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

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and related notes and other information included elsewhere in this Annual Report. In addition to historical data, this discussion contains forward-looking statements about our business, results of operations, cash flows, financial condition and prospects based on current expectations that involve risks, uncertainties and assumptions. Our actual results could differ materially from such forward-looking statements. Factors that could cause or contribute to those differences include, but are not limited to, those identified below and those discussed in Part I. Item 1A. Risk Factors and the section titled “Forward-Looking Statements” included elsewhere in this Annual. Additionally, our historical results are not necessarily indicative of the results that may be expected for any period in the future. We use words such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “predict,” “project,” “potential,” “seek,” “should,” “will,” “would,” and similar expressions to identify forward-looking statements.

Company Overview

We are a leading provider of production optimization, artificial lift and emissions management and monetization solutions for the oil and natural gas industry.

Consistent with the manner in which our chief operating decision maker evaluates performance and allocate resources, our operations are conducted, managed and presented within the following two reportable segments:

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Production Solutions: segment is comprised of our artificial lift operations, including digital solutions; and

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Natural Gas Technologies: segment is comprised of our vapor recovery and natural gas systems operations.

We have strategically positioned ourselves to provide products and services that include a full range of equipment and technology solutions that enable our customers to efficiently and cost-effectively maximize the profitability and economic lifespan of the production phase of their operations. As a result of this strategic position, we are able to generate revenues throughout the long production lives of oil and natural gas wells. Our products and services also integrate proprietary digital technologies that allow for remote monitoring and controls, and other enhanced uses of our equipment. We have an operating presence in every major onshore oil and natural gas producing region in the U.S. For a more detailed overview of our business, see Part 1. Item 1. Business and Part 1. Item 2. Properties in this Annual Report.

Recent Developments

IPO

We consummated our initial public offering (“IPO”) on January 15, 2025, in which we issued and sold 20,470,000 shares of our Class A common stock at a price of $24.00 per share, resulting in net proceeds to us of approximately $461.8 million, after deducting the underwriting discount of approximately $29.5 million.

Debt Repayments

On January 17, 2025, we used a portion of the net proceeds from the IPO, after giving effect to the redemption of certain Flowco LLC interests held by non-affiliate holders, to repay $440.0 million of outstanding borrowings under our revolving Credit Agreement. The repayment substantially lowered our outstanding debt and interest expense in 2025 and enhanced our liquidity and capital structure.

Share Repurchase Program

On June 11, 2025, our Board of Directors authorized a share repurchase program providing for the repurchase of up to $50 million of our outstanding common stock. The Repurchase Program is intended to provide the Company with

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flexibility to return capital to shareholders and to opportunistically repurchase shares when management believes such repurchases represent an attractive use of capital. Repurchases under the Repurchase Program may be made from time to time through open market purchases, privately negotiated transactions, or other means permitted under applicable securities laws and regulations. The Repurchase Program does not obligate us to repurchase any specific number of shares, and the timing, volume, and value of any repurchases will depend on a variety of factors, including our share price, trading volume, general market conditions, liquidity considerations, capital allocation priorities, and compliance with corporate and regulatory requirements. The Repurchase Program may be modified, suspended, or discontinued at any time at the discretion of our Board of Directors.

Management evaluates share repurchases as part of its broader capital allocation strategy, which also considers investment in organic growth initiatives, potential acquisitions, debt repayment, and maintaining adequate liquidity. We expect to fund any repurchases from available cash on hand and cash generated from operations.

Asset Acquisition

On August 1, 2025, we completed the acquisition of certain HPGL and VRU systems from Archrock, Inc. for approximately $71 million in cash. The acquisition included 155 HPGL and VRU systems and represents the Company’s first acquisition following the IPO.

The acquired assets helped expand our artificial lift and vapor recovery capabilities, including the addition of electric motor drive systems, which has enhanced our ability to serve customers focused on electrification initiatives and emissions reduction. This acquisition further has strengthened our position in the Permian Basin and expanded our customer base through the addition of contracted, revenue-generating assets.

Management believes the acquisition is consistent with the Company’s inorganic growth strategy and capital allocation framework, which prioritizes the acquisition of high-quality production optimization assets at attractive valuations. The acquisition was funded with cash proceeds from borrowings under our $725.0 million five-year senior secured revolving credit facility (“Credit Facility”) and did not materially affect our overall liquidity profile.

General Trends and Company Outlook

Macroeconomic Conditions and Commodity Prices

The Company’s operating results, financial condition, and cash flows are influenced by macroeconomic conditions and trends in commodity prices, particularly crude oil and natural gas. Demand for the Company’s products and services is closely tied to exploration, development, and production activity in the oil and natural gas industry, which in turn is affected by ever changing global economic conditions, energy demand, and commodity price environments.

Global macroeconomic factors, such as inflationary pressures, interest rate levels, geopolitical developments, and supply chain dynamics, can impact customer spending behavior, capital allocation decisions, and overall industry activity. Periods of elevated inflation may increase the Company’s operating costs, including labor, materials, and transportation, while higher interest rates may affect customers’ access to capital and willingness to invest in new or expanded production. Conversely, improved macroeconomic stability and access to capital can support increased drilling and completion activity, benefiting demand for the Company’s offerings.

Commodity prices remain a primary driver of customer activity levels. Sustained periods of higher crude oil and natural gas prices generally support increased well completions, production optimization, and investment in artificial lift and surface equipment, which positively affects demand for the Company’s products and services. Conversely, declines or heightened volatility in commodity prices may result in reduced customer spending, project delays, or cancellations, which could adversely impact our revenues and margins. While customers may respond to price fluctuations with varying degrees of sensitivity depending on basin economics, hedging strategies, and balance sheet strength, prolonged periods of low or volatile prices typically lead to reduced industry activity.

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We do not directly engage in commodity price hedging, and therefore our results are indirectly exposed to commodity price movements through changes in our customer behavior and activity levels. Management seeks to mitigate the impact of commodity price volatility through a diversified customer base, exposure to multiple basins, long-term customer relationships, and a focus on products and services that support both new well development and ongoing production.

We continue to monitor macroeconomic conditions and commodity price trends and evaluates their potential impact on our operations, financial performance, and liquidity. While future commodity prices and economic conditions remain uncertain, we believes our business model and market positioning provide resilience across commodity cycles.

Global Outlook and Geopolitical Environments

The ongoing heightened tension in the global geopolitical environments, especially the prolonged conflicts in Ukraine and in the Middle East and the continued tension between U.S. and China, continues to create uncertainty not only in the oil and natural gas markets, but also in the financial market and global supply chain. Commencing in early 2025, the Trump administration introduced new and significant trade policies and imposed or threatened to impose tariffs on imported products with numerous U.S. global trade partners. These aggressive and unpredictable trade policies could create volatility in U.S. stock markets and further disruptions in global supply chain dynamics. We do not know the ultimate severity or duration of these conflicts, but we continue to closely monitor shifts in global trade policies and evaluate their potential impacts on our business, financial condition and results of operations.

Our Industry Growth

The natural gas compression and artificial lift industry continued to experience robust growth, driven by rising global energy demand, technological innovations and evolving regulatory requirements. Advancements in compression technology, automation and data analytics continued to reshape operational efficiency and reliability across the industry. We believe that our longstanding and expansive customer relationships across every major onshore U.S. producing region combined with vertically integrated operations allow us to be strategically positioned to capitalize on these transformative trends and deliver sustainable long-term value.

As our business is closely aligned with well production and is typically less directly affected by commodity price, we are not exposed to the volatility often faced in the narrow-focused and shorter-cycle oil field service businesses. We deliver natural gas compression services in connection with domestic natural gas production that primarily occurs in natural gas basins, such as the Appalachian and Barnett, and in crude oil basins where associated natural gas is produced alongside crude oil production, such as San Juan, Anadarko and Permian basins, and Eagle Ford Shale.

Our products are chosen due to their reliability and ability to aid our customers in achieving maximum output and cash flow from their producing wells. Our products and services also integrate proprietary digital technologies that allow for remote monitoring and controls, and other enhanced uses of our equipment. We have an operating presence in every major onshore oil and natural gas producing region in the U.S., with majority of our consolidated revenue generated in Permian Basin.

Factors Affecting the Comparability of Our Financial Condition and Results of Operations

Our historical financial condition and results of operations for the periods presented may not be comparable, both from period over period and going forward, for the following reasons:

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Selling, general and administrative expenses. During 2025, we incurred additional selling, general and administrative expenses as a result of becoming a publicly traded company. These costs include expenses associated with our annual and quarterly financial reporting with the SEC, tax preparation expenses, Sarbanes-Oxley (“SOX”) compliance expenses, audit fees, legal fees, directors and officers insurance,

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investor relations expenses, Tax Receivable Agreement administration expenses and registrar and transfer agent fees.

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Corporate Reorganization. For periods prior to June 20, 2024, the historical consolidated financial statements presented herein are based on the operations of our accounting predecessor, Estis. For periods subsequent to June 20, 2024, the consolidated financial statements presented are based on the combined operations of the Merging Entities. As a result, the historical consolidated financial information may not provide an accurate indication of what our actual results would have been if the 2024 Business Combination had been completed at the beginning of the earliest period presented.

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Income Taxes. Our accounting predecessors are a collective limited liability companies that constitute as partnerships for U.S. federal income tax purposes, and therefore are not subject to U.S. federal income taxes and the provisions for income tax calculations thereof. As the IPO occurred subsequent to the last date presented in the comparative prior period in this Annual Report, the prior years’ financial information do not reflect any income tax benefit or expense attributable to us. Subsequent to the IPO, we became a taxable entity and started to be taxed as a corporation under the Internal Revenue Code and subject to U.S. federal income taxes (currently at a statutory rate of 21% of pretax earnings, as adjusted by the Internal Revenue Code), as well as state income taxes, for our interest ownership in Flowco LLC.

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Noncontrolling Interests. As a result of the IPO and a series of related reorganization transactions in connection with the IPO (the “Transactions”), we became the sole managing member of Flowco LLC and consolidate entities in which we have a controlling financial interest. Consequently, the financial statements for periods prior to the IPO included in this Annual Report have been adjusted to combine each of the previously separated Merging Entities. For the period after the IPO, the financial position and results of operations include those of Flowco Holdings and we report the noncontrolling interests related to the portion of LLC Interests not owned by us. Additionally, all shares of our Class B common stock are held by noncontrolling interest owners. The noncontrolling interests only impact financial statements presentations as of December 31, 2025 and for the year ended December 31, 2025.

Results of Operations

The consolidated financial information included in the following tables and discussions present the historical financial information of our operations. Additionally, the discussions relating to significant line items from our consolidated statements of operations are based on available information and represent our analysis of significant changes or events that impact the comparability of reported amounts. Where appropriate, we have identified specific events and changes that affect comparability or trends and, where reasonably practicable, have quantified the impact of such items. The results of operations data in the following tables for the periods presented have been derived from the audited financial statements included elsewhere in this Annual Report.

We currently have two operating segments: (i) Production Solutions; and (ii) Natural Gas Technologies. Our 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 IPO and debt issuance and does not include any immaterial and aggregated operating segments. The performance of our operating segments is primarily evaluated based on revenue and segment profit or loss with respect to such segments, in addition to other measures.

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Year Ended December 31, 2025 Compared to Year Ended December 31, 2024

Prior to June 20, 2024, all operating results reflect only Estis as predecessor to the Merging Entities. The following table sets forth certain selected financial results for the periods indicated (in thousands):

For the Year Ended December 31,

Revenues

Operating expenses

Other expenses

Loss on debt extinguishment — (221 ) 221 -100 %

Net income attributable to redeemable non -controlling interests 90,257

Net income attributable toFlowco Holdings Inc. $ 41,398

Revenue – Rentals. The primary driver for the increase in average active systems was related to Flogistix’s VRUs that were added to our combined fleet as part of the 2024 Business Combination within the Natural Gas Technologies segment and Estis’ organic growth in its surface equipment rental fleet within the Production Solutions segment. Due to the timing of the 2024 Business Combination, the year ended December 31, 2024 rental revenue include only Flogistix’s operational days of ten days in June 2024 and the six months ended December 31, 2024. Additionally, the average rental rates for VRUs are generally lower than the average rental rates for surface equipment. Accordingly, the weighted average rental rate of the combined fleet during the year ended December 31, 2025 is lower than the weighted average rental rate during the year ended December 31, 2024, which prior to the 2024 Business Combination was made up exclusively of surface equipment fleet.

Rental revenue was $418.0 million for the year ended December 31, 2025, an increase of $141.3 million, or 51%, from $276.7 million for the year ended December 31, 2024. This increase in rental revenue was driven primarily by two factors as follows:

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Surface equipment fleet size experienced an increase of 102 average active systems per month from 1,434 during the year ended December 31, 2024, to 1,536 average active surface equipment systems per month during the year ended December 31, 2025. Additionally, average rental rate also had a $1,877 increase in

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average monthly price from $11,195 per unit during the year ended December 31, 2024 to $13,072 per unit during the year ended December 31, 2025. These increases approximate 7% and 17% for fleet size and average rental rate per unit, respectively, and contribute to a total increase in surface equipment rental revenue of $48.3 million, or approximately 25.1%.

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The 2024 Business Combination impact on VRUs – the year ended December 31, 2024 rental revenue only reflect ten operation days in June 2024 and the six months ended December 31, 2024 of Flogistix’s VRU systems with a total of 2,838 average active systems during this time period and an average rental rate of approximately $4,696 per unit during the same period. During the year ended December 31, 2025, Flogistix’s VRU fleet size grew to an average of 3,016 active systems per month and an average rental rate of $4,883 per unit. These increases contribute to a total increase in vapor recovery rental revenue of $92.3 million, or approximately 109.4%, in the periods compared.

Revenue – Sales. Sales revenue was $341.8 million for the year ended December 31, 2025, an increase of $83.2 million, or 32%, from $258.6 million for the year ended December 31, 2024. This increase in revenue was primarily due to the added revenue streams in the sales revenue category. Approximately $122.4 million increase of downhole components sales, or 90%, and an $8.9 million increase of VRU sales, or 22%, were added to the total sales revenue in the year ended December 31, 2025 resulting from the 2024 Business Combination, partially offset by a decrease of approximately $48.1 million in natural gas systems sales due to a completion of a project for a customer. The sales of our VRU sales experienced a modest increase year-over-year due to a shift in purchasing patterns from our operators.

Additionally, we sell our natural gas systems through intercompany transactions for further use in the Production Solutions segment in addition to sales to our customers. Approximately $58.6 million of intercompany natural gas system sales to the Production Solutions segment was recognized in the year ended December 31, 2025 as we continued the growth in our Production Solutions segment, an increase of approximately $19.4 million in intercompany revenues from approximately $39.2 million in the year ended December 31, 2024. All intercompany revenues have been eliminated in consolidation.

Cost of Rentals. Rental cost was $114.3 million for the year ended December 31, 2025, an increase of $39.8 million, or 53%, from $74.5 million for the year ended December 31, 2024. The primary driver of this increase relates to an increase of $29.3 million of costs related to Flogistix’s VRUs as part of the 2024 Business Combination within the Natural Gas Technologies segment that were included for ten operational days in June 2024 and the six months ended December 31, 2024 along with an approximately $10.6 million increase in organic higher equipment maintenance and repair costs within the Production Solutions segment.

Cost of Sales. Sales cost was $232.2 million for the year ended December 31, 2025, an increase of $42.3 million, or 22%, from $189.9 million for the year ended December 31, 2024. This increase was primarily attributable to an increase of $74.2 million of costs related to Flowco Productions within the Production Solution segment and $6.3 million of costs related to Flogistix within the Natural Gas Technologies segment as part of the 2024 Business Combination, partially offset by reduced sale volumes and less product mix of sold natural gas systems of approximately $38.2 million from a completion of a project for a customer.

Selling, general and administrative expenses. Selling, general and administrative expenses for the year ended December 31, 2025, were $118.6 million, an increase of $56.1 million, or 90% from $62.5 million for the year ended December 31, 2024. This increase was primarily attributable to the added personnel, marketing, and sales expenses related to the 2024 Business Combination, which consists of $21.4 million, $13.0 million and $21.7 million increases within the Production Solutions, Natural Gas Technologies and Corporate segments, respectively. Included in these increases are: (i) $1.3 million of settlement expenses related to a lawsuit within our Production Solutions segment in September 2025; (ii) a $1.0 million non-recurring charge in June 2025 related to the re-purposing of one of our manufacturing facilities in Pampa, TX, within our Natural Gas Technologies segment; and (iii) $2.9 million of

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non-recurring charges in June 2025 related to termination benefits and related expenses, which includes one of our executive officers, within our Corporate segment.

Depreciation and amortization. Depreciation and amortization was $144.8 million for the year ended year ended December 31, 2025, an increase of $53.9 million, or 59%, from $90.9 million for the year ended December 31, 2024. This increase was primarily due to increased depreciation expense on machinery and equipment and increased amortization expense on intangible assets resulting from the 2024 Business Combination and from the additional HPGL and VRU systems acquired from the Archrock acquisition in August 2025.

Loss on sale of equipment. Loss on sale of equipment was $0.7 million for the year ended December 31, 2025, compared to $0.8 million for the year ended December 31, 2024, a decrease of $0.1 million, or 6.9%, due to a fewer number of unit disposals within the Production Solutions segment in 2025 compared to 2024.

Interest expense. Interest expense was $18.9 million for the year ended December 31, 2025 compared to $32.3 million for the year ended December 31, 2024. This decrease in interest expense of $13.4 million, or 41% is primarily due to decreased average borrowings outstanding in the year ended December 31, 2025 compared to the year ended December 31, 2024 resulting largely from the debt repayment in January 2025 of $440.0 million using the proceeds from the IPO, partially offset with the recent debt proceeds of $71.0 million in August 2025 to fund the Archrock acquisition.

Loss on debt extinguishments. Loss on debt extinguishments was $0.2 million for the year ended December 31, 2024 with no comparable item for the year ended December 31, 2025, related to the Credit Agreement entered into on August 20, 2024, which currently provides for a $725.0 million five-year senior secured revolving credit facility.

Other income (expenses). Other income was $0.7 million for the year ended December 31, 2025, compared to other expense of $2.8 million for the year ended December 31, 2024, a favorable swing of of $3.5 million. The change was primarily driven by various gains on lease terminations, partially offset by approximately $0.4 million of transactional expenses in the year ended December 31, 2025, and the absence of Estis’ non-operating expenses that were present during the year ended December 31, 2024.

Income tax benefit (provision). Income tax benefit was $0.8 million for the year ended December 31, 2025, a favorable swing of approximately $2.0 million, or 172%, compared to provision for income taxes of $1.2 million for the year ended December 31, 2024. Provision for income taxes for the year ended December 31, 2024, is entirely associated with Texas margin tax, as it was prior to the IPO and we were not an income tax paying entity for U.S. federal purposes. After the IPO, we became subject to U.S. federal, state, and local income taxes with respect to our allocable share of taxable income of Flowco Holdings at the prevailing corporate tax rates. The $0.8 million million income tax benefit during the year ended December 31, 2025, is comprised of approximately $2.5 million of income tax benefit position due to the exclusion of noncontrolling interest and releases of valuation allowances, is partially offset by $1.6 million Texas margin tax. The $0.4 million increase in Texas margin tax year-over-year was primarily attributable to the 2024 Business Combination.

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Year Ended December 31, 2024 Compared to Year Ended December 31, 2023

The following table sets forth certain selected financial results for the periods indicated (in thousands). Prior to June 20, 2024, all operating results reflect only Estis as predecessor to the Merging Entities:

For the Year Ended December 31,

Revenues

Operating expenses

Other expenses

Loss on debt extinguishment (221 ) — (221 ) 100%

Revenue—Rentals. Rental revenue was $276.7 million for the year ended December 31, 2024, an increase of $107.9 million, or 64%, from $168.8 million for the year ended December 31, 2023. $84.4 million of increase in rental revenue relates to the Natural Gas Technologies segment from companies acquired in the 2024 Business Combination. Rental fleet from the Natural Gas Technologies segment had an average of 2,838 active systems and an average monthly price of $4,696 for the year ended December 31, 2024. The remaining $23.5 million increase in rental revenue relates to the Production Solutions segment, which was driven by an increase of 33 average active systems per month from 1,401 during 2023 to 1,434 average active systems per month during 2024, and a $1,132 increase in average monthly price from $10,043 per unit during 2023 to $11,195 per unit during 2024. Thus, of the increase in rental revenue related to the Production Solutions segment, 2.4% is attributable to an increase in average active systems, and 11.3% is due to an increase in average monthly price.

Revenue—Sales. Sales revenue was $258.6 million for the year ended December 31, 2024, an increase of $184.1 million, or 247%, from $74.5 million for the year ended December 31, 2023. This increase in revenue was partially due to $135.5 million of revenue related to Flowco Productions within the Production Solutions segment and $41.4 million of revenue related to Flogistix within the Natural Gas Technologies segment as part of the 2024 Business Combination. The remainder of the increase was primarily due to an increase of $7.2 million of sales of natural gas systems to third parties. We sell our natural gas systems through intercompany transactions for further use in the Production Solutions segment as well as sales to our customers. During 2023, intercompany sales comprised a significant portion of total natural gas system sales as we continued to increase the volume of active systems within Production Solutions segment. Due to the change in focus of sales to third parties rather than our Production Solutions

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segment, third party sales volume of natural gas systems increased 10% year-over-year while pricing remained flat. All intercompany revenues have been eliminated in consolidation.

Cost of Rentals. Rental cost was $74.5 million for the year ended December 31, 2024, an increase of $32.3 million, or 77%, from $42.2 million for the year ended December 31, 2023. This increase was primarily attributable to $28.6 million of costs related to Flogistix as part of the 2024 Business Combination within the Natural Gas Technologies segment.

Cost of Sales. Sales cost was $189.9 million for the year ended December 31, 2024, an increase of $127.3 million, or 203%, from $62.6 million for the year ended December 31, 2023. The increase was primarily attributable to $94.9 million of costs related to Flowco Productions within the Production Solutions segment and $30.2 million of costs related to Flogistix within the Natural Gas Technologies segment as part of the 2024 Business Combination.

Selling, general and administrative expenses. Selling, general and administrative expenses were $62.5 million for the year ended December 31, 2024, an increase of $47.2 million, or 310%, from $15.2 million for the year ended December 31, 2023. This increase was primarily attributable to $21.2 million of costs related to Flowco Productions within the Production Solutions segment, $15.7 million of expenses related to Flogistix within the Natural Gas Technologies segment, and Corporate expenses of $6.0 million as a part of the 2024 Business Combination. The remaining increase of $3.9 million is due to increases in personnel expense and sales and marketing expense at Estis, including the addition of management and employees in connection with our IPO and anticipated public company reporting requirements.

Depreciation and amortization. Depreciation and amortization was $90.9 million for the year ended December 31, 2024, an increase of $47.0 million, or 107%, from $43.8 million for the year ended December 31, 2023. The increase in depreciation expense was primarily due to $13.2 million related to Flowco Productions within the Production Solutions segment and $27.6 million related to Flogistix within the Natural Gas Technologies segment as part of the 2024 Business Combination. The remainder of the increase in depreciation expense was due to purchases of machinery and equipment in the prior period, which primarily relates to the Production Solutions segment as depreciation and amortization within the Natural Gas Technologies segment remained consistent year-over-year.

Loss on sale of equipment. Loss on sale of equipment, net was $0.8 million for the year ended December 31, 2024 compared to $1.2 million for the year ended December 31, 2023, a decrease of $0.4 million, or 32%, due to fewer unit disposals in the Production Solutions segment in 2024 compared to 2023.

Interest expense. Interest expense was $32.3 million for the year ended December 31, 2024 compared to $19.0 million for the year ended December 31, 2023. This increase in interest expense of $13.4 million, or 71%, was due to interest expense related to Flowco Productions and Flogistix as part of the 2024 Business Combination, as well as the associated interest on increased borrowings under the Credit Agreement for distributions to members.

Loss on debt extinguishments. Loss on debt extinguishments was $0.2 million for the year ended December 31, 2024, with no comparable item for the year ended December 31, 2023, related to the Credit Agreement entered into on August 20, 2024, which currently provides for a $725.0 million five-year senior secured revolving credit facility.

Other income (expense). Other income (expense) was $2.8 million for the year ended December 31, 2024 compared to $0.9 million for the year ended December 31, 2023, an increase of $1.8 million, or 203%. The increase is due to $0.3 million related to Flowco Productions and Flogistix as part of the 2024 Business Combination as well as $2.7 million of transaction costs incurred in connection with the 2024 Business Combination and $0.9 million of professional service fees not determined to be direct and incremental to our IPO registration statement and not part of the core operating costs of the business. These costs were partially offset by $0.5 million of other expenses incurred during the year ended December 31, 2023 that did not recur during the year ended December 31, 2024.

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Provision for income taxes. Provision for income taxes was $1.2 million for the year ended December 31, 2024, an increase of $0.8 million or approximately 209% from $0.4 million for the year ended December 31, 2023. Provision for income taxes for the years ended December 31, 2024 and 2023, are entirely associated with Texas margin tax, as an LLC. This increase is due to Flowco Productions and Flogistix, as part of the 2024 Business Combination, being included in our financial results for approximately half of 2024.

Liquidity and Capital Resources

IPO and Subsequent Transactions

On January 15, 2025, we consummated our IPO and received $461.8 million net proceeds from the sale of 20,470,000 shares of our Class A common stock. The net proceeds from our IPO were used to purchase 20,470,000 newly issued LLC Interests directly from Flowco LLC at a price per unit equal to the IPO price per share of Class A common stock.

On August 24, 2024, we entered into a credit agreement, as amended to date, by and among Flowco MasterCo (the “Parent Borrower”), Flowco Productions, Estis Intermediate and Flogistix Intermediate, as borrowers, certain other direct and indirect subsidiaries of the Parent Borrower party thereto as guarantors, the lenders named therein, and JPMorgan Chase Bank, N.A., as administrative agent (as amended to date, the “Credit Agreement”). The Credit Agreement was entered into in connection with a continuation and upsize of the legacy credit facility established by a legacy credit agreement with Estis and certain of its subsidiaries as loan parties hereto.

In connection with the IPO described above, Flowco LLC used the net proceeds received from us to: (i) redeem approximately $20.9 million of Flowco LLC interests from certain non-affiliate holders and (ii) with respect to the remainder, repay indebtedness under our Credit Agreement of $440.0 million.

Sources of Liquidity and Indebtedness

As of December 31, 2025, we had $4.5 million of cash and cash equivalents. We believe existing cash and cash equivalents and cash flows from operations will be sufficient to support working capital and capital expenditure requirements for at least the next 12 months. We have historically generated cash and fund our operations primarily from cash flows from operating activities as well as availability under our Credit Agreement. Borrowings under our Credit Agreement have a maturity date of August 20, 2029, in which all principal owed is payable upon maturity. Our interest rate is Term Secured Overnight Finance Rate (“SOFR”) for one month plus 0.1% (“Adjusted REVSOFR30”) plus a contractual applicable margin based on the Company’s calculated leverage ratio, which combined approximates 6.4% per annum at the effective date with interest due monthly. If such rate is below contractual minimums, the interest rate will be calculated based on Adjusted Term SOFR Rate, Adjusted REVSOFR30 Rate or the Adjusted Daily Simple SOFR Rate. Depending upon market conditions and other factors, we may also have the ability to issue additional equity and/or debt, as needed.

Historically, our predecessors’ primary sources of liquidity were cash flows from operations, borrowings under Estis’ legacy credit agreement and equity provided by the Original Equity Owners. Our predecessors’ primary use of capital has been for working capital purposes, to make cash distributions to the Original Equity Owners and repay indebtedness.

As of December 31, 2025, we had $167.8 million outstanding borrowings and $557.2 million available borrowing capacity under our Credit Agreement.

As of February 20, 2026, we had $142.0 million outstanding borrowings and $579.6 million available borrowing capacity under our Credit Agreement. The Company plans to use a portion of such availability to pay the cash portion of the purchase price at the closing of the acquisition of Valiant Artificial Lift Solutions, which cash amount is expected to be $170.0 million subject to adjustments in accordance with the purchase agreement.

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On February 4, 2026, we filed a 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.

Additional Liquidity Requirements

As a holding company, we have no material assets other than our ownership of LLC Interests in Flowco LLC. As such, we have no independent means of generating revenue. The Flowco LLC Agreement provides for the payment of certain distributions to the Continuing Equity Owners and to us in amounts sufficient to cover the income taxes imposed on the Company with respect to the allocation of taxable income from Flowco LLC as well as to cover our obligations under the TRA and other administrative expenses.

Regarding the ability of Flowco LLC to make distributions to us, the terms of their financing arrangements under the Credit Facility contain covenants that may restrict Flowco LLC or its subsidiaries from paying such distributions, subject to certain exceptions. Further, Flowco LLC is generally prohibited under Delaware law from making a distribution to a member to the extent that, at the time of the distribution, after giving effect to the distribution, liabilities of Flowco LLC (with certain exceptions), as applicable, exceed the fair value of its assets.

In addition, under the TRA, we are required to make cash payments to the Continuing Equity Owners equal to 85% of the tax benefits, if any, that we actually realize (or in certain circumstances are deemed to realize), as a result of (i) Basis Adjustments; (ii) Section 704(c) Allocations; and (iii) certain tax benefits (such as interest deductions) arising from payments made under the TRA. We expect the amount of the cash payments that we will be required to make under the TRA will be significant. The actual amount and timing of any payments under the TRA will vary depending upon a number of factors, including the timing of redemptions or exchanges by the Continuing Equity Owners, the amount of gain recognized by the Continuing Equity Owners, the amount and timing of the taxable income we generate in the future, and the federal tax rates then applicable. Any payments made by us to the Continuing Equity Owners under the TRA will generally reduce the amount of overall cash flow that might have otherwise been available to us.

Additionally, in the event we declare any cash dividends, we intend to cause Flowco LLC to make distributions to us in amounts sufficient to fund such cash dividends declared by us to our stockholders. Deterioration in the financial condition, earnings, or cash flow of Flowco LLC for any reason could limit or impair their ability to pay such distributions.

If we do not have sufficient funds to pay taxes or other liabilities or to fund our operations, we may have to borrow funds, which could materially affect our liquidity and financial condition and subject us to various restrictions imposed by any such lenders. To the extent we are unable to make payments under the TRA for any reason, such payments generally will be deferred and will accrue interest until paid; provided, however, that nonpayment for a specified period may constitute a material breach of a material obligation under the TRA and therefore accelerate payments due under the TRA. In addition, if Flowco LLC does not have sufficient funds to make distributions, our ability to declare and pay cash dividends will also be restricted or impaired.

See Part I – Item 1A. Risk Factors – Risks Related to our Organizational Structure in this Annual Report.

Dividends

Our Board of Directors may elect to declare cash dividends on our Class A common stock, subject to our compliance with applicable law, and depending on, among other things, economic conditions, our financial condition, results of

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operations, projections, liquidity, earnings, legal requirements, and restrictions in the agreements governing our indebtedness.

In May, August, and November 2025, our Board of Directors declared and paid a cash dividend of $0.08 per share payable to holders of Class A common stock of record as of the close of business on May 14, 2025, August 15, 2025, and November 14, 2025 (the “Common Stock Dividend”). In conjunction with the Common Stock Dividend, Flowco LLC declared a distribution on its units of $0.08 per unit to all unitholders of record of Flowco LLC as of the close of business on May 14, 2025, August 15, 2025, and November 14, 2025, respectively. The declaration and payment of future dividends will be at the discretion of our Board of Directors and will depend on future business conditions, financial conditions, results of operations and other factors.

Common Share Repurchase Program

On June 11, 2025, our Board of Directors authorized a $50 million share repurchase program (the “Repurchase Program”) to reacquire shares via open market purchase, privately negotiated transactions, or by other means in accordance with the regulations of the Securities and Exchange Commission. The Repurchase Program does not obligate us to repurchase any particular amount of shares and may be modified, suspended, or discontinued at any time. The timing of purchases and the number of shares repurchased under the Repurchase Program will depend on a variety of factors including price, trading volume, market conditions and corporate and regulatory requirements. During the year ended December 31, 2025, we repurchased and subsequently retired 953,229 shares of our Class A common stock at an average price of $15.72 per share, excluding commissions.

On September 26, 2025, management 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 our behalf, up to the daily volume limit permitted under Rule 10b-18 of the Securities Exchange Act of 1934. As of December 31, 2025, no shares had been repurchased under the Repurchase Plan Agreement. The Repurchase Plan Agreement was effective November 6, 2025 through February 6, 2026 and had a maximum authorized amount of $15.0 million. Management did not renew the Repurchase Plan Agreement upon its expiration on February 6, 2026.

Cash Flow Analysis

The following table presents our summary cash flows for the periods presented. Prior to June 20, 2024, all cash flow activity reflects only our predecessor Estis.

For the Year Ended December 31,

Net cash provided by operating activities $ 294,370 $ 179,383

Net cash used in investing activities $ (199,752 ) $ (94,433 )

Net cash used in financing activities $ (94,711 ) $ (80,335 )

Operating activities. Net cash provided by operating activities was $294.4 million and $179.4 million for the years ended December 31, 2025 and 2024, respectively, an increase of approximately $115.0 million. Operating cash flows increased primarily due to higher earnings as a direct result from additional business operations from FPS and Flogistix as it relates to the 2024 Business Combination. The earnings resulted from FPS and Flogistix are reflected in the entire 2025 as opposed to ten days in June 2024 and the six months ended December 31, 2024. due to the timing of the 2024 Business Combination on June 20, 2024.

Investing activities. Net cash used in investing activities was $199.8 million and $94.4 million for the years ended December 31, 2025 and 2024, respectively, an increase of $105.4 million. This increase was primarily due to an increase of $64.8 million of cash paid in asset acquisitions, an increase of $36.8 million in capital expenditures, and the absence of $3.1 million of cash acquired in 2024 from the 2024 Business Combination.

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Financing activities. Net cash used in financing activities was $94.7 million and $80.3 million for the years ended December 31, 2025 and 2024, respectively, an increase of $14.4 million. The increase in net cash used in financing activities was primarily attributable to (i) $416.7 million net cash proceeds from new financing cash activities in 2025 related to $461.8 million in IPO proceeds, $20.9 million payments to acquire the LLC Interests from the Continuing Equity Owners, $15.0 million in share repurchases, $6.7 million dividend payments to Class A common stockholders and $2.5 million of payments related to offering costs for the IPO; (ii) offset by $430.6 million change in net cash used related to $818.7 million of payments on long-term debt, $7.5 million payments related to finance lease obligations, $186.9 million of proceeds from long-term debt, $202.0 million decrease in distributions to the Continuing Equity Owners and $6.7 million decrease in payments for debt financing.

Critical Accounting Estimates

In preparing financial statements in conformity with U.S. GAAP, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and 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 these financial statements include but are not limited to the following: determination of fair value in business combinations, inventory valuation, impairment of goodwill, intangible assets and long-lived assets, share-based compensation, and useful lives of property, plant and equipment and intangible assets. 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.

Determination of fair value in business combinations

Accounting for the acquisition of a business requires allocation of the purchase price to the various assets acquired and liabilities assumed at their respective fair values. The determination of fair value requires the use of significant estimates and assumptions, and in making these determinations, management uses all available information. For tangible and identifiable intangible assets acquired in a business combination, the determination of fair value utilizes several valuation methodologies including discounted cash flows which has assumptions with respect to the timing and amount of future revenue and expenses associated with an asset. The assumptions made in performing these valuations include, but are not limited to, discount rate, future revenues and operating costs, projections of capital costs, royalty rate, and other assumptions believed to be consistent with those used by principal market participants. Depending on the magnitude of the acquisition and the specialized nature of these calculations, we often engage third-party specialists to assist management in evaluating our assumptions as well as appropriately measuring the fair value of assets acquired and liabilities assumed.

Inventory valuation

Inventory is composed of components, parts and materials used in the fabrication, repair and maintenance of natural gas systems. Inventory is recorded at the lower of cost or net realizable value. We evaluate the components of inventory on a regular basis for excess and obsolescence. We record the decline in the carrying value of estimated excess or obsolete inventory as a reduction of inventory and as an expense included in cost of goods and services in the period in which it is identified. Our estimate of excess and obsolete inventory is susceptible to change from period to period and requires management to make judgments about the future demand of inventory. There were no changes in this estimate year-over-year and the estimate has a low degree of estimation uncertainty as the historical write-offs are generally consistent without material fluctuations. Typically, our write-offs approximate $1 million each year due to factors that include historical usage, estimated product demand, technological developments and current market conditions. We believe our inventory valuation reserve is adequate to properly value excess and obsolete inventory as of December 31, 2025 and 2024. However, any significant changes to the factors mentioned above could lead our estimate to change.

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Income taxes

After consummation of the IPO, we became subject to U.S. federal, state, and local income taxes with respect to our allocable share of taxable income of Flowco LLC 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 incurs no significant liability for federal or state income taxes other than for certain state taxes payable directly by it, primarily related to Texas margin tax.

Deferred taxes are recorded using the asset and liability method, whereby tax assets and liabilities are determined based on the differences between the financial reporting basis and tax basis of assets and liabilities using enacted tax laws and rates expected to apply to taxable income in the year in which the differences are expected to reverse. We assess the likelihood that our deferred tax assets will be recovered through adjustments to future taxable income. To the extent we believe recovery of tax assets is not likely, we establish a valuation allowance to reduce the asset to a value we believe will be recoverable based on our expectation of future taxable income. 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. If these estimates and related assumptions change in the future, additional valuation allowances may be recorded against the deferred tax assets resulting in additional income tax expense in the future.

Goodwill and long-lived assets

We evaluate goodwill for impairment annually on December 31, unless events or changes in circumstances indicate an impairment may have occurred before that time. We estimate the fair value based on a number of factors, including macroeconomic conditions, industry and market considerations, cost factors, overall financial performance and Company specific events. Estimating projected cash flows requires us to make certain assumptions as it relates to future operating performance.

Application of the goodwill impairment test requires management’s judgments, including a qualitative assessment to determine whether there are any impairment indicators, and determining the fair value of the reporting unit. A number of significant assumptions and estimates are involved in the application of the income approach to forecast future cash flows, including revenue and operating income growth rates, discount rates and other factors. While we believe that our estimates of current value are reasonable, if actual results differ from the estimates and judgments used including such items as future cash flows and the volatility inherent in markets which we serve, impairment charges against the carrying value of those assets could be required in the future.

No events or circumstances occurred that indicated the fair value of any of our reporting units may be below its carrying amount as of December 31, 2025 or 2024. As such, no impairment expense was recorded for the years ended December 31, 2025 and 2024.

Impairment of Long-Lived Assets

Long-lived assets, including property, plant, and equipment, and other finite-lived identifiable intangible assets, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Such events and changes may include significant changes in performance relative to expected operating results, significant changes in asset use, significant negative industry or economic trends, and changes in our business strategy, among others. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of the assets to estimated future undiscounted net cash flows expected to be generated by the asset.

Impairment losses are recognized in the period in which the impairment occurs and represent the excess of the asset carrying value over its fair value estimated using future discounted net cash flows. No impairment was recorded for the years ended December 31, 2025, 2024 and 2023.

Useful lives of property, plant and equipment and intangible assets

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Our industry is capital intensive. As of December 31, 2025, property and equipment represented 48.4% of our total assets and depreciation and amortization represented 23.7% of our total operating costs and expenses for the year ended December 31, 2025. As of December 31, 2024, property and equipment represented 44.2% of our total assets and depreciation and amortization represented 21.7% of our total operating costs and expenses for the year ended December 31, 2024. Our property, plant and equipment and intangible assets with finite useful lives are carried at cost less accumulated depreciation and amortization. For acquired intangible assets, we amortize the cost over their estimated useful lives using either a straight-line or an accelerated method that most accurately reflects the estimated pattern in which the economic benefit of the respective asset is consumed. No provision for salvage value is considered in determining depreciation of our property, plant and equipment. We calculate depreciation and amortization on our assets based on the estimated useful lives that we believe are reasonable. The estimated useful lives are subject to key assumptions such as maintenance and utilization. These estimates may change due to a number of factors such as changes in operating conditions or advances in technology. The estimate has a low degree of estimation uncertainty as there were no changes in the useful lives utilized by management in the periods presented. Maintenance and repairs are charged to expense when incurred. Improvements which extend the life or improve the existing asset are capitalized.

Emerging Growth Company Status

The Jumpstart Our Business Startups Act of 2012, or the JOBS Act, permits an “emerging growth company” such as us to take advantage of an extended transition period to comply with new or revised accounting standards applicable to public companies until those standards would otherwise apply to private companies. We have elected to use this extended transition period for complying with new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date we (i) are no longer an emerging growth company or (ii) affirmatively and irrevocably opt out of the extended transition period provided in the JOBS Act. As a result, we will not be subject to the same new or revised accounting standards as other public companies that are not emerging growth companies, and our consolidated financial statements may not be comparable to other public companies that comply with new or revised accounting pronouncements as of public company effective dates. We may choose to early adopt any new or revised accounting standards whenever such early adoption is permitted for private companies.

We will continue to be an emerging growth company until the earlier of (i) the last day of the fiscal year (a) following the fifth anniversary of the completion of our initial public offering, (b) in which we have total annual gross revenue of at least $1.235 billion or (c) in which we are deemed to be a large accelerated filer under the rules of the Securities and Exchange Commission, which means the market value of our common stock that is held by non-affiliates exceeds $700.0 million as of the last business day of our prior second fiscal quarter, or (ii) the date on which we have issued more than $1.0 billion in non-convertible debt during the previous three years.

As a public company, we are required to provide an annual management report on the effectiveness of our internal control over financial reporting commencing with our second annual report on Form 10-K. Additionally, our independent registered public accounting firm is not required to audit the effectiveness of our internal control over financial reporting until after we are no longer an “emerging growth company”, as defined in the JOBS Act.

Recent Accounting Pronouncements

For a discussion of new accounting pronouncements recently adopted and not yet adopted, see the notes to the audited consolidated financial statements included elsewhere in this Annual Report.

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Item 7A. Quantitative and Qualitative Disclosures about Market Risk

Interest Rate Risk

We are exposed to interest rate risk due to a variable interest rate component associated with outstanding borrowings under our Credit Agreement. Higher interest rates could adversely affect our financial condition and net income. Interest rate risk is highly sensitive due to many factors, including U.S. monetary and tax policies, U.S. and international economic factors and other factors beyond our control.

As of December 31, 2025, we had $167.8 million in borrowings outstanding under the Credit Agreement at a weighted-average interest rate of 5.72%.

Inflation

While inflationary cost increases can affect our income from operations’ margin, we believe that inflation generally has not had, and is not expected to have, a material adverse effect on our results of operations. In 2022, the U.S. experienced the highest inflation in decades primarily due to supply-chain issues, a shortage of labor and a higher demand for goods and services. The most noticeable adverse impact to our business was increased costs associated with materials, personnel expenses, consumables and vehicle-related costs. Most of our costs moderated in 2023 except for wages. We believe it is unlikely that salaries and wages will decrease to the levels experienced in prior years.

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Item 8. Financial Statements and Supplementary Data

The following Consolidated Financial Statements are filed as part of this Annual Report:

Flowco Holdings Inc.

Consolidated Financial Statements

Report of Independent Registered Public Accounting Firm (PCAOB ID: 238) 72

Consolidated Balance Sheets as of December 31, 2025 and 2024 73

Notes to Consolidated Financial Statements 78

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Report of Independent Registered Public Accounting Firm

To the Board of Directors and Stockholders of Flowco Holdings Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Flowco Holdings Inc. and its subsidiaries (the "Company") as of December 31, 2025 and 2024, and the related consolidated statements of operations, of redeemable non-controlling interests and stockholders'/members' equity and of cash flows for each of the three years in the period ended December 31, 2025, including the related notes (collectively referred to as the "consolidated financial statements"). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025 in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

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

We conducted our audits of these consolidated financial statements in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.

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

/s/ PricewaterhouseCoopers LLP

Houston, Texas

February 26, 2026

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

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Flowco Holdings Inc.

Consolidated Balance Sheets

As of

(in thousands except share and per share amounts)

Assets

Current assets:

Cash and cash equivalents $ 4,522 $ 4,615

Prepaid expenses and other current assets 5,615 9,982

Deferred tax asset 16,692 —

Current liabilities:

Current portion of operating lease obligations 8,004 6,809

Current portion of finance lease obligations 12,895 7,837

Long-term liabilities:

Tax receivable agreement liability 21,952 —

Operating lease obligations, net of current portion 9,783 12,739

Finance lease obligations, net of current portion 10,862 13,389

Commitments and contingencies (Note 14)

Redeemable non-controlling interests 1,129,298 —

Members' equity:

Total members' equity — 839,107

Stockholders' equity:

Additional paid-in capital 69,279 —

Total stockholders' equity to Flowco Holdings Inc. 228,626 —

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Flowco Holdings Inc.

Consolidated Statements of Operations

Year ended December 31,

(in thousands except share and per share amounts)

Revenues:

Operating expenses:

Other expenses:

Loss on debt extinguishment — (221 ) —

Net income attributable to redeemable non-controlling interests 90,257

Net income attributable to Flowco Holdings Inc. $ 41,398

Earnings per share:

Weighted average shares outstanding:

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Flowco Holdings Inc.

Consolidated Statements of Redeemable Non-Controlling Interests and Stockholders’/Members’ Equity

Distribution to Members — — — — — (52,500)

Reorganization to Flowco MergeCo — (1,000) — 5,100,000 — — — — — — — — — —

Net income — — — — — 58,089 — — — — — — — —

Equity-based compensation — — — — — 85 — — — — — — — —

Distribution to Members — — — — — (230,513) — — — — — — — —

Net income — — — — — 80,249 — — — — — — — —

Equity-based compensation — — — — — 992 — — — — — — — —

Net loss prior to the Transactions and IPO — — — — — (548) — — — — — — — —

Foreign currency translation adjustment — — — — — — — — — — (90) — — (90)

Distributions to Members — — — — — — — — — — — (28,548) — (28,548)

Dividends declared ($0.08 per share) — — — — — — — — — — — (6,871) — (6,871)

Repurchase of Class A common stock — — — — — — — — — — — — (15,150) (15,150)

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Flowco Holdings Inc.

Consolidated Statements of Cash Flows

Year Ended December 31,

(in thousands)

Cash flows from operating activities

Amortization of operating right-of-use assets 9,827 4,326 508

Amortization of deferred financing costs 1,349 714 400

Loss on debt extinguishment — 221 —

Gain on lease termination (944 ) (958 ) —

Provision for deferred income taxes (5,942 ) — —

Changes in operating assets and liabilities:

Prepaid expenses and other current assets 4,367 (3,029 ) (1,295 )

Other assets and liabilities (82 ) 864 —

Accounts payable - trade (8,493 ) 739 —

Cash flows from investing activities

Payment of contingent consideration related to a business combination (548 ) — —

Proceeds from sale of property, plant and equipment 467 166 841

Net cash acquired in 2024 Business Combination — 3,088 —

Payment for capitalized patent costs (571 ) (193 ) —

Cash flows from financing activities

Payment of offering costs (2,458 ) — —

Repurchase of Class A common stock (15,000 ) — —

Proceeds on finance lease terminations 469 715 —

Purchase of LLC Interests from Continuing Equity Owners (20,876 ) — —

Payment of debt issuance costs (13 ) (6,708 ) —

Payment of dividend equivalent units (10 ) — —

Payment of tax withheld on stock-based compensation (296 ) — —

Dividends paid to Flowco Holdings Inc. shareholders (6,719 ) — —

Net increase (decrease) in cash and cash equivalents (93 ) 4,615 —

Cash and cash equivalents

Beginning of period 4,615 — —

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Flowco Holdings Inc.

Consolidated Statements of Cash Flows (Continued)

Year Ended December 31,

Supplemental disclosures of investing and financing activities

Cash Paid for income taxes

Federal $ 5,100 $ — $ —

Aggregated state and local jurisdictions — — —

Disaggregated state and local jurisdictions:

Texas — — —

Other states — — —

Net cash paid (refunds received) for income taxes $ 5,100 $ — $ —

Supplemental schedule of non-cash activities

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Flowco Holdings Inc.

Notes to Consolidated Financial Statements

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 4,600active systems.

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

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

Initial Public Offering and Reorganization Transactions

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

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.

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Flowco Holdings Inc.

Notes to Consolidated Financial Statements

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:

•

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

•

Reduced disclosure obligations regarding executive compensation;

•

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

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Flowco Holdings Inc.

Notes to Consolidated Financial Statements

•

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

•

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

The Company has elected to use the extended transition period for complying with new or revised accounting standards, and as a result, the Company’s 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

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Flowco Holdings Inc.

Notes to Consolidated Financial Statements

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 in two 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:

•

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.

•

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.

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Flowco Holdings Inc.

Notes to Consolidated Financial Statements

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)

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Flowco Holdings Inc.

Notes to Consolidated Financial Statements

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:

•

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.

•

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.

•

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

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Flowco Holdings Inc.

Notes to Consolidated Financial Statements

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):

Major Product/Service Lines

Timing of Revenue Recognition

Geographical Markets

____________________________

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

Major Product/Service Lines

Timing of Revenue Recognition

Geographical Markets

____________________________

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

Major Product/Service Lines

Downhole Components — — — —

Vapor Recovery (1) — — — —

Timing of Revenue Recognition

Geographical Markets

International — — — —

____________________________

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Flowco Holdings Inc.

Notes to Consolidated Financial Statements

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

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):

85

Flowco Holdings Inc.

Notes to Consolidated Financial Statements

Year Ended December 31,

Acquired from 2024 Business Combination — 377

Accounts receivable allowance for credit losses, end of period $ 1,079 $ 1,169

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

As of December 31,

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):

Year Ended December 31,

Deferred revenue, beginning of period $ 8,002 $ 1,515

Acquired from 2024 Business Combination — 4,628

Deferred revenue, end of period $ 7,376 $ 8,002

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.

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Flowco Holdings Inc.

Notes to Consolidated Financial Statements

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:

Buildings 40 years

Compressor and related equipment 10-15 years

Machinery and equipment 3-15 years

Furniture, fixtures and office equipment 3-7 years

Software 3-5 years

Vehicles 5 years

Land Unlimited

Leasehold improvements Lesser of useful life or lease term

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

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.

87

Flowco Holdings Inc.

Notes to Consolidated Financial Statements

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 was no impairment of goodwill in 2025, 2024 or 2023.

88

Flowco Holdings Inc.

Notes to Consolidated Financial Statements

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:

Trade Names 10 years

Customer Relationships 3-14 years

Non-compete agreement 3 years

Patent 20 years

Developed Technology 10-20 years

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 recorded no 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 did not have any uncertain tax position as of December 31, 2025.

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Flowco Holdings Inc.

Notes to Consolidated Financial Statements

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:

•

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

•

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

•

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

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

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Flowco Holdings Inc.

Notes to Consolidated Financial Statements

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. The adoption of this standard did 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

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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):

Cash and cash equivalents $ 193

Accounts receivable - trade, net 18,104

Prepaid expenses and other current assets 2,551

Property, plant and equipment 357,443

Finance lease right-of-use assets 8,629

Operating lease right-of-use assets 9,763

Other assets 358

Accounts payable - Trade (18,143 )

Accrued expenses (9,495 )

Current portion of finance lease obligations (2,356 )

Current portion of operating lease obligations (3,579 )

Deferred revenue (4,085 )

Operating lease obligations, net of current portion (6,172 )

Finance lease obligations, net of current portion (6,506 )

Identifiable net assets acquired 333,440

Total consideration transferred $ 399,765

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Notes to Consolidated Financial Statements

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):

Cash and cash equivalents $ 2,895

Accounts receivable - trade, net 42,999

Prepaid expenses and other current assets 1,565

Property, plant and equipment 28,608

Finance lease right-of-use assets 6,102

Operating lease right-of-use assets 5,151

Other assets 300

Accounts payable - Trade (11,119 )

Accrued expenses (15,534 )

Current portion of finance lease obligations (3,225 )

Current portion of operating lease obligations (2,179 )

Operating lease obligations, net of current portion (2,972 )

Finance lease obligations, net of current portion (2,877 )

Identifiable net assets acquired 274,978

Total consideration transferred $ 454,863

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

Cost Basis Useful Life (years)

Flogistix

FPS

$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

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Notes to Consolidated Financial Statements

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.

Year Ended December 31,

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 was no measurement period adjustment made to the account balances recorded at the acquisition date.

Property, plant and equipment $ 2,363

Intangible assets 3,928

Earnout liability (548 )

Identifiable net assets acquired 5,743

Total consideration transferred $ 7,000

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 initial six-year period for the acquired customer relationships and three-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

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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):

Cost Basis Useful Life (years)

Property, plant and equipment $ 68,903 7 – 15

Intangible assets - customer contracts 1,925 3

Inventory 172 N/A

Total consideration transferred $ 71,000

Note 3 – Inventory