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Management attributes strong performance to the relentless pursuit of cycle time reduction, which improves project economics for both the company and its clients.

The Subsea opportunity list reached $30 billion, marking the seventh consecutive quarterly increase and more than 30% growth in value over the last two years.

Growth is increasingly driven by large-scale developments, with the number of potential projects valued over $1 billion more than doubling in the last two years.

The company is benefiting from a structural shift in capital flows toward offshore developments as operators prioritize energy security and reserve replacement.

Operational resilience was demonstrated in the Middle East, where comprehensive safety measures ensured minimal disruption despite regional conflict.

The iEPCI integrated model and Subsea 2.0 technology are serving as primary catalysts for direct awards and expanding the customer base to 22 distinct clients.

Surface Technologies performance was impacted by scheduled project timing in the Middle East, partially offset by higher completion activity in North America.

Management anticipates a step-up in inbound orders starting in 2027 and extending through the end of the decade.

The company remains confident in achieving $10 billion in Subsea orders for 2026, supported by a strengthening trend in order activity throughout the year.

Financial guidance for 2026 assumes a conversion rate of approximately 65% from EBITDA into free cash flow.

The strategy for 2027 and beyond focuses on increasing Subsea inbound revenue and EBITDA margins by converting higher-quality backlog into revenue.

Capital allocation remains committed to returning at least 70% of free cash flow to shareholders through dividends and share repurchases.

Middle East exposure is contextualized as representing only 4% of total company revenue, primarily within the Surface Technologies segment.

The company is in the qualification phase for a unique technical solution to address stress corrosion cracking in flexible pipes for Petrobras.

Subsea revenue coverage for the remainder of 2026 is approximately 95% when using the midpoint of guidance.

Management noted that while Surface Technologies revenue may be slightly lower than initial guidance, higher margins are expected to offset the volume decline.

Subsea 2.0 is expected to represent approximately 50% or more of recognized revenue by 2027.

Currently, 80% of new orders are coming in as Subsea 2.0, providing a clear glide path for margin improvement as legacy backlog is replaced.

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Management intends to grow without significant capital expenditure by increasing efficiency and throughput within existing infrastructure.

The 'configure-to-order' model reduces engineering time by 9 to 12 months, allowing the company to do more with the same physical assets.

The company is in the 'concept select' stage for industrializing the remaining two-thirds of the subsea workstream, including umbilicals and installation.

Management expects this initiative to be as impactful to the industry structure as the original Subsea 2.0 seafloor innovations.

The shift to standardized components allows suppliers to manufacture based on quantities rather than unique project specifications.

TechnipFMC provides suppliers with annual volume forecasts, enabling them to optimize their own balance sheets and production schedules.

The company is pivoting away from commodity products toward digital offerings like CyberFrac to automate completion sites.

This model requires minimal capital investment while providing a more stable and higher-margin financial contribution to the segment.

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