Flowco Holdings Inc.
For the period ended Jun 30, 2025. Filed Aug 5, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2025 · Filed Aug 5, 2025
FLOC$20.06+5.3%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-03-31; filed 2025-05-13.
0000950170-25-070277
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-06-30; filed 2025-08-05.
0000950170-25-102962
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 85 previous paragraphs and 106 current paragraphs.
57 unchanged; 24 reworded; 17 added; 4 removed; 0 previous and 8 current paragraphs rearranged.
Tables are not compared: 2 previous and 3 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (17)
Current report
three months ended June 30, 2025 Compared tothree months ended June 30, 2024
Current report
Rental revenue was $102.1 million for the three months ended June 30, 2025, an increase of $50.5 million, or 98%, from $51.6 million for the three months ended June 30, 2024. This increase in rental revenue was driven primarily by two factors as follows:
Current report
Surface equipment fleet size experienced an increase of 79 average active systems per month from 1,412 during the three months ended June 30, 2024, to 1,491 average active surface equipment systems per month during the three months ended June 30, 2025. Additionally, average rental rate also had a $1,825 increase in average monthly price from $11,125 per unit during the three months ended June 30, 2024 to
Current report
$12,950 per unit during the three months ended June 30, 2025. These increases approximate 6% and 16% for fleet size and average rental rate per unit, respectively.
Current report
The 2024 Business Combination impact on VRUs. The three months ended June 30, 2024 rental revenue only reflect ten operational days of Flogistix’ VRU systems with a total of 2,761 active systems as of June 30, 2024 and an average rental rate of approximately $4,452 per unit during the same period. During the three months ended June 30, 2025, Flogistix’ VRU fleet size grew to an average of 2,973 active systems per month and an average rental rate of $4,848 per unit.
Current report
Cost of rentals. Rental cost was $27.6 million in the three months ended June 30, 2025, an increase of $14.9 million, or approximately 117%, from $12.7 million for the three months ended June 30, 2024. The primary driver of this increase relates to increased costs of approximately $13.3 million associated with Flogistix’ VRU assets as part of the 2024 Business Combination within the Natural Gas Technologies segment that were minimally included in the three months ended June 30, 2024 along with increased equipment maintenance and repair costs from higher overall fleet count.
Current report
Other income (expenses). Other income (expenses) had a favorable swing of $2.5 million from a total of $1.9 million of other expenses, net, in the three months ended June 30, 2024 to a total of $0.6 million other income, net, in the three months ended June 30, 2025. The favorable change was primarily driven by various gains on lease terminations of approximately $0.5 million in the three months ended June 30, 2025 and the absence of Estis’ non-operating expenses that were present during the three months ended June 30, 2024.
Current report
SIX MONTHS ENDED JUNE 30, 2025 Compared to SIX MONTHS ENDED JUNE 30, 2024
Current report
Rental revenue was $199.4 million for the six months ended June 30, 2025, an increase of $101.7 million, or 104%, from $97.7 million for the six months ended June 30, 2024. This increase in rental revenue was driven primarily by two factors as follows:
Current report
Surface equipment fleet size experienced an increase of 72 average active systems per month from 1,414 during the six months ended June 30, 2024, to 1,486 average active surface equipment systems per month during the six months ended June 30, 2025. Additionally, average rental rate also had a $1,661 increase in average monthly price from $11,012 per unit during the six months ended June 30, 2024 to $12,673 per unit during the six months ended June 30, 2025. These increases approximate 5% and 15% for fleet size and average rental rate per unit, respectively.
Current report
The 2024 Business Combination impact on VRUs. The six months ended June 30, 2024 rental revenue only reflect ten operation days of Flogistix’ VRU systems with a total of 2,761 active systems as of June 30, 2024 and an average rental rate of approximately $4,452 per unit during the same period. During the six months ended June 30, 2025, Flogistix’ VRU fleet size grew to an average of 2,964 active systems per month and an average rental rate of $4,783 per unit.
Current report
Cost of sales. Sales cost was $128.1 million for the six months ended June 30, 2025, an increase of $79.6 million, or approximately 164%, from $48.5 million for the six months ended June 30, 2024. This increase was primarily attributable to $80.5 million of costs related to Flowco Productions within the Production Solution segment and $15.9 million of costs related to Flogistix within the Natural Gas Technologies segment as part of the 2024 Business
Current report
Selling, general and administrative expenses. Selling, general and administrative expenses for the six months ended June 30, 2025 were $63.2 million, an increase of $52.0 million from $11.2 million for the six months ended June 30, 2024. This increase was primarily attributable to the added personnel, marketing, and sales expenses related to the 2024 Business Combination from the following segments: which consists of $21.7 million, $15.7 million and $13.4 million increases within the Production Solutions, Natural Gas Technologies and Corporate segments, respectively. Included in $15.7 million and $13.4 million increases within the Natural Gas Technologies and the Corporate segments, respectively, are (i) $1.0 million non-recurring charge related to the re-purposing of one of our manufacturing facilities in Pampa, TX and (ii) approximately $2.9 million non-recurring charges related to termination benefits and related expenses, which includes one of our executive officers.
Current report
Other income (expenses). Other income (expenses) had a favorable swing of $2.3 million from a total of $2.0 million other expenses, net, in the six months ended June 30, 2024 to a total of $0.3 million other income, net, in the six months ended June 30, 2025 This favorable swing was primarily driven by various gains on lease terminations of approximately $0.7 million, partially offset by approximately $0.4 million of IPO related transactional expenses in the six months ended June 30, 2025, and the absence of Estis’ non-operating expenses that were present during the six months ended June 30, 2024
Current report
On May 2, 2025, our Board of Directors declared a cash dividend of $0.08 per share payable to holders of Class A common stock of record as of the close of business on May 14, 2025 and payable on May 28, 2025 (the “Common Stock Dividend”) and, in conjunction with the Common Stock Dividend, Flowco LLC declared a distribution on its units of $0.08 per unit payable on May 28, 2025 to all unitholders of record of Flowco LLC as of the close of business on May 14, 2025. The declaration and payment of future dividends will be at the discretion of our Board of Directors and will depend on future business conditions, financial conditions, results of operations and other factors.
Current report
Common Share Repurchase Program
Current report
On June 11, 2025, our Board of Directors authorized a $50 million share repurchase program (the “Repurchase Program”) to reacquire shares via open market purchase, privately negotiated transactions, or by other means in accordance with the regulations of the Securities and Exchange Commission. The Repurchase Program does not obligate us to repurchase any particular amount of shares and may be modified, suspended, or discontinued at any time. The timing of purchases and the number of shares repurchased under the Repurchase Program will depend on a variety of factors including price, trading volume, market conditions and corporate and regulatory requirements.
Removed paragraphs (4)
Previous report
threem onthse nded March 31, 2025 Compared tothreem onthse nded March 31, 2024
Previous report
Rental revenue was $97.3 million for the three months ended March 31, 2025, an increase of $51.1 million, or 111%, from $46.2 million for the three months ended March 31, 2024. This increase in rental revenue was driven by an increase of 3,053 average active systems per month from 1,416 during three months ended March 31, 2024, to 4,448 average active systems per month during three months ended March 31, 2025; and partially offset by $3,608 decrease in average monthly price from $10,911 per unit during three months ended March 31, 2024 to $7,303 per unit during three months ended March 31, 2025.
Previous report
(Gain) loss on sale of equipment. Gain (loss) on sale of equipment had a swing of $0.4 million favorable from the three months ended March 31, 2024 to three months ended March 31, 2025. This favorable change was due to a net gain of $45.0 thousand resulting from sales of assets in the three months ended March 31, 2025 compared to a loss of $0.4 million from Estis' sale of assets in the three months ended March 31, 2024.
Previous report
Other expense. Other expense was $0.3 million in the three months ended March 31, 2025 compared to $0.1 million in the three months ended March 31, 2024, an increase of approximately $0.2 million. The increase was primarily due to an increase in other non-operating expenses in three months ended March 31, 2025 related to IPO transactional expenses that were not present in the three months ended March 31, 2024.
Reworded paragraphs (24)
Previous wording
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited condensed consolidated financial statements and related notes included elsewhere in this Quarterly Report. The following discussion includes forward-looking statements that involve certain risks and uncertainties. For further information on items that could impact our future operating performance or financial condition, see the sections entitled “Risk Factors” section of our Annual Report on Form 10-K for the fiscal year ended December 31, 2024 and in this Quarterly Report, and “Cautionary Note Regarding Forward-Looking Statements” in this Quarterly Report. We assume no obligation to update any of these forward-looking statements, except as required by law. Unless otherwise indicated or the context otherwise requires, the historical financial information in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” reflects only the historical financial results of Flowco Holdings Inc. and its consolidated subsidiaries and references to the “Company,” “we,” “our,” or “us” are to Flowco Holdings Inc. and its consolidated subsidiaries
Current wording
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited condensed consolidated financial statements and related notes included elsewhere in this Quarterly Report. The following discussion includes forward-looking statements that involve certain risks and uncertainties. For further information on items that could impact our future operating performance or financial condition, see the sections entitled “Risk Factors” section of our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, and in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2025, and “Cautionary Note Regarding Forward-Looking Statements” in this Quarterly Report. We assume no obligation to update any of these forward-looking statements, except as required by law. Unless otherwise indicated or the context otherwise requires, the historical financial information in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” reflects only the historical financial results of Flowco Holdings Inc. and its consolidated subsidiaries and references to the “Company,” “we,” “our,” or “us” are to Flowco Holdings Inc. and its consolidated subsidiaries
Previous wording
Production Solutions: segment consists of our artificial lift operations, digital solutions and methane abatement technologies; and
Current wording
Production Solutions: segment consists of our artificial lift operation and related digital solutions technology; and
Previous wording
Natural Gas Technologies: segment consists of our vapor recovery and natural gas systems operations.
Current wording
Natural Gas Technologies: segment consists of our vapor recovery and natural gas systems operations and methane abatement technology.
Previous wording
As of March 31, 2025, our Production Solutions and Natural Gas Technologies segments combined operated a fleet of over 4,400 active systems, generating consistent, recurring revenues through the long production life of wells. For a more detailed overview of our business, see Part 1. Item 1. Business and Part 1. Item 2. Properties included in our Annual Report.
Current wording
As of June 30, 2025, our Production Solutions and Natural Gas Technologies segments operated a combine fleet of over 4,400 active systems, generating consistent, recurring revenues through the long production life of wells. For a more detailed overview of our business, see Part 1. Item 1. Business and Part 1. Item 2. Properties included in our Annual Report.
Previous wording
In April 2025, the Trump administration continued to push for new and significant trade policies by imposing a 10% baseline tariff on imported products with numerous U.S. global trade partners and additional individualized reciprocal tariffs on certain countries with which the U.S. has the largest trade deficits, followed by a 90-day pause in the effectiveness of some tariffs. Current uncertainties about the tariffs and their effects on trading relationships may affect costs for and availability of raw materials or contribute to inflation in the markets in which we operate and increase economic pressures on our customers. We continue to actively monitor the economic effects of the uncertainties created from these tariffs, as well as opportunities to mitigate their related impacts, costs and other effects in our business operations.
Current wording
We acknowledge the evolving and complex nature of the global tariff environment. Additionally, we also understand that current uncertainties about the tariffs and their effects on trading relationships may affect cost for and availability of raw materials or contribute to inflation in the markets in which we operate and increase economic pressures on our customers. We do not believe that the impacts on the current tariff environment will materially affect our business operations and results of operations. However, we continue to actively monitor the economic effects of the uncertainties created from these tariffs, as well as opportunities to mitigate their related impacts, costs and other effects in our business operations.
Previous wording
Over the mid to long-term, we expect demand for oil and natural gas exploration and production as well as new energy platforms to continue to require more advanced technology from the energy services industry. While the ongoing uncertainties persist for reasons mentioned above, we remain cautiously optimistic that our integrated scope of products and service offerings, our differentiated technologies and a strong market presence will provide us a sustained long-term growth.
Current wording
Over the mid to long-term, we expect demand for oil and natural gas exploration and production as well as new energy platforms to continue to require more advanced technology from the energy services industry. While the ongoing uncertainties persist for reasons mentioned above, we remain cautiously optimistic that our integrated scope of products and service offerings, our differentiated technologies and a strong market presence will enable us to achieve a sustained long-term growth.
Previous wording
Income Taxes. Our accounting predecessors are a collective limited liability companies that constitute as partnerships for U.S. federal income tax purposes, and therefore are not subject to U.S. federal income taxes and the provisions for income tax calculations thereof. As the IPO occurred subsequent to the last date presented in this Quarterly Report, we do not report any income tax benefit or expense attributable to us. After the IPO, we started to be taxed as a corporation under the Internal Revenue Code and subject to U.S. federal income taxes (currently at a statutory rate of 21% of pretax earnings, as adjusted by the Internal Revenue Code), as well as state and local income taxes, for our interest ownership in Flowco LLC.
Current wording
Income Taxes. Our accounting predecessors are a collective limited liability companies that constitute as partnerships for U.S. federal income tax purposes, and therefore are not subject to U.S. federal income taxes and the provisions for income tax calculations thereof. As the IPO occurred in the first quarter 2025, we do not report any income tax benefit or expense attributable to us in the period prior to the IPO. After the IPO, we started to be taxed as a corporation under the Internal Revenue Code and subject to U.S. federal income taxes (currently at a statutory rate of 21% of pretax earnings, as adjusted by the Internal Revenue Code), as well as state and local income taxes, for our interest ownership in Flowco LLC.
Previous wording
2025 Equity and Incentive Plan. To incentivize individuals providing services to us or our affiliates, our Board of Directors adopted an omnibus 2025 Equity and Incentive Plan (the “Equity Plan”) prior to the completion of our IPO. The Equity Plan provides for the grant, from time to time, at the discretion of our Board of Directors or a committee thereof, of stock options, stock appreciation rights, restricted stock, restricted stock units, stock awards, other stock awards, substitute awards and performance awards. Any individual who is our officer or employee or an officer or employee of our affiliates, and any other person who provides services to us or our affiliates, including members of our Board of Directors, will be eligible to receive awards under the Equity Plan at the discretion of our Board of Directors. From period of January 16, 2025, to March 31, 2025, we granted 674,379 restricted stock unit (“RSU”) awards, which will vest within three years, to certain of our employees, officers, and non-employee directors. Awards of RSUs to our officers and employees will vest on the third anniversary of the grant date, while awards of RSUs to our non-employee directors will vest pro rata quarterly over three years. For these awards granted during period from January 16, 2025, to March 31, 2025, we will recognize equity compensation expenses aggregating up to $6.7 million per year, starting in 2025, over the applicable vesting terms related to these RSU issuances.
Current wording
2025 Equity and Incentive Plan. To incentivize individuals providing services to us or our affiliates, our Board of Directors adopted an omnibus 2025 Equity and Incentive Plan (the “Equity Plan”) prior to the completion of our IPO. The Equity Plan provides for the grant, from time to time, at the discretion of our Board of Directors or a committee thereof, of stock options, stock appreciation rights, restricted stock, restricted stock units, stock awards, other stock awards, substitute awards and performance awards. Any individual who is our officer or employee or an officer or employee of our affiliates, and any other person who provides services to us or our affiliates, including members of our Board of Directors, will be eligible to receive awards under the Equity Plan at the discretion of our Board of Directors. From period of January 16, 2025, to June 30, 2025, we granted 674,379 restricted stock unit (“RSU”) awards, which will vest within three years, to certain of our employees, officers, and non-employee directors. Awards of RSUs to our officers and employees will vest on the third anniversary of the grant date, while awards of RSUs to our non-employee directors will vest pro rata quarterly over three years. For these awards granted during period from January 16, 2025, to June 30, 2025, after adjusting for forfeitures as of June 30, 2025, we will recognize total equity compensation expenses averaging approximately $6.5 million per year, starting in 2025, over the applicable vesting terms related to these RSU issuances.
Previous wording
Revenue – rentals. The primary driver for the increase in average active systems was related to Flogistix’ VRUs that were added to our combined fleet as part of the 2024 Business Combination within the Natural Gas Technologies segment and Estis’ organic growth in its surface equipment rental fleet within the Production Solutions segment. The average rental rates for VRUs are generally lower than the average rental rates for surface equipment. Accordingly, the weighted average rental rate of the combined fleet during the three months ended March 31, 2025, is lower than the weighted average rental rate during the three months ended March 31, 2024, which was made up exclusively of surface equipment.
Current wording
Revenue – rentals. The primary driver for the increase in average active systems was related to Flogistix’ VRUs that were added to our combined fleet as part of the 2024 Business Combination within the Natural Gas Technologies segment and Estis’ organic growth in its surface equipment rental fleet within the Production Solutions segment. As a result of the 2024 Business Combination, which occurred on June 20, 2024, the three months ended June 30, 2024 rental revenue include only ten operational days of Flogistix. Additionally, the average rental rates for VRUs are generally lower than the average rental rates for surface equipment, and as such, the weighted average rental rate of the combined fleet during the three months ended June 30, 2025, is lower than the weighted average rental rate during the three months ended June 30, 2024, which other than the last ten days of the three months ended June 30, 2024, was made up exclusively of surface equipment fleet.
Previous wording
Revenue – sales. Sales revenue was $95.1 million for the three months ended March 31, 2025, an increase of $74.5 million, or 363%, from $20.5 million for the three months ended March 31, 2024. This increase in revenue was primarily due to added revenue streams in the sales revenue category, approximately $61.4 million of downhole components sales and $13.9 million of VRU sales were added to the total sales revenue in the three months ended March 31, 2025 resulting from the 2024 Business Combination. We sell our natural gas systems through intercompany transactions for further use in the Production Solutions segment as well as sales to our customers. During the three months ended March 31, 2024, Natural Gas Technologies segment had $13.6 million intercompany natural gas system sales to the Production Solutions segment as we continued to increase the volume of active systems. Due to the change in focus of sales to third parties rather than our Production Solutions segment, intercompany sales volume of natural gas systems decreased to $9.1 million in the three months ended March 31, 2025. All intercompany revenues have been eliminated in consolidation.
Current wording
Revenue – sales. Sales revenue was $91.1 million for the three months ended June 30, 2025, an increase of $49.5 million, or 119%, from $41.6 million for the three months ended June 30, 2024. This increase in revenue was primarily due to added revenue streams in the sales revenue category, approximately $60.8 million of downhole components sales and $8.2 million of VRU sales were added to the total sales revenue in the three months ended June 30, 2025 resulting from the 2024 Business Combination, partially offset by a decrease of approximately $19.4 million in natural gas systems sales due to a loss of a major customer.
Previous wording
Cost of sales. Sales cost was $65.6 million for the three months ended March 31, 2025, an increase of $48.6 million, or approximately 287%, from $16.9 million for the three months ended March 31, 2024. This increase was primarily attributable to $39.6 million of costs related to Flowco Productions within the Production Solution segment and $10.0 million of costs related to Flogistix within the Natural Gas Technologies segment as part of the 2024 Business Combination, partially offset by reduced sale volumes and mix of products sold from other business operations.
Current wording
Cost of sales. Sales cost was $62.6 million for the three months ended June 30, 2025, an increase of $31.0 million, or approximately 98%, from $31.6 million for the three months ended June 30, 2024. This increase was primarily attributable to $40.9 million of costs related to Flowco Productions within the Production Solution segment and $6.0 million of costs related to Flogistix within the Natural Gas Technologies segment as part of the 2024 Business Combination, partially offset by reduced sale volumes and mix of products sold natural gas systems of approximately $15.9 million.
Previous wording
Selling, general and administrative expenses. Selling, general and administrative expenses for the three months ended March 31, 2025 were $30.5 million, an increase of $26.0 million from $4.5 million for the three months ended March 31, 2024. This increase was primarily attributable to the added personnel, marketing, and sales expenses related to the 2024 Business Combination from the following segments: which consists of $10.4 million, $9.4 million and $5.8 million increases within the Production Solutions, Natural Gas Technologies and Corporate segments, respectively.
Current wording
Selling, general and administrative expenses. Selling, general and administrative expenses for the three months ended June 30, 2025 were $32.7 million, an increase of $26.0 million from $6.7 million for the three months ended June 30, 2024. This increase was primarily attributable to the added personnel, marketing, and sales expenses related to the 2024 Business Combination from the following segments: which consists of $9.3 million, $7.8 million and $7.6 million increases within the Production Solutions, Natural Gas Technologies and Corporate segments, respectively. Included in $7.8 million and $7.6 million increases within the Natural Gas Technologies and the Corporate segments, respectively, are (i) $1.0 million non-recurring charge related to the re-purposing of one of our manufacturing facilities in Pampa, TX and (ii) approximately $2.9 million non-recurring charges related to termination benefits and related expenses, which includes one of our executive officers.
Previous wording
Depreciation and amortization. Depreciation and amortization was $34.1 million for the three months ended March 31, 2025 an increase of $22.4 million, from $11.7 million for the three months ended March 31, 2024. The increase in depreciation expense was primarily due to increased depreciation expense on machinery and equipment and increased amortization expense on intangible assets resulting from the 2024 Business Combination.
Current wording
Depreciation and amortization. Depreciation and amortization was $33.2 million for the three months ended June 30, 2025 an increase of $19.0 million, from $14.2 million for the three months ended June 30, 2024. The increase in depreciation expense was primarily due to increased depreciation expense on machinery and equipment and increased amortization expense on intangible assets resulting from the 2024 Business Combination.
Previous wording
Interest expense. Interest expense was $5.4 million in the three months ended March 31, 2025 compared to interest expense of $4.8 million in the three months ended March 31, 2024. This increase in interest expense of $0.6 million was primarily due to increased average borrowings outstanding in the three months ended March 31, 2025, and higher average interest rates in the three months ended March 31, 2025 compared to the three months ended March 31, 2024.
Current wording
Interest expense. Interest expense was $6.4 million in the three months ended June 30, 2025 compared to interest expense of $5.5 million in the three months ended June 30, 2024. This increase in interest expense of $0.9 million was primarily due to increased average borrowings outstanding and higher average interest rates in the three months ended June 30, 2025 compared to the three months ended June 30, 2024.
Previous wording
Provision for income taxes. Provision for income taxes was $2.6 million the three months ended March 31, 2025, an increase of $2.5 million or approximately 1,891% increase from the three months ended March 31, 2024. After the consummation of the IPO, we became subject to U.S. federal, state, and local income taxes with respect to its allocable share of taxable income of Flowco Holdings at the prevailing corporate tax rates. The increase in provision for income taxes were due to these income tax obligations that were not present during the three months ended March 31, 2024 as we operated under Flowco LLC, a limited liability company, and was treated as a partnership for income tax purposes. Income tax provision for three months ended March 31, 2025 was $2.3 million. The remaining increase in provision for income taxes of $0.2 million was due to increased Texas margin tax.
Current wording
Provision for income taxes. Provision for income taxes was $3.9 million the three months ended June 30, 2025, an increase of $3.7 million or approximately 2142.8% increase from the three months ended June 30, 2024. After the consummation of the IPO, we became subject to U.S. federal, state, and local income taxes with respect to our allocable share of taxable income of Flowco Holdings at the prevailing corporate tax rates. The increase in provision for income taxes were due to these income tax obligations that were not present during the three months ended June 30, 2024 as we operated under Flowco LLC, a limited liability company, and was treated as a partnership for income tax purposes. Income tax provision for three months ended June 30, 2025 was $3.2 million. The remaining increase in provision for income taxes of $0.7 million was due to increased Texas margin tax.
Previous wording
Cost of rentals. Rental cost was $26.9 million in the three months ended March 31, 2025, an increase of $15.9 million, or approximately 145%, from $11.0 million for the three months ended March 31, 2024. The primary driver of this increase relates to $14.1 million of costs related to Flogistix’ VRUs as part of the 2024 Business Combination within the Natural Gas Technologies segment that were not included in the three months ended March 31, 2024 along with increased costs for equipment maintenance and repair expense, due to the increased surface equipment fleet count.
Current wording
Cost of rentals. Rental cost was $54.5 million in the six months ended June 30, 2025, an increase of $30.8 million, or approximately 130%, from $23.7 million for the six months ended June 30, 2024. The primary driver of this increase relates to $27.4 million of costs related to Flogistix’ VRUs as part of the 2024 Business Combination within the Natural Gas Technologies segment that were minimally included in the six months ended June 30, 2024 along with increased equipment maintenance and repair costs from higher overall fleet count.
Previous wording
As of March 31, 2025, we had $0.7 million of cash and cash equivalents. We believe existing cash and cash equivalents and cash flows from operations will be sufficient to support working capital and capital expenditure requirements for at least the next 12 months. We have historically generated cash and fund our operations primarily from cash flows from operating activities as well as availability under our Credit Agreement. Borrowings under our Credit Agreement has a maturity date of August 20, 2029, in which all principal owed is payable upon maturity. Our interest rate is Term Secured Overnight Finance Rate (“SOFR”) for one month plus 0.1% (“Adjusted REVSOFR30”) plus a contractual applicable margin based on the Company’s calculated leverage ratio, which combined approximates 6.4% per annum at the effective date with interest due monthly. If such rate is below contractual minimums, the interest rate will be calculated based on Adjusted Term SOFR Rate, Adjusted REVSOFR30 Rate or the Adjusted Daily Simple SOFR Rate. Depending upon market conditions and other factors, we may also have the ability to issue additional equity and/or debt, as needed.
Current wording
As of June 30, 2025, we had $9.3 million of cash and cash equivalents. We believe existing cash and cash equivalents and cash flows from operations will be sufficient to support working capital and capital expenditure requirements for at least the next 12 months. We have historically generated cash and fund our operations primarily from cash flows from operating activities as well as availability under our Credit Agreement. Borrowings under our Credit Agreement has a maturity date of August 20, 2029, in which all principal owed is payable upon maturity. Our interest rate is Term Secured Overnight Finance Rate (“SOFR”) for one month plus 0.1% (“Adjusted REVSOFR30”) plus a contractual applicable margin based on the Company’s calculated leverage ratio, which combined approximates 6.2% per annum at the effective date with interest due monthly. If such rate is below contractual minimums, the interest rate will be calculated based on Adjusted Term SOFR Rate, Adjusted REVSOFR30 Rate or the Adjusted Daily Simple SOFR Rate. Depending upon market conditions and other factors, we may also have the ability to issue additional equity and/or debt, as needed.
Previous wording
As of May 9, 2025, we had $175.6 million outstanding borrowings and $547.4 million available borrowing capacity under our Credit Agreement.
Current wording
As of August 1, 2025, we had $226.6 million outstanding borrowings and $496.5 million available borrowing capacity under our Credit Agreement.
Previous wording
Our Board of Directors may elect to declare cash dividends on our Class A common stock, subject to our compliance with applicable law, and depending on, among other things, economic conditions, our financial condition, results of operations, projections, liquidity, earnings, legal requirements, and restrictions in the agreements governing our indebtedness. We currently intend to pay a dividend from available funds and future earnings on our Class A common stock. If and to the extent our Board of Directors declares cash dividends to our stockholders, we expect the dividend to be paid from cash flows from our operations. The timing, amount and financing of dividends, if any, will be subject to the discretion of our Board of Directors from time to time. As of March 31, 2025, we have not declared a cash dividend on our Class A common stock. Distributions to members or partners made by our predecessor entities, including distributions to members funded during 2024 in part by borrowings under our Credit Agreement, should not be viewed as indicative for future dividend payments with respect to our Class A common stock.
Current wording
Our Board of Directors may elect to declare cash dividends on our Class A common stock, subject to our compliance with applicable law, and depending on, among other things, economic conditions, our financial condition, results of operations, projections, liquidity, earnings, legal requirements, and restrictions in the agreements governing our indebtedness.
Previous wording
Operating activities. Net cash provided by operating activities was $42.5 million in the three months ended March 31, 2025 compared to $28.2 million in the three months ended March 31, 2024, an increase of approximately $14.3 million. Operating cash flows increased primarily due to higher net income as a direct result from additional business operations from FPS and Flogistix as it relates to the 2024 Business Combination, In addition, cash outflows associated with working capital increased $28.2 million, largely due to increases in accounts receivable, inventory, other assets, partially offset by increases in accounts payable, accrued expenses and other liabilities.
Current wording
Operating activities. Net cash provided by operating activities was $124.7 million in the six months ended June 30, 2025 compared to $50.2 million in the six months ended June 30, 2024, an increase of approximately $74.5 million. Operating cash flows increased primarily due to higher net income as a direct result from additional business operations from FPS and Flogistix as it relates to the 2024 Business Combination. In addition, cash outflows associated with working capital increased $2.7 million, largely due to an increase in accounts receivable, decreases in accounts payable, accrued expenses and deferred revenues; partially offset by decreases in inventory and prepaid expenses.
Previous wording
Investing activities. Net cash used in investing activities was $27.7 million and $14.7 million for the three months ended March 31, 2025 and 2024, respectively. The approximately $13.0 million increase was primarily due to an increase in purchases of property, plant and equipment during the three months ended March 31, 2025.
Current wording
Investing activities. Net cash used in investing activities was $63.4 million and $24.4 million for the six months ended June 30, 2025 and 2024, respectively. The approximately $39.0 million increase was primarily due to an increase in purchases of property, plant and equipment during the six months ended June 30, 2025.
Previous wording
Financing activities. Net cash used in financing activities was $18.8 million in the three months ended March 31, 2025 compared to net cash used of $12.6 million in the three months ended March 31, 2024. The $6.2 million increase in net cash used in financing activities was primarily related to $564.8 million of payments on long-term debt, $20.9 million payments to acquire the LLC Interests from the Continuing Equity Owners, $1.7 million payments related to finance lease obligations and $2.0 million of payments related to offering costs for the IPO, partially offset by $461.8 million of IPO proceeds, $104.5 million of proceeds from long-term debt and the absence of $17.0 million of distributions to the members of Estis that occurred in the three months ended March 31, 2024.
Current wording
Financing activities. Net cash used in financing activities was $56.6 million in the six months ended June 30, 2025 compared to net cash used of $20.8 million in the six months ended June 30, 2024. The $35.8 million increase in net cash used in financing activities was primarily related to $655.2 million of payments on long-term debt, $20.9 million payments to acquire the LLC Interests from the Continuing Equity Owners, $4.4 million payments related to finance lease obligations, $2.1 million dividend payments to Class A common stockholders and $2.0 million of payments related to offering costs for the IPO, partially offset by $461.8 million of IPO proceeds, $175.2 million of proceeds from long-term debt and $11.7 decrease in distributions to the Continuing Equity Owners.
Previous wording
Our significant accounting policies are described in Note 1-Description of the business and summary of significant accounting policies to our accompanying financial statements included elsewhere in this Quarterly Report on Form 10-Q. Some of those significant accounting policies require us to make difficult, subjective, or complex judgments or estimates. An accounting estimate is considered to be critical if it meets both of the following criteria: (i) the estimate requires assumptions about matters that are highly uncertain at the time the accounting estimate is made and (ii) different estimates reasonably could have been used, or changes in the estimate that are reasonably likely to occur from period to period may have a material impact on the presentation of our financial condition, changes in financial condition, or results of operations. There have been no material changes to the Company’s critical accounting estimates since our Annual Report, except as described below.
Current wording
Our significant accounting policies are described in Note 2 – Summary of Significant Accounting Policies to our accompanying financial statements included elsewhere in this Quarterly Report on Form 10-Q. Some of those significant accounting policies require us to make difficult, subjective, or complex judgments or estimates. An accounting estimate is considered to be critical if it meets both of the following criteria: (i) the estimate requires assumptions about matters that are highly uncertain at the time the accounting estimate is made and (ii) different estimates reasonably could have been used, or changes in the estimate that are reasonably likely to occur from period to period may have a material impact on the presentation of our financial condition, changes in financial condition, or results of operations. There have been no material changes to the Company’s critical accounting estimates since our Annual Report, except as described below.
Previous wording
After the IPO and Reorganization Transactions, we are the sole managing member of Flowco LLC. The redeemable non-controlling interests in the condensed consolidated statements of operations for the three months ended March 31, 2025 represent the portion of earnings attributable to the economic interest in Flowco LLC held by the Continuing Equity Owners. ASR 268 requires that the carrying amount of the redeemable non-controlling interest is equal to the greater of (1) the carrying value of the redeemable non-controlling interest adjusted each reporting period for income or loss attributable to the redeemable non-controlling interest or (2) the redemption value. The redemption value is calculated based on the arithmetic average of the volume weighted average prices of Class A common stock on the trading day immediately prior to the end of each reporting period. Remeasurements to the redemption value of the redeemable non-controlling interest are performed at each reporting period and any required adjustments are recorded as an allocation between permanent equity and temporary equity within the condensed consolidated balance sheets. The portion of the net income or loss attributable to redeemable non-controlling interest is reported as net income or loss attributable to redeemable non-controlling interests on our condensed consolidated statements of operations.
Current wording
After the IPO and Reorganization Transactions, we are the sole managing member of Flowco LLC. The redeemable non-controlling interests in the condensed consolidated statements of operations for the three and six months ended June 30, 2025 represent the portion of earnings attributable to the economic interest in Flowco LLC held by the Continuing Equity Owners. ASR 268 requires that the carrying amount of the redeemable non-controlling interest is equal to the greater of (1) the carrying value of the redeemable non-controlling interest adjusted each reporting period for income or loss attributable to the redeemable non-controlling interest or (2) the redemption value. The redemption value is calculated based on the arithmetic average of the volume weighted average prices of Class A common stock on the trading day immediately prior to the end of each reporting period. Remeasurements to the redemption value of the redeemable non-controlling interest are performed at each reporting period and any required adjustments are recorded as an allocation between permanent equity and temporary equity within the condensed consolidated balance sheets. The portion of the net income or loss attributable to redeemable non-controlling interest is reported as net income or loss attributable to redeemable non-controlling interests on our condensed consolidated statements of operations.
Rearranged current paragraphs (8)
Current report — wording carried from elsewhere
Additionally, we sell our natural gas systems through intercompany transactions for further use in the Production Solutions segment in addition to sales to our customers. Approximately $17.1 million of intercompany natural gas system sales to the Production Solutions segment was recognized in the three months ended June 30, 2025 as we continued to grow our Production Solutions segment, an increase of approximately $10.9 million in intercompany revenues from approximately $6.2 million in the three months ended June 30, 2024. All intercompany revenues have been eliminated in consolidation.
Current report — wording carried from elsewhere
Revenue – rentals. The primary driver for the increase in average active systems was related to Flogistix’ VRUs that were added to our combined fleet as part of the 2024 Business Combination within the Natural Gas Technologies segment and Estis’ organic growth in its surface equipment rental fleet within the Production Solutions segment. As a result of the 2024 Business Combination, which occurred on June 20, 2024, the six months ended June 30, 2024, rental revenue include only ten operational days of Flogistix. Additionally, the average rental rates for VRUs are generally lower than the average rental rates for surface equipment. Accordingly, the weighted average rental rate of the combined fleet during the six months ended June 30, 2025, is lower than the weighted average rental rate during the six months ended June 30, 2024, which other than the last ten days of the six months ended June 30, 2024, was made up exclusively of surface equipment fleet.
Current report — wording carried from elsewhere
Revenue – sales. Sales revenue was $186.2 million for the six months ended June 30, 2025, an increase of $124.0 million, or 199%, from $62.2 million for the six months ended June 30, 2024. This increase in revenue was primarily due to added revenue streams in the sales revenue category, approximately $122.2 million of downhole components sales and $22.1 million of VRU sales were added to the total sales revenue in the six months ended June 30, 2025 resulting from the 2024 Business Combination, partially offset by a decrease of approximately $20.2 million in natural gas systems sales due to a loss of a major customer.
Current report — wording carried from elsewhere
Additionally, we sell our natural gas systems through intercompany transactions for further use in the Production Solutions segment in addition to sales to our customers. Approximately $26.1 million of intercompany natural gas system sales to the Production Solutions segment was recognized in the six months ended June 30, 2025 as we continued to the growth in our Production Solutions segment, an increase of approximately $6.4 million in intercompany revenues from approximately $19.8 million in the six months ended June 30, 2024. All intercompany revenues have been eliminated in consolidation.
Current report — wording carried from elsewhere
Combination, partially offset by reduced sale volumes and mix of products sold natural gas systems of approximately $16.8 million.
Current report — wording carried from elsewhere
Depreciation and amortization. Depreciation and amortization was $67.3 million for the six months ended June 30, 2025 an increase of $41.4 million, from $25.9 million for the six months ended June 30, 2024. The increase in depreciation expense was primarily due to increased depreciation expense on machinery and equipment and increased amortization expense on intangible assets resulting from the 2024 Business Combination.
Current report — wording carried from elsewhere
Interest expense. Interest expense was $11.8 million in the six months ended June 30, 2025 compared to interest expense of $10.3 million in the six months ended June 30, 2024. This increase in interest expense of $1.5 million was primarily due to increased average borrowings outstanding and higher average interest rates in the six months ended June 30, 2025 compared to the six months ended June 30, 2024.
Current report — wording carried from elsewhere
Provision for income taxes. Provision for income taxes was $6.5 million the six months ended June 30, 2025, an increase of $6.2 million or approximately 2033% increase from the six months ended June 30, 2024. After the consummation of the IPO, we became subject to U.S. federal, state, and local income taxes with respect to our allocable share of taxable income of Flowco Holdings at the prevailing corporate tax rates. The increase in provision for income taxes were due to these income tax obligations that were not present during the six months ended June 30, 2024 as we operated under Flowco LLC, a limited liability company, and was treated as a partnership for income tax purposes. Income tax provision for six months ended June 30, 2025 was $5.5 million. The remaining increase in provision for income taxes of $0.7 million was due to increased Texas margin tax.