Flowco Holdings Inc.

Note 1 - Nature of Operations 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.

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 production lives of oil and gas wells. The Company's core technologies include high pressure gas lift (“HPGL”), conventional gas lift, plunger lift and vapor recovery unit (“VRU”) solutions. As of December 31, 2025, the Company operates a fleet of over 4,600 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 throughtwo 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.

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 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 a result, 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.

As of December 31, 2025, the Company owns 32.4% of economic interests in Flowco LLC.

Business Combination

On June 20, 2024, the Flowco LLC entered into a Contribution Agreement with GEC Estis Holdings LLC (parent company of Estis Compression LLC (“Estis") (“Estis Member”)), Flowco Production Solutions, L.L.C. (“Flowco Member”) and Flogistix Holdings, LLC (“Flogistix Member”) (parent company of Flogistix, LP (“Flogistix”)) (Estis Member, Flowco Member and Flogistix Member collectively, the “Members”), pursuant to which, the Members contributed 100% of the direct equity interests of Estis Intermediate Holdings, LLC (“Estis Intermediate”), Flowco Productions LLC (“Flowco Productions”) and Flogistix Intermediate Holdings, LLC (“Flogistix Intermediate”, collectively with Estis Intermediate and Flowco Productions, referred to as the “Merging Entities”) to the Company in exchange for Series A Units of the Company proportionate to the value of the contributed entities (the “2024 Business Combination”). In connection with the transaction, (i) Estis Member contributed substantially all of its net assets (including membership interests in Estis) to Estis Intermediate immediately prior to the consummation of the 2024 Business Combination and the contribution of the membership interests of Estis Intermediate to the Company, (ii) Flowco Member also contributed substantially all of its net assets to Flowco Productions immediately prior to the consummation of the 2024 Business Combination and the contribution of the membership interests of Flowco Productions to the Company, and (iii) Flogistix Member also contributed substantially all of its net assets (including the equity interests in Flogistix GP, LLC and Flogistix) to Flogistix Intermediate immediately prior to the consummation of the 2024 Business Combination and the contribution of the membership interests of Flogistix Intermediate to the Company.

The 2024 Business Combination was accounted for in accordance with ASC 805, Business Combinations, and Estis Intermediate has been identified as the accounting acquirer and Flowco Productions and Flogistix Intermediate, the acquirees. Additionally, Estis Intermediate has been identified as the predecessor and as such, these financial statements reflect only the historical financial information of Estis Intermediate for any period prior to June 20, 2024. All financial information as of and subsequent to June 20, 2024, reflects that of the Merging Entities, as well as changes in the capital structure and operations of the Company. See Note 2 – Business Combinations for more information.

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:

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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;

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Reduced disclosure obligations regarding executive compensation;

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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;

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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

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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 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 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 accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the U.S. (“US GAAP”).

In connection with the IPO, the Company completed a series of organizational and ownership transactions, as discussed in the reissuance of Item 8 Financial Statements and Supplementary Data on Form 8-K filed with the SEC on February 4, 2026. These transactions were among entities under common control, pursuant to which the Company became a holding company whose principal asset consists of limited liability company interests in Flowco LLC. Following the IPO, the Company became the sole managing member of Flowco LLC and has since controlled its business and affairs, while owning a minority economic interest in Flowco LLC, with the remaining economic interests held by the Continuing Equity Owners.

The IPO resulted in the Company having multiple classes of common stock with differing voting and economic rights and established an organizational structure in which the Company consolidates Flowco LLC for financial reporting purposes. Because the Continuing Equity Owners retained a controlling interest in Flowco LLC following the IPO, and no change in control of Flowco LLC occurred, these consolidated financial statements reflect a continuation of the financial position and results of operations of Flowco LLC. Accordingly, the assets, liabilities, and equity of Flowco Holdings Inc. have been reflected in these consolidated financial statements at the historical carrying amounts of Flowco LLC, consistent with a transaction among entities under common control.

The accompanying consolidated financial statements include the accounts of the Company and its subsidiaries. All significant intercompany transactions and balances have been eliminated upon consolidation.

The accompanying consolidated financial statements contain all adjustments, consisting of only normal recurring adjustments, necessary for a fair statement of financial position as of December 31, 2025 and 2024, and results of operations for the years ended December 31, 2025, 2024 and 2023, and cash flows for the years ended December 31, 2025, 2024 and 2023.

The Company does not have any components of other comprehensive income within its consolidated financial statements, and, therefore, does not separately present a statement of comprehensive income in its consolidated financial statements.

Principles of Consolidation

The accompanying 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. Accordingly, the Company consolidates Flowco LLC and reports redeemable non-controlling interests representing the economic interest in Flowco LLC held by the Continuing Equity Owners.

The redeemable non-controlling interests in the consolidated statements of operations for the year ended December 31, 2025, 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 accompanying consolidated balance sheets as of December 31, 2025, 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 December 31, 2025, the combined economic interest of redeemable non-controlling interests was 67.6%.

Segment Information

The Company operates intwo operating and reporting segments. Operating and reporting segments are determined in accordance with ASC 280, Segment Reporting (“ASC 820”) and are defined as components of an enterprise for which separate financial information is evaluated regularly by the chief operating decision maker (“CODM”) to allocate resources and assess performance. The CODM reviews segment profit or loss as the measure of profitability, which is presented on a reportable segment level for purposes of allocating resources and evaluating operating and financial performance. In addition to segment profit or loss, the CODM also reviews Adjusted EBITDA, a non-US GAAP measure defined as adjusted earnings before income taxes, depreciation and amortization.

The Company operates and manages its business units in the following two operating and reporting segments:

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Production Solutions: relates to rentals, sales and services related to high pressure gas lift, conventional gas lift and plunger lift, including other digital solutions and technologies.

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Natural Gas Technologies: relates to the design and manufacturing for the rental, sales and servicing of vapor recovery and natural gas systems.

For more information regarding segment reporting, see Note 16 - Segment Information.

Use of Estimates

In preparing financial statements in conformity with US 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 liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates used in the preparation of the accompanying consolidated financial statements include but are not limited to the following: revenue recognition; allowance for credit losses; inventory reserve; impairment of goodwill; intangible assets and long-lived assets; share-based compensation; useful lives of property; plant and equipment and intangible assets; and estimation of contingencies. Management believes these estimates and assumptions provide a reasonable basis for the fair presentation of the consolidated financial statements. Actual results could differ from those estimates.

Earnings per Share

Basic earnings per share is computed by dividing net earnings attributable to the Company by the weighted average number of common shares/units outstanding during the period. Diluted earnings per share is computed by dividing net earnings attributable to the Company by the weighted-average share outstanding during the period after adjusting for the impact of securities that would have a dilutive effect on earnings per share.

Earnings per share is presented for the period from after the IPO, January 16, 2025, to December 31, 2025. Prior to the IPO the membership structure consisted of Common Units and Class A Units. Flowco Holdings’ current capital structure is not reflective of the capital structure of Flowco LLC prior to the IPO and the Transactions. Therefore, earnings per share is not calculated for the period from January 1, 2025 to before the IPO and for the years ended December 31, 2024 and 2023.

Revenue Recognition

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

Rental Revenue

Rental revenue is earned from the lease of rental production equipment, consisting principally of compressors. These rental contracts are accounted for as operating leases under the authoritative guidance for leases (“ASC 842”) and rental revenue is recognized as income is earned over the term of the rental agreement.

Our rental contract terms range from month-to-month up to 48 months and are typically billed at a fixed monthly rate while the equipment is in use by the customer. Payment for rentals is typically collected within 15 to 60 days. Monthly agreements are generally cancellable with 30-day notice by the customer.

Upon lease commencement, the Company evaluates the rental agreements to determine if they meet the criteria set forth in ASC 842 for classification as sales-type leases or direct financing leases; if a rental agreement meets none of these criteria, the Company classifies it as an operating lease. Based on the assessment of the lease classification criteria, all rental agreements have been classified as operating leases. As such, the underlying assets remain on our balance sheet within property, plant, and equipment and are depreciated consistently with other owned assets. Rental revenue is recognized on a straight-line basis over the term of the rental and is included in rental revenue in the consolidated statements of operations.

The Company’s rental agreements generally include lease and non-lease components where the timing and pattern of transfer are the same. Non-lease components related to our lease arrangements, such as ongoing monitoring and maintenance services, are performed with the same timing and pattern of transfer for the lease component. Because the pattern of recognition of the non-lease components is the same as that of the lease component, the Company has elected the practical expedient, in accordance with ASC 842, to combine all lease and non-lease components as a single component. The Company has determined that the rental of equipment is the predominant component of the rental agreement and therefore has accounted for these transactions entirely in accordance with ASC 842.

The Company has included several stipulations within its agreements with customers to protect its assets and mitigate risk of loss during the rental period. The primary method is through Company operation of the units including ongoing monitoring and maintenance. Contracts contain a clause for customer liability should any damage or loss to the units occur during customer oversight or operational control. Many contracts include a requirement for customers to insure a small percentage of the asset or pay a premium if they elect not to insure the asset.

Sales Revenue

The Company accounts for sales revenue in accordance with ASU 2014-09, Revenue from Contracts with Customers (“ASC 606”), and all subsequent amendments issued thereafter. Sales revenue is recognized when a customer obtains control of promised goods and is recognized in an amount that reflects the consideration which the entity expects to receive in exchange for those goods. The principles in ASC 606 are applied using a five-step model that includes (1) identifying the contract(s) with a customer, (2) identifying the performance obligations in the contract, (3) determining the transaction price, (4) allocating the transaction price to the performance obligations in the contract, and (5)

recognizing revenue when (or as) the performance obligations are satisfied. ASC 606 also requires disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers.

Sales revenue is measured as the amount of fixed consideration to which we expect to be entitled in exchange for transferring products to our customers. Our contracts with customers typically contain a single performance obligation to provide agreed-upon products. We do not assess whether promised goods are performance obligations if they are immaterial in the context of the contract with the customer. Sales revenue is recognized when our performance obligation is satisfied at a point in time, at the amount we expect to be entitled when control of the products is transferred to our customers.

Payment for sales revenue is typically collected within 15 to 70 days. Since the period between sale of the product and receipt of payment is not expected to exceed one year, we have elected not to calculate or disclose a financing component for our customer contracts. We do not incur any material costs of obtaining contracts. Sales revenue generally does not include right of return or other significant post-delivery obligations.

Below are the three categories of what primarily contributes to the Company’s sales revenue:

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Equipment and compressors. For sales of equipment based on firm purchase orders or sales contacts, sales revenue is recognized when fabrication of the equipment is completed, it is segregated and ready for customer pickup and the customer has been notified. The completion notification includes the invoice for the sale, which represents a right to payment from the customer. At that point, risks and rewards of ownership transfer to the customer per the terms of the contract. Product delivery, including shipping and handling costs associated with outbound freight, is the responsibility of the customer. While the customer is arranging transportation of the equipment, it remains in the Company’s physical possession with a unique customer identification number in a separate location. The Company does not have the contractual right to direct the use of the product or direct it to another customer. The length of time between the completion notification and product delivery typically ranges from 2 to 14 days.

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Oil & gas products and parts. As it relates to the sale of oil & gas products, the Company has a single performance obligation associated with these contracts – the manufacture and sale of the contracted good to the customer. Revenue from the sale of goods is recognized upon satisfaction of the performance obligation, which occurs point-in-time upon transfer of control of the product upon delivery to the customer. The transaction price (i.e., the amount that the Company has the right to under the terms of the sales contract with the customer) is the standalone sales price of each individual good and is typically settled within 30 to 45 days of the satisfaction of the performance obligation. The Company treats shipping and handling activities as a fulfillment activity, and the costs are recognized in cost of sales. With respect to taxes assessed by governmental authorities that are imposed upon sales transactions and collected by the Company from its customers, the Company’s policy is to exclude such amounts from revenues. Payment for sales is typically collected within 15 to 70 days.

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Maintenance and repair services. The Company performs maintenance and repair services for gas lift systems, plunger lift systems, and plunger assisted gas lift systems as well as services related to downhole fluid recovery, spooling, capillary, downhole tool installation and removal and other related activities. As it relates to oil & gas services, the Company has a single performance obligation associated with these contracts – the completion of the contracted service. Revenue from the sale of services is recognized upon satisfaction of the performance obligation, which occurs point-in-time upon completion of the service, which typically occurs within one to three days from the date the services commence. The transaction price for services (i.e., the amount that the Company has the right to under the terms of the service contract with the customer) is the standalone price of each service completed and charged to the customer. The transaction price is typically settled within 30 to 45 days of the satisfaction of the performance obligation. With respect to taxes assessed by governmental authorities that are imposed upon service transactions and collected by the Company from its customer, the Company’s policy is to exclude such amounts from revenues.

Disaggregation of Revenue

The following tables present our third-party revenue from contracts with customers by reportable segment (see Note 15 – Segment Information) and disaggregated by major product and service lines, timing of revenue recognition, and geographical markets for the years ended December 31, 2025, 2024 and 2023 (in thousands):

Customer Concentration

No customer in the Natural Gas Technologies segment accounted for 10% or more of consolidated revenues as of December 31, 2025. One customer in the Natural Gas Technologies segment accounted for approximately 11% and 17% of total consolidated revenues for the years ended December 31, 2024 and 2023, respectively.

No customer in the Production Solutions segment accounted for at least 10% of total consolidated revenues for the years ended December 31, 2025, 2024 and 2023.

Vendor Concentration

No vendor in the Natural Gas Technologies segment accounted for at least 10% of purchases for the years ended December 31, 2025 or 2024. Two vendors in the Natural Gas Technologies segment accounted for approximately 32% of purchases for the year ended December 31, 2023.

No vendor in the Production Solutions segment accounted for at least 10% of purchases for the years ended December 31, 2025, 2024 and 2023, respectively.

Cash and Cash Equivalents

The Company considers all highly liquid investments with a maturity of three months or less at the time of purchase to be cash equivalents. The carrying values of cash and cash equivalents approximate their fair values due to the short-term nature of these instruments. From time to time, the cash balance in the Company’s bank accounts may exceed amounts covered by insurance provided by the U.S. Federal Deposit Insurance Corporation (“FDIC”). Certain subsidiaries of the Company transfer any excess cash to pay down the senior secured revolving credit facility (the “Revolving Credit Facility”), which is then drawn on for cash on an as needed basis. As of December 31, 2025 and 2024, the Company had no cash designated as restricted cash.

Accounts Receivable

Accounts receivable are stated at amounts management expects to collect from outstanding balances. The Company’s accounts receivable are due from customers who rent or purchase products from the Company. The Company then bills its customers in accordance with contractual agreements. Generally, receivables from customers are uncollateralized and unsecured.

The trade accounts receivable is recorded net of an allowance for credit losses. The allowance for credit losses is based upon the amount of losses expected to be incurred in the collection of these accounts pursuant to the guidance outlined in Accounting Standards Update (“ASU”) 2016-13, Financial Instruments – Credit Losses (“ASU 2016-13”, “Topic 326”, or ”ASC 326”). The estimated losses are calculated using the loss rate method based upon a review of outstanding receivables, including specific accounts, related aging, and on historical collection experience based on the invoice due date. These allowances reflect the Company's estimate of the amount of receivables that will be deemed uncollectible based on historical write-off experience and, as applicable, current conditions and reasonable and supportable forecasts that affect collectability. The Company's estimate is subject to change based on evolving circumstances, including factors affecting the economy or in the circumstances of individual customers. In addition, specific accounts are written off against the allowance when management determines the account is uncollectible.

The balance of allowance for credit losses amounted to$1.1 million and$1.2 million as of December 31, 2025 and 2024, respectively.

The following table summarizes the change in the accounts receivable allowance for credit losses for the periods presented (in thousands):

The following table provides information about accounts receivable and contract liabilities from contracts with customers (in thousands):

Contract liabilities represent consideration received or consideration which is unconditionally due from customers prior to transferring goods or services to the customer under the terms of the contract and is included within deferred revenue in the accompanying consolidated balance sheets.

The following table presents a reconciliation of contract liabilities (in thousands):

The Company does not disclose the aggregate transaction price for remaining performance obligations, generally because either the revenue from the satisfaction of the performance obligations is recognized in the amount invoiced or the original expected duration of the contract is one year or less.

Inventory

Inventory is composed principally of artificial lift products and the associated parts and materials necessary to construct these products as well as natural gas compressors to be sold and the associated parts and materials used to construct, repair and maintain these products. Inventory is valued at the lower of cost or net realizable value. Production Solutions inventory is measured using the first in, first out (“FIFO”) costing method and average costing method. Natural Gas Technologies inventory is measured using the average costing method, which is based on historical purchases at an individual item level. The cost of fabrication of compressor packages, including labor and shop overhead, is charged to cost of sales during the period in which revenue from sale of such equipment is recognized.

The Company regularly reviews inventory quantities on hand and records provisions for excess or obsolete inventory based primarily on historical usage, estimated product demand, market conditions and technological developments.

During the years ended December 31, 2025 and 2024 and 2023, the Company recorded charges of$1.8 million,$1.8 million and$2.5 million respectively, to write down slow moving inventory, perform cost adjustments and physical adjustments. These charges are included within cost of sales in the accompanying consolidated statements of operations.

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 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 are as follows:

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.

Impairment of Long-Lived Assets

Long-lived assets held and used by the Company are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset group may not be recoverable. For purposes of evaluating the recoverability of long-lived assets, the recoverability test is performed using undiscounted future net cash flows of assets grouped at the lowest level for which there are identifiable cash flows that are independent of the cash flows of other groups of assets. If the undiscounted future net cash flows are less than the carrying amount of the asset, the asset is deemed impaired. The amount of the impairment is measured as the difference between carrying value and the fair value of the asset. The Company concluded that there were no indicators evident or other circumstances present that these assets were not recoverable and accordingly, no impairment charges of long-lived assets were recognized during the years ended December 31, 2025, 2024 and 2023.

Internally Developed Software

Certain direct development costs associated with internally developed software are capitalized. Costs incurred during the preliminary project stage for internal software programs are expensed as incurred, whereas costs incurred during the development stage of new software and for upgrades and enhancements for existing software programs that result in additional functionality are capitalized. Subsequent to capitalization, internally developed software is amortized over its estimated useful life through depreciation and amortization on the statement of operations. Impairment charges are taken as a result of circumstances that indicate that the carrying values of the assets are not fully recoverable.

Leases

The Company accounts for leases in accordance with ASC 842. The Company determines if an arrangement is a lease at inception of the arrangement and classifies it as an operating lease or finance lease. A right-of-use (“ROU”) asset (the right to use the leased item) and a financial liability to make lease payments are recognized at inception of the lease.

ROU assets are initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payment made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located, less any lease incentives received. The lease liability is based on the present value of unpaid lease payments over the lease term, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Company’s incremental borrowing rate.

Contracts may contain both lease and non-lease components. To the extent applicable, the Company allocates the consideration in the contract to the lease and non-lease components based on their relative stand-alone prices. However, for leases of real property for which the Company is a lessee, it has elected not to separate lease and non-lease components and instead accounts for these as a single lease component. As a policy election, the Company elected to not include leases equal to or less than 12 months on the accompanying consolidated balance sheet.

The two components of operating lease expense, amortization and interest, are recognized on a straight-line basis over the lease term as a single expense element within depreciation and amortization on the consolidated statements of operations. For finance leases, interest on the accrued lease liability is recognized in interest expense, and amortization of ROU assets are recognized on the accompanying consolidated statements of operations within depreciation and amortization.

Goodwill

The Company evaluates goodwill for impairment at least annually at the reporting unit level. A reporting unit is the operating segment, or one level below that operating segment (the component level) if discrete financial information is prepared and regularly reviewed by segment management. However, components are aggregated as a single reporting unit if they have similar economic characteristics. For the purpose of impairment testing, goodwill acquired in a business combination is allocated to each of the Company’s reporting units that are expected to benefit from the combination. The Company evaluates changes in its reporting structure to assess whether that change impacts the composition of one or more of its reporting units. If the composition of the Company’s reporting units’ changes, goodwill is reassigned between reporting units using the relative fair value allocation approach.

The Company performs its annual impairment test of goodwill on December 31, unless events or changes in circumstances indicate an impairment may have occurred before that time. As part of its goodwill impairment test, the Company may first assess qualitative factors (including macroeconomic conditions, industry, and market considerations, cost factors and overall financial performance) to determine whether it is more likely than not that the fair value of each of the Company's reporting units with goodwill was less than its carrying amount. If further testing is necessary or a quantitative test is elected, the Company performs a Step 1 analysis for goodwill impairment. In a Step 1 analysis, the Company considers the market approach, the income approach, or a combination of both. Under the market approach, the fair value of the reporting unit is based on quoted market prices of companies comparable to the reporting unit being valued. Under the income approach, the fair value of the reporting unit is based on the present value of estimated cash flows. The income approach is dependent on a number of significant management assumptions, including estimated future revenue growth rates, gross margin on sales, operating margins, capital expenditures, tax rates and discount rates.

If the carrying amount of the reporting unit exceeds the calculated fair value, an impairment charge is recognized in an amount equal to that excess, limited to the total amount of goodwill allocated to that reporting unit. Additionally, the Company considers the income tax effect from any tax-deductible goodwill on the carrying amount of the reporting unit, if applicable, when measuring the goodwill impairment charge.

The Company assessed qualitative factors described above and concluded that there wasno impairment of goodwill in 2025, 2024 or 2023.

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 include customer relationships, developed technology and trade name assets which are amortized using the straight-line method over their respective estimated useful lives below:

The Company reviews intangible assets subject to amortization at the relevant asset group level for impairment when circumstances indicate that the carrying amount of an intangible asset is not recoverable and its carrying value exceeds its fair value.

Amortization of intangible assets is included in depreciation and amortization in the accompanying consolidated statements of operations. The Company recordedno impairment of intangible assets during 2025, 2024 or 2023.

Income Taxes

The Company is subject to U.S. federal, state, and local income taxes with respect to its allocable share of taxable income of Flowco LLC, which is assessed at the prevailing corporate tax rates. Flowco LLC operates as a limited liability company and is treated as a partnership for income tax purposes. Accordingly, Flowco LLC does not incur significant liability for federal taxes since the taxable income or loss is passed through to its members. Flowco LLC incurs liabilities for certain state taxes payable directly by it, primarily related to Texas margin tax, which are not significant and for which the expense is included in the provision for income taxes in the accompanying consolidated statements of operations for the years ended December 31, 2025, 2024 and 2023.

The Company accounts for income taxes under the asset and liability method, and deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying values of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. The Company recognizes deferred tax assets to the extent that it believes these assets are more likely than not to be realized. In making such a determination, the Company considers all positive and negative evidence, including but not limited to future reversals of existing taxable temporary differences, projected future taxable income, tax planning strategies and recent results of operations. A valuation allowance is provided if it is determined that it is more likely than not that the deferred tax asset will not be realized.

The Company evaluates and accounts for uncertain tax positions using a two-step approach. Recognition (step one) occurs when the Company concludes that a tax position, based solely on its technical merits, is more likely than not to be sustainable upon examination. Measurement (step two) determines the amount of benefit that is greater than 50% likely to be realized upon ultimate settlement with a taxing authority that has full knowledge of all relevant information. Derecognition of a tax position that was previously recognized would occur when the Company subsequently determines that a tax position no longer meets the more likely-than-not threshold of being sustained. The Company didnot have any uncertain tax position as of December 31, 2025.

Tax Receivable Agreement

In connection with the IPO, the Company entered into a tax receivable agreement (“TRA”) with Flowco LLC and the Continuing Equity Owners whereby the Company agreed to pay to such Continuing Equity Owners 85% of the benefits that the Company realizes, or is deemed to realize, as a result of the Company’s allocable share of existing tax basis acquired in the IPO, increases in the Company’s share of existing tax basis and adjustments to the tax basis of the assets of Flowco LLC as a result of sales or exchanges of Common Units, and certain other tax benefits related to entering into the TRA.

Actual tax benefits realized by the Company may differ from tax benefits calculated under the TRA as a result of the use of certain assumptions in the TRA, including the use of an assumed weighted-average state and local income tax rate to calculate tax benefits. Payments to be made under the tax receivable agreement will depend upon a number of factors, including the timing and amount of our future income.

The Company accounts for amounts payable under the TRA in accordance with ASC Topic 450, Contingencies (“ASC 450”). As such, subsequent changes in the value of the tax receivable agreement liability between reporting periods are recognized in the statement of operations. See Note 9 – Income Taxes and Tax Receivable Agreement, for additional information on the TRA.

Stock-Based Compensation

The Company accounts for stock-based compensation in accordance with ASC 718, Compensation – Stock Compensation (“ASC 718”). Compensation costs associated with the Company’s stock-based compensation is measured at the grant-date fair value and is estimated based on the Company’s Class A common stock. The Company accounts for forfeitures when they occur, and any compensation expense previously recognized on unvested RSUs will be reversed upon forfeiture. See Note 12 – Stock-based Compensation, for addition information on the Company’s stock-based compensation plans and awards.

Fair Value Measurements

The Company uses valuation approaches that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible. A three-tiered hierarchy is established as a basis for considering such assumptions and for inputs used in the valuation methodologies in measuring fair value. This hierarchy requires that the Company use observable market data, when available, and minimize the use of unobservable inputs when determining fair value:

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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.

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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.

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

Recently Adopted Accounting Standards

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which requires disclosure of disaggregated income taxes paid, prescribes standard categories for the components of the effective tax rate reconciliation, and modifies other income tax-related disclosures. ASU 2023-09 is effective for public business entities for fiscal years beginning after December 15, 2024 and December 15, 2025 for all other entities, including EGC companies that elected to use the extended transition period. ASU 2023-09 may be applied prospectively or retrospectively, and allows for early adoption. The Company adopted ASU 2023-09 on

January 1. 2025 for the year ended December 31, 2025, and included the required disclosures in Note 9 – Income Taxes and Tax Receivable Agreement.

In November 2023, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which improves reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. The amendments in this update enhance annual and interim disclosure requirements, determine significant segment expense, clarify circumstances in which an entity can disclose multiple segment measures of profit or loss, provide new segment disclosure requirements for entities with a single reportable segment, and contain other disclosure requirements. This update is effective for annual periods beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024. Theadoption of this standarddid not have a material effect on the Company's consolidated financial statements, other than the newly required disclosures. See Note 16 – Segment Information for significant expense categories and amounts for each reportable segment that are reviewed by the CODM.

Recently Issued Accounting Standards Not Yet Adopted

In March 2024, FASB issued ASU No. 2024-01, Compensation- Stock Compensation (Topic 718): Scope Application of Profits Interest and Similar Awards. ASU 2024-01 provides an illustrative example that includes four fact patterns to demonstrate how an entity should apply the scope guidance in paragraph 718-10-15-3 to determine whether a profits interest award should be accounted for in accordance with Topic 718. ASU 2024-01 is effective for public business entities for fiscal years beginning after December 15, 2024 and December 15, 2025 for all other entities. As the Company has elected to use the extended transition period for complying with new or revised accounting standards, this update does not become effective for the Company until fiscal years beginning after December 31,2025. As such, the Company is currently evaluating the impact of ASU 2024-01 on its consolidated financial statements and related disclosures.

In November 2024, the FASB issued ASU 2024-03, Income Statement – Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation 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 does not expect the adoption of ASU 2024-03 to have a material impact on its consolidated financial statements.

In September 2025, the FASB issued ASU 2025-06, Intangibles - Goodwill and Other - Internal-Use Software. The targeted improvements in this update aim 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. Early adoption is permitted. The Company is evaluating the impact of this standard on its consolidated financial statements.

Note 2 – Business Combinations and Asset Acquisition

2024 Business Combination

On June 20, 2024, the 2024 Business Combination was completed and accounted for using the acquisition method for business combination pursuant to ASC 805. The results of operations are included in the accompanying consolidated statements of operations from the date of the acquisition. Under the acquisition method of accounting, the assets and liabilities have been recorded at their respective estimated fair values as of the date of closing and reported into the accompanying consolidated balance sheets. Determining the fair value of acquired assets and liabilities assumed requires management’s judgment and the use of independent valuation specialists.

The carrying amounts of cash and cash equivalents, and other net working capital accounts approximated their fair values due to their nature or the short-term maturity of instruments. The acquired debt was determined to approximate fair value as the terms were commensurate with current market terms. The acquired leases were accounted for in accordance with ASC 842. The fair value of the intangible assets acquired was determined using variations of the income approach that utilizes unobservable inputs classified as Level 3 measurements.

The total purchase price for the 2024 Business Combination was $854.6 million consisting of $399.8 million relating to Flogistix and $454.8 million relating to Flowco Productions. The value of the consideration was equivalent to the enterprise value of the underlying businesses which were determined using the guideline public company method market approach. Goodwill was recognized as the excess of consideration over the net assets acquired of Flowco Productions and Flogistix and represented the value derived from the assembled workforce, established processes, and expected future market growth. In the fourth quarter ended December 31, 2024, the Company identified an adjustment to the fair value of the acquired intangible assets resulting in a decrease to the fair value of goodwill of $17.8 million and $3.0 million for Flogistix and Flowco Productions, respectively, with a corresponding increase to the intangible assets related to the respective entities. These adjustment were not considered measurement period adjustments.

As of December 31, 2025, the fair value allocation was final, with no measurement period adjustment made to the account balances recorded at the acquisition date. The following table presents the consideration transferred and fair value of Flogistix assets acquired and liabilities assumed in accordance with ASC 805 (in thousands):

The following table presents the consideration transferred and fair value of Flowco Productions assets acquired and liabilities assumed in accordance with ASC 805 (in thousands):

Identifiable intangible assets and their amortization periods were estimated as follows (in thousands):

$66.3 million of Flogistix goodwill was recognized within the Natural Gas Technology segment and $179.9 million of Flowco Productions goodwill was recognized within the Productions Solutions segment in the consolidated balance sheet. The Company determined the useful life of the customer relationships using a form of the income approach referred to as excess earnings method. This approach is based on forecasted revenue expected from the acquired customers, accounting for the loss of customers over time. The Company determined the useful life of the trade name based on anticipated future use of the trade name and industry norms. The Company determined the useful life of the developed technology on the basis of the obsolescence factor and long-term projections for U.S. gross domestic product (“GDP”) and consumer price index (“CPI”) and the understanding of the current and expected future state of the technology.

The following table (in thousands) presents certain unaudited pro forma financial information for the years ended December 31, 2024 and 2023, as if the 2024 Business Combination had been completed on January 1, 2023. Net Sales and net income of Flogistix in the historical consolidated statements of operations for the period from June 20, 2024 to December 31, 2024 were $125.7 million and $18.4 million, respectively. Net Sales and net income of Flowco

Productions in the historical consolidated statements of operations for the period from June 20, 2024 to December 31, 2024 were $135.5 million and $4.6 million, respectively. These unaudited pro forma results may not necessarily reflect the actual results of operations that would have been achieved, nor are they necessarily indicative of future results of operations. The unaudited pro forma information reflects adjustments for depreciation and amortization resulting from the fair value step-up of property, plant and equipment and the intangible assets acquired, recognition of incremental costs due to the fair value step-up for inventory acquired, and the reduction in interest expense from elimination of deferred financing costs.

Other Business Combination

On October 25, 2024, the Company completed the acquisition of 100% of the equity interests in an oilfield services company located in Midland, Texas, for a total purchase price of $7.0 million. This acquisition consists primarily of machinery and equipment and certain intangible assets related to customer relationships contract and intellectual property. This acquisition is complementary to the Company's existing oilfield service presence already in the area and provides additional service capacity in a region where producers are actively drilling for crude oil and natural gas.

This acquisition was accounted for as a business combination which, among other things, requires assets acquired and liabilities assumed to be measured at their acquisition date fair values. The agreement also contained a contingent liability in the form of an earnout arrangement whereby the Company is contractually obligated to pay the seller if certain operating conditions are met. This contingent liability has been included as part of the consideration given up at the closing of this acquisition. The excess of consideration given up over the net fair values was recorded to goodwill. As of December 31, 2025, the earnout arrangement had been paid in full and the contingent liability was fully released from the accompanying consolidated financial statements.

The table below presents the final purchase price and assessment of the fair value of the assets acquired (in thousands). There wasno measurement period adjustment made to the account balances recorded at the acquisition date.

Property, plant and equipment recognized in the above acquisition are primarily related to vehicles and trailers. The net book value was assumed to be the fair value for these acquired property, plant and equipment.

Identifiable intangible assets recognized in the above acquisition are primarily related to oilfield services contracts, non-compete agreements and customer relationships. The basis for determining the fair value of these intangible assets is the estimated future net cash flows expected to be generated from the acquired agreements and customer relationships. The intangibles acquired in this acquisition are being amortized on a straight-line basis over an initialsix-year period for the acquired customer relationships andthree-year period for the acquired non-compete agreements and other contracts.

Revenues and earnings related to this acquisition are included within the consolidated statements of operations since the acquisition date and are not considered to be material for separate disclosure. Supplemental pro forma revenue and earnings reflecting this acquisition as if it had been completed on January 1, 2023, are not materially different from the information presented in the accompanying consolidated statement of operations and are, therefore, not presented.

Asset Acquisition

On July 1, 2025, the Company entered into an asset purchase agreement with Archrock, Inc. (“Archrock”), pursuant to which the Company acquired certain HPGL and VRU systems, related intangible assets, and a small amount of inventory, for cash consideration of $71.0 million. The Company completed this transaction on August 1, 2025 and accounted for this transaction as an asset acquisition, 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):

Note 3 – Inventory

Inventory consists of the following as of December 31, 2025 and 2024 (in thousands):

Note 4 – Property, plant and equipment

Property, plant and equipment consist of the following as of December 31, 2025 and 2024 (in thousands):

The Company’s rental fleet included in machinery and equipment above was$1.0 billion (approximately$735.4 million, net of accumulated depreciation) as of December 31, 2025 and was$799.5 million (approximately$620.0 million, net of accumulated depreciation) as of December 31, 2024.

Depreciation expenses during 2025, 2024 and 2023 were approximately$101.0 million,$67.5 million and$40.2 million, respectively.

Note 5 – Leases

The Company has operating leases related to office space and manufacturing facilities. The Company has finance leases related to vehicles, tractors, and trailers. The Company’s office space leases have a remaining lease term ofthree to 87 months as of December 31, 2025. The Company’s finance leases have remaining lease terms ranging fromone to 84 months as of December 31, 2025. Certain leases include one or more options to renew, with renewal terms that can extend the lease term fromone toseven years. The exercise of lease renewal options is typically at our discretion. The measurement of the lease term includes options to extend or renew the lease when it is reasonably certain that we will exercise those options.

Lease terms are negotiated on an individual basis and may contain a wide range of different terms and conditions. The lease agreements do not impose any covenants other than the security interests in the leased assets that are held by the lessor. Leased assets may not be used as security for borrowing purposes.

Leases are recognized as a right-of-use asset and a corresponding liability at the date at which the leased asset is available for use by the Company.

Amounts recognized in the consolidated balance sheet

The consolidated balance sheets consist of the following amounts relating to operating and finance leases (in thousands):

Additions to operating right-of-use assets during 2025 and 2024 were approximately$5.3 million and$5.5 million, respectively. Disposals to operating right-of-use assets during 2025 and 2024 were approximately$4.2 million and$0.6 million, respectively.

Additions to finance right-of-use assets during 2025 and 2024 were approximately$17.9 million and$8.4 million, respectively. Disposals to finance right-of-use assets during 2025 and 2024 were approximately$5.1 million and$0.1 million, respectively.

The weighted average lessee’s incremental borrowing rate applied to the operating and finance lease liabilities on December 31, 2025 was 6.6% and 6.9%, respectively. The weighted average lessee's incremental borrowing rate applied to the operating and finance lease liabilities on December 31, 2024 was 6.7% and 8.0%, respectively. The weighted average remaining lease term for operating and finance lease on December 31, 2025 was 2.80 years and 2.68 years, respectively. The weighted average remaining lease term for operating and finance lease on December 31, 2024 was 3.77 years and 2.10 years, respectively.

Amounts recognized in the consolidated statement of operations

The consolidated statements of operations consist of the following amounts relating to leases (in thousands):

The below table shows the total cash outflows for leases for the periods presented (in thousands):

The table below reconciles the undiscounted future minimum operating and finance lease payments to the operating and finance lease liabilities recorded on the balance sheet as of December 31, 2025 (in thousands):

Lessor Accounting

Rental agreements are for the rental of our compressor units to customers. Rental revenue for the years ended December 31, 2025, 2024 and 2023 were approximately $418.0 million,$276.7 million, and$168.8 million, respectively. Revenue related to these rental agreements is reflected as rental revenue in the consolidated statements of operations.

Scheduled future minimum lease payments to be received by the Company as of December 31, 2025 for each of the next five years is as follows (in thousands):

Note 6 – Goodwill and Intangible Assets

The following table summarizes the activity in goodwill balance for periods presented below (in thousands):

Intangible assets, net, consist of the following as of December 31, 2025 and 2024 (in thousands):

Amortization expense totaled$31.7 million, $17.2 million and $2.1 million for the years ended December 31, 2025, 2024 and 2023, respectively.

As of December 31, 2025, the weighted average remaining useful lives for the Company's intangible assets are as follows:

Amortization expense is classified in operating expenses on the accompanying consolidated statements of operations. Estimated future amortization expense as of December 31, 2025 for each of the next five years and thereafter is as follows (in thousands):

Note 7 – Accrued Liabilities

Accrued liabilities as of December 31, 2025 and 2024, are summarized as follows (in thousands):

Accrued taxes consist of amounts owed for obligations under sales & use tax arrangements, property taxes and applicable state income taxes.

Note 8 – Long-Term Debt

Long-term debt consists of the following as of December 31, 2025 and 2024 (in thousands):

Revolving Credit Facility

On August 20, 2024, Flowco LLC and its subsidiaries (the “Borrowers”) entered into a credit agreement (the “Credit

Agreement”), which provided for an initial $700 million, five-year senior secured revolving credit facility (the “Revolving Credit Facility”). The Credit Facility modifies the Estis’ legacy credit agreement, and settled all outstanding indebtedness under the then existing agreements. The Credit Agreement was further amended on November 27, 2024, pursuant to which the aggregate revolving commitment was increased to $725.0 million. The Company has the ability to request the issuance of letters of credit under the Revolving Credit Facility in an aggregate amount of up to $20 million. As of December 31, 2025, the Company had$0.5 million of outstanding letters of credit. The Company also has the ability to borrow swingline loans under the Revolving Credit Facility in an aggregate principal amount of up to $50 million.

The Revolving Credit Facility matures on August 20, 2029, and can be used for working capital, capital expenditures, and acquisitions.

The borrowing base is determined by eligible accounts receivable, inventory, and equipment values, subject to reserves. Borrowing availability depends on the lesser of the aggregate revolving commitment or borrowing base, minus outstanding loans and letters of credit. Borrowings can be based on either an alternate base rate (“ABR”) or a term SOFR rate, with interest margins ranging from 0.75% to 2.50%, depending on the total leverage ratio.

As of December 31, 2025, the Company had$167.8 million in borrowings outstanding under the Revolving Credit Facility at the Term SOFR rate of 3.97% and applicable margin of 1.75%, for an all-in rate of 5.72%.

As of December 31, 2024, the Company had$635.9 million in borrowings outstanding under the Revolving Credit Facility at the Term SOFR rate of 4.65% and applicable margin of 1.75%, for an all-in rate of 6.40%.

In addition, the Revolving Credit Facility contains financial covenants with respect to minimum interest coverage ratio and maximum total leverage ratio, as detailed below.

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The Borrowers will not permit the Interest Coverage Ratio (as defined in the Credit Agreement), as of the end of any calendar quarter commencing with the calendar quarter ending December 31, 2024, to be less than 2.50 to 1.00; and

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The Borrowers will not permit the Total Leverage Ratio (as defined in the Credit Agreement), as of the end of any calendar quarter commencing with the calendar quarter ending December 31, 2024, to be greater than 3.50 to 1.00.

The Borrowers are in compliance with all covenants as of and for the year ended December 31, 2025.

The debt issuance costs are being amortized to interest expense over the life of the Revolving Credit Facility. Unamortized debt issuance costs are included in other assets in the accompanying consolidated balance sheets. For the years ended December 31, 2025 and 2024, the Company recorded$18.9 million and$32.3 million of interest expense related to the Revolving Credit Facility.

The schedule of future maturities of long-term debt as of December 31, 2025, consists of the following (in thousands):

Note 9 – Income Taxes and Tax Receivable Agreement

Income Tax Provision and Rate

The Company is organized as a corporation for income tax purposes and is subject to federal, state and local taxes on its income, which is primarily sourced from its membership interest in Flowco LLC held for any given reporting period. Flowco LLC is a partnership for U.S. federal and state income tax purposes and is considered as a pass-through entity. As such, its net taxable income and related tax credits, if any, are passed through to its members and included in the members' tax returns. The income or losses attributable to the non-controlling interest holders are not included in the Company’s federal or state income tax returns. Consequently, the tax effects of the redeemable non-controlling interests are reflected as a permanent difference in the Company’s effective tax rate reconciliation.

For the period from January 16, 2025, to December 31, 2025, the Company made federal income tax estimated payments of $5.1 million.

The components of the provision for income taxes for the period presented are as follows (in thousands):

The reconciliation of our effective income tax rates to the U.S. Federal income tax rate for the period presented is as follows (in thousands except for percentages):

(1) State taxes in Texas made up the majority of the tax effect in this category.

As the Company had no business transactions or activities prior to the IPO, no income taxes were incurred for the period from January 1, 2025, to January 15, 2025. For the period from January 16, 2025, to December 31, 2025, the Company recorded a federal income tax provision of less than $0.1 million, which consist of$1.6 million of Texas margin tax, netted with $2.4 million income tax benefit. As a result, the Company’s effective tax rate was less than 1% for the period from January 16, 2025, to December 31, 2025.

Deferred Taxes

Deferred income taxes are provided for the temporary differences between the financial reporting basis and the tax basis of our assets and liabilities. The carrying value of the net deferred tax assets is based on management’s judgments using certain estimates and assumptions that we will be able to generate sufficient future taxable income in certain tax jurisdictions to realize the benefits of such assets. The components of our net deferred tax assets for the period presented are as follows (in thousands):

IPO, the Transactions and Tax Receivable Agreement

In connection with the IPO, the Company recorded a net deferred tax asset of $12.4 million related to (i) the difference between the book and tax basis of its investment in Flowco LLC of $10.0 million, net of $13.7 million of valuation allowance and (ii) $2.4 million net operating loss obtained from the purchase of 5,251,620 LLC Interests from the Continuing Equity Owners discussed in Note 1 - Nature of Organization and Background, which is expected to be amortized over the useful lives of the underlying assets. The Company established a valuation allowance on its deferred tax assets when it believes it is more likely than not that all or a portion of these deferred tax assets will not be realized. In making such a determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax planning strategies and recent results of operations.

The initial deferred tax asset of $26.1 million and the related valuation allowance of $13.7 million, for a net asset of $12.4 million was recorded as additional paid-in capital in the Consolidated Balance Sheets. Additionally, and concurrent with the Transactions, the Company recorded a payable pursuant to the TRA of $12.5 million and a corresponding reduction to additional paid-in capital. The net impact to additional paid-in capital was a reduction of $0.1 million and is presented within the Company’s consolidated statements of stockholders’/members’ equity.

In connection with the IPO and the Transactions, the Company entered into the TRA with the Continuing Equity Owners that provides for the payment by the Company to such the Continuing Equity Owners of 85% of the benefits, that the Company realizes, or is deemed to realize, as a result of (i) future redemptions funded by the Company or exchanges of Common Units of Flowco LLC for the Company’s Class A common stock, and (ii) the Company’s allocable share of existing tax basis acquired in its IPO and other tax benefits related to entering into the TRA.

During the year ended December 31, 2025, the Company acquired an aggregate of 4,260,059 Common Units of Flowco LLC in connection with the redemption of Common Units of Flowco LLC from the Continuing Equity Owners, which resulted in an increase in the tax basis of the Company’s investment in Flowco LLC, subject to the provisions of the TRA. As a result of these exchanges, during the year ended December 31, 2025, the Company recognized an increase to its deferred tax assets (net of valuation allowance) in the amount of $0.4 million, and corresponding TRA liabilities of $8.8 million, representing 85% of the tax benefits due to the Continuing Equity Owners.

As of December 31, 2025, the total amount due under the TRA was$22.0 million and the Company has yet to make its first TRA payment.

Note 10 – Stockholders’/Members’ Equity and Redeemable Non-Controlling Interests

Equity Structure Prior to the IPO

Prior to the IPO, members’ equity was inclusive of additional paid-in capital and retained earnings of Flowco LLC. The capital structure of Flowco LLC consisted of only one class of limited partnership interests, Class A units. As of December 31, 2024 and as of January 15, 2025, Flowco LLC had 10,000,000 Class A units outstanding.

Current Equity Structure Post IPO

The following table summarizes the capitalization and voting rights of the Company’s classes of stock as of December 31, 2025:

The Company’s board of directors (“Board of Directors”) is authorized to direct the Company to issue shares of preferred stock in one or more series and, its discretion, to determine the number and designation of such series and the powers, rights, preferences, privileges and restrictions, including voting rights, dividend rights, conversion rights, redemption privileges and liquidation preferences, of each series of preferred stock. As of December 31, 2025, no series of preferred stock have been issued.

Holders of shares of Class A common stock are entitled to receive dividends when and if declared by the Board of Directors out of funds legally available therefore, subject to any statutory or contractual restrictions on the payment of dividends and to any restrictions on the payment of dividends imposed by the terms of any outstanding preferred stock. Upon dissolution or liquidation, after payment in full of all amounts required to be paid to creditors and to the holders of preferred stock having liquidation preferences, if any, the holders of shares of Class A common stock will be entitled to receive pro rata the remaining assets available for distribution. Holders of shares of Class A common stock do not have preemptive, subscription, redemption, or conversion rights. There are no redemption or sinking fund provisions applicable to the Class A common stock.

Except in certain limited circumstances, holders of Class B common stock do not have any right to receive dividends or to receive a distribution upon dissolution or liquidation. Additionally, holders of shares of Class B common stock do not have preemptive, subscription or redemption rights. There are no redemption or sinking fund provisions applicable to the Class B common stock. Any amendment of the Company’s amended and restated certificate of incorporation that gives holders of Class B common stock (1) any rights to receive dividends or any other kind of distribution, (2) any right to convert into or be exchanged for shares of Class A common stock, or (3) any other economic rights (except for payments in cash-in-lieu of receipt of fractional stock) will require, in addition to any stockholder approval required by applicable law, the affirmative vote of holders of a majority of the voting power of the outstanding shares of Class A common stock voting separately as a class. The Company must, at all times, maintain (i) a one-to-one ratio between the number of shares of Class A common stock issued by the Company and the number of LLC Interests owned by the Company, and (ii) maintain a one-to-one ratio between the number of shares of Class B common stock owned by the Continuing Equity Owners and the number of LLC Interests owned by such Continuing Equity Owners.

Shares of Class B common stock will be issued in the future only to the extent necessary to maintain a one-to-one ratio between the number of LLC Interests held by the Continuing Equity Owners and the number of shares of Class B common stock issued to the Continuing Equity Owners. Although shares of Class B common stock are not redeemable, shares of Class B common stock are automatically transferred to the Company (on a one-for-one basis) upon any redemption or exchange of the related LLC Interests pursuant to the terms of the Flowco LLC Agreement and such shares of Class B common stock will be canceled and may not be reissued. Only permitted transferees of LLC Interests held by the Continuing Equity Owners will be permitted transferees of Class B common stock.

The LLC Interests held by Continuing Equity Owners include a redemption right which may be settled by the Company, through the (1) issuance of a new share of Class A common stock for each LLC Interest redeemed or (2) settled by cash proceeds received from a qualifying offering of Class A common stock. The LLC Interests are classified as temporary equity as the cash settlements are not at the sole discretion of the Company.

Redemptions of LLC Interests

During the year ended December 31, 2025, certain Continuing Equity Owners redeemed 4,260,059 of their Common Units of Flowco LLC, along with their corresponding shares of Class B common stock, in exchange for an equal number of shares of Class A common stock. Simultaneously, and in connection with these exchanges and redemptions, the Company canceled the exchanged shares of Class B common stock. As a result, the exchanged and redeemed LLC Interests are now considered to be within the control of the Company for accounting purposes, and the redeemable non-controlling interest associated with these redeemed shares was reclassified from temporary equity to permanent equity in theyear ended December 31, 2025.

As of December 31, 2025, the Company holds a 32.4% economic interest in Flowco LLC through its ownership of 29,091,960 LLC Interests but consolidates Flowco LLC as sole managing member. The remaining 60,562,983 LLC Interests representing a 67.6% interest are held by the Continuing Equity Owners.

Share Repurchase Program

On June 11, 2025, the 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 the Company 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.

During the year ended December 31, 2025, the Company repurchased 953,229 shares of Class A common stock under the Repurchase Program at an average price of $15.72 per share for a total cost of$15.0 million inclusive of commissions and fees. Accrued excise taxes from these repurchases were$0.2 million and is included within accrued expenses in the accompanying consolidated balance sheets. As of December 31, 2025, all repurchased shares had been canceled and retired, resulting in a permanent reduction in both the number of shares outstanding and the Company’s total stockholders’ equity.

As of December 31, 2025, the remaining total available authorization under the Repurchase Program was approximately $35.0 million.

On September 26, 2025, the Company executed a 10b5-1 repurchase plan agreement (the “Repurchase Plan Agreement”) with a third-party financial institution (the “Agent”) granting the Agent the authority to execute open-market repurchases on behalf of the Company, up to the daily volume limit permitted under Rule 10b-18 of the Securities Exchange Act of 1934. There wereno shares repurchased under the Repurchase Plan Agreement during theyear ended December 31, 2025. The Repurchase Plan Agreement commenced on November 6, 2025 and terminated at the close of business on February 6, 2026. The Repurchase Plan Agreement had a maximum authorized amount of $15.0 million. Management did not renew the Repurchase Plan Agreement upon its expiration on February 6, 2026.

Redeemable Non-Controlling Interests

After the IPO, the Company became the sole managing member of Flowco LLC, and has the sole voting interest in, and control of the management of, Flowco LLC. As a result, the Company consolidates the financial results of Flowco LLC. The redeemable non-controlling interests on the accompanying consolidated balance sheets represents the economic interest in Flowco LLC held by the Continuing Equity Owners, adjusted to equal the greater of (i) 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 (ii) 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 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 non-controlling interests on our consolidated statements of operations.

The ownership of the LLC Interests as of December 31, 2025 and 2024, is summarized as follows:

Distributions to Members

As a limited liability company treated as a partnership for income tax purposes, Flowco LLC does not incur significant federal, state or local income taxes, as these taxes are primarily the obligations of its members. Under the LLC Agreement, Flowco LLC is required to distribute cash, to the extent that Flowco LLC has cash available, on a pro rata basis to its members, including the Company, to the extent necessary to cover the Company’s tax liabilities, if any, with respect to each member’s share of Flowco LLC’s taxable earnings. Additionally, the Company may also, from time to time, make supplemental tax distributions to the extent a member, other than the Company, has an assumed tax liability in excess of the distributions made; however, these supplemental distributions must be made on a pro rata basis to all members, including the Company.

During the year ended December 31, 2025, Flowco LLC made total distributions of approximately$28.5 million and$12.1 million to the Continuing Equity Owners and the Company, respectively.

Note 11 – Earnings Per Share

Basic earnings per share is computed by dividing net income attributable to the Company by the weighted-average number of shares of Class A common stock outstanding during the period. Diluted earnings per share is computed by adjusting the net income available to the Company and the weighted average shares outstanding to give effect to potentially dilutive securities. Shares of Class B common stock are not entitled to receive any distributions or dividends and are therefore excluded from this presentation since they are not participating securities.

Earnings per share is presented for the period from after the IPO, January 16, 2025, to December 31, 2025. Prior to the IPO, the membership structure consisted of Common Units and Class A Units. Flowco Holdings’ current capital structure is not reflective of the capital structure of Flowco LLC prior to the IPO and the Transactions. Therefore, earnings per share has not been presented for the period of the years prior to the IPO.

The following table sets forth reconciliations of the numerators and denominators used to compute basic and diluted net income per share of Class A common stock for the periods following the Transactions (in thousands, except per share amounts):

Net income attributable to the redeemable non-controlling interests added back to net income in the fully dilutive computation has been adjusted for income taxes which would have been expensed had the income been recognized by the Company, a taxable entity. The weighted average common shares outstanding in the diluted computation per share assumes all outstanding LLC Interests are redeemed and exchanged with the shares of Class A common stock rather than cash-settle.

The dilutive impact of LLC Interests assumed to be redeemed in exchange for the issuance of Class A common stock was included in the computation of diluted earnings per share under the if-converted method for the period from January 16, 2025, to December 31, 2025. The impact of unvested RSUs was dilutive and has been included using the treasury stock method.

Note 12 – Stock-Based Compensation

In connection with the IPO, the stockholders approved the 2025 Equity and Incentive Plan (the “Equity Plan”), which became effective on January 17, 2025. The Equity Plan generally is administered by the Board of Directors of with respect to awards to non-employee directors and by the compensation committee with respect to other participants and authorizes the Company to grant incentive stock-based awards.

Under the Equity Plan,6,000,000 shares of Class A common stock were initially reserved for issuance, which shares may be granted pursuant to a variety of stock-based compensation awards, including stock options, stock appreciation rights, RSUs, and other stock-based awards. The maximum number of shares that are subject to awards under the Equity Plan is subject to an annual increase equal to the lesser of 2% of the number of Class A shares common stock issued and outstanding on December 31 of the immediately preceding calendar year and an amount determined by our Board of Directors. No more than 6,000,000 shares of Class A common stock in the aggregate may be issued under the Equity Plan in connection with incentive stock options. As of December 31, 2025,5,325,621 shares of Class A common stock are available for future grant under the Equity Plan.

In January and February 2025, the Company granted an aggregate of 674,379 RSUs to certain of the Company’s executives and employees and non-employee directors in conjunction with the Equity Plan with an aggregate grant date fair value of$20.0 million. The RSU awards to executives and employees cliff vest in full on the third anniversary of the grant date of the award, subject to employee’s continued employment. The RSU awards to non-employee directors vest in twelve equal installments on each of the first twelve quarterly anniversaries following the grant date of the award, subject to such non-employee director continuing in service through such date. Only the RSUs awarded to employees will accelerate and vest in full upon a change in control (as defined in the Equity Plan).

The following table summarizes the award activity under the Equity Plan for December 31, 2025 and 2024:

Total compensation expense for RSUs was approximately$7.4 million year ended December 31, 2025, and is included in selling, general and administrative costs in the accompanying consolidated statements of operations for the year ended December 31, 2025.

The unamortized compensation cost related to RSUs of approximately$12.1 million as of December 31, 2025 is expected to be recognized over a weighted-average period of approximately 2.0 years.

Note 13 - Employee Benefit Plan

The Company maintains a 401(k) retirement savings plans for the employees that meet certain eligibility requirements. The Internal Revenue Code allows eligible employees to defer a portion of their compensation, within prescribed limits, on a pre-tax basis through contributions to the 401(k) plan. Currently, the Company matches 80 to 100% of an employee’s contribution to the 401(k) plan, with the matching contribution from the Company being capped at 4% of the employee’s compensation. These matching contributions vest immediately.

The Company’s matching contributions amounted to approximately$3.7 million and$1.9 million during the years ended December 31, 2025 and 2024, respectively.

Note 14 - Commitments and Contingencies

The Company is, and from time to time may be, subject to various claims and legal proceedings which arise in the ordinary course of business. In the opinion of management, there are no legal matters that are likely to have a material adverse effect on the Company’s consolidated financial position, results of operations or cash flows. The Company has insurance coverage with a Federal Insurance Company covering employment practices and other fiduciary liabilities on employees.

Note 15 – Fair Value Measurements

As of December 31, 2025, and December 31, 2024, 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 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.

The Company has assessed that the fair value of cash and cash equivalents, accounts receivable, accounts payable, and other current liabilities, approximates their carrying amounts largely due to the short-term nature of these accounts.

The Company has also determined the carrying value of the long-term debt approximates its fair value given its variable rate and indirect indexation to the Company’s credit risk.

See Note 2 – Business Combinationsfor information regarding the estimated fair value of goodwill.

Contingent Consideration

The Company entered into a contingent consideration liability related to a business combination with a certain oilfield services company described in Note 2 – Business Combinations. Included in total consideration of this acquisition is an earnout payment of $0.6 million to the seller. The amount ultimately owed to the seller is based on meeting a certain earnout threshold in the twelve consecutive calendar months following the close of the transaction. If met, a one-time payment is required to be paid in October 2025, at which point the earnout expires. This earnout liability will be reassessed at each reporting period until expiration and changes in fair value will be reported in earnings as they occur. The earnout liability was considered to be a Level 3 fair value measurement as the significant inputs are unobservable and require significant judgment or estimation. Management engaged a third-party valuation specialist to determine the fair value of the earnout liability as of the acquisition date. The earnout liability was valued using a Monte Carlo simulation in a risk-neutral framework based on forecasted gross revenue.

As of December 31, 2025, the earnout arrangement has been paid in full and the contingent liability was fully released from the accompanying consolidated financial statements.

The Company did not have any other assets or liabilities that were measured at fair value on a recurring or non-recurring basis on December 31, 2025 and 2024.

Note 16 – Segment Information

Our operations are primarily based in the U.S. All material revenues of the Company are derived from the U.S. Substantially all long-lived assets of the Company are located in the U.S.

The Company identifies reportable operating segments based on management’s structure, the customer’s application of its products and services offered by each and the financial data utilized by the Company’s Chief Executive Officer, as the CODM, to assess segment performance and allocate resources among segments. The Company’stwo reportable operating segments are as follows:

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Production Solutions: relates to rental, sale and services related to high pressure gas lift, conventional gas lift and plunger lift. This segment includes rental, sales, and service revenues.

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Natural Gas Technologies: relates to the design, manufacturing, rental, sale and servicing of vapor recovery and natural gas systems. This segment includes rental, sales, service revenues and emissions management and monetization technology.

Corporate headquarters and certain functional departments do not earn revenues but incur costs which do not constitute business activities. Therefore, these corporate headquarters and certain functional departments do not qualify as an operating segment and have been included within corporate and other, which is also not considered a reportable segment. Corporate and other includes (i) corporate and overhead costs, and (ii) capitalized costs related to the IPO and debt issuance and does not include any immaterial and aggregated operating segments.

The CODM assesses segment performances and allocates resources based on profitability. The CODM evaluates operating performance and decides how to allocate resources based on segment profit or loss, which is equivalent to segment income from operations, as well as Adjusted EBITDA, a non-GAAP measure defined as adjusted earnings before interest, income taxes, depreciation and amortization. The CODM uses the segment profit or loss for each segment predominantly in the annual budget and forecasting process. The CODM considers quarter-to-quarter variances on a sequential basis when making decisions about the allocation of operating and capital resources to each segment.

The below tables contain revenues and certain expenses regularly presented to the CODM in order to make decisions regarding the Company's business, including resource allocation and performance assessments, as well as the current focus in compliance with ASC 280, Segment Reporting, for the periods presented (in thousands):

The following table sets forth certain selected financial information for our operating segments for the periods presented (in thousands):

Note 17 – Subsequent Events

In January 2026, the Company granted an aggregate of 788,896 RSUs to certain of the Company’s executives and employees in conjunction with the Equity Plan with an aggregate grant date fair value of $14.8 million. Of these RSUs,584,798 vest in three equal installments on the first, second, and third anniversaries of the grant date, with accelerated vesting upon a qualifying change in control of the Company. The remaining 204,098 RSUs vest on the third anniversary of the grant date, also with accelerated vesting upon a qualifying change in control. Each RSU represents a contingent right to receive one share of Class A Common Stock. The RSU awards to non-employee directors vest in twelve equal installments on each of the first twelve quarterly anniversaries following the grant date of the award, subject to such non-employee director continuing in service through such date.

In January 2026, eligible employees received performance restricted stock unit (“PRSUs”) awards totaling 201,366 units and with an aggregate grant date fair value of$4.1 million from which a minimum ofzero percent and a maximum of 200% units could be awarded based upon measurement of total stockholder return of the Company’s common stock (“TSR”) during thethree-year performance period of January 1, 2026 to December 31, 2028. These PRSUs cliff vest on the third anniversary of the award grant date and can range from zero percent to 200% of target grant amount, with accelerated vesting in the event of a change in control.

On January 30, 2026, the 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 February 13, 2026 and will be paid on February 25, 2026. The Company’s operating subsidiary, Flowco MergeCo LLC, will also make a corresponding distribution of $0.08 per unit to holders of its LLC Interests.

On February 2, 2026, the Company announced that it has entered into a definitive agreement to acquire Valiant Artificial Lift Solutions (“Valiant”) for a total consideration of $200 million, subject to certain customary adjustments as set forth in the purchase agreement, struc tured as $170 million in cash (subject to certain customary adjustments as set forth in the purchase agreement) and 1,454,849 shares of the Company’s Class A common stock. The pending transaction, which is expected to close in March 2026, is subject to customary closing conditions and receipt of required regulatory approvals.

On February 4, 2026, the Company filed a universal shelf registration statement on Form S-3 (the “Shelf Registration Statement”), which was declared effective on February 10, 2026. The Shelf Registration Statement registered both (i) the sale by the Company of up to $500 million of its shares of Class A common stock, preferred stock, rights, warrants or units and (ii) up to 57,530,845 shares of Class A common stock by the selling stockholders named in the Shelf Registration Statement. Such offerings may be made from time to time in one or more offerings.

On February 24, 2026, the Company’s Board of Directors appointed Robert Y. Brown IV as the Corporate Controller and Principal Accounting Officer. Mr. Brown previously served as the Company’s Assistant Corporate Controller. Also, effective February 24, 2026, James A. Merrill transitioned his role within the Company from the Corporate Controller and Principal Accounting Officer into a leadership role within the Natural Gas Technologies segment.