Parts and Managing Director of Natural Resources at Water Tower Research. Before we begin, I would like to remind participants that our discussion could include forward-looking statements as of today, September 18, 2025. FET's disclosures regarding such statements can be found under the Investor tab of its corporate homepage. FET provides technology solutions to the oil, natural gas, industrial, and renewable energy industries. The company's products are designed to help its customers safely increase operational efficiency and reduce the environmental impact of their activities. Operational efficiency is measured by improved performance, resulting in lower costs and higher returns on investment. The company's product lines are segregated into two segments: drilling and completions, and artificial lift and downhole.
FET serves some of the largest oilfield services companies in the world with its drilling and completions segment and the E&P operators who own and process hydrocarbons with its artificial lift and downhole segment. Neal and Lyle, I'd like to thank you for joining us today.
Thanks, Jeff. Great to be here.
Execution of FET's beat-the-market strategy over the last couple of years has opened new business opportunities for the company that support its ability to generate free cash flow to fund strategic growth investments, debt reduction, and returning cash to shareholders through common stock repurchases. Neal, you recently highlighted FET's 36% market share in what you term leadership markets. Can you provide us some specifics on what those markets are and whether or not there's potential for incremental share gains?
Yeah, absolutely, Jeff. You know, our leadership markets contain, you know, product families where we already have a strong and meaningful share position. Here, our products and solutions are fully adopted by the industry. They're proven. They're trusted by our customers. A few good examples of our leadership markets are, you know, coil tubing, cased hole wireline, subsea, remotely operated vehicles, sand and flow control systems for thermal oil sands. In these markets, you know, FET is a leader, and you know, we love these products and our competitive position. You know, as you mentioned, we have strong share, and to achieve growth there, we do need to rely on really two primary drivers. The first is innovation. Through iterative product development, you know, we can increase the value of our product for our customers and separate ourselves from our competition.
For example, in coil tubing, we've recently introduced a product that is high strength while also suitable for sour service or corrosive environments. This is a really important product they're introducing, and it's ideal for the Middle East. We're excited about its potential, and we have a team there actually selling that product right now. Another example is our Unity operating system for remotely operated vehicles. Unity allows our customers to reduce costs significantly by minimizing the amount of offshore personnel working. What's exciting there for us is we provide this operating system on both new vehicles and existing ones. Great opportunity there. In addition to the innovation aspect, we think long-term demand and the critical nature of our leadership market products will expand our market opportunity by 50% or more in the next five years.
With leadership revenue being around two-thirds of FET's total revenue, we also have strong incremental margin opportunity here. We have a robust market position. We're going to combine that with further innovation and industry growth. I think it's going to be a real positive for incremental share gains as we go forward.
You talked about the Middle East, and I'm curious, how does your customers' drive to continue to increase their operational efficiency affect demand for some of the solutions that you mentioned?
Yeah, it's incredibly important. When we think about, at FET, we think about operational efficiency. We also call it service intensity. Every step of the drilling and completion process needs to be faster, and it needs to be safer. That requires more of our products. Over the last nine or ten years, the number of frac stages in the U.S. per rig has increased about 9% a year. Also, footage drilled per rig has increased about 6% per year. The industry is driving efficiency, and our value proposition here is simple. Our products and solutions allow our customers to drill longer wells and frac faster. A great example of that is our greaseless wireline cable from Quality Wireline. The development of this cable not only eliminated grease, which can be an environmental hazard, but it also allowed our customers to run in and out of the well faster.
By speeding up that process, our product allows pressure pumpers to frac more stages per day. This is where the service intensity story gets really interesting, though. By using our wireline cable, service companies can complete more stages per day. That means pressure pumpers are wearing out their pumps faster, wearing out hoses faster, wearing out radiators faster, check valves, manifolds faster, and the wireline cable will wear out faster too, because it's going in and out of the hole more times per day. In essence, our innovation is creating more demand for the products we provide while also making our customers more efficient. That's why service intensity really drives our consumable products.
You know, based on the conversations that you have with customers, I know it's probably early to think about 2026, but do you see any of that push around completion intensity and stimulation intensity? Do you see that trend increasing, staying the same, or where do you see that in the next year or two?
No, I think it's absolutely going to increase. As we look out, let's call it five years, our expectation is that the service intensity that we've seen will continue going forward. I think there's a lot more that we can do. We joke with customers that they can't frac 26 hours per day, but we do have an ability to still do more. We do have the ability to add more wells. We have the ability to drill longer laterals, but it is incumbent upon the service companies and the operators to have the right equipment to do that. That's where we at FET come and play.
Unconventional resource development has been a mainstay in the U.S. for well over a decade now. Where do you see that lifecycle in some of the international markets that you serve? I know the Middle East and Saudi Arabia in particular have talked about increasing unconventional gas production to displace oil in their power generation markets. Do you see that as a growth opportunity for FET?
Yes, absolutely, Jeff. Geographically, really, there are two important markets for us that are taking a fast approach to adopting the unconventional technology: the Middle East and Argentina. We call it Latin America, but Argentina specifically. The Middle East is about 10% to 15% of our revenue, so it's one of our largest geo markets. We have manufacturing distribution facilities in Saudi Arabia and the UAE. Through these, we can service any country in the Middle East. For Argentina, we've seen great progress as well. Our Latin America revenue is up 18% for the first six months of the year, year over year, and Argentina has been a really nice contributor to that. I think it's really about taking the operational efficiencies that we've seen in unconventional resource places in the U.S. and taking that technology.
Our customers in the Middle East and in Latin America want to drill more wells with longer laterals and less rigs. They want to frac more stages per day. They're looking at us and saying, what do you have in the U.S.? They're telling us, we want that. We're a critical partner. If we can transplant our proven expertise, our technologies, and our products to different regions, we are going to allow them to achieve their goals.
Is part of the Argentine resurgence driven by an improved fiscal regime in the country?
That sure seems to be a driver. I think anytime you have stability, plus government support, especially international locations where national oil companies and the government have a big say on resource development, having the right policies, the right governments in place do play an important role there. I think that's been the case in Argentina as well.
Can you outline the process, Neal, for getting FET's technologies adopted by national oil companies? Let's just take Saudi Aramco, for example. If they adopt a technology, is it more likely then to be adopted by some of the neighboring countries?
Yeah, I think it's important. Each company is different, right? Each national oil company has their own really unique viewpoint. Overall, the process is similar, and it does help to be approved in the region. I think each national oil company does look around and see what their competitors are doing. For us, getting our technologies approved is really a multi-layered process. The first step is getting a technical review and a field trial. This is where having that proven track record helps. In your example, if we're approved by Saudi Aramco and we have good success, that helps us get a field trial in the UAE or Kuwait or Iraq, absolutely. Concurrently, when we have our technologies, we have to make sure they're aligned with the national oil company's priorities. This is where our investment and our experts, our technical and commercial teams, really pay off.
They understand the needs of our customers, and they help us position ourselves accordingly. Putting it all together, how do we get a win? How do we have success? For us, success comes from having our products included in the national oil company's product catalog and their standard operating procedures. Getting to that point, that qualification process is long and arduous, but once you're in, you can be incredibly sticky. That's where we want to see continuous progress from today to 2030, getting those approvals and getting into that sticky situation.
You talked about growth potential in some of these leadership markets. I'm curious, how difficult is it to defend your market share in some of those markets?
Yeah, you always have to be ready, right? If you're the leader, people are going to look for the leader. We defend and grow market share really through the continuous innovation that I talked about earlier, providing quality products to help our customers succeed. This is the core of who we are. It's a pillar of our beat-the-market strategy. This is where a niche market approach helps. In the markets we compete, we generally only have a few competitors, and this helps keep discipline in those markets. I think as long as we're delivering innovation and quality and having great service, we're in good shape. As we think about pricing, and that's an important factor, the products and solutions that we provide are really critical to our customer success. They are always going to want the best price, but in many cases, they do want value.
A great example we've talked about before, Jeff, is within our FR-120 iron roughneck. It's a premium capital product. It's one that we're not going to put in our discount bin ever. We're looking at a kind of a challenging land U.S. rig environment, but they are buying FR-120s because they know it increases drilling efficiency. If you have leadership markets, leadership products that allow customers to do more with less, they're going to be interested. While pricing is important, we are selling value and efficiency first.
That efficiency that you can deliver to the service company, for example, becomes a selling tool for them as they look for their E&P customers who might be using those rigs and looking to drill some of the long lateral wells that you spoke of, right?
Absolutely. That's a great point because even with the FR-120 iron roughneck, we sell that to drillers or service companies. We've seen a big pull-through as the operators are telling the service companies, we know you're more efficient with an FR-120 iron roughneck. Put that on your rig. I think even in a limited CapEx environment where, you know, service companies are focused on free cash flow, they're going to budget and they're going to put money towards key products that allow them to be more efficient, especially ones that their customers want to see.
As companies are scrubbing their capital budgets, looking for places to save where they can save, can you talk a little bit about sensitivity to pricing and price increases? I know you all pushed prices on some of your products early in the year, I think in response to tariffs. Can you provide a little insight into that and your ability to maintain margins in some of these markets?
No customer wants a price increase letter, right? We look at tariffs and their impact in a couple of ways. One, can our supplier eat the whole thing? That's the best, right? Can they handle it? If we can do that, great. If not, can we find an alternative source that will reduce or eliminate the tariff? We'll try that. Really, the last resort is we need to pass this through a customer. We hate to do it, but we don't have a lot of margin here to absorb it ourselves. I would say in most cases that has been received, and we've seen our customers, I think, pass on some of that cost to their customer.
Ultimately, if we can hit our value proposition by increasing efficiency, the operator is going to get more foot drilled per day, even if they spend a little bit more money on an FR-120 iron roughneck because of tariffs, and it's worth it. It's making sure we find those right value opportunities and staying out of the commodity side of the business where it's hard to pass price through.
Yes, with respect to an FR-120 iron roughneck, the drilling component of an AFE for some of these wells is actually relatively small compared to some of the stimulation components. I guess it's relatively easy to push that technology if it allows the driller to drill, get the well to total depth much quicker, right?
Right. You know, we've seen a step change. These longer laterals require bigger drill pipe, and the tools that rigs need to have on their floors have gotten bigger. If you don't have the right tools, you're going to either damage the pipe as you're trying to drill, or you're just not going to be as effective. That's kind of what we think about our capital products, where these are really kind of complementary components for our customers. We don't build entire rigs, but if you have a rig that is 10 or 15 years old, you can upgrade it significantly by putting an FR-120 on and at a fraction of a new build rig's cost. That is part of the value we have there with our capital products.
Growth markets represent a material opportunity for FET over the next several years. Neal, can you outline how these markets play a crucial role in the Vision 2030 strategy that you talked about on the earnings call in August?
Yeah, we're really excited about our Vision 2030 strategy. You know, as we think about our growth markets, again, they're very similar to our leadership markets. We have products and solutions that are differentiated and proven. In our growth markets, many times they're in the early stages of industry adoption, or we may have a very narrow customer base, or we may be, let's say, geographically limited, only in the U.S. versus internationally. When we think about our aggregate growth market share, it's much, much smaller than our leadership markets. However, when we think about Vision 2030, growing market share here is incredibly exciting. Again, since our growth market products have very similar qualities with our leadership markets, it makes sense to us that we should have similar share, you know, around 36% over time. We think over time, a longer period of time, that can happen.
For Vision 2030, our target is that over the next five years, we're going to grow our share in these growth markets from 8% to 16%. If we're successful, this strategy in a flat market, again, with no growth, that's not our baseline assumption, but in a flat market that doesn't grow, just by gaining share here, we could increase our revenue by nearly $250 million. It's an amazing, amazing opportunity that we want to achieve.
When you talk about that type of revenue growth, where do you see the total addressable market in some of those growth sectors over the next several years?
Yeah, the growth market is about twice the size of our leadership market, which is incredible. It's a $3 billion opportunity. It's a much larger opportunity set, and the runway for growth is exciting. Again, if we're successful, increasing revenue by $250 million with strong incremental margins, that is an exciting, exciting opportunity.
Neal, how much of that growth potential for FET is driven by adoption of existing proven technologies versus maybe needing to innovate to solve the solution that the industry will need in 2028 and 2029?
Yeah, a lot of these products are already proven technology, and it's really about taking the product and expanding it. We talked about the adoption or the narrow customer base. A couple of key areas in our growth markets, we've called them out, coil line pipe, the subsea defense industry, casing hardware. I think, though, the biggest opportunity is probably with our downhole pump protectors. These are tools that we provide in the U.S. that have been incredibly successful for extending the life of downhole pumps. However, the share we have internationally is really small, even though the market is four times bigger. What we're going to take is a proven technology in the United States that works well with ESPs. We're going to expand to other applications, including rod lift, and expand geography, outside the U.S. and grow globally.
That's where we take that proven technology, and we take our share, and we take our expertise, and we grow internationally in these growth opportunities.
Is some of that growth potential internationally just driven by what's going on in some of these markets as they look at how they're developing their resources?
It is. You know what we found, and we talked a little bit earlier about national oil companies, they want to be on the cutting edge, right? They want technology. If it really aligns with their priorities, they're going to take it. They're going to utilize it. That's exciting. That's where, for us, we have our global footprint. We have our international sales teams. We're in the offices around the Middle East of the oil companies, around Latin America, in Africa. We cover the world. We're excited about that opportunity of international growth, again taking our successful products here from the U.S. and exporting them internationally.
You mentioned coil line pipe as one of the technologies. For someone who's not familiar, can you just, from a high level, talk about the benefits of coil line pipe in the applications versus traditional steel pipe?
Yeah, traditional steel pipe is generally supplied in 40-foot sections, so you can put it on the back of a flatbed truck. Coil line pipe is supplied in thousands of feet. We take that same steel and we coil it around a reel and deliver the reel to site. When you get it to site, you're thinking about having 1,000 to 5,000 feet of coil line pipe on a reel versus a 40-foot section. If you think about the installation time, the operator has to put each 40-foot section of traditional steel pipe on the ground and weld it up. That takes 30 minutes or more. In that same amount of time, you could have laid a couple of thousand feet of coil line pipe. We save time, we eliminate welds, and it just seems like a no-brainer.
If you can install a thousand or a couple thousand feet at a time in the time it takes you to weld one joint, this solution really seems like a no-brainer. We believe customer adoption will increase as operators start to prioritize saving money and time over status quo.
Depending on the diameter, I think on your website, coil line pipe can be manufactured in links from about 1,000 feet to 8,500 feet for certain applications. Where do you see the greatest growth opportunity for that business? Is part of that growth, to your point about wells, driven by customers' desire to eliminate basically failure points in some of these, or what could be failure points in pipelines?
Yeah, I think that's a part of that as well. If you think about the applications, you mentioned 1,000 feet to 850 feet, that means there's no field weld having to be made. A field weld, you have to have a really good welder. You have to have quality control checks. All that stuff takes time and money. We eliminate that. I think that the failure point, but also the time, is a big part. What we really like about coil line pipe is it can be used in a number of applications. It's upstream, downstream. We have a lot of offshore opportunities that we've been able to take advantage of. Just within the U.S. itself, that market is massive. We think we could triple our coil line pipe sales and still have a lot of room to grow. That's how big the market is for us.
Is there much of a margin, you talked about coil tubing earlier, is there any margin difference between coil tubing and coil line pipe?
I think the margins are relatively comparable, but where we see the great opportunity is that the incremental margin is incredibly high, and it's much higher than FET's EBITDA margin today. We're trying to really step on that gas pedal and on our sales efforts because, again, every revenue dollar there is really meaningful to our incremental margins.
You've talked about your Dayton manufacturing facility. I'm curious, when you think about the growth opportunity in coil line pipe plus what you see in coil tubing, does that facility have the capacity to keep up with where you think demand could go?
Absolutely, it does. Yeah, we designed that facility to handle a lot more pipe going through. We have the facility in place. For us, it's adding capacity, adding people, adding shifts, and we're in a great labor market there. Hard workers, great workforce. We're excited. It also goes back to our capital-light business model. We haven't talked about it really much today, but if you think about our capital-light business model, to grow revenue, we're not having to invest a lot of CapEx. In fact, in that scenario that you talked about, our Dayton manufacturing facility, we could grow our revenue significantly without a dollar of CapEx there.
You mentioned the Unity operating system in your ROV line a little bit earlier, but I want to touch on it in maybe a little more detail. FET's ROV lines expose the company to offshore applications beyond traditional energy, which was evidenced by the recent award of a contract for a rescue submersible vessel from the Indonesian Navy. Can you talk about FET's long history of supplying vessels for non-energy type markets, in particular military and naval applications?
Right, yeah, our history, and we've supported, you know, military and naval forces for more than 45 years. It's a long, long history there. We have several, several offerings. We have our ROVs, again, the remotely operated vehicles. We have rescue submarines. We have launch and recovery systems. We have specialized underwater cabling winch systems. We have some things that we really can't talk about publicly that we've done. You did mention our submarine rescue vehicle, or the SRV award that we recently have. This is really the fourth one in our history that we're about to manufacture. I think that's a, we have a good, good history there. Also, what I think is exciting, as we think about defense, it's one of our growth markets, is we think we have more opportunities there. We have our fourth SRV that we're manufacturing now.
Our commercial teams right now are working hard to book more. The opportunities, they take a long time to finalize. It could be three or four years. What's exciting to me is we have a number of leads in our queue.
I think is some of the demand you're seeing from non-traditional energy customers, just is it driven by the desire to do more under the surface of the water where it's more difficult to detect what's going on?
I think that's right, Jeff. As satellite, you know, there's satellites everywhere now, and it's hard to hide, but going underwater makes it more difficult to detect. That's one of the reasons I think we're seeing increased interest on the defense side. What I really like is we have that history. We have the core competency. As we think about that adjacent market, we're already really well positioned to take advantage of it. Our ROVs and rescue vehicles are going to support growing submarine fleets. I think it's a great niche for us. With our years of deep water experience, this is a unique opportunity that we're going to take advantage of.
I believe you indicated that sea trials for the SRV with the Indonesian contract will begin in 2028. Would you anticipate that upon successful trials that could open up incremental opportunities for that line of vehicles?
I think we're a good and proven vendor already. I think the sea trials, it's really more on a per-customer base. It's just kind of a step in the process. We're there, and really our goal now is to get more opportunities. I think as we're seeing more international navies show interest, it's finding the right priority for their budget and getting them a rescue submarine or rescue vehicle. It's exciting.
FET's full-year 2025 adjusted EBITDA guidance is about $85 million now, compared to the company's initial outlook of $85 million to $105 million at the beginning of the year. The current outlook is consistent with your comments in May that, based on industry activity, adjusted EBITDA could fall toward the low end of the original outlook. Lyle, how has the U.S. business for FET, which I think represents a little over 50% of total revenue in the most recent quarter, has it stabilized with the rig count stabilization that we've seen in the last couple of months?
Yeah, Jeff, thanks for the opportunity to talk about Forum Energy Technologies today and maybe a little background to frame up guidance. I think first, roughly 80% of our revenue comes from our high-value consumable items, many of the ones that Neal talked about earlier. Our revenue therefore is really highly correlated with industry activity, and we measure that by looking at global rig count. In April, OPEC made their announcement of increasing production, and we correctly forecasted that activity was going to fall. It's now running about 5% down third quarter versus the first quarter levels. With that decline, we did adjust our full-year EBITDA guidance to about $85 million, near the bottom end of that pre-decline guidance. Activity, like you mentioned, makes up half of our revenue, but in the U.S., U.S. activity has fallen a lot faster than global activity. U.S.
rig count was down 3% in the second quarter, and it's already down another 6% in the second quarter. We're continuing to see some softness in the U.S. market. What we're hearing from our customers, what they're saying publicly, is that they believe U.S. activity is nearing a bottom. Given that, we're comfortable with the guidance we provided, that assuming commodities stay roughly where they are, activity will continue to grind lower through the rest of the year. Our EBITDA guidance there at $85 million works pretty well. I think another thing I would share about that guidance is if you look at the second half of our second half guidance, it's roughly flat in terms of EBITDA with the first half. Given that activity is softer, how do we bridge that? A few items just to highlight. First, we do have support from elevated backlog.
At the end of the last quarter, we announced that our backlog was as large as it's been in 10 years. Second, we're on pace with announced cost-saving initiatives that we launched after the OPEC announcement. We'll continue to see incremental EBITDA benefit from those. Finally, we do expect to continue some share gain in line with the beat-the-market strategy that Neal talked about earlier. All in all, that's how we get to that $85 million of guidance and on track for that so far this year.
Lyle, if I look at, to try to measure share gains, if I look at the revenue per rig type numbers that you cite that are pretty easy to graph, is that the easiest way to see increased share gains, but also the effect of intensity and increased demand for some of the consumables that, because of intensity, have a shorter replacement cycle that drives incremental business opportunities?
Yes, spot on, Jeff. I think two things there. One is us taking share, so our revenue grows with activity, but also service intensity. All the things that Neal talked about, incremental revenue for us, even though the number of units working out in the field is lower.
We touched briefly on pricing sensitivity of customers earlier, but can you talk about tariff and tariff impacts on the business as we continue to see kind of some shifting in the sands there?
Yeah, yeah. With raw material make up about 50% of our revenue, tariffs and the impact on raw material is an important part for us, and our teams are doing a great job of managing that. One thing that we do see is continued uncertainty around tariffs really tied to modifications in tariff policy. Specifically there, what we've seen is varying tariff levels. Sometimes tariffs go up, sometimes they go down, and changes in what countries are impacted by tariffs. A great example of that would be the recent significant tariff increases coming onto India, which really nobody saw coming. Right now, we're reacting to that policy change. Our teams have been very proactive in managing tariffs. Really, a few points that we've done there very well, I believe.
Following the tariffs that were implemented during the first Trump administration, our teams spent time strategically de-risking our supply base so we could decrease dependence on any specific country. This year, we've been able to leverage our international facilities in Saudi and in Canada to really avoid shipping products in and through the U.S. when they were destined for non-U.S. customers. Finally, we did talk about pricing already. As Neal mentioned, we have been successful at passing along cost increases by raising some of our price. I think long-term, tariffs are going to normalize. They've normalized in the past, but in the near term, tariffs are just an inconvenience that our teams are managing.
FET's Canadian business was a little bit soft early in the year. Some of that may have been seasonal related, but also some of what your customers were doing. Can you talk about where that business is now and has it returned to more of a seasonal level for you?
Yeah, Canada is an important market for us. About 20% of our revenue comes from there. We talked about the fact that in the second quarter, our revenue in Canada was roughly flat, despite the fact that the second quarter is typically seasonal breakup or when activity takes a big pause up in Canada. You kind of look at first quarter and second quarter together. Those two normalize out quite a bit, and we feel good about that. Also, we expect incremental strength in the second half of the year up in Canada. We have seasonally higher customer spending levels as typical in Canada, and we're continuing to penetrate the market with our specialty Veraperm flow control products, one of the key attributes of that business when we acquired it a couple of years ago.
The 2025 full-year free cash flow outlook was raised in August to $60 to $80 million from an original $40 to $60 million, despite what you described as adjusted EBITDA coming in toward the low end of the original range. Lyle, what gives you the confidence to lift free cash flow while pointing at the lower end of that adjusted EBITDA number?
Yeah, I love talking about cash flow. Free cash flow has been a primary focus of our management teams, and we've aligned both short and long-term incentives accordingly. With all that focus and with the process improvements our teams have made, we've generated $168 million of free cash flow over the past eight quarters. Relative to our size, relative to our market cap, that's significant, and it helps with that increased confidence. We look at this year specifically. When we laid out our original free cash flow guidance range for the year, we anticipated that this year's revenue would be relatively flat with last, and we didn't expect or forecast any working capital reduction.
However, now that markets have gotten to be a little bit softer, our teams have reacted quickly, reduced inbound raw material, and with that lower activity, we expect both receivables and inventory balances to come down this year and generate incremental free cash flow. That's a piece of the reason we could raise the guidance. Also, in the second quarter, we generated $8 million of incremental cash from another real estate sale-leaseback transaction. When we put all that together, we felt really comfortable raising our full-year free cash flow guidance by 40%. That new guidance now, Jeff, implies a free cash flow yield of somewhere between 19% and 25% yield on yesterday's market cap close. Really proud of how our teams have done on cash flow and look forward to seeing what we can do going forward.
In December, Forum Energy Technologies' board authorized a $75 million share repurchase plan. Through July, the company has bought about 579,000 shares for about $11 million. Lyle, with respect to the stock and you talked about free cash flow, the shares are up about 75% year to date based on the strong performance and the free cash flow yield that you spoke about. In light of your capital allocation priorities, how are you thinking about the trade-offs between investing in growth opportunities, further debt reduction, and incremental share repurchases as you look out into 2026?
Yeah, I mentioned the free cash flow yield being north of 20%. That's very exciting for us, but I also think it's been very exciting for investors, and we've seen a nice response in our share price so far this year. Really, to put a point on the success of the buybacks, the 579,000 shares, Jeff, that you talked about that we've repurchased through January represent about 5% of the shares that were outstanding at the beginning of January. Already a real needle mover. Question, you're going to continue to generate a lot of cash. What do you do with it? As a capital-light business, our shareholder return framework focuses on two key attributes or two key pillars. First, we're committed to maintaining conservative net leverage. We've said that we would use 50% of our free cash flow to further reduce net debt.
At the end of the second quarter, our net debt was around 1.4 times, and it's coming down through the end of this year. The other 50% we can allocate to strategic investments, and those could be M&A or share repurchases. Speaking about that trade-off, it really comes to what's the best value for the dollar. Looking at the M&A landscape today, there are deals that could potentially be had, but when we look at the bid-ask spreads and where we think the values are, that bid-ask spread is still pretty large. When we look at our shares and we look at them at an incredible value with that high free cash flow yield, it's really hard for us to find a better use of our capital than continuing to invest in ourselves and buying our shares back. We're comfortable with that.
As we noted on our last earnings call, if we follow this framework, we could repurchase another significant portion of our shares by year-end. All in all, we think we've got a good framework here, reducing net debt while strategically deploying our cash that we're going to continue to generate.
Neal, early on you talked about the beat-to-market strategy and in the context of the Vision 2030 goals that you laid out in August. Can you tie those two things together and really kind of summarize how you think that positions FET to build on what Lyle talked about with free cash flow and really deliver value over the next several years?
Absolutely. Yeah, the beat-to-market strategy is really the cornerstone of what we do, and we've seen some incredible benefits already. We've put considerable effort and investment into our product portfolio targeting niche markets, again, because these have better returns. Since this process was implemented in 2022, our annualized revenue per rig is up 20%. I think with our beat-to-market strategy, we're poised for growth and have a plan to increase revenue and free cash flow per share significantly. This is Vision 2030. The idea here is we want to look at our markets through a different lens, through our leadership markets and our growth markets. This is going to allow us to execute our strategy and clearly identify and pursue market share gains. It'll help us give a deeper understanding of our addressable markets. We think under the market growth scenario, our addressable markets could expand by more than 50%.
This would allow us, if we beat the market, we execute our Vision 2030, and we have that market expansion, we could organically double our revenue by 2030. We have strong operating leverage. We are a very capital-light business model, and we could grow our free cash flow per share significantly. By 2030, the cash on hand that we could have would allow us to execute on strategic investments, including accretive acquisitions, ones like Veraperm, and additional shareholder returns. It'll put us in a great position. Vision 2030 is our North Star, and our teams are excited and aligned to execute this plan over the next five years.
Neal, Lyle, I want to thank you for taking the time to join us today. It's great to hear about the strategy, and we look forward to watching as you continue to execute and capture incremental share in your leadership and in your growth markets. Thank you for your time.
Thank you, Jeff.
For our participants, I want to thank you for joining us for today's Fireside Chat with FET CEO Neal Lux and CFO Lyle Williams. Our research on FET can be accessed from our website www.watertowerresearch.com. The views expressed in this Fireside Chat may not necessarily reflect the views of Water Tower Research LLC and are provided for informational purposes only. This Fireside Chat may not be distributed or reproduced without the written consent of Water Tower Research and should not be considered research nor recommendation. WTR is an investor engagement firm, not a licensed broker-dealer, broker, market-maker, investment bank, underwriter, or investment advisor. Additional disclaimers can be found at watertowerresearch.com. Again, Lyle, Neal, thank you so much for your time today.
Thanks, Jeff.