excess cash given under-levered balance sheet; debt reduced ~$450M YTD with maturities extended to 2033 at ≤4% .
  • Subsea 2.0 penetration: >50% of inbound; ~40% of capacity on Subsea 2.0 exiting 2025; mix to rise further in 2026, driving margin expansion .
  • Working capital and FCF conversion: Normalized FCF ~55% of EBITDA at neutral working capital; ambition to stay neutral or better amidst strong inbound .
  • Services mix and durability: Multiple buckets (installation, IMR, refurbishment, intervention); compounding with installed base; ~$1.8B run-rate discussed .
  • Seasonal Q4 softness: Vessel utilization, especially North Sea, to lower Subsea revenue and margins sequentially despite strong backlog coverage .
  • All-electric subsea: Focused on CCS, brownfield tiebacks, and in-situ retrofits; fewer greenfield adoptions than first anticipated .

Estimates Context

  • Q3 beats: Revenue $2.65B vs $2.61B*; EPS $0.75 vs $0.659*; EBITDA $518.9M vs $519.1M* (in line). FX loss muted reported EBITDA vs excl-FX $531.4M .
  • Q4 setup: Consensus revenue $2.53B*, EPS $0.51*, EBITDA $434.4M* aligns with management’s seasonal guidance (Subsea revenue down mid-single digits; margin to ~18.8%) .
  • Potential estimate revisions: Raised 2025 FCF ($1.3–$1.45B) and Surface margin (16–16.5%); CFO indicated total-company adjusted EBITDA ≈$1.83B excluding FX for FY25—likely upward bias to EBITDA/FCF models and capital return pacing .

Values marked with * are retrieved from S&P Global.

Key Takeaways for Investors

  • Subsea franchise compounding: Direct awards, Subsea 2.0, and iEPCI™ underwrite revenue growth and margin expansion through 2026; backlog quality supports execution and cash conversion .
  • Cash machine: FCF raised to $1.3–$1.45B with 70%+ targeted returns; $2B added buyback authorization (total $2.3B) is a near-term stock support .
  • Balance sheet optionality: Net cash $439M; debt reduced; maturities extended at low rates—capacity for aggressive distributions without compromising flexibility .
  • Q4 seasonality: Expect softer Subsea revenue/margins on vessel utilization; any weakness likely transitory given robust 2026 outlook .
  • Mix-driven margin tailwinds: Rising Subsea 2.0 throughput and services scale to outgrow revenue and expand margins—CFO guides Subsea margin up in 2026 to 20.5–22% .
  • Technology edge: Targeted all-electric deployments (CCS, tiebacks, retrofit) and flexible pipe capabilities (Brazil) deepen moat and award flow .
  • Watch FX and Surface orders: FX can swing reported results; Surface inbound/backlog trending lower, though margins improved—monitor 2026 Surface outlook with Q4 results .

Appendix: Additional Relevant Press Releases

  • Dividend and Buyback Authorization: Declared $0.05 dividend; authorized additional $2B repurchases (total $2.3B), ~16% of shares at 10/21 price .
  • Petrobras Flexible Pipe Awards: Substantial ($250–$500M) and significant ($75–$250M) flexible pipe contracts; manufacturing in Açu, Brazil .