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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our financial statements and related notes included under Item 8 of this Annual Report on Form 10-K. This discussion contains forward-looking statements based on our current expectations, estimates and projections about our operations and the industry in which we operate. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of a variety of risks and uncertainties, including those described in “Risk Factors” and “Cautionary note regarding forward-looking statements” and elsewhere in this Annual Report on Form 10-K. We assume no obligation to update any of these forward-looking statements.

Overview

FET optimizes customer operations by improving safety, increasing efficiency, and reducing environmental impact. Our highly engineered products include capital equipment and consumable products. FET’s customers include oil and natural gas operators, oilfield service companies, pipeline and refinery operators, defense contractors and renewable energy companies. Consumable products are used by our customers in drilling, well construction and completion activities and at processing centers and refineries. Our capital products are directed at drilling rig equipment for constructing new or upgrading existing rigs, subsea construction and development projects, pressure pumping equipment, the placement of production equipment on new producing wells, downstream capital projects and capital equipment for renewable energy projects. In 2025, approximately 80% of our revenue was derived from consumable products and activity-based equipment, while the balance was primarily derived from capital products with a small amount from rental and other services.

We expect that the world’s long-term energy demand will continue to rise for the foreseeable future. Hydrocarbons are expected to play a vital role in meeting the world’s long-term energy needs even as renewable energy sources grow in importance. As such, we are focused on developing products to help oil and gas operators lower expenses, increase production, and reduce their emissions while also deploying our technologies in renewable energy applications.

FET operates in the following two reportable segments: (1) Drilling and Completions and (2) Artificial Lift and Downhole. Refer to Note 15 Business Segments for the product lines making up each segment.

A summary of the products and services offered by each segment is as follows:

•Drilling and Completions. This segment designs, manufactures and supplies products and solutions to the drilling, subsea, coiled tubing, well stimulation and intervention markets, including applications in the oil and natural gas, renewable energy, defense and communications industries. The products and solutions consist primarily of (i) capital equipment and consumable products used in the drilling process; (ii) capital equipment and aftermarket products including subsea ROVs and trenchers, submarine rescue vehicles, specialty components and tooling, and technical services; (iii) capital equipment and consumable products sold to the pressure pumping market, including hydraulic fracturing pumps, cooling systems, and high-pressure flexible hoses and flow iron; (iv) wireline cable and pressure control equipment used in the well completion and intervention service markets; and (v) coiled tubing strings and pressure control equipment used in coiled tubing operations, as well as coiled line pipe and related services.

•Artificial Lift and Downhole. This segment designs, manufactures and supplies products and solutions for the artificial lift, well construction, production and infrastructure markets. The products and solutions consist primarily of: (i) products designed to safeguard artificial lift equipment and downhole cables; (ii) well construction casing and cementing equipment; (iii) customized downhole technology solutions, providing sand and flow control products for heavy oil applications; (iv) engineered process systems, production equipment, as well as specialty separation equipment; and (v) a wide range of industrial valves focused on oil and natural gas as well as power generation, renewable energy and other general industrial applications.

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Market Conditions

Generally, demand for our products and services is directly related to our customers’ drilling and completions activity, and their capital expenditure budgets. Their activity and the associated budgets are heavily influenced by forecasted energy prices and production targets. Demand for our capital products is driven by the utilization of service company equipment. Utilization is a function of equipment capacity and durability in demanding environments.

During 2025, global oil and natural gas markets were heavily impacted by shifting supply dynamics and geopolitical developments. Additionally, U.S. trade policy and global tariff responses created significant macroeconomic uncertainty across the industry.

In the future, volatile macroeconomic conditions, including changing tariffs imposed by U.S. or foreign governments, could disrupt world energy markets and international supply chains. Although near-term events may present challenges, we expect that global population growth and oil and gas production declines will continue to support long-term energy demand, which may outpace global supply.

The table below shows average crude oil and natural gas prices for West Texas Intermediate (“WTI”), Brent, and Henry Hub. Average oil prices declined over the course of the year, with Brent crude averaging approximately $63 per barrel in December after declining throughout the second half of the year. This downward trend was driven by global crude oil supply exceeding demand, a result of both sluggish global economic growth and the accelerated unwinding of OPEC+ production cuts. In contrast, average natural gas prices strengthened during 2025, supported by strong demand, tightening supply and geopolitical uncertainty.

Average global oil, $/bbl

Average North American Natural Gas, $/Mcf

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The table below shows the average number of active drilling rigs operating by geographic area and drilling for different purposes based on the weekly rig count information published by Baker Hughes Company. Our revenues, over the long-term, are highly correlated to the global drilling rig count, which decreased 6.7% in 2025 compared to average global rig count in 2024. The decrease was mainly driven by lower average oil prices, enhanced drilling efficiencies, and sustained capital discipline among exploration and production companies.

In the third quarter of 2025, Baker Hughes implemented a revised methodology for counting rigs, primarily affecting data pertaining to Saudi Arabia. Consequently, international rig counts reported for the prior period have been adjusted accordingly and may now vary from figures presented in previous disclosures.

Active Rigs by Location

Land vs. Offshore Rigs

U.S. Commodity Target

U.S. Well Path

The table below shows the amount of total inbound orders by segment for the years ended December 31, 2025 and 2024:

Orders:

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Results of operations

Year ended December 31, Change

(in thousands of dollars, except per share information) 2025 2024 $ %

Revenue

Cost of sales

Gross profit

Selling, general and administrative expenses

Segment operating income (loss)

Operating margin % 2.7 % 3.8 %

Operating margin % 13.1 % 14.1 %

Operating margin % 2.4 % 4.4 %

Loss (gain) on disposal of assets and other (378) 484 (862) *

Loss on extinguishment of debt — 2,854 (2,854) *

Foreign exchange losses (gains) and other, net (4,754) 7,315 (12,069) *

Weighted average shares outstanding

Loss per share

* not meaningful

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Revenues

Our revenue for the year ended December 31, 2025 was $791.5 million, a decrease of $25.0 million, or 3.1%, compared to the year ended December 31, 2024. For the year endedDecember 31, 2025, our Drilling and Completions segment and Artificial Lift and Downhole segment comprised of 60.3% and 39.8% of our total revenues, respectively, compared to 57.7% and 42.3%, respectively, for the year ended December 31, 2024. The overall decrease in revenue was primarily related to challenging market conditions, including a notable reduction in global drilling and completions activity, as well as tariff impacts in our Valve Solutions product line. These pressures were partially offset by higher revenue recognized from ROVs projects and increased coiled line pipe sales. The changes in revenues by operating segment consisted of the following:

Drilling and Completions segment — Revenue was $477.2 million for the year ended December 31, 2025, an increase of $6.4 million, or 1.4%, compared to the year ended December 31, 2024. This increase was driven by higher revenue recognized from ROVs projects and increased coiled line pipe sales due to growing U.S. demand and a large offshore project. These favorable factors were partially offset by lower global drilling and completions activity.

Artificial Lift and Downhole segment — Revenue was $314.8 million for the year ended December 31, 2025, a decrease of $30.9 million, or 8.9%, compared to the year ended December 31, 2024. The decline in revenue was driven by lower sand control sales and tariff-related impacts on valve products sales volumes. These decreases were partially offset by higher casing equipment sales.

Segment operating income (loss) and segment operating margin percentage

Segment operating income for the year ended December 31, 2025 was $19.1 million compared to $35.7 million for the year ended December 31, 2024. For the year ended December 31, 2025, segment operating margin percentage was 2.4% compared to 4.4% for the year ended December 31, 2024. Segment operating margin percentage is calculated by dividing segment operating income (loss) by revenues for the period. The change in operating income (loss) and operating margin percentage for each segment is explained as follows:

Drilling and Completions segment — Segment operating income was $12.8 million, or 2.7%, for the year ended December 31, 2025 compared to $17.8 million, or 3.8%, for the year ended December 31, 2024. The $4.9 million decrease in segment operating results was primarily due to inventory write-downs, asset impairments and other costs, net of recoveries, of $20.2 million related to the Company’s strategic decision to consolidate facilities and discontinue certain products. This decrease was partially offset by a reduction in amortization expense following intangible asset impairments recognized in the fourth quarter of 2024.

Artificial Lift and Downhole segment — Segment operating income was $41.2 million, or 13.1%, for the year ended December 31, 2025 compared to $48.9 million, or 14.1%, for the year ended December 31, 2024. The $7.7 million decrease in segment operating results was primarily driven by lower market activity and unfavorable customer and product mix.

Corporate — Selling, general and administrative expenses for Corporate were $34.9 million for the year ended December 31, 2025, a $3.9 million increase compared to the year ended December 31, 2024. This increase was primarily related to higher performance-based incentive compensation costs and one-time professional fees.

Other items not included in segment operating income (loss)

Several items are not included in segment operating income (loss), but are included in the total operating income (loss). These items include Transaction expenses, Impairment of intangible assets, Gain on sale-leaseback transactions and Loss (gain) on disposal of assets and other. For further information related to Impairment of intangible assets, see Note 6 Goodwill and Intangible Assets. For further information related to Gain on sale-leaseback transactions, see Notes 5 Property and Equipment and 8 Leases.

Other income and expense

Other income and expense includes interest expense, foreign exchange gains (losses) and other, and loss on extinguishment of debt.

We incurred $18.3 million of interest expense during the year ended December 31, 2025, a decrease of $13.2 million compared to the year ended December 31, 2024 due to the decreased borrowings. See Note 7 Debt for further details related to debt.

The foreign exchange gains and losses are primarily the result of movements in the British pound, Euro and Canadian dollar relative to the U.S. dollar. These movements in exchange rates create foreign exchange gains or losses when applied to monetary assets or liabilities denominated in currencies other than the location’s functional currency, primarily U.S. dollar denominated cash, trade account receivables and net intercompany receivable balances for our entities using a functional currency other than the U.S. dollar.

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Taxes

We recorded tax expense of $26.2 million for the year ended December 31, 2025 compared to a tax expense of $6.9 million for the year ended December 31, 2024. The estimated annual effective tax rates for the years ended December 31, 2025 and 2024 were impacted by losses in jurisdictions where the recording of a tax benefit is not available. Furthermore, the tax expense or benefit recorded can vary from period to period depending on the Company’s relative mix of earnings and losses by jurisdiction.

Liquidity and capital resources

Sources and uses of liquidity

Our internal sources of liquidity are cash on hand and cash flows from operations, while our primary external sources include trade credit, the Credit Facility and the 2029 Bonds. Our primary uses of capital have been for inventory, sales on credit to our customers, maintenance and growth capital expenditures, repurchases of stock, debt repayments and acquisitions. We continually monitor other potential capital sources, including equity and debt financing, to meet our investment and target liquidity requirements. Our future success and growth will be highly dependent on our ability to generate positive operating cash flow and access outside sources of capital.

As of December 31, 2025, we had $37.3 million of borrowings under our Credit Facility and $100.0 million outstanding principal amount of 2029 Bonds. See Note 7 Debt for further details related to the terms for our debt agreements and Note 16 Subsequent Events for further details on amendments to our Credit Facility subsequent to December 31, 2025.

As of December 31, 2025, we had cash and cash equivalents of $34.7 million and $72.5 million of availability under our Credit Facility. We anticipate that our future working capital requirements for our operations will fluctuate directionally with revenues. Furthermore, availability under the Credit Facility will fluctuate directionally based on the level of our eligible accounts receivable and inventory subject to applicable sublimits. In addition, we expect total 2026 capital expenditures to be approximately $10.0 million, primarily for replacement of end of life machinery and equipment.

We expect our available cash on-hand, cash generated by operations, and estimated availability under the Credit Facility to be adequate to fund current operations for at least the next 12 months and for the foreseeable future. In addition, based on existing market conditions and our expected liquidity needs, among other factors, we may use a portion of our cash flows from operations, proceeds from divestitures, securities offerings or other eligible capital to reduce outstanding debt or repurchase shares of our common stock under our repurchase program.

Our Board of Directors approved programs for the repurchase of outstanding shares of our common stock. From the inception of the programs in November 2021 through December 31, 2025, we repurchased approximately 1.7 million shares of our common stock for aggregate consideration of $41.9 million. We repurchased approximately 1.4 million shares of our common stock for aggregate consideration of $34.3 million during 2025.

Our cash flows for the years ended December 31, 2025 and 2024 are presented below (in thousands):

Year ended December 31,

Net cash provided by operating activities $ 70,402 $ 92,191

Net cash provided by (used in) investing activities 9,566 (137,526)

Net cash provided by (used in) financing activities (91,566) 45,242

Effect of exchange rate changes on cash 1,598 (1,411)

Net decrease in cash, cash equivalents and restricted cash $ (10,000) $ (1,504)

Net cash provided by operating activities

Net cash provided by operating activities was $70.4 million for the year ended December 31, 2025 compared to net cash provided by operating activities of $92.2 million for the year ended December 31, 2024. During the year ended December 31, 2025, net working capital provided cash of $17.8 million, compared to net working capital cash provided of $57.6 million for the year ended December 31, 2024. This decline in operating cash flow was offset by

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the increase in net income adjusted for non-cash items which provided $52.6 million of cash for the year ended December 31, 2025 compared to $34.6 million for the year ended December 31, 2024.

Net cash provided by (used in) investing activities

Net cash provided by investing activities was $9.6 million for the year ended December 31, 2025, mainly related to $14.6 million proceeds from sale-leaseback transactions, partially offset by capital expenditures of $6.0 million. Net cash used in investing activities was $137.5 million for the year ended December 31, 2024, mainly related to the Variperm Acquisition of $150.4 million and capital expenditures of $8.1 million, partially offset by $20.3 million of proceeds from sale-leaseback transactions.

Net cash provided by (used in) financing activities

Net cash used in financing activities was $91.6 million for the year ended December 31, 2025 and included $53.1 million of net repayments of our Credit Facility and repurchases of common stock of $34.6 million. Net cash provided by financing activities was $45.2 million for the year ended December 31, 2024 and included $54.9 million of net proceeds from debt mainly due to the Variperm acquisition, partially offset by $8.5 million of paid financing costs.

Off-balance sheet arrangements

As of December 31, 2025, we had no off-balance sheet instruments or financial arrangements, other than letters of credit entered into in the ordinary course of business. For additional information, refer to Note 11 Commitments and Contingencies.

Critical accounting policies and estimates

The discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. In preparing our consolidated financial statements, we make judgments, estimates and assumptions affecting the amounts reported. We base our estimates on factors including historical experience and various assumptions that we believe are reasonable under the circumstances. These factors form the basis for making estimates about the carrying values of assets and liabilities that are not readily apparent from other sources. Certain accounting policies involve judgments and uncertainties to such an extent that there is a reasonable likelihood that materially different amounts could have been reported under different conditions, or if different assumptions had been used. We evaluate our estimates and assumptions on a regular basis. Actual results may differ from these estimates and assumptions used in preparation of our consolidated financial statements.

In order to provide a better understanding of how we make judgments, and develop estimates and assumptions about future events, we have described our most critical accounting policies and estimates used in preparation of our consolidated financial statements below.

Revenue recognition

Revenue is recognized in accordance with Accounting Standards Codification Topic (“ASC”) 606, when control of the promised goods or services is transferred to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services. For the year ended December 31, 2025, approximately 79% of our revenue was recognized from goods transferred to customers at a point in time while 21% of our revenue was recognized from goods transferred to customers over time.

Although terms of our contracts may vary considerably, the 21% of revenues recognized over time relate to certain contracts in our Subsea, Production Equipment and Downhole product lines which are typically based on a fixed amount for the entire contract. Recognition over time for these contracts is supported by our assessment of the products supplied as having no alternative use to us and by clauses in the contracts that provide us with an enforceable right to payment for performance completed to date.

For performance obligations satisfied over time, we measure progress toward completion using either an input method or an output method, depending on which method best depicts the transfer of control of goods or services to the customer. The selection of the method requires judgment and is based on the nature of the goods or services promised and the terms of the contract.

For certain contracts, we use an input method and measure progress using the cost‐to‐cost method because it best depicts the transfer of assets to the customer, which occurs as costs are incurred on the contract. The amount of revenue recognized is calculated based on the ratio of costs incurred to date compared to total estimated costs which requires management to calculate reasonably dependable estimates of total contract costs. Whenever revisions of estimated contract costs and contract values indicate that the contract costs will exceed estimated

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revenues, thus creating a loss, a provision for the total estimated loss is recorded in that period. We recognize revenue and cost of sales each period based upon the advancement of the work-in-progress unless the stage of completion is insufficient to enable a reasonably certain forecast of profit to be established. In such cases, no profit is recognized during the period.

For other contracts, we use an output method to measure progress toward completion where such measures provide a more faithful depiction of performance. Under the output method, revenue is recognized based on direct measurements of value transferred to the customer, such as milestones achieved, units delivered, or other deliverables transferred relative to the remaining goods or services to be provided under the contract.

Accounting estimates during the course of projects may change. The effect of such a change, which can be upward as well as downward, is accounted for in the period of change, and the cumulative income recognized to date is adjusted to reflect the latest estimates. These revisions to estimates are accounted for on a prospective basis.

Contracts are sometimes modified to account for changes in product specifications or requirements. Most of our contract modifications are for goods and services that are not distinct from the existing contract. As such, these modifications are accounted for as if they were part of the existing contract, and therefore, the effect of the modification on the transaction price and our measure of progress for the performance obligation to which it relates is recognized as an adjustment to revenue on a cumulative catch-up basis.

Inventories

Inventories, consisting of finished goods and materials and supplies held for resale, are carried at the lower of cost or net realizable value. We evaluate our inventories based on an analysis of stocking levels, historical sales levels and future sales forecasts, to determine obsolete, slow-moving and excess inventory. While we have policies for calculating and recording reserves against inventory carrying values, we exercise judgment in establishing and applying these policies.

As of December 31, 2025 and 2024, our inventory reserve balances were $23.0 million and $35.7 million, respectively. For the years ended December 31, 2025 and 2024, we recognized inventory write downs totaling $19.7 million and $2.7 million, respectively. These charges are all included in “Cost of sales” in the consolidated statements of comprehensive loss. See Note 4 Inventories for further information related to these charges.

Business combinations

We account for business combinations using the acquisition method of accounting, and accordingly, the assets and liabilities of the acquired business are recorded at their fair values at the date of acquisition. Goodwill acquired in connection with business combinations represents the excess of consideration over the fair value of net assets acquired. Certain assumptions and estimates are employed in evaluating the fair value of assets acquired and liabilities assumed. These estimates may be affected by factors such as changing market conditions, technological advances in the oil and natural gas industry or changes in regulations governing that industry. The most significant assumptions requiring judgment involve identifying and estimating the fair value of intangible assets and the associated useful lives for establishing amortization periods. To finalize purchase accounting for significant acquisitions, we utilize the services of independent valuation specialists to assist in the determination of the fair value of acquired intangible assets.

Goodwill

An assessment for impairment is performed annually or when there is an indication an impairment may have occurred. Goodwill is reviewed for impairment by comparing the carrying value of the reporting unit’s net assets, including allocated goodwill, to the estimated fair value of the reporting unit. We determine the fair value of the reporting unit using a combination of a discounted cash flows approach and a guideline public company method. We selected these valuation approaches because we believe they, combined with our best judgment regarding underlying assumptions and estimates, provides the best estimate of fair value for the reporting unit. Determining the fair value of a reporting unit requires the use of estimates and assumptions. Such estimates and assumptions include revenue growth rates, future operating margins, the weighted average cost of capital, a terminal growth value, and future market conditions, among others. We believe that the estimates and assumptions used in our impairment assessments are reasonable. If the reporting unit’s carrying value is greater than its calculated fair value, we recognize a goodwill impairment charge for the amount by which the carrying value of goodwill exceeds its fair value.

We determined our Downhole product line consists of a single reporting unit and, accordingly, goodwill acquired from the Variperm acquisition was allocated to that reporting unit.

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At October 1, 2025, we performed our annual impairment test and concluded that there had been no impairment because the estimated fair value exceeded its carrying value by approximately 40%. There are significant inherent uncertainties and management judgment in estimating the fair value of the reporting unit. While we believe we have made reasonable estimates and assumptions to estimate the fair value of the reporting unit, it is possible that a material change could occur.

Long-lived assets

As of December 31, 2025, our long-lived assets included property and equipment, definite lived intangibles, and operating lease right of use assets with balances of $51.9 million, $93.6 million and $80.7 million, respectively. Key estimates related to long-lived assets include useful lives and recoverability of carrying values and changes in such estimates could have a significant impact on financial results.

We review long-lived assets with definite lives for potential impairment whenever events or changes in circumstances indicate that the carrying amount of a long-lived asset may not be recoverable. In 2024, an impairment loss of $119.1 million was recorded on intangible assets within the Coiled Tubing product line. Refer to Note 6 Goodwill and Intangible Assets for further discussion. In 2025, we recognized $1.2 million and $1.6 million of property and equipment impairment and operating lease right of use assets impairment, respectively, related to the Company’s strategic decision to consolidate facilities and discontinue certain products. Refer to Note 5Property and Equipmentand Note 8Leases for further discussion. No impairments to property and equipment or operating lease right of use assets were recorded in 2024.

Income taxes

We follow the liability method of accounting for income taxes. Under this method, deferred income tax assets and liabilities are determined based upon temporary differences between the carrying amounts and tax bases of our assets and liabilities at the balance sheet date, and are measured using enacted tax rates and laws that will be in effect when the differences are expected to reverse. We recognize deferred tax assets to the extent that we believe these assets are more likely than not to be realized. In making such a determination, we consider all available positive and negative evidence, including future reversals of existing temporary differences, projected future taxable income, tax-planning and recent operating results. Any changes in our judgment as to the realizability of our deferred tax assets are recorded as an adjustment to the deferred tax asset valuation allowance in the period the change occurs. For the year ended December 31, 2025, we recognized tax expense for valuation allowances totaling $4.3 million related to the net increase in our valuation allowance provided against our deferred tax assets to write down our deferred tax assets in these jurisdictions to what is more likely than not realizable. We increased our valuation allowance related to our U.S. deferred tax assets by $1.5 million along with a $2.8 million net increase to certain non-U.S. deferred tax assets in the United Kingdom, Singapore and Canada. See Note 9 Income Taxes for further information related to these charges.

The accounting guidance for income taxes requires that we recognize the financial statement benefit of a tax position only after determining that the relevant tax authority would more likely than not sustain the position following an audit. If a tax position meets the “more likely than not” recognition criteria, the accounting guidance requires the tax position be measured at the largest amount of benefit greater than 50% likely of being realized upon ultimate settlement. If management determines that likelihood of sustaining the realization of the tax benefit is less than or equal to 50%, then the tax benefit is not recognized in the consolidated financial statements.

We have operations in countries other than the U.S. Consequently, we are subject to the jurisdiction of a number of taxing authorities. The final determination of tax liabilities involves the interpretation of local tax laws, tax treaties, and related authorities in each jurisdiction. Changes in the operating environment, including changes in tax law or interpretation of tax law and currency repatriation controls, could impact the determination of our tax liabilities for a given tax year.

Recent accounting pronouncements

From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (“FASB”), which we adopt as of the specified effective date. Refer to Note 2 Summary of Significant Accounting Policies for information related to recent accounting pronouncements.

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Cautionary note regarding forward-looking statements

This Annual Report on Form 10-K contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Exchange Act. These forward-looking statements are subject to a number of risks and uncertainties, many of which are beyond the Company’s control. All statements, other than statements of historical fact, included in this Annual Report on Form 10-K regarding our strategy, future operations, financial position, estimated revenues and losses, projected costs, prospects, plans and objectives of management are forward-looking statements. When used in this Annual Report on Form 10-K, the words “will,” “could,” “believe,” “anticipate,” “intend,” “estimate,” “expect,” “may,” “continue,” “predict,” “potential,” “project” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain such identifying words.

All forward-looking statements speak only as of the date of this Annual Report on Form 10-K. We disclaim any obligation to update or revise these statements unless required by law, and you should not place undue reliance on these forward-looking statements. Although we believe that our plans, intentions and expectations reflected in or suggested by the forward-looking statements we make in this Annual Report on Form 10-K are reasonable, forward-looking statements are not guarantees of future performance and involve risks and uncertainties that may cause actual results to differ materially from ourplans, intentions or expectations. This may be the result of various factors, including, but not limited to, those factors discussed in “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and elsewhere in this Annual Report on Form 10-K.

Item 7A. Quantitative and qualitative disclosures about market risk

Not required under Regulation S-K for “smaller reporting companies.”

Item 8. Consolidated Financial Statements and Supplementary Data

Page

Consolidated balance sheets as of December 31, 2025 and 2024 49

Notes to consolidated financial statements 52

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the shareholders and the Board of Directors of Forum Energy Technologies, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Forum Energy Technologies, Inc. and subsidiaries (the “Company”) as of December 31, 2025 and 2024, the related consolidated statements of comprehensive income (loss), changes in stockholders’ equity, and cash flows, for each of the two years in the period ended December 31, 2025, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2025, in conformity with accounting principles generally accepted in the United States of America.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 27, 2026, expressed an unqualified opinion on the Company’s internal control over financial reporting.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that were communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing a separate opinions on the critical audit matters or on the accounts or disclosures to which it relates.

Goodwill — Downhole Reporting Unit — Refer to Notes 2 and 6 to the financial statements

Critical Audit Matter Description

The Company completed its annual impairment test for goodwill as of October 1 using the combination of discounted cash flow model (“income approach”) and guideline public company method (“market approach”). The Company performed a quantitative impairment evaluation of the $64.7 million in goodwill for the Downhole reporting unit by comparing the estimated fair value of the reporting unit to its carrying value. The fair value exceeded its carrying value as of the measurement date and, therefore, no impairment was recognized.

We identified the Company’s goodwill impairment assessment for the Downhole reporting unit as a critical audit matter because of the significant judgments made by management to estimate the fair value of the reporting unit. This required a high degree of auditor judgment and an increased extent of effort, including the need to involve our fair value specialists when performing audit procedures to evaluate the reasonableness of management’s estimates and assumptions utilized in the income approach related to revenue growth rates, operating margins, weighted average costs of capital and terminal growth rate, among others.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to management’s forecasts of revenue and operating margins and the selection of discount rates used by management to determine the fair value of the Downhole reporting unit and included the following, among others:

•We tested the effectiveness of controls over management’s goodwill impairment evaluation, including those over management’s determination of the weighted average costs of capital and forecasts of future revenue and operating margin.

•With the assistance of our fair value specialists, we evaluated the reasonableness of the (1) valuation methodology and (2) weighted average costs of capital including testing the source information underlying the determination of the weighted average costs of capital, testing the mathematical accuracy of the calculation, and developing a range of independent estimates and comparing those to the weighted average costs of capital selected by management.

•With the assistance of our fair value specialists, we evaluated the reasonableness of the terminal growth rate by analyzing inflation, economic and industry growth statistics available from independent sources.

•We evaluated management’s ability to accurately forecast future revenue and operating margin by comparing actual results to management’s historical forecasts and evaluated the reasonableness of such forecasts by comparing to (1) historical results and (2) internal communications to management and the Board of Directors.

/s/ Deloitte & Touche LLP

Houston, Texas

February 27, 2026

We have served as the Company’s auditor since 2019.

Forum Energy Technologies, Inc. and subsidiaries

Consolidated statements of comprehensive loss

Year ended December 31,

(in thousands, except per share information) 2025 2024

Operating expenses

Impairment of intangible assets — 119,123

Gain on sale-leaseback transactions (11,182) (4,860)

Loss (gain) on disposal of assets and other (378) 484

Other expense (income)

Loss on extinguishment of debt — 2,854

Foreign exchange losses (gains) and other, net (4,754) 7,315

Weighted average shares outstanding

Loss per share

Other comprehensive income (loss), net of tax of $203 and $0:

Change in foreign currency translation 7,501 (8,168)

Gain on pension liability 294 157

The accompanying notes are an integral part of these consolidated financial statements.

Forum Energy Technologies, Inc. and subsidiaries

Consolidated balance sheets

(in thousands, except share information) December 31,2025 December 31,2024

Assets

Current assets

Prepaid expenses and other current assets 23,017 19,179

Costs and estimated profits in excess of billings 9,369 11,632

Property and equipment, net of accumulated depreciation 51,905 63,421

Deferred financing costs, net 1,580 2,154

Liabilities and equity

Current liabilities

Current portion of long-term debt $ 1,407 $ 1,866

Billings in excess of costs and profits recognized 16,884 4,516

Commitments and contingencies

Equity

The accompanying notes are an integral part of these consolidated financial statements.

Forum Energy Technologies, Inc. and subsidiaries

Consolidated statements of cash flows

Year ended December 31,

(in thousands, except share information) 2025 2024

Cash flows from operating activities

Adjustments to reconcile net loss to net cash provided by operating activities:

Impairment of property and equipment and other assets 4,291 —

Impairment of intangible assets — 119,123

Stock-based compensation expense 9,041 7,137

Provision for doubtful accounts (193) 389

Loss on extinguishment of debt — 2,854

Gain on sale-leaseback transactions (11,182) (4,860)

Changes in operating assets and liabilities

Prepaid expenses and other current assets (4,199) 8,132

Cost and estimated profits in excess of billings 2,514 1,615

Billings in excess of costs and profits recognized 11,997 438

Net cash provided by operating activities 70,402 92,191

Cash flows from investing activities

Capital expenditures for property and equipment (6,015) (8,145)

Proceeds from sale of property and equipment 1,007 703

Proceeds from sale-leaseback transactions 14,574 20,324

Acquisition of businesses, net of cash acquired — (150,408)

Net cash provided by (used in) investing activities 9,566 (137,526)

Cash flows from financing activities

Proceeds from issuance of Seller Term Loan — 59,677

Payments of Seller Term Loan — (59,677)

Payment of capital lease obligations (1,609) (1,319)

Repurchases of stock (34,612) —

Payments of withheld taxes on stock-based compensation plans (1,321) (1,090)

Deferred financing costs (914) (8,534)

Net cash provided by (used in) financing activities (91,566) 45,242

Effect of exchange rate changes on cash 1,598 (1,411)

Net decrease in cash, cash equivalents and restricted cash (10,000) (1,504)

Cash, cash equivalents and restricted cash at beginning of period 44,661 46,165

Cash, cash equivalents and restricted cash at end of period $ 34,661 $ 44,661

Supplemental cash flow disclosures

Noncash investing and financing activities

Finance lease assets obtained in exchange for lease obligations 2,187 2,098

Accrued purchases of property and equipment 85 1,345

Stock issued related to business acquisition — 44,220

Liability awards converted to shares settled — 337

The accompanying notes are an integral part of these consolidated financial statements.

Forum Energy Technologies, Inc. and subsidiaries

Consolidated statements of changes in stockholders’ equity

Restricted stock issuance, net of forfeitures 1 (1,091) — — — (1,090)

Stock-based compensation expense — 7,137 — — — 7,137

Liability awards converted to shares settled — 337 — — — 337

Stock issued related to business acquisition 20 44,200 — — — 44,220

Change in pension liability — — — — 157 157

Currency translation adjustment — — — — (8,168) (8,168)

Restricted stock issuance, net of forfeitures 2 (1,323) — — — (1,321)

Stock-based compensation expense — 9,041 — — — 9,041

Change in pension liability — — — — 294 294

Currency translation adjustment — — — — 7,501 7,501

The accompanying notes are an integral part of these consolidated financial statements.

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Forum Energy Technologies, Inc. and subsidiaries

Notes to consolidated financial statements

1. Nature of Operations

Forum Energy Technologies, Inc. (the “Company,” “FET,” “we,” “our,” or “us”), a Delaware corporation, is a global manufacturing company serving the oil, natural gas, defense and renewable energy industries. With headquarters located in Houston, Texas, FET provides value added solutions that increase the safety, efficiency, and environmental impact of our customers’ operations.

2. Summary of Significant Accounting Policies

Basis of presentation

The Company’s accompanying consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). Certain reclassifications have been made to prior year amounts to conform with the current year presentation.

Principles of consolidation

The consolidated financial statements include the accounts of the Company and its wholly and majority owned subsidiaries after elimination of intercompany balances and transactions.

Use of estimates

The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period.

In the preparation of these consolidated financial statements, estimates and assumptions have been made by management including, among others, an assessment of percentage of completion of projects based on costs to complete contracts, the selection of useful lives of tangible and intangible assets, expected future cash flows from long lived assets to support impairment tests, provisions necessary for trade receivables, amounts of deferred taxes and income tax contingencies. Actual results could differ from these estimates.

The financial reporting of contracts depends on estimates, which are assessed continually during the term of those contracts. The amounts of revenues and income recognized are subject to revisions as the contract progresses to completion and changes in estimates are reflected in the period in which the facts that give rise to the revisions become known. Additional information that enhances and refines the estimating process that is obtained after the balance sheet date, but before issuance of the consolidated financial statements, is reflected in the consolidated financial statements.

Common Stock

On May 9, 2025, the Company’s stockholders approved an amendment to the Company’s Third Amended and Restated Certificate of Incorporation to increase the Company’s authorized shares of common stock from 14.8million shares to 29.6million shares.

Cash and cash equivalents

Cash and cash equivalents consist of cash on deposit and high quality, short-term money market instruments with an original maturity of three months or less. Cash equivalents are based on quoted market prices, a Level 1 fair value measure.

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Notes to consolidated financial statements (continued)

Accounts receivable-trade

Trade accounts receivables are carried at their estimated collectible amounts. Trade credit is generally extended on a short-term basis; thus receivables do not bear interest, although a finance charge may be applied to amounts past due. We maintain an allowance for doubtful accounts for estimated losses that may result from the inability of our customers to make required payments. Such allowances are based upon several factors including, but not limited to, credit approval practices, industry and customer historical experience as well as the current and projected financial condition of the specific customer. Accounts receivable outstanding longer than contractual terms are considered past due. We write-off accounts receivable to the allowance for doubtful accounts when they become uncollectible. Any payments subsequently received on receivables previously written-off are credited to bad debt expense.

The changes in allowance for doubtful account during the years ended December 31, 2025 and 2024 were as follows (in thousands):

Inventories

Inventories, consisting of finished goods and materials and supplies held for resale, are carried at the lower of cost or net realizable value. For certain operations, cost, which includes the cost of raw materials and labor for finished goods, is determined using standard cost which approximates a first-in first-out basis. For other operations, this cost is determined on an average cost, first-in first-out or specific identification basis. Net realizable value means estimated selling price in the ordinary course of business, less reasonably predictable cost of completion, disposal, and transportation. We continuously evaluate inventories based on an analysis of inventory levels, historical sales experience and future sales forecasts, to determine obsolete, slow-moving and excess inventory.

For the years ended December 31, 2025 and 2024, we recognized inventory write downs totaling $19.7 million and $2.7 million, respectively. These charges are all included in cost of sales in the consolidated statements of comprehensive loss. See Note 4 Inventories for further information related to these charges.

Property and equipment

Property and equipment are stated at cost less accumulated depreciation. Finance leases of property and equipment are stated at the present value of future minimum lease payments. Expenditures for property and equipment and for items which substantially increase the useful lives of existing assets are capitalized at cost and depreciated over their estimated useful life utilizing the straight-line method. Routine expenditures for repairs and maintenance are expensed as incurred. Depreciation is computed using the straight-line method based on the estimated useful lives of assets, generally two to 30 years. Property and equipment held under finance leases are amortized straight-line over the shorter of the lease term or estimated useful life of the asset. Gains or losses resulting from the disposition of assets are recognized in income with the related asset cost and accumulated depreciation removed from the balance sheet. Assets acquired in connection with business combinations are recorded at fair value.

We review property and equipment for potential impairment whenever events or changes in circumstances indicate that the carrying amount of a long-lived asset may not be recoverable. In performing the review for impairment, future cash flows expected to result from the use of the asset and its eventual disposal are estimated. If the undiscounted future cash flows are less than the carrying amount of the assets, there is an indication that the asset may be impaired. The amount of the impairment is measured as the difference between the carrying value and the estimated fair value of the asset. The fair value is determined either through the use of an external valuation, or by means of an analysis of discounted future cash flows based on expected utilization.

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Notes to consolidated financial statements (continued)

Lease obligations

We determine if an arrangement is a lease at inception. Leases with an initial term of 12 months or less are not recorded in our consolidated balance sheets. Leases with an initial term greater than 12 months are recognized in our consolidated balance sheets based on lease classification as either operating or financing. Operating leases are included in operating lease assets, accrued liabilities and operating lease liabilities. Finance leases are included in property and equipment, current portion of long-term debt, and long-term debt. Some of our lease agreements include lease and non-lease components for which we have elected to not separate for all classes of underlying assets. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants. We sublease certain real estate to third parties when we have no future use for the property.

Our lease portfolio primarily consists of operating leases for certain manufacturing facilities, warehouses, service facilities, office spaces, equipment and vehicles. Operating lease assets and operating lease liabilities are recognized based on the present value of the future minimum lease payments at the commencement date. As most of our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at the commencement date in determining the present value of future payments. Our leases have remaining terms of one to 18 years and may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. The operating lease assets also include any upfront lease payments made and exclude lease incentives and initial direct costs incurred. Lease expense for operating leases is recognized on a straight-line basis over the lease term.

We review operating lease assets for potential impairment whenever events or changes in circumstances indicate that the carrying amount of a long-lived asset may not be recoverable. In performing the review for impairment, future cash flows expected to result from the use of the asset and its eventual disposal are estimated. If the undiscounted future cash flows are less than the carrying amount of the asset, there is an indication that the asset may be impaired. The amount of the impairment is measured as the difference between the carrying value and the estimated fair value of the asset. The fair value is determined by means of an analysis of discounted future cash flows based on expected utilization.

Goodwill and intangible assets

For goodwill, an assessment for impairment is performed annually or when there is an indication an impairment may have occurred. The Company completes its annual impairment test for goodwill using an assessment date of October 1. Goodwill is reviewed for impairment by comparing the carrying value of the reporting unit’s net assets (including allocated goodwill) to the fair value of the reporting unit. The fair value of the reporting unit is determined using a combination of a discounted cash flows approach and a guideline public company method. Determining the fair value of a reporting unit requires the use of estimates and assumptions. Such estimates and assumptions include revenue growth rates, operating margins, weighted average costs of capital, a terminal growth rate, and future market conditions, among others. The Company believes that the estimates and assumptions used in impairment assessments are reasonable.

We determined our Downhole product line consists of a single reporting unit and, accordingly, goodwill acquired from the Variperm acquisition was allocated to that reporting unit.

The Company recognizes a goodwill impairment charge for the amount by which the carrying value of goodwill exceeds the reporting unit’s fair value. Any impairment losses are reflected in operating income. At October 1, 2025, we performed our annual impairment test and concluded that there had been no impairment because the estimated fair value exceeded its carrying value by approximately 40%.

Intangible assets with definite lives are comprised of customer and distributor relationships, patents and technology, trade names, trademarks and non-compete agreements which are amortized on a straight-line basis over the life of the intangible asset, generally three to 19 years. These assets are tested for impairment whenever events or changes in circumstances indicate that their carrying amount may not be recoverable. In performing the review for impairment, future cash flows expected to result from the use of the asset are estimated. If the undiscounted future cash flows are less than the carrying amount of the asset, there is an indication that the asset may be impaired. The amount of the impairment is measured as the difference between the carrying value and the estimated fair value of the asset. The fair value is determined either through the use of an external valuation, or by means of an analysis of discounted future cash flows. The impairment loss recognized represents the excess of an asset’s carrying value as compared to its estimated fair value. No impairments to intangible assets were recorded in 2025. In 2024, an impairment loss of $119.1 million was recorded on intangible assets within the Coiled Tubing product line. Refer to Note 6 Goodwill and Intangible Assets for further discussion.

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Notes to consolidated financial statements (continued)

Recognition of provisions for contingencies

In the ordinary course of business, we are subject to various claims, suits and complaints. We, in consultation with internal and external legal advisors, will provide for a contingent loss in the consolidated financial statements if, at the date of the consolidated financial statements, it is probable that a liability has been incurred and the amount can be reasonably estimated. If it is determined that the reasonable estimate of the loss is a range and that there is no best estimate within that range, a provision will be made for the lower amount of the range. Legal costs are expensed as incurred.

An assessment is made of the areas where potential claims may arise under contract warranty clauses. Where a specific risk is identified, and the potential for a claim is assessed as probable and can be reasonably estimated, an appropriate warranty provision is recorded. Warranty provisions are eliminated at the end of the warranty period except where warranty claims are still outstanding. The liability for product warranty is included in accrued liabilities in the consolidated balance sheets.

Revenue recognition and deferred revenue

Contract Identification. We account for a contract when it is approved, both parties are committed, the rights of the parties are identified, payment terms are defined, the contract has commercial substance and collection of consideration is probable.

Performance Obligations. A performance obligation is a promise in a contract to transfer a distinct good or service to the customer under ASC 606. The majority of our contracts with customers contain a single performance obligation to provide agreed-upon products or services. For contracts with multiple performance obligations, we allocate revenue to each performance obligation based on its relative standalone selling price. In accordance with ASC 606, we do not assess whether promised goods or services are performance obligations if they are immaterial in the context of the contract with the customer. We have elected to apply the practical expedient to account for shipping and handling costs associated with outbound freight after control of a product has transferred to a customer as a fulfillment cost which is included in cost of sales. Furthermore, since our customer payment terms are short-term in nature, we have also elected to apply the practical expedient which allows an entity to not adjust for the effects of a significant financing component if it expects that the customer’s payment period will be less than one year in duration.

Contract Value. Revenue is measured based on the amount of consideration specified in the contracts with our customers and excludes any amounts collected on behalf of third parties. We have elected the practical expedient to exclude amounts collected from customers for all sales (and other similar) taxes.

The estimation of total revenue from a customer contract is subject to elements of variable consideration. Certain customers may receive rebates or discounts which are accounted for as variable consideration. We estimate variable consideration as the most likely amount to which we expect to be entitled, and we include estimated amounts in the transaction price to the extent it is probable that a significant reversal of cumulative revenue will not occur when the uncertainty associated with the variable consideration is resolved. Our estimate of variable consideration and determination of whether to include estimated amounts in the transaction price are based largely on an assessment of our anticipated performance and all information (historic, current, forecast) that is reasonably available to us.

Timing of Recognition. We recognize revenue when we satisfy a performance obligation by transferring control of a product or service to a customer. Our performance obligations are satisfied at a point in time or over time as work progresses.

Revenue from goods transferred to customers at a point in time accounted for 79% of revenues for the year ended December 31, 2025. The majority of this revenue is product sales, which are generally recognized when items are shipped from our facilities and title passes to the customer. The amount of revenue recognized for products is adjusted for expected returns, which are estimated based on historical data.

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Notes to consolidated financial statements (continued)

Revenue from goods transferred to customers over time accounted for 21% of revenues for the year ended December 31, 2025, which is related to certain contracts in our Subsea, Production Equipment and Downhole product lines. Recognition over time for these contracts is supported by our assessment of the products supplied as having no alternative use to us and by clauses in the contracts that provide us with an enforceable right to payment for performance completed to date.

For certain contracts, we use an input method and measure progress using the cost-to-cost method because it best depicts the transfer of assets to the customer which occurs as costs are incurred on the contract. The amount of revenue recognized is calculated based on the ratio of costs incurred to-date compared to total estimated costs which requires management to calculate reasonably dependable estimates of total contract costs. Whenever revisions of estimated contract costs and contract values indicate that the contract costs will exceed estimated revenues, thus creating a loss, a provision for the total estimated loss is recorded in that period. We recognize revenue and cost of sales each period based upon the advancement of the work-in-progress unless the stage of completion is insufficient to enable a reasonably certain forecast of profit to be established. In such cases, no profit is recognized during the period.

Accounting estimates during the course of projects may change, primarily related to our remotely operated vehicles (“ROVs”) which may take longer to manufacture. The effect of such a change, which can be upward as well as downward, is accounted for in the period of change, and the cumulative income recognized to date is adjusted to reflect the latest estimates. These revisions to estimates are accounted for on a prospective basis.

We sell our products through a number of channels including a direct sales force, marketing representatives, and distributors. We have elected to expense sales commissions when incurred as the amortization period would be less than one year. These costs are recorded within cost of sales.

Portfolio Approach. We have elected to apply ASC 606 to a portfolio of contracts with similar characteristics as we reasonably expect that the effects on the financial statements of applying this guidance to the portfolio would not differ materially from applying this guidance to the individual contracts within that portfolio.

Disaggregated Revenue. Refer to Note 15 Business Segments for disaggregated revenue by product line and geography.

Contract Balances. Contract balances are determined on a contract by contract basis. Contract assets represent revenue recognized for goods and services provided to our customers when payment is conditioned on something other than the passage of time. Similarly, when we receive consideration, or such consideration is unconditionally due, from a customer prior to transferring goods or services to the customer under the terms of a sales contract, we record a contract liability. Such contract liabilities typically result from billings in excess of costs incurred and advance payments received on product sales.

Concentration of credit risk

Trade accounts receivable are financial instruments which potentially subject the Company to credit risk. Trade accounts receivable consist of uncollateralized receivables from domestic and international customers. For the years ended December 31, 2025 and 2024, no customer accounted for 10% or more of the total revenue or 10% or more of the total accounts receivable balance at the end of the respective period.

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Notes to consolidated financial statements (continued)

Stock-based compensation

We measure all stock-based compensation awards at fair value on the date they are granted to employees and directors, and recognize compensation cost over the requisite service period for awards with only a service condition, and over a graded vesting period for awards with service and performance or market conditions.

The fair value of stock-based compensation awards with market conditions is measured using a Monte Carlo Simulation model and, in accordance with ASC 718, is not adjusted based on actual achievement of the performance goals. The Black-Scholes option pricing model is used to measure the fair value of options. Forfeitures are accounted for as they occur.

Income taxes

Accounting guidance for income taxes requires that we recognize the financial statement benefit of a tax position only after determining that the relevant tax authority would more likely than not sustain the position following an audit. If a tax position meets the “more likely than not” recognition criteria, accounting guidance requires the tax position be measured at the largest amount of benefit greater than 50% likely of being realized upon ultimate settlement.

Non-U.S. local currency translation

We have global operations and the majority of our non-U.S. operations have designated the local currency as the functional currency. Realized and unrealized gains and losses resulting from re-measurements of monetary assets and liabilities denominated in a currency other than the local entity’s functional currency are included in the consolidated statements of comprehensive loss as incurred.

Financial statements of our foreign operations where the functional currency is not the U.S. dollar are translated into U.S. dollar using the current rate method whereby assets and liabilities are translated at the balance sheet rate and income and expenses are translated at the average exchange rates in effect during the period. The resultant translation adjustments are reported as a component of accumulated other comprehensive loss within equity in our consolidated balance sheets.

Fair value

The carrying amounts for financial instruments classified as current assets and current liabilities approximate fair value, due to the short maturity of such instruments. The book values of other financial instruments, such as our debt related to the Credit Facility, approximates fair value because interest rates charged are similar to other financial instruments with similar terms and maturities and the rates vary in accordance with a market index.

For financial assets and liabilities disclosed at fair value, fair value is determined as the exit price, or the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The established fair value hierarchy divides fair value measurement into three broad levels:

•Level 1 - inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date;

•Level 2 - inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly; and

•Level 3 - inputs are unobservable for the asset or liability, which reflect the best judgment of management.

The financial assets and liabilities that are disclosed at fair value for disclosure purposes are categorized in one of the above three levels based on the lowest level input that is significant to the fair value measurement in its entirety. Level 1 provides the most reliable measure of fair value, whereas Level 3 generally requires significant management judgment.

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Notes to consolidated financial statements (continued)

Recent accounting pronouncements

From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (“FASB”), which the Company adopts as of the specified effective date. Unless otherwise discussed, management believes that the impact of recently issued standards, which are not yet effective, will not have a material impact on the Company’s consolidated financial statements upon adoption.

Accounting Standards Adopted in 2025

Income Taxes (Topic 740). In December 2023, FASB issued ASU 2023-09, which improves income tax disclosures. This update is effective for fiscal years beginning after December 15, 2024. Early adoption is permitted. This update should be applied prospectively but retrospective application is permitted. The Company adopted this accounting standard effective January 1, 2025 on a prospective basis, and the adoption resulted in additional tax disclosures in our consolidated financial statements.

Accounting Standards Issued But Not Yet Adopted

Disaggregation of Income Statement Expenses (Subtopic 220-40). In November 2024, FASB issued ASU 2024-03 to improve financial reporting by requiring entities to disclose additional information about specific expense categories in the notes to financial statements at interim and annual reporting periods. This update is effective for fiscal years beginning after December 15, 2026. Early adoption is permitted. This update should be applied either (1) prospectively to financial statements issued for reporting periods after the effective date of this update or (2) retrospectively to any or all prior periods presented in the financial statements. The Company is in the process of evaluating the impact it may have on our consolidated financial statements.

3. Revenues

Disaggregated revenues

Refer to Note 15 Business Segments for disaggregated revenues by product line and geography.

Contract balances

The following table reflects the changes in our contract assets and contract liabilities balances for the years ended December 31, 2025 and 2024:

$ %

Accrued revenue $ 21 $ 752

Costs and estimated profits in excess of billings 9,369 11,632

Billings in excess of costs and profits recognized 16,884 4,516

During the year ended December 31, 2025, our contract assets decreased by $3.0 million and our contract liabilities increased by $21.2 million primarily due to the timing of milestone billings in our Subsea product line.

During the year ended December 31, 2025, we recognized revenue of $12.1 million that was included in the contract liabilities balance at the beginning of the period.

Substantially all of our contracts are less than one year in duration. As such, we have elected to apply the practical expedient which allows an entity to exclude disclosures about its remaining performance obligations if such obligation is part of a contract that has an original expected duration of one year or less.

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Notes to consolidated financial statements (continued)

4. Inventories

The Company’s significant components of inventories at December 31, 2025 and 2024 were as follows (in thousands):

December 31,

The changes in inventory reserve during the two-year period ended December 31, 2025 were as follows (in thousands):

During 2025, we recognized $15.4 million of inventory write-downs related to the Company’s strategic decision to consolidate facilities and discontinue certain products.

5. Property and Equipment

Property and equipment consisted of the following (in thousands):

Estimated useful lives December 31,

Depreciation expense was $13.8 million and $16.9 million for the years ended December 31, 2025 and 2024, respectively. During 2025, we recognized $1.2 million of impairment related to the Company’s strategic decision to consolidate facilities and discontinue certain products.

June 2025, the Company disposed land and buildings related to sale-leaseback transactions with a net book value of approximately $1.9 million and received net proceeds of $8.8 million, of which $0.8 million is receivable with a due date of June 2027. The Company recognized a gain of $6.9 million as a result, which is reported in operating income (loss) in the consolidated statements of comprehensive loss.

In August 2025, the Company disposed land and buildings related to sale-leaseback transactions with a net book value of approximately $2.3 million and received net proceeds of $6.5 million. The Company recognized a gain of $4.3 million as a result, which is reported in operating income (loss) in the consolidated statements of comprehensive loss.

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Notes to consolidated financial statements (continued)

In November 2024, the Company disposed land and buildings related to sale-leaseback transactions with a net book value of approximately $15.5 million and received net proceeds of $20.3 million. The Company recognized a gain of $4.9 million as a result, which is reported in operating income (loss) in the consolidated statements of comprehensive loss.

6. Goodwill and Intangible Assets

Goodwill

The changes in the carrying amount of goodwill from December 31, 2024 to December 31, 2025, were as follows (in thousands):

Artificial Lift and Downhole

Goodwill, December 31, 2023 $ —

Impact on non-U.S. local currency translation (5,125)

Impact on non-U.S. local currency translation 3,014

We perform our annual test of goodwill as of October 1 or when events and circumstances indicate that the fair value may be below its carrying value. There was no impairment of goodwill during the years ended December 31, 2025 and 2024.

Intangible Assets

At December 31, 2025 and 2024, intangible assets consisted of the following (in thousands):

Cost Accumulatedamortization Net Amortizationperiod (in years)

Intangible assets with definite lives are tested for impairment whenever events or changes in circumstances indicate that their carrying amount may not be recoverable.

The Coiled Tubing product line has faced headwinds since 2019, including tariffs on raw materials, lower sales volumes in 2020 and 2021 due to the pandemic, and inflation-driven steel price increases since 2022. During 2024, the Coiled Tubing product line faced further cost headwinds due to increased importation duties. Given these factors, the Company performed an impairment test and determined that the carrying value of intangibles assets in the Coiled Tubing product line was impaired. As a result, the Company recorded an impairment charge of $119.1 million in 2024.

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Notes to consolidated financial statements (continued)

The fair values used in the impairment analysis were determined using the net present value of the expected future cash flows for the asset group (classified within level 3 of the fair value hierarchy). The Company determined the fair value of the reporting unit using a discounted cash flow analysis, which requires significant assumptions and estimates about the future operations of the reporting unit. The assumptions about future cash flows and growth rates are based on the Company’s current estimates, strategic plans and management’s estimates for future activity levels. Forecasted cash flows in future periods were estimated using a terminal value calculation, which considered long-term earnings growth rates.

Amortization expense was $19.9 million and $36.8 million for the years ended December 31, 2025 and 2024, respectively. The estimated future amortization expense for the next five years is as follows (in thousands):

Year ending December 31, Amount

7. Debt

Debt as of December 31, 2025 and December 31, 2024 consisted of the following (in thousands):

December 31,

2029 Bonds

On November 8, 2024, we completed the offering of $100.0 million aggregate principal amount of 10.50% senior secured bonds (the “2029 Bonds”). The 2029 Bonds were privately placed, at an issue price of par. The net proceeds of approximately $96.0 million from the offering, together with cash on hand of $10.2 million and borrowings from our Credit Facility of $15.0 million, were used to repay all borrowings outstanding under the Seller Term Loan issued in connection with the acquisition of Variperm in January 2024 and to redeem in full all outstanding 2025 Notes (as defined below).

The 2029 Bonds were issued pursuant to the Bond Terms, dated as of November 5, 2024 (the “Bond Terms”), between the Company and Nordic Trustee AS, as bond trustee and security agent (the “Bond Trustee”). In May 2025, the 2029 Bonds were listed on the Euronext ABM exchange. The 2029 Bonds are the Company’s senior secured obligations and are jointly and severally guaranteed on a senior secured basis by each of the Company’s present and future direct and indirect domestic subsidiaries that guarantees its Credit Facility and certain of the Company’s foreign subsidiaries.

The 2029 Bonds will mature on November 7, 2029. Interest on the 2029 Bonds will accrue at a rate of 10.50% per annum payable semi-annually in arrears on May 7 and November 7 of each year in cash, beginning May 7, 2025. Prepayment of the 2029 Bonds prior to May 7, 2027 requires the payment of make-whole amounts, and prepayments on or after that date are subject to prepayment premiums that decline over time.

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Notes to consolidated financial statements (continued)

The 2029 Bonds contain the following financial covenants: (i) a maximum leverage ratio of 4.0x; and (ii) a minimum liquidity test equal to $25.0 million, in each case, for the Company and its consolidated subsidiaries. The Bond Terms also contain certain equity cure rights with respect to such financial covenants. The 2029 Bonds are also subject to negative covenants as set forth in the Bond Terms. As of December 31, 2025, the Company was in compliance with all of its 2029 Bonds financial covenants.

Upon the occurrence of certain change of control events, as specified in the Bond Terms, each holder of the 2029 Bonds will have the right to require that the Company repurchase all or some of such holder’s 2029 Bonds in cash at a purchase price equal to 101% of the aggregate principal amount thereof.

The Bond Terms contain certain customary events of default, including, among other things: (i) default in the payment of any amount when due; (ii) default in the performance or breach of any other covenant in the Finance Documents, as defined in the Bond Terms, which default continues uncured for a period of 20 business days after the earlier of (1) the Company’s actual knowledge of such event or (2) the Company’s receipt of notice from the Bond Trustee; and (iii) certain voluntary or involuntary events of bankruptcy, insolvency or reorganization of the Company.

Credit Facility

Our senior secured asset-based lending facility (“Credit Facility”) matures on the earliest of (a) September 8, 2028 and (b) the date that is 91 days prior to the maturity of the 2029 Bonds (or any notes issued to refinance the 2029 Bonds) (which will not apply if the 2029 Bonds or such refinancing notes are repaid prior to such 91st day). The maturity date of our Credit Facility was amended subsequent to year end. Refer to Note 16 Subsequent Events for further details. The Credit Facility provides revolving credit commitments of $250.0 million (with a sublimit of up to $70.0 million available for the issuance of letters of credit for the account of the Company and certain of its domestic subsidiaries) (the “U.S. Line”), of which up to $50.0 million is available to certain of our Canadian subsidiaries for loans in U.S. or Canadian dollars (with a sublimit of up to $10.0 million available for the issuance of letters of credit for the account of our Canadian subsidiaries) (the “Canadian Line”). The sublimit for the issuance of letters of credit for the account of the Company and certain of its domestic subsidiaries was amended subsequent to year end. Refer to Note 16 Subsequent Events for further details. Lender commitments under the Credit Facility, subject to certain limitations, may be increased by an additional $100.0 million.

Availability under the Credit Facility is subject to a borrowing base calculated by reference to eligible accounts receivable in the U.S., Canada and certain other jurisdictions (subject to a cap) and eligible inventory in the U.S. and Canada. Our borrowing capacity under the Credit Facility could be reduced or eliminated, depending on future fluctuations in our receivables and inventory. As of December 31, 2025, our total borrowing base was $146.0 million, of which $37.3 million amount was drawn and $36.2 million was used as security for outstanding letters of credit, resulting in remaining availability of $72.5 million.

Borrowings under the U.S. Line bear interest at a rate equal to, at our option, either (a) the Secured Overnight Financing Rate (“SOFR”), subject to a floor of 0.00%, plus a margin of 2.25% to 2.75%, or (b) a base rate plus a margin of 1.25% to 1.75%, in each case based upon the Company’s quarterly total net leverage ratio. The interest rate margins applicable to the U.S. Line were amended subsequent to year end. Refer to Note 16 Subsequent Events for further details. The U.S. Line base rate is determined by reference to the greatest of (i) the federal funds rate plus 0.50% per annum, (ii) the one-month adjusted term SOFR plus 1.00% per annum, and (iii) the “prime rate” of interest announced by Wells Fargo Bank, National Association, subject to a floor of 0.00%.

Borrowings under the Canadian Line bear interest at a rate equal to, at our Canadian borrowers’ option, either (a) Canadian Overnight Repo Rate Average (“CORRA”), subject to a floor of 0.00%, plus a margin of 2.25% to 2.75%, or (b) a base rate plus a margin of 1.25% to 1.75%, in each case based upon the Company’s quarterly net leverage ratio. The interest rate margins applicable to the Canadian Line were amended subsequent to year end. Refer to Note 16 Subsequent Events for further details. The Canadian Line base rate is determined by reference to the greater of (i) the one-month CORRA plus 1.00% per annum and (ii) the prime rate for Canadian dollar commercial loans made in Canada as reported by Thomson Reuters, subject to a floor of 0.00%.

The weighted average interest rate under the Credit Facility was approximately 7.29% and 8.17% for the years ended December 31, 2025 and 2024, respectively.

The Credit Facility also provides for a commitment fee in the amount of (a) 0.375% on the unused portion of revolving commitments if average usage of the Credit Facility is greater than 50% and (b) 0.500% on the unused portion of revolving commitments if average usage of the Credit Facility is less than or equal to 50%.

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Forum Energy Technologies, Inc. and subsidiaries

Notes to consolidated financial statements (continued)

If excess availability under the Credit Facility falls below the greater of 12.5% of the borrowing base and $31.25 million, we will be required to maintain a fixed charge coverage ratio of at least 1.00:1.00 as of the end of each fiscal quarter until excess availability under the Credit Facility exceeds such threshold for 60 consecutive days.

Subject to customary exceptions, all obligations under the Credit Facility are guaranteed, jointly and severally, by our wholly-owned U.S. subsidiaries and, in the case of the Canadian Line, our wholly-owned Canadian subsidiaries, and are secured by substantially all assets of each such entity and the Company, subject to customary exclusions. Subject to customary exceptions, all obligations under the Credit Facility are further guaranteed by our subsidiaries organized or domiciled under the laws of the United Kingdom or any territory or county thereof and secured by certain assets of such subsidiaries. In certain circumstances, obligations under the Credit Facility may be required to be guaranteed by and secured by the assets of our subsidiaries organized or domiciled under the laws of Germany or any territory or county thereof.

The Credit Facility contains various covenants that, among other things, limit our ability (none of which are absolute) to incur additional indebtedness or issue certain preferred shares, grant certain liens, make certain loans and investments, pay dividends, make distributions or make other restricted payments, enter into mergers or acquisitions unless certain conditions are satisfied, change our lines of business, prepay certain indebtedness, enter into certain affiliate transactions or engage in certain asset dispositions.

If an event of default exists under the Credit Facility, the lenders will have the right to accelerate the maturity of the obligations outstanding under the Credit Facility and exercise other rights and remedies. Obligations outstanding under the Credit Facility, however, will be automatically accelerated upon an event of default arising from a bankruptcy or insolvency event. An event of default includes, among other things, nonpayment of principal, interest, fees or other amounts within certain grace periods; representations and warranties proving to be untrue in any material respect; failure to perform or otherwise comply with covenants in the Credit Facility or other loan documents, subject, in certain instances, to grace periods; cross-defaults to certain other indebtedness if such default occurs at the final maturity of such indebtedness or if the effect of such default is to cause, or permit the holders of such indebtedness to cause, the acceleration of such indebtedness; bankruptcy or insolvency events; material monetary judgment defaults; invalidity or unenforceability of the Credit Facility or any other loan document; and the occurrence of a Change of Control (as defined in the Credit Facility).

As of December 31, 2025, the Company was in compliance with all of its Credit Facility financial covenants.

2025 Notes

Our 9.00% Convertible Senior Secured Notes due 2025 (“2025 Notes”), of which no principal amount was outstanding at December 31, 2025, paid interest at the rate of 9.00%, of which 6.25% was payable in cash and 2.75% was payable in cash or additional notes, at the Company’s option.

In June 2024, we repurchased $13.0 million in aggregate principal amount of our 2025 Notes for $13.0 million. The net carrying value of the extinguished debt, including unamortized debt discount and debt issuance costs, was $12.5 million, resulting in a $0.5 million loss on extinguishment of debt.

In August 2024, we redeemed $60.0 million in aggregate principal amount of our 2025 Notes for $60.0 million. The net carrying value of the extinguished debt, including unamortized debt discount and debt issuance costs, was $58.2 million, resulting in a $1.8 million loss on extinguishment of debt.

In November 2024, we redeemed the remaining $61.2 million outstanding principal amount of our 2025 Notes at par, and we discharged our obligations under the indenture governing the 2025 Notes. The net carrying value of the extinguished debt, including unamortized debt discount and debt issuance costs, was $59.9 million, resulting in a $1.3 million loss on extinguishment of debt.

Seller Term Loan

On January 4, 2024, the Company entered into the Seller Term Loan in connection with the closing of the Variperm acquisition, which had an initial principal amount of $60.0 million and a maturity date in December 2026. The Seller Term Loan bore interest at the rate of (i) 11.00% per year for the period commencing on the closing date to (but excluding) the first anniversary of the closing date, (ii) 17.00% per annum for the period commencing on the first anniversary of the closing date to (but excluding) the second anniversary of the closing date and (iii) 17.50% per annum for the period commencing on the second anniversary of the closing date to (but excluding) the maturity date. The Company had an option to prepay the Seller Term Loan anytime without premium or penalty.

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Forum Energy Technologies, Inc. and subsidiaries

Notes to consolidated financial statements (continued)

In November 2024, we repaid in full our Seller Term Loan for $58.4 million. The net carrying value of the extinguished debt, including unamortized debt issuance costs, was $59.2 million, resulting in a $0.8 million gain on extinguishment of debt.

Other Debt

Other debt consists of various finance leases of equipment.

Future principal payments under long-term debt for each of the years ending December 31 are as follows (in thousands):

Year ending December 31, Amount

Less: debt issuance cost (5,362)

Less: present value discount on finance leases (588)

8. Leases

Our lease portfolio primarily consists of operating leases for certain manufacturing facilities, warehouses, service facilities, office spaces, equipment and vehicles. The following table summarizes the supplemental consolidated balance sheet information related to leases as of December 31, 2025 and 2024 (in thousands):

December 31,

Assets

Operating lease assets Operating lease assets $ 80,733 $ 70,389

Finance lease assets Property and equipment, net 4,676 3,579

Liabilities

Current

Finance Current portion of long-term debt 1,407 1,866

Noncurrent

Operating Operating lease liabilities 83,957 73,145

Finance Long-term debt, net of current portion 2,601 1,507

During 2025, we recognized $1.6 million of operating lease assets impairment related to the Company’s strategic decision to consolidate facilities and discontinue certain products.

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Forum Energy Technologies, Inc. and subsidiaries

Notes to consolidated financial statements (continued)

The following table summarizes the components of lease expenses (in thousands):

Year ended December 31,

Finance lease cost

Interest on lease liabilities Interest expense 241 269

The maturities of lease liabilities as of December 31, 2025 are as follows (in thousands):

Operating Leases Finance Leases Total

The following table summarizes the weighted-average remaining term and weighted average discount rates related to leases as of December 31, 2025 and 2024:

Year ended December 31,

Weighted-average remaining lease term (years)

Operating leases 9.4 8.8

Financing leases 3.7 1.9

Weighted-average discount rate

The following table summarizes the supplemental cash flow information related to leases for the years ended December 31, 2025 and 2024 (in thousands):

Year ended December 31,

Cash paid for amounts included in the measurement of lease liabilities:

Operating cash flows from operating leases $ 17,813 $ 15,904

Operating cash flows from finance leases 241 269

Financing cash flows from finance leases 2,032 1,725

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Forum Energy Technologies, Inc. and subsidiaries

Notes to consolidated financial statements (continued)

Sale-leaseback transactions

In June 2025, the Company sold and leased back land and buildings for net proceeds of $8.8 million, of which $0.8 million is receivable with a due date of June 2027. The initial annual rent for the assets is $0.7 million with initial term of 15 years, subject to annual increase. The transactions met the requirements of sale-leaseback accounting. The related assets were removed from property and equipment and the appropriate operating lease assets and liabilities of approximately $7.6 million were recorded in the consolidated balance sheets.

In August 2025, the Company sold and leased back land and buildings for net proceeds of $6.5 million. The initial annual rent for the assets is $0.6 million with initial term of 18 years, subject to annual increase. The transactions met the requirements of sale-leaseback accounting. The related assets were removed from property and equipment and the appropriate operating lease assets and liabilities of approximately $7.2 million were recorded in the consolidated balance sheets.

In November 2024, the Company sold and leased back land and buildings for net proceeds of $20.3 million. The initial annual rent for the assets is $1.7 million with initial term of 15 years, subject to annual increase. The transactions met the requirements of sale-leaseback accounting. The related assets were removed from property and equipment and the appropriate operating lease assets and liabilities of approximately $19.1 million were recorded in the consolidated balance sheets.

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Forum Energy Technologies, Inc. and subsidiaries

Notes to consolidated financial statements (continued)

9. Income Taxes

The components of income (loss) before income taxes were as follows (in thousands):

Year ended December 31,

The components of income tax expense (benefit) were as follows (in thousands):

Year ended December 31,

Current

U.S. federal $ —

U.S. state and local 435

Deferred

U.S. federal —

U.S. state and local —

Income tax expense $ 26,247

As previously disclosed prior to the adoption of ASU 2023-09, the components of income tax expense (benefit) were as follows (in thousands):

Year ended December 31,

Current

Deferred

Income tax expense $ 6,900

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Forum Energy Technologies, Inc. and subsidiaries

Notes to consolidated financial statements (continued)

The reconciliation between the actual provision for income taxes and that computed by applying the U.S. statutory rate to income (loss) before income taxes are outlined below based on the updated requirements of ASU 2023-09 for 2025 (in thousands, except percentages):

Year ended December 31,

Provision for income taxes at U.S. federal statutory rate $ 3,483 21.0 %

State and local income taxes, net of federal income tax effect 449 2.7 %

Effect of cross-border tax laws

U.S. tax on foreign earnings 6,630 40.0 %

Changes in U.S. valuation allowances 1,467 8.8 %

U.S. nontaxable or nondeductible items

Executive compensation and share-based payments 1,073 6.5 %

Other U.S. adjustments

Return to provision (219) (1.3) %

Foreign tax effects

Canada

Capital gain exclusion (1,410) (8.5) %

Foreign tax rate differential (1,690) (10.2) %

Interest and other 437 2.6 %

Valuation allowance (1,754) (10.6) %

Germany

Tax settlement and other 3,242 19.5 %

Change in federal tax rate 637 3.8 %

Foreign tax rate differential 401 2.4 %

Return to provision and other 1,114 6.7 %

United Kingdom

Foreign exchange gain (loss) 627 3.8 %

Foreign tax rate differential 522 3.1 %

Foreign tax credit adjustment 647 3.9 %

Return to provision 495 3.0 %

Ireland

Interest and other 473 2.9 %

Barbados

Return to provision 395 2.4 %

Other foreign jurisdictions 519 3.1 %

Changes in global unrecognized tax benefits 200 1.2 %

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Forum Energy Technologies, Inc. and subsidiaries

Notes to consolidated financial statements (continued)

As previously disclosed prior to the adoption of ASU 2023-09, the effective income tax rate differs from the statutory federal income tax rate as follows (in thousands, except percentages):

Year ended December 31,

Income tax benefit at the statutory rate $ (26,970) (21.0) %

State taxes, net of federal tax benefit (115) (0.1) %

Non-U.S. operations 3,143 2.4 %

Domestic incentives (402) (0.3) %

Prior year federal, non-U.S. and state tax 3,488 2.7 %

Nondeductible expenses 2,124 1.7 %

Income tax expense $ 6,900 5.4 %

The Organization for Economic Co-operation and Development introduced Base Erosion and Profit Shifting (“BEPS”) Pillar 2 rules that impose a global minimum tax rate of 15%. As of January 1, 2024, numerous countries, including European Union member states, have enacted a global minimum tax and more countries are expected to enact similar minimum tax regimes in 2026. Based on current enacted legislation, we do not expect a material impact on our future effective tax rate.

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The primary components of deferred taxes include (in thousands):

December 31,

Deferred tax assets

Net operating loss and other tax carryforwards 216,428 186,118

Total deferred tax assets $ 9,878 $ 8,912

Deferred tax liabilities

Prepaid expenses and other (511) (450)

Goodwill from certain acquisitions is tax deductible due to the acquisition structure as an asset purchase or due to tax elections made by the Company and the respective sellers at the time of acquisition.

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Forum Energy Technologies, Inc. and subsidiaries

Notes to consolidated financial statements (continued)

We have deferred tax assets related to net operating loss and other tax carryforwards in the U.S., and in certain states and foreign jurisdictions. We recognize deferred tax assets to the extent that we believe these assets are more likely than not to be realized.

At December 31, 2025, we had $417.8 million of gross U.S. net operating loss carryforwards and $10.6 million of state net operating losses. Of these losses, $33.2 million will expire no later than 2038 if they are not utilized prior to that date. The remaining $384.6 million will not expire. We also had $41.2 million of gross non-U.S. net operating loss carryforwards with indefinite expiration dates. In addition to our net operating loss carryforwards, we also had gross U.S. interest limitation carryforwards of $249.3 million and gross non-U.S. interest limitation carryforwards of $210.3 million, all with indefinite expiration dates. The ultimate realization of income tax benefits for these net operating loss and interest limitation carryforwards depends on our ability to generate sufficient taxable income in the respective taxing jurisdictions. Because of the change of ownership provisions of the Tax Reform Act of 1986, use of a portion of our domestic net operating losses may be limited in future periods depending upon future changes in ownership. Where we have unrecognized tax benefits in jurisdictions with existing net operating losses, we utilize the unrecognized tax benefits as a source of income to offset such losses. We do not anticipate being able to fully utilize all of the losses prior to their expiration in the following jurisdictions: the U.S, United Kingdom, Singapore and China.

During 2025, we recognized $4.3 million of tax expense related to the net increase in our valuation allowance provided against our deferred tax assets to write down our deferred tax assets in these jurisdictions to what is more likely than not realizable. We increased our valuation allowance related to our U.S. deferred tax assets by $1.5 million along with a $2.8 million net increase to certain non-U.S. deferred tax assets in the United Kingdom, Singapore and Canada.

Deferred tax liabilities arising from the difference between the financial reporting and income tax bases inherent in our foreign subsidiaries, referred to as outside basis differences, have not been provided for U.S. income tax purposes because we do not intend to sell, liquidate or otherwise trigger the recognition of U.S. taxable income with regard to our investment in these foreign subsidiaries. Determining the amount of U.S. deferred tax liabilities associated with outside basis differences is not practicable at this time.

We file income tax returns in the U.S. as well as in various states and non-U.S. jurisdictions. With few exceptions, we are no longer subject to income tax examination by tax authorities in these jurisdictions prior to 2018.

We account for uncertain tax positions in accordance with guidance in ASC Topic 740, which prescribes the minimum recognition threshold a tax position taken or expected to be taken in a tax return is required to meet before being recognized in the financial statements. A reconciliation of the beginning and ending amount of uncertain tax positions is as follows (in thousands):

Additional based on tax positions related to prior years 557

Settlements (632)

FET US Equity

FET · 10-K · period ended 2025-12-31

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Item 7A. Quantitative and qualitative disclosures about market risk

Item 8. Consolidated Financial Statements and Supplementary Data

FET US Equity☆

FET · 10-K · period ended 2025-12-31

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Item 7A. Quantitative and qualitative disclosures about market risk

Item 8. Consolidated Financial Statements and Supplementary Data

FET US Equity