Orders and Outlook: Offshore demand remains constructive, supported by sustained Subsea inbound and expanding long-cycle project visibility. Q4 awards included the 20K Tiber project in the Gulf of America with bp, a Subsea 2.0 production systems contract for Chevron’s Gorgon Stage 3 in Australia, and a flexible pipe contract in the U.K. North Sea. The company’s FY2025 Subsea orders exceeded $10 billion, with book-to-bill above 1.0x and backlog up year over year.
For 2026, management raised Subsea revenue and margin guidance, reflecting stronger execution, higher iEPCI mix, and improved operating leverage. Free cash flow is expected to remain robust, supported by disciplined capital spending and margin expansion in core Subsea operations.
Segment Results Held Back in Q4
Quarter over quarter, FTI’s revenue declined approximately 5%, while adjusted EBITDA fell roughly 15%, with margin compressing due to seasonally lower vessel utilization and $52 million of restructuring and impairment charges. Subsea revenue declined sequentially in Q4, and operating profit fell more sharply due to these charges. However, these were partially offset by continued backlog conversion.
Surface Technologies revenue declined modestly in Q4, but operating profit improved on stronger Middle East services activity and cost discipline. Net income declined sequentially, reflecting the impact of lower Subsea profitability and restructuring costs.
Cash Flows Surged; Net Cash Position: For FY2025, FTI’s operating cash flow increased, and free cash flow more than doubled, supported by higher earnings and improved working capital management. The company ended FY2025 with positive net cash, strengthening financial flexibility. During 2025, FTI returned $1 billion to shareholders through share repurchases and dividends, reflecting confidence in cash durability while maintaining balance sheet strength entering 2026.
Thanks for reading the FTI take three, designed to give you three critical takeaways from FTI's earnings report. Soon, we will present a second update on FTI earnings, highlighting its current strategy, news, and notes we extracted from our deeper dive.
