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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

(Mark One)


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2026


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 001-42477

Flowco Holdings Inc.

(Exact Name of Registrant as Specified in its Charter)


Delaware	99-4382473
( State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
1300 Post Oak Blvd., Suite 450 Houston, TX	77056
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (713) 997-4877

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Class A common stock, par value $0.0001 per share	FLOC	New York Stock Exchange
Class A common stock, par value $0.0001 per share	FLOC	NYSE Texas, Inc.

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☐
Emerging growth company	☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of May 1, 2026, the number of shares of the registrant’s Class A common stock outstanding was approximately 41,824,162, and the number of shares of the registrant’s Class B common stock outstanding was approximately 48,521,254.

Table of Contents


		Page

PART I.	FINANCIAL INFORMATION

Item 1.	Financial Statements (Unaudited)	8
	Condensed Consolidated Balance Sheets as of March 31, 2026 and December 31, 2025	9
	Condensed Consolidated Statements of Operations for the three months ended March 31, 2026 and 2025	10
	Condensed Consolidated Statements of Changes in Stockholders' Equity for the three months ended March 31, 2026 and 2025	11
	Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2026 and 2025	12
	Notes to Unaudited Condensed Consolidated Financial Statements	13
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	41
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	50
Item 4.	Controls and Procedures	50

PART II.	OTHER INFORMATION

Item 1.	Legal Proceedings	53
Item 1A.	Risk Factors	53
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	53
Item 3.	Defaults Upon Senior Securities	54
Item 4.	Mine Safety Disclosures	54
Item 5.	Other Information	54
Item 6.	Exhibits	54

Signatures		56

BASIS OF PRESENTATION

Certain Definitions

The following is a listing of certain abbreviations, acronyms, and other industry terminology that may be used throughout this Quarterly Report on Form 10-Q (“Quarterly Report”):

•

“Blocker Companies” refer to (i) WD Thunder CV Parallel Blocker LP, (ii) WDE Flogistix Upper TE, LLC, (iii) WDE Flogistix Upper FI, LLC, (iv) GEC III-GI FPS Blocker Corp. and (v) GEC III-GI Estis Blocker Corp.

•

“Blocker Shareholders” refer to the owners of the Blocker Companies prior to the Transactions, who exchanged their interests in the Blocker Companies for shares of our Class A common stock ("Class A common stock") in connection with the consummation of the Transactions.

•

“Continuing Equity Owners” refer collectively to holders of LLC Interests and our Class B common stock ("Class B common stock") immediately following consummation of the Transaction, including certain executive officers, employees and other minority investors and their respective permitted transferees who may exchange at each of their respective options, in whole or in part from time to time, their LLC Interests (along with an equal number of shares of Class B common stock (and such shares will be immediately cancelled)) for, at our election, cash or newly-issued shares of our Class A common stock.

•

“Credit Agreement” refers, as applicable, to the Second Amended and Restated Credit Agreement, dated as of August 20, 2024, by and among, Flowco MasterCo LLC; Flowco Productions, LLC; Estis Intermediate Holdings, LLC; Flogistix Intermediate Holdings, LLC; as borrowers, the loan parties named therein, the lenders named therein, and JPMorgan Chase Bank, N.A.; as administrative agent, and the joint bookrunner and joint lead arrangers named therein, as amended to date.

•

“Estis” means Estis Compression, LLC, a Delaware limited liability company. Estis Compression, LLC is a wholly owned subsidiary of Estis Intermediate Holdings, LLC, and the predecessor to Flowco LLC.

•

“Estis Intermediate” means Estis Intermediate Holdings, LLC, a Delaware limited liability company and a parent company to Estis.

•

“Estis Member” means GEC Estis Holdings, LLC, as an Original Equity Owner.

•

“Flogistix” means Flogistix, LP, a Texas limited partnership.

•

“Flogistix Intermediate” means Flogistix Intermediate Holdings, LLC, a Delaware limited liability company.

•

“Flogistix Member” means Flogistix Holdings, LLC, as an Original Equity Owner.

•

“Flowco Holdings” or "Company" refers to Flowco Holdings Inc., a Delaware corporation. Flowco Holdings was formed on July 25, 2024, and was the issuer of the Class A common stock offered and sold in the IPO.

•

“Flowco LLC” refers to Flowco MergeCo LLC, a Delaware limited liability company.

•

“Flowco LLC Agreement” refers, as applicable, to Flowco LLC’s amended and restated limited liability company agreement, dated as of June 20, 2024, as in effect prior to the IPO, or to the second amended and restated limited liability company agreement dated as of January 17, 2025, and as such agreement may thereafter be amended and/or restated.

•

“Flowco MasterCo” means Flowco MasterCo LLC, a Delaware limited liability company and a wholly owned subsidiary of Flowco LLC.

•

“Flowco Productions” means Flowco Productions LLC, a Delaware limited liability company.

•

“FPS” or the “FPS Member” means Flowco Production Solutions, L.L.C., as an Original Equity Owner.

•

“GAAP” or “U.S. GAAP” means accounting principles generally accepted in the U.S.

•

“GEC” means GEC Advisors LLC, a Delaware limited liability company.

•

“GEC Affiliates” means GEC and its affiliates, including Jonathan B. Fairbanks.

•

“IPO” refers to our initial public offering, which we consummated on January 15, 2025, and through which we offered and sold 20,470,000 shares of our Class A common stock at a price to the public of $24.00 per share, which includes the exercise in full by the underwriters of their option to purchase an additional 2,670,000 shares of our Class A common stock. The gross proceeds to us from the IPO were $491.3 million, before deducting underwriting discounts.

•

“LLC Interests” refer to the common units of Flowco LLC, including those that we purchase with a portion of the net proceeds from the IPO.

•

“Master Reorganization Agreement” refers to the Master Reorganization Agreement by and among Flowco Holdings, Flowco LLC, Estis Member, FPS Member, Flogistix Member, the Blocker Companies, the Blocker Shareholders and the other parties thereto.

•

“Original Equity Owners” refer to the owners of LLC Interests in Flowco LLC prior to the consummation of the Transactions, collectively, which consist of FPS Member, Estis Member and Flogistix Member.

•

“Section 704(c) Allocations” refers to disproportionate allocations (if any) of income and gain from inventory property held by Flowco LLC as of the date of the IPO under Section 704(c) of the Internal Revenue Code of 1986, as amended, resulting from our acquisition of LLC Interests from Flowco LLC including in connection with the Transactions.

•

“Tax Receivable Agreement” refers to the Tax Receivable Agreement entered into by and among Flowco Holdings, Flowco LLC and the Continuing Equity Owners in connection with the IPO, pursuant to which, among other things, Flowco Holdings is required to pay to each Continuing Equity Owner 85% of certain tax benefits, if any, that it realizes (or in certain cases is deemed to realize) as a result of the tax benefits provided by Basis Adjustments, Section 704(c) Allocations, and certain other tax benefits (such as interest deductions) covered by the Tax Receivable.

•

“Transactions” refers to the organizational transactions described in “The Transactions” below in Part I of this Quarterly Report and the IPO, and the application of the net proceeds therefrom.

•

“We,” “us,” “our,” the “Company,” and similar references refer: (i) following the consummation of the Transactions, including the IPO, to Flowco Holdings, and, unless otherwise stated, all of its direct and indirect subsidiaries, including Flowco LLC; and (ii) prior to the completion of the Transactions, including the IPO, to Flowco LLC and, unless otherwise stated, all of its direct and indirect subsidiaries, or, as applicable, our predecessors and their respective subsidiaries.

•

“White Deer” means White Deer Management LLC, a Delaware limited liability company.

•

“White Deer Affiliates” means White Deer and its affiliates.

Cautionary Statement Regarding Forward-Looking Statements

This Quarterly Report contains “forward-looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Forward-looking statements are neither historical facts nor assurances of future performance and may include words such as “anticipate”, “believe”, “could”, “estimate”, “expect”, “goal”, “intend”, “likely”, “may”, “plan”, “project”, “strategy” and other words and terms of similar meaning. Although we believe that our expectations regarding future events are based on reasonable assumptions, we can give no assurance that such expectations or assumptions will be achieved. Important factors that could cause actual

results to differ materially from those in the forward-looking statements are described under Part 1, Item 1A, Risk Factors of our Annual Report on Form 10-K for the year ended December 31, 2025 (“Annual Report”).

About this Quarterly Report

Flowco MergeCo LLC. (“Flowco LLC”), including its predecessor and subsidiaries, is the accounting predecessor of Flowco Holdings Inc. (“Flowco Holdings”) for financial reporting purposes. Flowco Holdings was formed to serve as the issuer in the IPO, which was consummated on January 15, 2025. Concurrent with the completion of the IPO, Flowco Holdings became the new parent holding company of Flowco LLC and its subsidiaries. As a result, the unaudited condensed consolidated financial statements of the combined entity represents a continuation of the financial position and results of operations of Flowco LLC and is fully consolidated under Flowco Holdings.

Certain monetary amounts, percentages, and other figures included in this Quarterly Report have been subject to rounding adjustments. Percentage amounts included in this Quarterly Report have not in all cases been calculated on the basis of such rounded figures, but on the basis of such amounts prior to rounding. For this reason, percentage amounts in this Quarterly Report may vary from those obtained by performing the same calculations using the figures in our consolidated financial statements included elsewhere in this Quarterly Report. Certain other amounts that appear in this Quarterly Report may not sum due to rounding.

The Transactions

Flowco Holdings, formed as a Delaware corporation on July 25, 2024, is a holding company, and its principal asset consists of LLC Interests in Flowco LLC. Prior to the IPO, all of our business operations were conducted through Flowco LLC, and the Original Equity Owners were the only members of Flowco LLC.

IPO and Reorganization Transactions

In connection with the IPO and pursuant to the Master Reorganization Agreement and related documents (including an Omnibus Agreement entered into following the IPO described below), we consummated the following organizational transactions, described below, to reorganize our corporate structure:

•

we amended the Flowco LLC Agreement to, among other things, (i) recapitalize all existing ownership interests in Flowco LLC; (ii) issue non-economic member interest; and (iii) appoint Flowco Holdings as the sole managing member of Flowco LLC upon its acquisition of LLC Interests in connection with the IPO;

•

we amended and restated Flowco Holdings’ certificate of incorporation to, among other things, provide (i) for Class A common stock, with each share of our Class A common stock entitling its holder to one vote per share on all matters presented to our stockholders generally; (ii) for Class B common stock, with each share of our Class B common stock entitling its holder to one vote per share on all matters presented to our stockholders generally, and that shares of our Class B common stock may only be held by the Continuing Equity Owners and their respective permitted transferees;

•

we acquired the LLC Interests held by certain of the existing indirect owners of Flowco LLC, by means of one or more mergers or otherwise, including mergers of the Blocker Companies, in exchange for 5,251,620 shares of our Class A common stock;

•

we issued 64,823,042 shares of our Class B common stock to the Continuing Equity Owners, which is equal to the number of LLC Interests held by such Continuing Equity Owners, for nominal consideration;

•

we issued 20,470,000 shares of our Class A common stock (after taking into account the exercise in full of the underwriters’ option to purchase an additional 2,670,000 shares of our Class A common stock in the IPO) to the purchasers in the IPO in exchange for gross proceeds of approximately $491.3 million (after taking into account the exercise in full of the underwriters’ option to purchase an additional 2,670,000 shares of our Class A common stock in the IPO at $24.00 per share) based upon the IPO price of $24.00 per share, before deducting the underwriter discounts and offering related expenses;

•

we used the net proceeds from the IPO to purchase 20,470,000 newly issued LLC Interests directly from Flowco LLC at a price per unit equal to the IPO price;

•

Flowco LLC used the net proceeds from the sale of LLC Interests to Flowco Holdings (i) to redeem approximately $20.9 million of Flowco LLC interests from certain non-affiliate holders and (ii) with respect to the remainder, repay indebtedness under our Credit Agreement as described under Part I, Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations – Liquidity and Capital Resources; and

•

Flowco Holdings entered into (i) the Stockholder Agreement with GEC, White Deer and certain of their affiliates; (ii) the Registration Rights Agreement with the Continuing Equity Owners and Blocker Shareholders; and (iii) the Tax Receivable Agreement with Flowco LLC and each of the TRA Participants (as defined below). Following the IPO, it was determined that certain allocations of Class A common stock, and of a corresponding number of Class B common stock and LLC Interests, in connection with certain reorganization transactions were made in error. Flowco Holdings, Flowco LLC and the applicable members of Flowco LLC entered into an Omnibus Agreement to correct such errors through (i) a rescission of 1,057,629 LLC Interests and corresponding number of shares of Class B common stock previously issued to a White Deer Affiliate and (ii) the issuance of 1,057,629 LLC Interests to Flowco Holdings, and the issuance of 1,057,629 shares of Class A common stock to White Deer Affiliates. The outstanding shares and LLC Interests described herein give effect to the corrections set forth in the Omnibus Agreement.

Post-IPO Organizational Structure

Described below are the details of our organizational structure immediately following the IPO:

•

Flowco Holdings became a holding company with its principal asset consisting of LLC Interests acquired directly from Flowco LLC and indirectly from the Blocker Shareholders;

•

Flowco Holdings became the sole managing member of Flowco LLC and had a sole control of the business and affairs of Flowco LLC;

•

Flowco Holdings issued 25,721,620 LLC Interests of Flowco LLC, representing approximately 28.4% of the economic interest in Flowco LLC;

•

GEC Affiliates owned, (i) directly and indirectly, 868,557 shares of Class A common stock of Flowco Holdings, representing approximately 1.0% of the combined voting power of all of Flowco Holdings’ common stock and approximately 3.4% of the economic interest in Flowco Holdings; (ii) directly through the GEC Affiliates’ ownership of LLC Interests and indirectly through Flowco Holdings’ ownership of LLC Interests, approximately 41.9% of the economic interest in Flowco LLC; and (iii) 37,087,231 shares of Class B common stock of Flowco Holdings, representing approximately 41.0% of the combined voting power of all of Flowco Holdings’ common stock;

•

White Deer Affiliates owned, (i) directly and indirectly, 4,383,063 shares of Class A common stock of Flowco Holdings, representing approximately 4.8% of the combined voting power of all of Flowco Holdings’ common stock and approximately 17.0% of the economic interest in Flowco Holdings; (ii) directly through the White Deer Affiliates’ ownership of LLC Interests and indirectly through Flowco Holdings’ ownership of LLC Interests, approximately 16.0% of the economic interest in Flowco LLC; and (iii) 10,100,525 shares of Class B common stock of Flowco Holdings, representing approximately 11.2% of the combined voting power of all of Flowco Holdings’ common stock;

•

The Continuing Equity Owners (excluding GEC Affiliates and White Deer Affiliates) owned (i) 17,635,286 LLC Interests of Flowco LLC, representing approximately 19.5% of the economic interest in Flowco LLC and (ii) 17,635,286 shares of Class B common stock of Flowco Holdings, representing approximately 19.5% of the combined voting power of all of Flowco Holdings’ common stock; and

•

The purchasers in the IPO owned (i) 20,470,000 shares of Class A common stock (after taking into account the exercise in full of the underwriters’ option to purchase an additional 2,670,000 shares of our Class A common stock in the IPO) of Flowco Holdings, representing approximately 22.6% of the combined voting power of all Flowco Holdings’ common stock and approximately 79.6% of the economic interest in Flowco Holdings, and (ii) through Flowco Holdings’ ownership of LLC Interests, indirectly hold approximately 22.6% of the economic interest in Flowco LLC.

As the sole managing member of Flowco LLC, we operate and control all the business and affairs of Flowco LLC and, through Flowco LLC and its direct and indirect subsidiaries, conduct our business. Following the IPO, we have a minority economic interest in Flowco LLC but control the management of Flowco LLC as its sole managing member. As a result, we consolidate Flowco LLC and record a significant non-controlling interest in a consolidated entity in our consolidated financial statements for the economic interest in Flowco LLC held by the Continuing Equity Owners.

As of March 31, 2026, we own 46.3% of economic interests in Flowco LLC.

Up-C Structure and Tax Receivable Agreements

Our post-IPO and current corporate structure is commonly referred to as an umbrella partnership-C corporation (“Up-C”) structure, which is often used by partnerships and limited liability companies when they undertake an initial public offering of their business. The Up-C structure allows the Tax Receivable Agreement Participants (“TRA Participants”) to retain their equity ownership in Flowco LLC and to continue to realize tax benefits associated with owning interests in an equity that is treated as a partnership, or “flow-through” entity, for U.S. federal income tax purposes. Investors in and after the IPO, by contrast, continued to hold their equity ownership in our Company, a Delaware Corporation that is a domestic corporation for U.S. federal income tax purposes, in the form of shares of Class A common stock. One of the tax benefits to the TRA Participants associated with this structure is that future taxable income of Flowco LLC that is allocated to the TRA Participants will be taxed on a flow-through basis and, therefore, will not be subject to corporate taxes at the entity level. The Up-C structure also provides the TRA Participants with potential liquidity that holders of non-publicly traded limited liability companies are not typically afforded. The TRA Participants and Flowco Holdings also expect to benefit from the Up-C structure as a result of certain cash tax savings arising from redemptions or exchanges of the TRA Participants’ LLC Interests for Class A common stock or cash, and certain other

tax benefits covered by the Tax Receivable Agreement discussed under Part I, Item 1A. Risk Factors – Risk Factors Related to our Organizational Structure in our Annual Report.

In general, the TRA Participants expect to receive payments under the Tax Receivable Agreement of 85% of the amount of certain tax benefits, and Flowco Holdings expects to benefit in the form of cash tax savings in amounts equal to 15% of certain tax benefits. Any payments made by us to the TRA Participants under the Tax Receivable Agreement will reduce cash otherwise arising from such tax savings. We expect such payments will be substantial.

Prior to the completion of the IPO, we entered into the Tax Receivable Agreement with Flowco LLC and the TRA Participants that provides for the payment by Flowco Holdings to the TRA Participants of 85% of the amount of tax benefits, if any, that Flowco Holdings actually realizes (or in some circumstances is deemed to realize) as a result of (i) Basis Adjustments, (ii) Section 704(c) Allocations, and (iii) certain tax benefits (such as interest deductions) arising from payments made under the Tax Receivable Agreement.

Redemption Rights of Holders of LLC Interests

The Continuing Equity Owners may, subject to certain exceptions, from time to time at each of their options require Flowco LLC to redeem all or a portion of their LLC Interests in exchange for, at our election, newly-issued shares of our Class A common stock on a one-for-one basis or a cash payment equal to a volume weighted average market price of one share of our Class A common stock for each LLC Interest redeemed, in each case, in accordance with the terms of the Flowco LLC Agreement; provided that, at our election, we may effect a direct exchange by Flowco Holdings of such Class A common stock or such cash, as applicable, for such LLC Interests. The Continuing Equity Owners may, subject to certain exceptions, exercise such redemption right for as long as their LLC Interests remain outstanding. Simultaneously with the payment of cash or shares of Class A common stock, as applicable, in connection with a redemption or exchange of LLC Interests pursuant to the terms of the Flowco LLC Agreement, a number of shares of our Class B common stock registered in the name of the redeeming or exchanging Continuing Equity Owner will automatically be transferred to us and will be cancelled for no consideration on a one-for-one basis with the number of LLC Interests redeemed or exchanged.

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

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Flowco Holdings Inc.

Condensed Consolidated Balance Sheets

(unaudited)


	As of
	March 31, 2026		December 31, 2025
	(in thousands except share and per share amounts)
Assets
Current assets:
Cash and cash equivalents	$	17,337	$	4,522
Accounts receivable, net of allowances for credit losses of $1,284 and $1,079, respectively (Note 9)		146,068		100,465
Inventory		185,972		149,590
Prepaid expenses and other current assets		6,248		5,615
Total current assets		355,625		260,192
Property, plant and equipment, net		853,862		797,534
Operating lease right-of-use assets		16,871		17,556
Finance lease right-of-use assets		25,098		25,861
Intangible assets, net (Note 8)		315,992		273,437
Goodwill (Note 8)		305,248		249,692
Deferred tax asset, net		20,046		16,692
Other assets		5,092		5,387
Total assets	$	1,897,834	$	1,646,351

Liabilities, redeemable non-controlling interests and stockholders' equity
Current liabilities:
Accounts payable	$	45,221	$	22,827
Accrued expenses		31,658		26,909
Current portion of operating lease obligations		8,354		8,004
Current portion of finance lease obligations		13,010		12,895
Deferred revenue		16,732		7,376
Total current liabilities		114,975		78,011
Long-term liabilities:
Long-term debt, net		327,991		167,819
Tax receivable agreement liability		92,437		21,952
Operating lease obligations, net of current portion		8,733		9,783
Finance lease obligations, net of current portion		9,851		10,862
Total long-term liabilities		439,012		210,416
Total liabilities		553,987		288,427
Commitments and contingencies (Note 16)
Redeemable non-controlling interests		1,007,625		1,129,298
Stockholders' equity:
Class A common stock, $0.0001 par value – 300,000,000 shares authorized; 41,816,350 shares issued and outstanding as of March 31, 2026; 300,000,000 shares authorized; 25,721,620 shares issued and outstanding as of December 31, 2025.		4		3
Class B common stock, $0.0001 par value – 150,000,000 shares authorized; 48,521,254 shares issued and outstanding as of March 31, 2026; 150,000,000 shares authorized; 64,823,042 shares issued and outstanding as of December 31, 2025.		5		6
Additional paid-in capital		336,213		69,279
Retained earnings		—		159,338
Total stockholders' equity to Flowco Holdings Inc.		336,222		228,626
Total liabilities, redeemable non-controlling interests and stockholders' equity	$	1,897,834	$	1,646,351

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

Flowco Holdings Inc.

Condensed Consolidated Statements of Operations

(unaudited)


		Three Months Ended March 31,
		2026			2025
	(in thousands except share and per share amounts)
Revenues:
Rentals		$	121,873		$	97,296
Sales			87,657			95,054
Total revenues			209,530			192,350
Operating expenses:
Cost of rentals (exclusive of depreciation and amortization disclosed separately below)			32,552			26,851
Cost of sales (exclusive of depreciation and amortization disclosed separately below)			62,404			65,566
Selling, general and administrative expenses			36,476			30,534
Depreciation and amortization			41,495			34,119
(Gain) loss on sale of equipment			310			(45	)
Income from operations			36,293			35,325
Other expenses:
Interest expense, net			(4,348	)		(5,365	)
Other expenses, net			(461	)		(267	)
Total other expenses			(4,809	)		(5,632	)
Income before provision for income taxes			31,484			29,693
Income tax provision			(4,030	)		(2,648	)
Net income			27,454			27,045
Net income attributable to redeemable non-controlling interests			20,012			20,873
Net income attributable to Flowco Holdings Inc.		$	7,442		$	6,172

Earnings per share:
Basic		$	0.24		$	0.24
Diluted		$	0.23		$	0.24
Weighted average shares outstanding:
Basic			31,620,520			25,721,620
Diluted			32,719,382			26,187,264

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

Flowco Holdings Inc.

Condensed Consolidated Statements of Redeemable Non-Controlling Interests and Stockholders' Equity

(unaudited)


			Flowco LLC Members' Equity (prior to the Transactions) - Note 1								Flowco Holdings Stockholders' Equity
(in thousands, except number of units)		Redeemable Non- Controlling	Common Units			Class A Units			Members'		Class A Common Stock			Class B Common Stock				Additional Paid- In		Retained		Total Stockholders'
		Interests	Units	Amount		Units	Amount		Equity		Shares	Amount		Shares	Amount			Capital		Earnings		Equity
Balance as of December 31, 2025	$	1,129,298	—	$	—	—	$	—	$	—	29,091,960	$	3	60,562,983	$	6	$	69,279	$	159,338	$	228,626
Net income		20,012	—		—	—		—		—	—		—	—		—		—		7,442		7,442
Foreign currency translation adjustment		—	—		—	—		—		—	—		—	—		—		25		—		25
Distributions to Members		—	—		—	—		—		—	—		—	—		—		—		(14,842)		(14,842)
Issuance of common stock, net		—	—		—	—		—		—	—		—	—		—		(69)		—		(69)
Stock-based compensation		—	—		—	—		—		—	7,812		—	—		—		3,086		—		3,086
Dividends declared ($0.08 per share)		—	—		—	—		—		—	—		—	—		—		—		(2,480)		(2,480)
Class A common stock issued in exchange of Class B common stock		(267,207)	—		—	—		—		—	12,041,729		1	(12,041,729)		(1)		267,207		—		267,207
Activity in deferred tax and TRA liability from Class A common stock issued in exchange of Class B common stock		—	—		—	—		—		—	—		—	—		—		(43,390)		—		(43,390)
Valiant acquisition consideration		—	—		—	—		—		—	1,454,849		—	—		—		32,821		—		32,821
Retirement of Class A common stock		—	—		—	—		—		—	(780,000)		—	—		—		(16,682)		—		(16,682)
Subsequent measurement of redeemable non-controlling interests		125,522	—		—	—		—		—	—		—	—		—		23,936		(149,458)		(125,522)
Balance as of March 31, 2026	$	1,007,625	—	$	—	—	$	—	$	—	41,816,350	$	4	48,521,254	$	5	$	336,213	$	—	$	336,222

Balance as of December 31, 2024	$	—	—	$	—	10,000,000	$	—	$	839,107	—	$	—	—	$	—	$	—	$	—	$	—
Net loss prior to the Transactions and IPO		—	—		—	—		—		(548)	—		—	—		—		—		—		—
Reorganization transactions		838,559	—		—	(10,000,000)		—		(838,559)	—		—	65,748,380		6		—		—		6
Equity-based compensation and crystalization of legacy equity plans		3,588	—		—	—		—		—	—		—	—		—		—		—		—
IPO and the Transactions		71,129	—		—	—		—		—	25,721,620		3	(925,338)		—		363,382		—		363,385
Increase in deferred tax asset from IPO and the Transactions, net of amounts payable under Tax Receivable Agreement		—	—		—	—		—		—	—		—	—		—		(52)		—		(52)
Net income subsequent to the Transactions and IPO		21,421	—		—	—		—		—	—		—	—		—		—		6,172		6,172
Stock-based compensation		—	—		—	—		—		—	—		—	—		—		1,374		—		1,374
Subsequent measurement of redeemable non-controlling interests		740,979	—		—	—		—		—	—		—	—		—		(364,704)		(376,275)		(740,979)
Balance as of March 31, 2025	$	1,675,676	—	$	—	—		—	$	—	25,721,620	$	3	64,823,042	$	6	$	—	$	(370,103)	$	(370,094)

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

Flowco Holdings Inc.

Condensed Consolidated Statements of Cash Flows

(unaudited)


	Three Months Ended March 31,
	2026			2025
	(in thousands)
Cash flows from operating activities
Net income	$	27,454		$	27,045
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		41,495			34,119
Provision for inventory obsolescence		404			603
Amortization of operating right-of-use assets		2,542			2,052
Amortization of deferred financing costs		338			335
(Gain) loss on sale of equipment		310			(45	)
Gain on lease termination		(19	)		(190	)
Stock-based compensation		3,086			4,962
Provision for deferred income taxes		4,030			2,648
Allowance for credit losses		373			407
Changes in operating assets and liabilities:
Accounts receivable		(15,385	)		(14,355	)
Inventory		(1,302	)		(6,380	)
Prepaid expenses and other current assets		654			461
Other assets and liabilities		(43	)		—
Accounts payable - trade		15,948			401
Accrued expenses		(3,897	)		(6,943	)
Deferred revenue		5,021			(426	)
Operating lease liabilities		(2,804	)		(1,848	)
Finance lease liabilities		503			(297	)
Net cash provided by operating activities		78,708			42,549
Cash flows from investing activities
Net cash paid in Valiant acquisition		(161,764	)		—
Additions to property, plant and equipment		(26,385	)		(27,850	)
Proceeds from sale of property, plant and equipment		4			206
Payment for capitalized patent costs		(133	)		(19	)
Net cash used in investing activities		(188,278	)		(27,663	)
Cash flows from financing activities
Issuance of Class A common stock in IPO, net of underwriting discount		—			461,803
Payment of offering costs		—			(2,034	)
Repurchase of Class A common stock		(16,516	)		—
Payments on long-term debt		(308,962	)		(579,864	)
Proceeds from long-term debt		469,134			124,962
Payments on finance lease obligations		(4,055	)		(2,829	)
Proceeds on finance lease terminations		—			37
Purchase of LLC Interests from Continuing Equity Owners		—			(20,876	)
Payment of debt issuance costs		—			(13	)
Payment of dividend equivalent units		(2	)		—
Distributions to members of Flowco LLC		(14,842	)		—
Dividends paid to Flowco Holdings Inc. shareholders		(2,372	)		—
Net cash provided by (used in) financing activities		122,385			(18,814	)
Net increase (decrease) in cash and cash equivalents		12,815			(3,928	)
Cash and cash equivalents
Beginning of period		4,522			4,615
End of period	$	17,337		$	687

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

Flowco Holdings Inc.

Notes to Condensed Consolidated Financial Statements

Note 1 - Nature of Organization and Background

Nature of Operations and Organization

Flowco Holdings Inc. (the “Company”) was incorporated as a Delaware corporation on July 25, 2024 (Date of Formation) for the purpose of completing an initial public offering (“IPO”) of its Class A common stock and related transactions in order to continue the business of Flowco MergeCo LLC (“Flowco LLC”) as a publicly traded entity. After the IPO, the Company became a holding company in an Up-C structure and a sole managing member of Flowco LLC with its only material asset consisting of common membership units of Flowco LLC. The Company’s amended and restated certificate of incorporation designates two classes of the Company’s common stock: (i) Class A common stock, par value $0.0001 per share, and (ii) Class B common stock, par value $0.0001 per share, which shares have fully voting, but no economic rights. For holders of Class B common stock, each share of Class B common stock is paired with a common unit (collectively, “LLC Interests”).

The Company is a leading provider of production optimization, artificial lift and emissions management and monetization solutions for the oil and natural gas industry. The Company's products and services include a full range of equipment and technology solutions that enable real-time remote monitoring and control to maximize efficiencies of its products and services. The Company generates revenues throughout the long producing lives of oil and gas wells. The Company's core technologies include high pressure gas lift (“HPGL”), electric submersible pump (“ESP”), conventional gas lift, plunger lift and vapor recovery unit (“VRU”) solutions. As of March 31, 2026, the Company operates a fleet of over 5,400 active systems.

The Company is headquartered in Houston, Texas with major service facilities and operations in Midland, Texas; Carlsbad, New Mexico; and Williston, North Dakota. The Company operates manufacturing and repair facilities in El Reno, Oklahoma; Houston, Fort Worth, Kilgore and Pampa, Texas; and Lafayette, Louisiana.

The Company provides its products and services through two reportable segments: (i) Production Solutions; and (ii) Natural Gas Technologies. Any corporate costs or assets not directly related to these two reportable segments have been categorized in a separate corporate and other category.

Initial Public Offering and Reorganization Transactions

On January 15, 2025, the Company consummated the IPO of 20,470,000 shares of Class A Common Stock (including shares issued pursuant to the exercise in full of the underwriters’ option to purchase additional shares) for net proceeds totaling approximately $461.8 million. The IPO closed on January 17, 2025.

In connection with the IPO, the Company amended and restated the existing limited liability company agreement of Flowco LLC (“LLC Agreement”) to, among other things, (i) recapitalize all existing ownership interests in Flowco LLC held by the existing members of Flowco LLC into a new single class of LLC Interests; and (ii) issue a non-economic member interest and appoint the Company as the sole managing member of Flowco LLC upon its acquisition of the LLC interests.

Simultaneously with the IPO, the Company amended and restated its certificate of incorporation to, among other things, provide: (i) for Class A common stock, with each share of its Class A common stock entitling its holder to one vote per share on all matters presented to our stockholders generally; and (ii) for Class B common stock, with each share of our Class B common stock entitling its holder to one vote per share on all matters presented to our stockholders generally, any shares of our Class B common stock may only be held by the Continuing Equity Owners and their

Flowco Holdings Inc.

Notes to Condensed Consolidated Financial Statements

respective permitted transferees. As a result, the Company became a holding company and the sole managing member of Flowco LLC, with no material assets other than 100% of the voting membership interest in Flowco LLC.

Simultaneously with the IPO, the Company acquired the LLC Interests held by certain of the existing indirect owners of Flowco LLC in exchange for 5,251,620 shares of its Class A common stock. After giving effect to the use of proceeds in the IPO, the Company issued 64,823,042 shares of Class B common stock to the Continuing Equity Owners, which is equal to the number of LLC Interests held by such Continuing Equity Owners, for nominal consideration. Following the IPO, it was determined that certain allocations of Class A common stock, and of a corresponding number of Class B common stock and LLC Interests, in connection with certain reorganization transactions were made in error. Flowco LLC and the applicable members of Flowco LLC entered into an Omnibus Agreement to correct such errors through (i) a rescission of 1,057,629 LLC Interests and corresponding number of shares of Class B common stock previously issued to a White Deer Affiliate and (ii) the issuance of 1,057,629 LLC Interests to Flowco Holdings, and the issuance of 1,057,629 shares of Class A common stock to White Deer Affiliates. Such corrections did not result in any change in the aggregate number of LLC Interests issued and outstanding, or the combined number of shares of Class A common stock and Class B common stock issued and outstanding. The foregoing outstanding shares and LLC Interests give effect to the corrections set forth in the Omnibus Agreement.

Subsequent to the IPO, the Company used the net proceeds from the IPO to purchase 20,470,000 newly issued LLC Interests for approximately $461.8 million directly from Flowco LLC at a price per unit equal to the IPO price per share of Class A common stock less the underwriting discount.

As of March 31, 2026, the Company owns 46.3% of economic interests in Flowco LLC.

Emerging Growth Company Status

The Company is an “emerging growth company,” as defined in Section 2(a)(19) of the Exchange Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). Under the JOBS Act, an emerging growth company may take advantage of certain reduced reporting and other requirements that are otherwise generally applicable to public companies. These provisions include, but are not limited to:

•

Exemption from the requirement to have the Company’s independent registered public accounting firm attest to management’s assessment of the effectiveness of the Company’s internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act;

•

Reduced disclosure obligations regarding executive compensation;

•

Exemption from the requirements of holding a non-binding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved;

•

Exemption from certain requirements related to the presentation of selected financial data and Management’s Discussion and Analysis of Financial Condition and Results of Operations; and

•

The ability to delay adoption of new or revised accounting standards until such standards are required to be adopted by private companies.

The Company has elected to use the extended transition period for complying with new or revised accounting standards, and as a result, the Company’s condensed consolidated financial statements may not be comparable to those of companies that comply with such new or revised accounting standards as of the effective dates applicable to public companies.

The Company will remain an emerging growth company until the earliest of: (i) the last day of the fiscal year in which it has total annual gross revenues of $1.235 billion or more; (ii) the last day of the fiscal year following the fifth anniversary of the IPO; (iii) the date on which the Company has issued more than $1 billion in non-convertible debt

Flowco Holdings Inc.

Notes to Condensed Consolidated Financial Statements

during the previous three-year period; or (iv) the date on which the Company is deemed to be a “large accelerated filer,” which means the market value of the Company’s Class A common stock that is held by non-affiliates exceeds $700.0 million as of the last business day of the most recently completed second fiscal quarter (following twelve months from the IPO).

Basis of Presentation

The unaudited condensed consolidated financial statements accompanying these notes include the financial statements of the Company, all entities that are wholly owned by the Company and all entities in which the Company has a controlling financial interest. All intercompany transactions and balances have been eliminated in the consolidation process. The unaudited condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and the instructions to Rule 10-01 of Regulation S-X. Accordingly, they do not include all the information and footnotes required by U.S. GAAP for complete financial statements.

These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Annual Report. In the opinion of management, the accompanying unaudited condensed financial statements contain all adjustments, consisting of only normal recurring adjustments, necessary for a fair statement of its financial position, results of operations, and cash flows for the periods presented. The operating results for the interim periods presented are not necessarily indicative of the results expected for the full year.

Principles of Consolidation

The accompanying condensed consolidated financial statements include the accounts of the Company, Flowco LLC and its consolidated subsidiaries. Flowco LLC meets the definition of a variable interest entity (“VIE”) for which the Company is considered as the primary beneficiary due to its sole decision-making authority that controls significant activities of Flowco LLC and its obligation to absorb losses and receive benefits of the operations of Flowco LLC.

The redeemable non-controlling interests in the condensed consolidated statements of income for the three months ended March 31, 2026, represent the portion of earnings attributable to the economic interest in Flowco LLC held by the Continuing Equity Owners. The redeemable non-controlling interests in the condensed consolidated balance sheets as of March 31, 2026, represents the portion of the net assets of the Company attributable to the Continuing Equity Owners, based on the portion of the LLC Interests owned by such unit holders. As of March 31, 2026, the combined economic interest of redeemable non-controlling interests was 53.7%.

Note 2 - Summary of Significant Accounting Policies

Our accompanying unaudited condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. These statements have been prepared in accordance with U.S. GAAP and reflect all adjustments that, in our opinion, are necessary for a fair statement of the results for the interim periods presented. All such adjustments are of a normal recurring nature. These unaudited condensed consolidated financial statements should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2025 (the “Annual Report”).

Use of Estimates

In preparing financial statements in conformity with U.S. GAAP, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and

Flowco Holdings Inc.

Notes to Condensed Consolidated Financial Statements

liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.

Items subject to estimates and assumptions include revenue recognition, allowance for credit losses, inventory reserve, impairment of goodwill, intangible assets and long-lived assets, stock-based compensation, useful lives of property, plant and equipment and intangible assets, estimation of contingencies, the incremental borrowing rate applied in lease accounting, the fair value of equity awards, tax valuation allowance and probability of making payments under the TRA (as defined in Note 11 – Income Taxes and Tax Receivable Agreement), among others. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable, the result of which forms the basis for making judgments about the carrying values of assets and liabilities, and measurement of revenues and expenses. To the extent there are material differences between these estimates, judgments, or assumptions and actual results, the Company’s condensed consolidated financial statements will be affected.

Fair Value Measurements

Accounting standards applicable to fair value measurements establish a framework for measuring fair value and stipulate disclosures about fair-value measurements. The standards apply to recurring and non-recurring financial and non-financial assets and liabilities that require or permit fair-value measurements. Among the required disclosures is the fair-value hierarchy of inputs the Company uses to value an asset or a liability. The three levels of the fair-value hierarchy are described as follows:

•

Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that we have the ability to access at the measurement date.

•

Level 2 inputs are those other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.

•

Level 3 inputs are unobservable inputs for the asset or liability.

As of March 31, 2026, and December 31, 2025, the Company’s financial instruments primarily consisted of cash and cash equivalents, trade accounts receivable, trade accounts payable, and long-term debt. The book values of cash and cash equivalents, trade accounts receivable, and trade accounts payable are representative of fair value due to their short-term maturities. Our five-year senior secured revolving credit facility (the “Revolving Credit Facility”) applies floating interest rates to amounts drawn under the facility; therefore, the carrying amount of our Revolving Credit Facility also approximates its fair value.

Recurring Fair Value Measurements

The Company did not have any assets or liabilities that were measured at fair value on a recurring basis as of March 31, 2026.

Non-Recurring Fair Value Measurements

The Company’s nonrecurring fair value measurements as of March 31, 2026 primarily relate to assets acquired and liabilities assumed in the Valiant transaction. These assets and liabilities were recorded at their estimated fair values as of their acquisition date. For more information, see Note 3 – Business Combination and Asset Acquisition.

Property, Plant and Equipment, Net

Property, plant and equipment, net are stated at cost, net of accumulated depreciation. Depreciation of property, plant and equipment is provided over the estimated useful lives of the respective assets or groups of assets, using the straight-line method. Any property, plant and equipment acquired in connection with a business combination will be recorded

Flowco Holdings Inc.

Notes to Condensed Consolidated Financial Statements

at its fair value as of the acquisition date and depreciated over its remaining economic useful life using the straight-line method.

Expenditures for additions, major renewals, and betterments are capitalized, and expenditures for maintenance and repairs are charged to earnings as incurred. The estimated useful lives of major asset categories, which have been updated to incorporate the assets acquired from the Valiant Acquisition (described within Note 3 – Business Combination and Asset Acquisition) are as follows:


Buildings		40 years
Compressor and related equipment		10-15 years
Machinery and equipment		1-15 years
Furniture, fixtures and office equipment		3-7 years
Software		3-5 years
Vehicles		5 years
Land		Unlimited
Leasehold improvements		Lesser of useful life or lease term

When assets are retired or otherwise disposed of, the cost and the applicable accumulated depreciation is removed from the respective accounts and the resulting gain or loss is reflected in earnings.

Intangible Assets Other Than Goodwill

Intangible assets that have finite useful lives are measured at cost less accumulated amortization and impairment losses, if any. Subsequent expenditures for intangible assets are capitalized only when they increase the future economic benefits embodied in the specific asset to which they relate. Amortization is recognized in profit or loss on a straight-line basis over the estimated useful lives of intangible assets. The Company's intangible assets, which have been updated to incorporate the assets acquired from the Valiant Acquisition (described within Note 3 – Business Combination and Asset Acquisition), are amortized using the straight-line method over their respective estimated useful lives below:


Trade Names		10 years
Customer Relationships		3-14 years
Customer Contracts		10 years
Non-compete agreement		3 years
Patent		20 years
Developed Technology		10-20 years

New Accounting Pronouncements to be Adopted

In November 2024, the FASB issued ASU 2024-03, Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregated of Income Statement Expenses. ASU 2024-03 requires companies to disclose, in the notes to the financial statements, specific information about certain costs and expenses at each interim and annual reporting period. This includes disclosing amounts related to employee compensation, depreciation, and intangible asset amortization. In addition, companies will need to provide qualitative description of the amounts remaining in relevant expense captions that are not separately disaggregated quantitatively. ASU 2024-03 is effective for public business entities for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Implementation of ASU 2024-03 may be applied prospectively or retrospectively. The Company is still considering the impact of ASU 2024-03 on its consolidated financial statements.

In May 2025, the FASB issued ASU 2025-03, Business Combinations (Topic 805) and Consolidation (Topic 810): Determining the Accounting Acquirer in the Acquisition of a Variable Interest Entity. ASU 2025-03 provides

Flowco Holdings Inc.

Notes to Condensed Consolidated Financial Statements

clarifying guidance on determining the accounting acquirer in certain transactions involving VIEs. This update aims to improve consistency and comparability in financial reporting and will be effective for annual periods beginning after December 15, 2026, including interim periods within those annual periods. Early adoption is permitted. Implementation of ASU 2025-03 requires a prospective application. The Company is currently reviewing the provisions of this update and does not expect the adoption of ASU 2025-03 to have a material impact on its consolidated financial statements.

In September 2025, the FASB issued ASU 2025-06, Targeted Improvements to the Accounting for Internal-Use Software. ASU 2025-06 aims to better align current software development processes when considering capitalization of internal-use software costs. ASU 2025-06 is effective for public business entities for fiscal years beginning after December 15, 2027 and interim periods within those annual periods. The Company is currently evaluating the impact on its consolidated financial statements.

The Company considers the applicability and impact of all ASUs. ASUs not listed above were evaluated and determined to either be not applicable, already adopted and disclosed or not material upon adoption.

Note 3 – Business Combination and Asset Acquisition

Valiant Business Combination

On March 2, 2026, the Company closed on the acquisition of all of the issued and outstanding equity interests of Riverstone Oilfield Services and Equipment, Inc., a Delaware corporation (the “Acquired Company”), from Riverway Group, a Cayman Islands exempted company with limited liability (the “Seller”) pursuant to the Stock Purchase Agreement dated as of February 1, 2026 (the “Purchase Agreement”) by and between the Company and the Seller. The Acquired Company is the parent company of its wholly owned subsidiary, Valiant Artificial Lift Solutions, LLC (“Valiant”).

Valiant was one of the largest private, pure-play providers of ESP systems in the U.S., providing linear ESP systems, surface fluid transfer systems, and well surveillance solutions to operator primarily in the Permian Basin. Strategically, this transaction (the “Valiant Acquisition”) is expected to afford the Company with opportunities to realize significant synergies with its existing product and service offerings. The Valiant Acquisition is expected to enhance the Company’s ability to support customers earlier in the well’s production lifecycle and maintain ongoing involvement as operating conditions evolve, creating additional operational opportunities throughout the life of the well. The Company also expects to leverage its expanded footprint and customer relationships to cross-sell these complementary technologies across its combined customer base, supporting continued growth in the Permian Basin and other U.S. basins.

In connection with the consummation of the Valiant Acquisition, the Company paid aggregate consideration, of approximately $315.9 million, consisting of (i) $283.1 million of cash, of which $121.3 million was related to Valiant’s cash on hand, subject to adjustment in accordance with the Purchase Agreement, and (ii) 1,454,849 shares of Class A common stock of the Company (“Common Stock,” and such shares issuable, the “Stock Consideration”). The Company funded the cash consideration through available capacity under its Revolving Credit Facility (described further herein in Note 10 - Long-Term Debt). Upon the consummation of the Valiant Acquisition, both the Acquired Company and Valiant became wholly owned subsidiaries of the Company.

The Company accounted for the Valiant Acquisition as a business combination pursuant to Accounting Standards Codification 805 (“ASC 805”), which requires, among other things, that identifiable assets acquired and liabilities assumed be recognized at their acquisition date fair value. Any excess of consideration transferred over the estimated fair value of assets acquired, net of liabilities assumed, is recorded as goodwill. Determining the fair value of acquired assets and liabilities assumed requires management to make estimates, assumptions and judgments, and in some cases, management may also utilize third-party specialists to assist and advise on those estimates.

Flowco Holdings Inc.

Notes to Condensed Consolidated Financial Statements

The allocation of the purchase price included in the current period balance sheet is based on the best estimate of management and is preliminary and subject to change. We will continue to obtain information to assist in determining the fair value of net assets acquired during the measurement period. The final valuation will be completed as the Company obtains the information necessary to complete the analysis, but no later than one year from the acquisition date.

The following table presents the preliminary purchase price allocation of the acquisition date fair value of the major classes of the assets acquired and liabilities assumed as of March 2, 2026 (in thousands):


	As of March 2, 2026
Assets acquired:
Cash and cash equivalents	$	121,312
Accounts receivable, net		30,590
Inventories		35,484
Other current assets		1,287
Property, plant and equipment		59,699
Operating lease right-of-use assets		617
Finance lease right-of-use assets		384
Intangible assets		51,000
Total assets acquired		300,373
Liabilities assumed:
Accounts payable		6,446
Accrued expenses		6,061
Deferred revenue		4,336
Operating lease obligations		617
Finance lease obligations		384
Deferred tax liability		22,188
Total liabilities assumed		40,032
Total identifiable net assets		260,341
Goodwill		55,556
Total purchase price	$	315,897

The fair value of the assets acquired and liabilities assumed are categorized in the following levels:

•

Level 1 – Cash and cash equivalents, based on observable inputs such as quoted prices in active markets at the measurement date for identical assets or liabilities

•

Level 2 – Receivables, inventory, other current assets, right of use assets, accounts payable, accrued expenses, deferred revenue, lease obligations and deferred tax liability; based on inputs that are observable such as quoted prices in markets that are not active (e.g. quoted pricing on vendor invoices), or inputs which are observable, for substantially the full term of the asset or liability.

•

Level 3 – Intangibles, property, plant and equipment; based on unobservable inputs for which there is little or no market data and which assumption are made about how market participants would price the assets or liabilities. The Company used a combination of the income, cost and market participant approaches based on various assumptions and inputs.

Property, plant and equipment acquired consists primarily of (i) leased fleet assets such as cable, pumps, transformers, variable speed drives and (ii) machinery equipment and manufacturing fixtures. These assets will be depreciated on a straight-line basis over the estimated useful lives of the assets.

Preliminary value of identifiable intangible assets relates to contract-based customer relationship, trade name and non-compete agreement with certain executives of Valiant and will be amortized over the period of expected benefit for

Flowco Holdings Inc.

Notes to Condensed Consolidated Financial Statements

each respective asset. Identifiable intangible assets and their amortization periods are estimated as follows (in thousands):


	Cost Basis		Useful Life (years)
Non-compete agreement	$	4,700	3
Trade name		11,100	10
Customer relationships		25,000	8
Customer contract		10,200	10
	$	51,000

The preliminary allocation of purchase price above includes approximately $55.6 million allocated to nondeductible goodwill and is supported by the strategic benefits (discussed above) to be generated from the Valiant Acquisition. For discussion pertaining to goodwill assignment by segment resulting from the Valiant Acquisition, see Note 8 – Goodwill and Intangible Assets, Net.

The following table sets forth the acquisition consideration for the Valiant Acquisition as of March 2, 2026 (in thousands):


	As of March 2, 2026
Cash consideration, excluding Valiant's cash on hand	$	170,000
Cash consideration for Valiant's cash on hand		113,076
Equity consideration		32,821
Total purchase price	$	315,897

Net Sales and net income of Valiant included in the accompanying condensed consolidated statements of operations for the period from March 2, 2026 to March 31, 2026 were $11.0 million and $2.5 million, respectively. The following table sets forth the unaudited supplemental pro forma financial information for the three months ended March 31, 2026 and 2025, as if the Company had completed the Valiant Acquisition on January 1, 2025 (in thousands):


	Three Months Ended March 31,
	2026		2025
Pro forma revenue	$	230,456	$	219,442
Pro forma net income	$	32,669	$	33,700

Archrock Asset Acquisition

On July 1, 2025, the Company entered into an asset purchase agreement with Archrock, Inc. (“Archrock”), pursuant to which the Company would acquire certain HPGL and VRU systems, related intangible assets, and a small amount of inventory, for cash consideration of $71 million. The Company completed this transaction on August 1, 2025 and accounted for this transaction as an asset acquisition under ASC 805, as substantially all of the fair value is concentrated in a group of similar identifiable assets. As such, the Company allocated the total cost of the asset acquisition to the net assets acquired on the basis of their estimated relative fair values on the acquisition date. Transaction costs incurred in connection with this transaction were de minimis.

The purchase price allocation related to the Archrock acquisition is as follows (in thousands):


	Cost Basis		Useful Life (years)
Property, plant and equipment	$	68,903		7 – 15
Intangible assets - customer contracts		1,925			3
Inventory		172		N/A
Total consideration transferred	$	71,000

Flowco Holdings Inc.

Notes to Condensed Consolidated Financial Statements

Note 4 – Revenue Recognition

The Company’s revenues are derived from multiple sources. The following are descriptions of its principal revenue generating activities.

Rental Revenue

The company earns rental revenue from leasing production equipment, primarily artificial lift and compression systems, under operating leases in accordance with the authoritative guidance for leases (“ASC 842”). Rental contracts range from month to month up to 48 months, with billing at a fixed monthly rate and payment typically due within 15 to 60 days. Upon lease commencement, the Company evaluates rental agreements to determine classification, but all agreements have been classified as operating leases, keeping the equipment on the balance sheet and depreciating it accordingly. Rental revenue is recognized on a straight-line basis over the lease term. Additionally, the Company has elected a practical expedient to combine lease and non-lease components (such as maintenance services) into a single component, as their timing and pattern of transfer are the same. To protect its assets, the company incorporates risk mitigation measures in rental agreements, including monitoring, maintenance, and customer liability clauses for damage or loss.

Sales Revenue

Sales revenue is recognized in accordance with ASC 606, which follows a five-step model to determine when and how revenue is recorded. Typically, contracts involve a single performance obligation, and revenue is recognized at a point in time when control of the product transfers to the customer. Sales revenue is measured as the fixed consideration expected from the customer, with payments generally collected within 15 to 70 days. Since the time between the sale and payment does not exceed a year, the Company does not include a financing component in its contracts. Additionally, there are no material costs associated with obtaining contracts, no right of return, and no significant post-delivery obligations.

The Company’s sales revenue primarily comes from three categories: (i) equipment and compressors, (ii) oil & gas products and parts, and (iii) maintenance and repair services:

•

For equipment and compressors, revenue is recognized when fabrication is complete, the product is segregated, and the customer has been notified that it is ready for pickup. At this point, the Company invoices the customer, and ownership risks and rewards transfer to the customer per the contract terms. The customer is responsible for arranging transportation, and while awaiting pickup (typically within 2 to 14 days), the equipment remains in the Company’s possession but is designated for the specific customer. The Company does not have the right to direct the product elsewhere.

•

For oil and gas products and parts, the Company has a single performance obligation – the manufacture and sale of the contracted goods. Revenue is recognized upon the transfer of control which occurs at a point in time upon delivery. The transaction price is based on the standalone sales price of each good, and payments are typically collected within 15 to 70 days. Shipping and handling are treated as fulfillment activities and recognized as costs of sales. Any sales taxes collected are excluded from revenue.

•

For maintenance and repair services, the Company provides services for gas lift systems, plunger lift systems, downhole fluid recovery, and related activities. Revenue is recognized at a point in time upon completion of the service, which typically takes one to three days from commencement. The transaction price corresponds to the standalone price of the completed service, with payments generally collected within 30 to 45 days. Similar to product sales, taxes collected from customers are excluded from reported revenues.

Flowco Holdings Inc.

Notes to Condensed Consolidated Financial Statements

Disaggregation of Revenues

The following table presents our third-party revenue from contracts with customers by reportable segment (see Note 17 – Segment Information) and disaggregated by major product and service lines, timing of revenue recognition, and geographical markets for the three months ended March 31, 2026 (in thousands):


	Three Months Ended March 31, 2026
Segments	Production Solutions		Natural Gas Technologies		Other and Eliminations			Total
Major Product/Service Lines
Surface Equipment (1)	$	70,027	$	—	$	—		$	70,027
Downhole Components		70,136		—		—			70,136
Vapor Recovery (1)		—		62,111		(43	)		62,068
Natural Gas Systems		—		18,519		(11,220	)		7,299
Total	$	140,163	$	80,630	$	(11,263	)	$	209,530
Timing of Revenue Recognition
Goods and services transferred at a point in time	$	65,446	$	33,474	$	(11,263	)	$	87,657
Services transferred over time		74,717		47,156		—			121,873
Total	$	140,163	$	80,630	$	(11,263	)	$	209,530
Geographical Markets
United States	$	138,341	$	80,325	$	(11,263	)	$	207,403
International		1,822		305		—			2,127
Total	$	140,163	$	80,630	$	(11,263	)	$	209,530

____________________________

(1) All of revenue for these service lines are recognized in accordance with ASC 842 as described within the Revenue Recognition section above.


	Three Months Ended March 31, 2025
Segments	Production Solutions		Natural Gas Technologies		Other and Eliminations			Total
Major Product/Service Lines
Surface Equipment (1)	$	54,598	$	—	$	—		$	54,598
Downhole Components		61,394		—		—			61,394
Vapor Recovery (1)		—		56,616		(45	)		56,571
Natural Gas Systems		—		28,881		(9,094	)		19,787
Total	$	115,992	$	85,497	$	(9,139	)	$	192,350
Timing of Revenue Recognition
Goods and services transferred at a point in time	$	61,394	$	42,799	$	(9,139	)	$	95,054
Services transferred over time		54,598		42,698		—			97,296
Total	$	115,992	$	85,497	$	(9,139	)	$	192,350
Geographical Markets
United States	$	113,458	$	85,298	$	(9,139	)	$	189,617
International		2,534		199		—			2,733
Total	$	115,992	$	85,497	$	(9,139	)	$	192,350

___________________________

(1) All of revenue for these service lines are recognized in accordance with ASC 842 as described within the Revenue Recognition section above.

Deferred Revenue

As of March 31, 2026, the Company had a deferred revenue balance of $16.7 million compared to the December 31, 2025 balance of $7.4 million. Deferred revenue represents our obligation to transfer products to or perform services for a customer for which we have received cash or billed in advance. The revenue that has been deferred will be recognized upon product delivery or as services are performed. As of March 31, 2026, the Company did not have any

Flowco Holdings Inc.

Notes to Condensed Consolidated Financial Statements

contracts with an original length of greater than a year from which revenue is expected to be recognized in the future related to performance obligations that are unsatisfied.

Note 5 – Inventory

Inventory consists of the following as of March 31, 2026 and December 31, 2025 (in thousands):


	As of March 31,			As of December 31,
	2026			2025
Components, parts and materials	$	93,540		$	86,503
Finished goods		81,719			50,944
Work in progress		16,813			17,801
Inventory		192,072			155,248
Less: inventory allowance		(6,100	)		(5,658	)
Inventory, net	$	185,972		$	149,590

Note 6 – Property, Plant and Equipment

Property, plant and equipment consist of the following as of March 31, 2026 and December 31, 2025 (in thousands):


	As of March 31,	As of December 31,
	2026	2025
Land

Flowco Holdings Inc. 10-Q