Open the filing on EDGARFlowco Holdings Inc. Reports Fourth Quarter and Full Year 2025 Results
HOUSTON -- (BUSINESS WIRE) -- Flowco Holdings Inc. (NYSE: FLOC) (“Flowco” or the “Company”), a provider of production optimization, artificial lift and emissions management and monetization solutions for the oil and natural gas industry, today announced financial results for the fourth quarter and full year ended December 31, 2025.
Where presented, the financial results for 2024 represent periods (i) during which Flowco’s operating subsidiary, Flowco MergeCo LLC (“Flowco LLC”), was a privately-owned limited liability company and (ii) prior to the completion of Flowco’s initial public offering in January 2025. Historical financial information for the periods ended in 2024 reflects information for Flowco LLC, and historical financial information presented prior to June 20, 2024 reflects only the historical financial information of Estis Compression LLC (“Estis”) as the accounting predecessor prior to the business combination of Estis, Flowco Production Solutions, LLC and Flogistix, LP and parent entities formed in connection with such business combination (the “2024 Business Combination”).
Key Fourth Quarter 2025 Highlights
Revenues of $197.2 million, generating net income of $43.0 million and Adjusted Net Income of $45.7 million
Adjusted EBITDA of $83.5 million
Adjusted EBITDA Margin of 42.4%
Net cash provided by operating activities of $87.2 million and Free Cash Flow of $63.2 million
In January 2026, Flowco's Board of Directors declared a quarterly cash dividend of $0.08 per share
Robust liquidity with approximately $579.6 million of availability under our revolving credit facility as of February 20, 2026
Financial Summary
| Three Months Ended | Year Ended December 31, |
|---|
| December 31, 2025 | September 30, 2025 | December 31, 2024 | 2025 | 2024 |
|---|
| (in thousands) |
|---|
| Revenues | $197,213 | $176,941 | $185,993 | $759,719 | $535,278 |
| Net income | 42,985 | 34,273 | 22,336 | 131,655 | 80,249 |
| Adjusted Net Income (1) | 45,734 | 37,301 | 28,779 | 148,802 | 99,283 |
| Adjusted EBITDA (1) | 83,545 | 76,803 | 73,779 | 311,737 | 223,661 |
| Adjusted EBITDA Margin (1) | 42.4% | 43.4% | 39.7% | 41.0% | 41.8% |
(1) Adjusted Net Income, Adjusted EBITDA, Adjusted EBITDA Margin, and Free Cash Flow are non-GAAP financial measures. See definitions of these measures and the reconciliation of GAAP to non-GAAP financial measures outlined in the reconciliation tables accompanying this press release.
Joe Bob Edwards, President and CEO, commented, “Flowco ended the year with a strong fourth quarter, underscoring a year of consistent execution and differentiated growth across both of our operating segments in a market environment that remained dynamic and at times uncertain. U.S. oil and natural gas production reached record levels during the year, driven in part by operators’ continued focus on maximizing recovery and optimizing existing wells - a trend that directly aligns with Flowco’s production optimization platform.
In the fourth quarter, we maintained our industry-leading margins as anticipated sales growth complemented the strength of our resilient, high-margin rental portfolio. In the fourth quarter and throughout the year, we generated meaningful free cash flow, enabling us to reduce leverage to levels below where we stood prior to our asset transaction in August. This performance reflects the durability of our financial model and our continued focus on disciplined capital allocation.
Subsequent to quarter-end, we announced our agreement to acquire Valiant Artificial Lift Solutions, expanding our artificial lift capabilities and strengthening our ability to deliver the right solution for our customers in each well, every time. The transaction remains subject to customary regulatory approvals, and we expect it to close in the first week of March.
We believe this transaction meaningfully expands our addressable market and strengthens our ability to support customers earlier in a well’s producing life and throughout the well lifecycle. As we integrate the business in 2026, we are confident in our ability to drive incremental growth and long-term value while continuing to advance Flowco’s broader production optimization strategy.”
Segment Information
We report our results in two segments, Production Solutions and Natural Gas Technologies. Production Solutions includes the rental, sale and service associated with high pressure gas lift, conventional gas lift and plunger lift, including a range of digital solutions and other production related technologies. Natural Gas Technologies includes the design, manufacture, rental and sale of vapor recovery and natural gas systems. Corporate costs not directly related to either segment are categorized separately.
Segment Financial Information
| Three Months Ended | Year Ended December 31, |
|---|
| December 31, 2025 | September 30, 2025 | December 31, 2024 | 2025 | 2024 |
|---|
| (in thousands) |
|---|
| Production Solutions | | | | | |
| Revenues | $127,442 | $125,596 | $113,330 | $497,275 | $327,805 |
| Adjusted Segment EBITDA (1) | 57,477 | 55,260 | 49,929 | 216,670 | 161,354 |
| Adjusted Segment EBITDA Margin (1) | 45.1% | 44.0% | 44.1% | 43.6% | 49.2% |
| Natural Gas Technologies | | | | | |
| Revenues | $69,771 | $51,345 | $72,663 | $262,444 | $207,473 |
| Adjusted Segment EBITDA (1) | 29,982 | 25,317 | 27,802 | 111,358 | 66,259 |
| Adjusted Segment EBITDA Margin (1) | 43.0% | 49.3% | 38.3% | 42.4% | 31.9% |
| Corporate | | | | | |
| Adjusted Segment EBITDA (1) | $(3,914) | $(3,774) | $(3,952) | $(16,291) | $(3,952) |
| Adjusted Segment EBITDA Margin (1) | nm | nm | nm | nm | nm |
| Total | | | | | |
| Revenues | $197,213 | $176,941 | $185,993 | $759,719 | $535,278 |
| Adjusted Segment EBITDA (1) | 83,545 | 76,803 | 73,779 | 311,737 | 223,661 |
| Adjusted Segment EBITDA Margin (1) | 42.4% | 43.4% | 39.7% | 41.0% | 41.8% |
(1) Adjusted Segment EBITDA and Adjusted Segment EBITDA Margin are non-GAAP financial measures. See definitions of these measures and the reconciliation of GAAP to non-GAAP financial measures outlined in the reconciliation tables accompanying this release.
Production Solutions
Fourth quarter 2025 revenue for the Production Solutions segment increased 1.5% from the third quarter of 2025, primarily due to an increase in Surface Equipment revenue. Adjusted Segment EBITDA increased 4.0% quarter over quarter for the same period, with Adjusted Segment EBITDA Margin increasing 110 basis points. The increase in Adjusted Segment EBITDA and Adjusted Segment EBITDA Margin resulted from a decrease in SG&A in the segment and a favorable revenue mix quarter over quarter.
Natural Gas Technologies
Fourth quarter 2025 revenue for the Natural Gas Technologies segment increased 35.9% from the third quarter of 2025, primarily due to an increase in Vapor Recovery and Natural Gas Systems sales. Adjusted Segment EBITDA increased
18.4% quarter over quarter for the same period, with Adjusted Segment EBITDA Margin decreasing 634 basis points due to a revenue mix shift toward sales.
Corporate
Corporate Adjusted Segment EBITDA for fourth quarter 2025 was $(3.9) million, compared to $(3.8) million Corporate Adjusted Segment EBITDA in the third quarter of 2025.
Balance Sheet & Liquidity
As of February 20, 2026, the Company had outstanding borrowings under its senior secured revolving credit facility (“Credit Agreement”) of $142.0 million and, with a current borrowing base of $722.1 million, had availability under the Credit Agreement of $579.6 million. The Company intends to use a portion of such availability to fund the cash consideration payable at the closing of its acquisition of Valiant Artificial Lift Solutions, which is expected to total approximately $170.0 million, subject to customary adjustments in accordance with the purchase agreement.
Dividend Declaration
On January 30, 2026, Flowco announced that its Board of Directors had declared a quarterly cash dividend of $0.08 per share of Class A common stock payable on February 25, 2026 to Class A common stockholders of record as of the close of business on February 13, 2026. Flowco MergeCo LLC, the Company’s operating subsidiary, will make a corresponding distribution of $0.08 per unit to holders of its common units.
Conference Call and Webcast Information
Flowco will host a conference call on Thursday, February 26, 2026, at 8:00 am Eastern Time to discuss fourth quarter and full year 2025 results. The conference call can be accessed live over the phone by dialing 1-877-704-4453 (for the U.S.) or 1-201-389-0920 (for International). A telephonic replay of the conference call will be available two hours after the call and can be accessed by dialing 1-844-512-2921 (for the U.S.) or 1-412-317-6671 (for International). The passcode for the call and replay is 13758392. A live webcast of the conference call will also be available under the Investor Relations section of Flowco’s website at ir.flowco-inc.com.
About Flowco
Flowco 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 oil and natural gas producers to efficiently and cost-effectively maximize the profitability and economic lifespan of their assets.
Forward-Looking Statements
Forward-looking statements notice
The information in this press release includes forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. All statements other than statements of historical facts contained in this press release may be forward-looking statements. These statements generally relate to future events or our future financial or operating performance, and include, but are not limited to: statements regarding guidance or estimates related to the Company’s results of operations or financial condition; industry trends, customer demand and industry outlook, and effects on Flowco’s operations; Flowco’s strategies and plans, including matters relating to the Company growth, capital expenditures, dividend policies, and leverage profile. When used in this press release, words such as “expect,” “project,” “estimate,” “believe,” “anticipate,” “intend,” “plan,” “seek,” “forecast,” “target,” “predict,” “may,” “should,” “would,” “could,” and “will,” the negative of these terms and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain such identifying words. Forward-looking statements are based on management’s current expectations and assumptions, and are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. Accordingly, we caution you that any such forward-looking statements are not guarantees of future performance and are subject to risks, assumptions and uncertainties that are difficult to predict.
Although Flowco believes that the expectations reflected in these forward-looking statements are reasonable as of the date made, actual results may prove to be materially different from the results expressed or implied by the forward-looking statements. These risks and uncertainties are described further in our annual report on Form 10-K for the year ended December 31, 2024 and our quarterly report for the period ended September 30, 2025 filed with the Securities and Exchange Commission. Flowco undertakes no obligation and does not intend to update these forward-looking statements to reflect events or circumstances occurring after this press release. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release.
Condensed Consolidated Statement of Operations
| Three Months Ended | Twelve Months Ended |
|---|
| December 31, 2025 | September 30, 2025 | December 31, 2024 | December 31, 2025 | December 31, 2024 |
|---|
| (in thousands except share and per share amounts) |
|---|
| Revenues: | | | | | |
| Rentals | $111,592 | $106,966 | $91,705 | $417,958 | $276,687 |
| Sales | 85,621 | 69,975 | 94,288 | 341,761 | 258,591 |
| Total revenues | 197,213 | 176,941 | 185,993 | 759,719 | 535,278 |
| Operating expenses: | | | | | |
| Cost of rentals (exclusive of depreciation and amortization disclosed separately below) | 30,593 | 29,295 | 25,538 | 114,341 | 74,494 |
| Cost of sales (exclusive of depreciation and amortization disclosed separately below) | 59,176 | 44,888 | 65,857 | 232,209 | 189,930 |
| Selling, general and administrative expenses | 26,380 | 28,980 | 26,249 | 118,577 | 62,453 |
| Depreciation and amortization | 38,601 | 38,953 | 34,360 | 144,838 | 90,862 |
| Loss on sale of equipment | 487 | 232 | 70 | 742 | 797 |
| Income from operations | 41,976 | 34,593 | 33,919 | 149,012 | 116,742 |
| Other expenses: | | | | | |
| Interest expenses | (4,372) | (2,757) | (10,171) | (18,939) | (32,345) |
| Loss on debt extinguishment | - | - | - | - | (221) |
| Other income (expenses), net | 219 | 229 | (943) | 740 | (2,756) |
| Total other expenses | (4,153) | (2,528) | (11,114) | (18,199) | (35,322) |
| Income before provision for income taxes | 37,823 | 32,065 | 22,805 | 130,813 | 81,420 |
| Income tax benefit (provision) | 5,162 | 2,208 | (469) | 842 | (1,171) |
| Net income | 42,985 | 34,273 | $22,336 | 131,655 | $80,249 |
| Net income attributable to redeemable non-controlling interests | 25,747 | 21,756 | | 90,257 | |
| Net income attributable to Flowco Holdings Inc. | $17,238 | $12,517 | | $41,398 | |
| Earnings per share (1): | | | | | |
| Basic | $0.62 | $0.46 | | $1.53 | |
| Diluted | $0.41 | $0.32 | | $1.24 | |
| Weighted average shares outstanding (1): | | | | | |
| Basic | 28,766,587 | 27,445,906 | | 26,977,063 | |
| Diluted | 90,064,283 | 90,661,805 | | 90,673,021 | |
(1) The calculations of basic and diluted earnings per share and weighted average shares of common stock outstanding cover the periods after January 16, 2025, which are the periods following the Company's initial public offering and the related reorganization transactions, through the end of fourth quarter 2025.
Condensed Consolidated Balance Sheets
| As of |
|---|
| December 31, 2025 | December 31, 2024 |
|---|
| (in thousands except share and per share amounts) |
|---|
| Assets | | |
| Current assets: | | |
| Cash and cash equivalents | $4,522 | $4,615 |
| Accounts receivable, net of allowances for credit losses of $1,079 and $1,169, respectively | 100,465 | 120,353 |
| Inventory | 149,590 | 151,179 |
| Prepaid expenses and other current assets | 5,615 | 9,982 |
| Total current assets | 260,192 | 286,129 |
| Property, plant and equipment, net | 797,534 | 702,616 |
| Operating lease right-of-use assets | 17,556 | 19,480 |
| Finance lease right-of-use assets | 25,861 | 21,871 |
| Intangible assets, net | 273,437 | 302,522 |
| Goodwill | 249,692 | 249,692 |
| Deferred tax asset | 16,692 | - |
| Other assets | 5,387 | 6,639 |
| Total assets | $1,646,351 | $1,588,949 |
| Liabilities, redeemable non-controlling interests and stockholders'/members' equity | | |
| Current liabilities: | | |
| Accounts payable | $22,827 | $31,321 |
| Accrued expenses | 26,909 | 33,829 |
| Current portion of operating lease obligations | 8,004 | 6,809 |
| Current portion of finance lease obligations | 12,895 | 7,837 |
| Deferred revenue | 7,376 | 8,002 |
| Total current liabilities | 78,011 | 87,798 |
| Long-term liabilities: | | |
| Long-term debt, net | 167,819 | 635,916 |
| 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 |
| Total long-term liabilities | 210,416 | 662,044 |
| Total liabilities | 288,427 | 749,842 |
| Commitments and contingencies | | |
| Redeemable non-controlling interests | 1,129,298 | - |
| Members' equity: | | |
| Members' equity | - | 839,107 |
| Total members' equity | - | 839,107 |
| Stockholders' equity: | | |
| Class A common stock, $0.0001 par value - 300,000,000 shares authorized; 29,091,960 shares issued and outstanding as of December 31, 2025; no such shares authorized, issued or outstanding as of December 31, 2024. | 3 | - |
| Class B common stock, $0.0001 par value - 150,000,000 shares authorized; 60,562,983 shares issued and outstanding as of December 31, 2025; no such shares authorized, issued or outstanding as of December 31, 2024. | 6 | - |
| Additional paid-in capital | 69,279 | - |
| Retained earnings | 159,338 | - |
| Total stockholders' equity to Flowco Holdings Inc. | 228,626 | - |
| Total liabilities, redeemable non-controlling interests and members'/stockholders' equity | $1,646,351 | $1,588,949 |
Condensed Consolidated Statements of Cash Flows
| Three Months Ended December 31, | Twelve Months Ended December 31, |
|---|
| 2025 | 2025 | 2024 |
|---|
| (in thousands) |
|---|
| Cash flows from operating activities | | | |
| Net income | $42,985 | $131,655 | $80,249 |
| Adjustments to reconcile net income to net cash provided by operating activities: | | | |
| Depreciation and amortization | 38,601 | 144,838 | 90,862 |
| Provision for inventory obsolescence | 201 | 1,837 | 1,809 |
| Amortization of operating right-of-use assets | 3,200 | 9,827 | 4,326 |
| Amortization of deferred financing costs | 337 | 1,349 | 714 |
| Loss on sale of equipment | 487 | 742 | 797 |
| Loss on debt extinguishment | - | - | 221 |
| Gain on lease termination | (153) | (944) | (958) |
| Stock-based compensation | 1,556 | 11,026 | 992 |
| Provision for deferred income taxes | (5,162) | (5,942) | - |
| Allowance for credit losses | (536) | 1,015 | 636 |
| Changes in operating assets and liabilities: | | | |
| Accounts receivable | 19,041 | 18,873 | (15,487) |
| Inventory | 9,499 | (76) | 21,920 |
| Prepaid expenses and other current assets | 2,053 | 4,367 | (3,029) |
| Other assets and liabilities | (8) | (82) | 864 |
| Accounts payable - trade | (9,501) | (8,493) | 739 |
| Accrued expenses | (7,290) | (6,931) | (4,246) |
| Deferred revenue | (5,162) | (626) | (4,292) |
| Operating lease liabilities | (3,496) | (9,913) | 864 |
| Finance lease liabilities | 524 | 1,848 | 2,402 |
| Net cash provided by operating activities | 87,176 | 294,370 | 179,383 |
| Cash flows used in investing activities | | | |
| Asset acquisition | - | (71,813) | (7,000) |
| Additions to property, plant and equipment | (24,004) | (127,287) | (90,494) |
| Payment of contingent consideration related to a business combination | - | (548) | - |
| Proceeds from sale of property, plant and equipment | 33 | 467 | 166 |
| Net cash acquired in 2024 Business Combination | - | - | 3,088 |
| Payment for capitalized patent costs | (137) | (571) | (193) |
| Net cash used in investing activities | (24,108) | (199,752) | (94,433) |
| Cash flows used in financing activities | | | |
| Issuance of Class A common stock in IPO, net of underwriting discount | - | 461,803 | - |
| Payment of offering costs | - | (2,458) | - |
| Repurchase of Class A common stock | - | (15,000) | - |
| Payments on long-term debt | (207,887) | (1,114,672) | (296,009) |
| Proceeds from long-term debt | 153,077 | 646,574 | 459,683 |
| Payments on finance lease obligations | (3,919) | (14,965) | (7,503) |
| Proceeds on finance lease terminations | 120 | 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) | - |
| Distributions to members of Flowco LLC | (4,845) | (28,548) | (230,513) |
| Dividends paid to Flowco Holdings Inc. shareholders | (2,327) | (6,719) | - |
| Net cash provided by (used in) financing activities | (65,781) | (94,711) | (80,335) |
| Net increase (decrease) in cash and cash equivalents | (2,713) | (93) | 4,615 |
| Cash and cash equivalents | | | |
| Beginning of period | 7,235 | 4,615 | - |
| End of period | $4,522 | $4,522 | $4,615 |
Non-GAAP Financial Measures
In addition to our results determined in accordance with generally accepted accounting principles in the United States (“GAAP”), the Company uses non-GAAP financial measures, such as Adjusted Net Income, EBITDA, Adjusted EBITDA and Free Cash Flow, as well as Adjusted Segment EBITDA and Adjusted Segment EBITDA Margin, in this press release to supplement financial information presented in accordance with GAAP. We believe that excluding certain items from our GAAP results provides management additional insight on the consolidated financial performance from period to period to project our future consolidated financial performance as forecasts are developed at a level of detail different from that used to prepare GAAP-based financial measures. Moreover, we believe these non-GAAP financial measures provide our management and investors with useful information to help them evaluate our operating results by facilitating an enhanced understanding of our operating performance and enabling them to make more meaningful period to period comparisons. There are limitations to the use of the non-GAAP financial measures presented in this press release. For example, our non-GAAP financial measures may not be comparable to similarly titled measures of other companies. Other companies, including companies in our industry, may calculate non-GAAP financial measures differently than we do, limiting the usefulness of those measures for comparative purposes. Similarly, Free Cash Flow does not represent our residual cash flow for discretionary expenditures, since the calculation of this measure does not reflect certain debt service requirements or certain other non-discretionary expenditures. Non-GAAP measures should be considered in addition to results prepared in accordance with GAAP, but should not be considered a substitute for, or superior to, GAAP results. The Company urges investors to review the reconciliation and not to rely on any single financial measure to evaluate our business.
Adjusted Net Income
Adjusted Net Income is a non-GAAP measure that we define as net income (loss) adjusted to eliminate the impact of (i) transaction-related expenses, (ii) share-based compensation, (iii) loss on the sale of equipment, (iv) loss on debt payments and (v) changes to the value of our inventory. Adjusted Net Income is a supplemental non-GAAP financial measure used by management, our stockholders and others to provide visibility on the profitability and financial strength of the Company by excluding certain expenses related to non-recurring Company transactions.
Reconciliation from net income to Adjusted Net Income is set forth as follows:
| Three Months Ended | Twelve Months Ended December 31, |
|---|
| December 31, 2025 | September 30, 2025 | December 31, 2024 | 2025 | 2024 |
|---|
| (in thousands) |
|---|
| Net income | $42,985 | $34,273 | $22,336 | $131,655 | $80,249 |
| Transaction related expenses (1) | 705 | - | 2,727 | 1,204 | 5,810 |
| Share-based compensation expense (2) | 1,557 | 1,479 | 483 | 9,668 | 992 |
| Non-recurring charges (3) | - | 1,317 | - | 5,219 | - |
| Loss on sale of equipment | 487 | 232 | 70 | 742 | 797 |
| Loss on debt extinguishment | - | - | - | - | 221 |
| Inventory valuation adjustments (4) | - | - | 3,163 | 314 | 11,214 |
| Adjusted Net Income | $45,734 | $37,301 | $28,779 | $148,802 | $99,283 |
(1) Represents the transaction-related expenses as part of the 2024 Business Combination, non-capitalizable IPO related costs and business combination expenses associated with the Valiant acquisition, which were expensed as incurred and included in the consolidated statements of operations.
(2) Reflects non-cash compensation expense for equity-based awards to our employees and non-employee directors for the periods presented.
(3) Represents (i) one-time charge for a settlement expense related to a lawsuit for the three months ended September 30, 2025, and (ii) termination benefits and related expenses and the costs associated with the re-purposing of one of our manufacturing facilities in Pampa, TX for the three months ended June 30, 2025.
(4) Reflects non-cash adjustment related to inventory fair value step-up from the 2024 Business Combination which has been included in cost of sales.
Adjusted EBITDA and Adjusted EBITDA margin
We define EBITDA as net income, adjusted to exclude interest expense, provision for income taxes and depreciation and amortization. We define Adjusted EBITDA as EBITDA adjusted to exclude (i) share-based compensation expense, (ii) business combination-related expenses and (iii) other non-cash and non-recurring expenses.
EBITDA and Adjusted EBITDA are key performance indicators we use in evaluating our operating performance and in making financial, operating and planning decisions. In particular, the exclusion of certain expenses in calculating EBITDA and Adjusted EBITDA provides additional visibility on operating performance across reporting periods by removing the effect of non-cash and/or non-recurring expenses. Accordingly, we believe that this measure provides useful information to our stockholders and others in understanding and evaluating our operating results in the same manner as our management and board of directors.
Reconciliation from net income to EBITDA and Adjusted EBITDA are set forth as follows:
| Three Months Ended | Twelve Months Ended December 31, |
|---|
| December 31, 2025 | September 30, 2025 | December 31, 2024 | 2025 | 2024 |
|---|
| (in thousands) |
|---|
| Net income | $42,985 | $34,273 | $22,336 | $131,655 | $80,249 |
| Interest expense | 4,372 | 2,757 | 10,171 | 18,939 | 32,345 |
| Income tax benefit (provision) | (5,162) | (2,208) | 469 | (842) | 1,171 |
| Depreciation and amortization | 38,601 | 38,953 | 34,360 | 144,838 | 90,862 |
| EBITDA | 80,796 | 73,775 | 67,336 | 294,590 | 204,627 |
| Transaction related expenses (1) | 705 | - | 2,727 | 1,204 | 5,810 |
| Share-based compensation expense (2) | 1,557 | 1,479 | 483 | 9,668 | 992 |
| Non-recurring charges (3) | - | 1,317 | - | 5,219 | - |
| Loss on sale of equipment | 487 | 232 | 70 | 742 | 797 |
| Loss on debt extinguishment | - | - | - | - | 221 |
| Inventory valuation adjustments (4) | - | - | 3,163 | 314 | 11,214 |
| Adjusted EBITDA | $83,545 | $76,803 | $73,779 | $311,737 | $223,661 |
(1) Represents the transaction-related expenses as part of the 2024 Business Combination, non-capitalizable IPO related costs and business combination expenses associated with the Valiant acquisition, which were expensed as incurred and included in the consolidated statements of operations.
(2) Reflects non-cash compensation expense for equity-based awards to our employees and non-employee directors for the periods presented.
(3) Represents (i) one-time charge for a settlement expense related to a lawsuit for the three months ended September 30, 2025, and (ii) termination benefits and related expenses and the costs associated with the re-purposing of one of our manufacturing facilities in Pampa, TX for the three months ended June 30, 2025.
(4) Reflects non-cash adjustment related to inventory fair value step-up from the 2024 Business Combination which has been included in cost of sales.
Adjusted Segment EBITDA and Adjusted Segment EBITDA Margin
In addition to business segment profit or loss, our management also evaluates Adjusted Segment EBITDA, which is presented on a business unit level for purposes of allocating resources and evaluating operating and financial performance. As discussed above, 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. This segment includes rental, sales and service revenues.
Natural Gas Technologies: relates to the design, manufacturing, rental, sale and servicing of vapor recovery and natural gas systems. This segment includes rental, sales, service revenues and methane abatement technology.
We define Adjusted Segment EBITDA as segment net income, as adjusted in the same manner as defined for EBITDA and Adjusted EBITDA above. Reconciliation from segment net income, which includes direct segment costs but excludes corporate costs not directly related to either segment, to Adjusted Segment EBITDA is set forth as follows:
| Three Months Ended | Twelve Months Ended December 31, |
|---|
| December 31, 2025 | September 30, 2025 | December 31, 2024 | 2025 | 2024 |
|---|
| (in thousands) |
|---|
| Production Solutions | | | | | |
| Net income | $33,236 | $31,734 | $29,712 | $126,678 | $73,385 |
| Interest expense | 219 | (1,651) | (3,031) | 963 | 13,455 |
| Income tax benefit (provision) | (25) | - | 356 | 239 | 770 |
| Depreciation and amortization | 22,832 | 23,577 | 20,198 | 84,215 | 61,475 |
| EBITDA | 56,262 | 53,660 | 47,235 | 212,095 | 149,085 |
| Transaction related expenses (1) | 705 | - | - | 705 | 1,028 |
| Share-based compensation expense (2) | - | - | 329 | 1,280 | 700 |
| Non-recurring charges (3) | - | 1,317 | - | 1,317 | - |
| (Gain) loss on sale of equipment | 510 | 283 | 41 | 959 | 784 |
| Loss on debt extinguishment | - | - | (221) | - | - |
| Inventory valuation adjustments (4) | - | - | 2,545 | 314 | 9,757 |
| Adjusted Segment EBITDA | 57,477 | 55,260 | 49,929 | 216,670 | 161,354 |
| Natural Gas Technologies | | | | | |
| Net income | $14,037 | $9,774 | $14,542 | $46,672 | $29,519 |
| Interest expense | 207 | 224 | (1,816) | 857 | 3,135 |
| Income tax benefit (provision) | - | 1 | 113 | 142 | 401 |
| Depreciation and amortization | 15,761 | 15,369 | 14,162 | 60,596 | 29,387 |
| EBITDA | 30,005 | 25,368 | 27,001 | 108,267 | 62,442 |
| Transaction related expenses (1) | - | - | - | - | 2,055 |
| Share-based compensation expense (2) | - | - | 154 | 2,308 | 292 |
| Non-recurring charges (3) | - | - | - | 1,000 | - |
| (Gain) loss on sale of equipment | (23) | (51) | 29 | (217) | 13 |
| Inventory valuation adjustments (4) | - | - | 618 | - | 1,457 |
| Adjusted Segment EBITDA | 29,982 | 25,317 | 27,802 | 111,358 | 66,259 |
| Corporate | | | | | |
| Net income | $(4,288) | $(7,235) | $(21,918) | $(41,695) | $(22,655) |
| Interest expense | 3,946 | 4,184 | 15,018 | 17,119 | 15,755 |
| Income tax benefit (provision) | (5,137) | (2,209) | - | (1,223) | - |
| Depreciation and amortization | 8 | 7 | - | 27 | - |
| EBITDA | (5,471) | (5,253) | (6,900) | (25,772) | (6,900) |
| Transaction related expenses (1) | - | - | 2,727 | 499 | 2,727 |
| Share-based compensation expense (2) | 1,557 | 1,479 | - | 6,080 | - |
| Non-recurring charges (3) | - | - | - | 2,902 | - |
| (Gain) loss on sale of equipment | - | - | - | - | - |
| Loss on debt extinguishment | - | - | 221 | - | 221 |
| Inventory valuation adjustments (4) | - | - | - | - | - |
| Adjusted Segment EBITDA | (3,914) | (3,774) | (3,952) | (16,291) | (3,952) |
| Total Adjusted EBITDA | $83,545 | $76,803 | $73,779 | $311,737 | $223,661 |
(1) Represents the transaction-related expenses as part of the 2024 Business Combination, non-capitalizable IPO related costs and business combination expenses associated with the Valiant acquisition, which were expensed as incurred and included in the consolidated statements of operations.
(2) Reflects non-cash compensation expense for equity-based awards to our employees and non-employee directors for the periods presented.
(3) Represents (i) one-time charge for a settlement expense related to a lawsuit for the three months ended September 30, 2025 (Production Solutions) and (ii) termination benefits and related expenses (Corporate) and the costs associated with the re-purposing of one of our manufacturing facilities in Pampa, TX (Natural Gas Technologies) for the three months ended June 30, 2025.
(4) Reflects non-cash adjustment related to inventory fair value step-up from the 2024 Business Combination which has been included in cost of sales.
Free Cash Flow
Free Cash Flow is a non-GAAP measure that we define as cash flow provided by operating activities less additions to property, plant and equipment (which includes both maintenance and growth capital expenditures, but excludes asset acquisitions of a business, and excludes other business acquisitions and equity investments). Management believes this information is important to provide because it is used by management to evaluate the Company’s operational performance and trends between periods and to manage our business. Management also believes this information may be useful to investors and analysts to gain a better understanding of the Company’s results of ongoing operations. Free Cash Flow is not intended to replace GAAP financial measures. A reconciliation of net cash provided by operating activities to Free Cash Flow, as well as Free Cash Flow (Deficit) after Asset Acquisition, is set forth as follows:
| Three Months Ended December 31, | Twelve Months Ended December 31, |
|---|
| 2025 | 2025 | 2024 |
|---|
| (in thousands) |
|---|
| Net cash provided by operating activities | $87,176 | $294,370 | $179,383 |
| Additions to property, plant and equipment | (24,004) | (127,287) | (90,494) |
| Free Cash Flow | 63,172 | 167,083 | 88,889 |
| Asset acquisition | - | (71,813) | (7,000) |
| Free Cash Flow (Deficit) after Asset Acquisition | $63,172 | $95,270 | $81,889 |
Contacts
Andrew Leonpacher | VP of Finance, Corporate Development, and Investor Relations andrew.leonpacher@flowco-inc.com
(713) 997-4647
Cheryl Brashear-White | VP of Marketing Communications cheryl.white@flowco-inc.com
(405) 819-5290
Source: Flowco Holdings Inc.