FLOC 10-K & 10-Q changes, risk factors and insider trading

We have identified material weaknesses in our internal control over financial reporting. If we are unable to remediate these material weaknesses, or if we identify additional material weaknesses in the future or otherwise fail to maintain effective internal control over financial reporting, we may not be able to accurately or timely report our financial condition or results of operations, which may adversely affect our business and Class A common stock price.

Concerns over global economic conditions, inflation, energy costs, geopolitical issues, supply chain disruptions, the availability and cost of credit, and the continuing conflicts between Russia and Ukraine and in the Middle East have contributed to increased economic uncertainty. An expansion or escalation of the Russian-Ukraine or Middle East conflicts or an economic slowdown or recession in the United StatesU.S. or in any other country that significantly affects the supply of or demand for oil or natural gas could negatively impact our operations and therefore adversely affect our results. Global economic conditions have a significant impact on oil and natural gas prices and any stagnation or deterioration in global economic conditions could result in less demand for our services and could cause our customers to reduce their planned spending on drilling and production activity. Adverse global economic conditions may cause our customers, vendors and/or suppliers to lose access to the financing necessary to sustain or increase their current level of operations, fulfill their commitments and/or fund future operations and obligations. Furthermore, challenging economic conditions may result in certain of our customers experiencing bankruptcy or otherwise becoming unable to pay vendors, including us. In the past, global economic conditions, and expectations for future global economic conditions, have sometimes experienced significant deterioration in a relatively short period of time and there can be no assurance that global economic conditions or expectations for future global economic conditions will recover in the near term or not quickly deteriorate again due to one or more factors. These conditions could have a material adverse effect on our business, financial condition and results of operations.

We depend on various information technologies and other products and services to store and process business information and otherwise support our business activities. We also manufacture and sell hardware and software to provide monitoring, controls and optimization of customer critical assets in oil and natural gas production and distribution. In addition, certain of our customer offerings include digital components, such as remote monitoring of certain customer operations. We also provide services to maintain these systems. Additionally, our operations rely upon partners, suppliers and other third-party providers of information technology and other products and services. If any of these information technologies, products or services are damaged, cease to properly function, are breached due to employee error, malfeasance, system errors, or other vulnerabilities, or are subject to cybersecurity attacks, such as those involving unauthorized access, malicious software and/or other intrusions, we and our partners, suppliers or other third parties could experience: (i) production downtimes,downtimes; (ii) operational delays,delays; (iii) the compromising of confidential, proprietary or otherwise protected information, including personal and customer data,data; (iv) destruction, corruption, or theft of data,data; (v) security breaches,breaches; (vi) other manipulation, disruption, misappropriation or improper use of our systems or networks,networks; (vii) hydrocarbon pollution from loss of containment,containment; (viii) financial losses from remedial actions,actions; (ix) loss of business or potential liability,liability; (x) adverse media coverage,coverage; and (xi) legal claims or legal proceedings, including regulatory investigations and actions, and/or damage to our reputation. Increased risks of such attacks and disruptions also exist as a result of geopolitical conflicts, such as the continuing conflict between Russia and Ukraine and the Middle East. While we have not experienced a material breach of our information technologies and we attempt to mitigate these risks by employing a number of measures, including employee training, technical security controls and maintenance of backup and protective systems, the Company’s and our customers’, partners’, vendors’ and other third- parties’ systems, networks, products and services remain potentially vulnerable to known or unknown cybersecurity attacks and other threats, any of which could have a material adverse effect on our business, results of operations, financial condition and cash flows.

We have identified material weaknesses in our internal control over financial reporting. If we are unable to remediate these material weaknesses, or if we identify additional material weaknesses in the future or otherwise fail to maintain effective internal control over financial reporting, we may not be able to accurately or timely report our financial condition or results of operations, which may adversely affect our business and Class A common stock price.

As a public company, we are required, pursuant to Section 404 of the Sarbanes-Oxley Act, to furnish a report by management on the effectiveness of our internal control over financial reporting. However, we are exempt from furnishing management report on the effectiveness of our internal control over financial reporting for the period covered in this Annual Report due to a transition period established by rules of the SEC for newly public companies. Additionally, our independent registered public accounting firm is not required to attest to 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. We may not be able to conclude on an ongoing basis that we have effective internal control over financial reporting, in which case our independent registered public accounting firm could not issue an unqualified opinion related to the effectiveness of our internal control over financial reporting. If we are unable to conclude that we have effective internal control over financial reporting and our independent registered public accounting firm is unable to issue an unqualified opinion related to the effectiveness of our internal control over financial reporting, investors could lose confidence in our reported financial information, which could have a material adverse effect on the trading price of our Class A common stock. See “Management’s Annual Report on Internal Control Over Financial Reporting” in Item 9A of this Annual Report.

Increasing attention to climate change, societal expectations on companies to address climate change, investor and societal expectations regarding voluntary ESG initiatives and disclosures, and consumer demand for alternative forms of energy may result in increased costs, including, but not limited to, increased costs related to compliance, stakeholder engagement, contracting and insurance, reduced demand for our products, reduced profits, increased investigations and litigation, and negative impacts on the price of our shares of Class A common unitsstock and access to capital markets. For instance, there have been efforts within the investment community (including investment advisors, investment fund managers, sovereign wealth funds, public pension funds, universities and individual investors) to promote the divestment of, or limit investment in, the stock of companies in the oil and natural gas industry. There has also been pressure on lenders and other financial services companies to limit or curtail financing of companies in the oil and natural gas industry. If these efforts continue or expand, our stock price and our ability to raise capital may be negatively impacted.

Environmental laws, regulations and policies could limit our customers’ exploration and production activities. Although we do not directly engage in drilling or hydraulic fracturing activities, we provide products and services to operators in the oil and natural gas industry who are actively involved in the drilling and hydraulic fracturing activities. There has been significant growth in opposition to oil and natural gas development both in the United StatesU.S. and globally. This opposition is focused on attempting to limit or stop hydrocarbon development in certain areas. Examples of such opposition include: (i) efforts to reduce access to public and private lands; (ii) delaying or canceling permits for drilling or pipeline construction or export facilities; (iii) limiting or banning industry techniques such as hydraulic fracturing, and/or adding restrictions on the use of water and associated disposal; (iv) delaying or denying air-quality permits; and (v) advocating for increased regulations, punitive taxation, or citizen ballot initiatives or moratoriums on industry activity.

Our operations require us to comply with a number of U.S. and international laws and regulations, including those relating to anti-corruption, anti-bribery, fair competition, export and import compliance, money laundering and data privacy. In particular, our international operations are subject to the regulations imposed by the Foreign Corrupt Practices Act as well as anti-bribery and anti-corruption laws of various jurisdictions in which we operate. While we strive to maintain high ethical standards and robust internal controls, we cannot provide assurance that our internal controls, training and compliance systems will always protect us from acts committed by our employees, agents or business partners that would violate such U.S. or international laws or regulations. Any such violations of law or improper actions could subject us to civil or criminal investigations in the United StatesU.S. or other jurisdictions, could lead to substantial civil or criminal, monetary and non-monetary penalties and related stockholder lawsuits, could lead to increased costs of compliance and could damage our reputation, business, results of operations, financial condition and cash flows.

Our material input costs are adversely affected by tariffs imposed by the U.S. government on products imported into the United StatesU.S. and by trade restrictions imposed on business dealings with particular entities and/or individuals. Further trade restrictions, retaliatory trade measures and additional tariffs could result in higher input costs for our products, disrupt our supply chain and logistics, cause adverse financial impacts due to volatility in foreign exchange rates and interest rates, inflationary pressures on raw materials and energy, and heighten cybersecurity threats and other restrictions. We may not be able to fully mitigate the impact of these increased costs or pass price increases on to our customers. We cannot predict future developments, and such existing or future tariffs could have a material adverse effect on our results of operations, financial position and cash flows.

Flowco LLC will continue to be treated as a partnership for U.S. federal income tax purposes and, as such, generally will not be subject to any entity-level U.S. federal income tax. Instead, any taxable income of Flowco LLC will be allocated to holders of LLC Interests, including us. Accordingly, we will incur income taxes on our allocable share of any net taxable income of Flowco LLC. Under the terms of the Flowco LLC Agreement, Flowco LLC will be obligated, subject to various limitations and restrictions, including with respect to our debt agreements, to make tax distributions to holders of LLC Interests, including us. In addition to tax expenses, we will also incur expenses related to our operations, including payments under the Tax Receivable Agreement, which we expect could be significant. See “Part III, Item 13. Certain Relationship and Related Transactions, and Director Independence.” We intend, as its managing member, to cause Flowco LLC to make cash distributions to the holders of LLC Interests in an amount sufficient to (i) fund all or part of their tax obligations in respect of taxable income allocated to them and (ii) cover our operating expenses, including payments under the Tax Receivable Agreement. However, Flowco LLC’s ability to make such distributions may be subject to various limitations and restrictions, such as restrictions on distributions that would either violate any contract or agreement to which Flowco LLC is then a party, including debt agreements, or any applicable law, or that would have the effect of rendering Flowco LLC insolvent. If we do not have sufficient funds to pay tax or other liabilities, or to fund our operations (including, if applicable, as a result of an acceleration of our obligations under the Tax Receivable Agreement), we may have to borrow funds, which could materially and adversely affect our liquidity and financial condition, and subject us to various restrictions imposed by any lenders of such funds. To the extent we are unable to make timely payments under the Tax Receivable Agreement 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 Tax Receivable Agreement resulting in the acceleration of payments due under the Tax Receivable Agreement. See “Part III, Item 13. Certain Relationship and Related Transactions, and Director Independence.” 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 “Risk Factors — Risk Factors Related to the Offering and Ownership of our Class A Common Stock” and “Part II. Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities - Dividends.”

In connection with the consummation of the IPO, we entered into a Tax Receivable Agreement with Flowco LLC and each of the TRA Participants. Under the Tax Receivable Agreement, we are required to make cash payments to the TRA Participants 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) Flowco Holdings’ allocable share of existing tax basis acquired in connection with the Transactions and increases to such allocable share of existing tax basis; (ii) Flowco Holdings’ utilization of certain tax attributes of the Blocker Companies (including the Blocker Companies’ allocable share of existing tax basis); (iii) the increases in our share of the tax basis of assets of Flowco LLC resulting from (a) the purchase of LLC Interests directly from Flowco LLC in connection with the IPO, (b) any future redemptions or exchanges of LLC Interests from the Continuing Equity Owners as described under “Part III, item 13. Certain Relationship and Related Transactions, and Director Independence,” and (c) certain distributions (or deemed distributions) by Flowco LLC; and (iv) certain other tax benefits arising from payments under the Tax Receivable Agreement. We will be required to make such payments to the TRA Participants even if all of the Continuing Equity Owners were to exchange or redeem their remaining LLC Interests.

The payment obligation is an obligation of Flowco Holdings and not of Flowco LLC. We expect that the amount of the cash payments we will be required to make under the Tax Receivable Agreement will be substantial. Any payments made by us to the TRA Participants under the Tax Receivable Agreement will not be available for reinvestment in our business and will generally reduce the amount of overall cash flow that might have otherwise been available to us. To the extent that we are unable to make timely payments under the Tax Receivable Agreement for any reason, the unpaid amounts will be deferred and will accrue interest until paid by us, provided, however, that nonpayment for a specified period may constitute a material breach of a material obligation under the Tax Receivable Agreement resulting in the acceleration of payments due under the Tax Receivable Agreement. The payments under the Tax Receivable Agreement are not conditioned upon continued ownership of us by the exchanging Continuing Equity Owners. Furthermore, if we experience a Change of Control (as defined under the Tax Receivable Agreement), which includes certain mergers, asset sales, and other forms of business combinations, we would be obligated to make an immediate payment, and such payment may be significantly in advance of, and may materially exceed, the actual realization, if any, of the future tax benefits to which the payment relates. This payment obligation could (i) make us a less attractive target for an acquisition, particularly in the case of an acquirer that cannot use some or all of the tax benefits that are the subject of the Tax Receivable Agreement and (ii) result in holders of our Class A common stock receiving substantially less consideration in connection with a change of control transaction than they would receive in the absence of such obligation. Accordingly, the Continuing Equity Holders’ interests may conflict with those of the holders of our Class A common stock. The existing tax basis acquired in connection with the Transactions, the actual increase in tax basis, and the actual utilization of any resulting tax benefits, as well as the amount and timing of any payments under the Tax Receivable Agreement, will vary depending upon a number of factors:factors, including the timing of redemptions by the Continuing Equity Owners; the price of shares of our Class A common stock at the time of the redemption; the extent to which such redemptions are taxable; the amount of gain recognized by such Continuing Equity Owners; the amount and timing of the taxable income allocated to us or otherwise generated by us in the future; the portion of our payments under the Tax Receivable Agreement constituting imputed interest; and the federal and state tax rates then applicable.

Our organizational structure, including the Tax Receivable Agreement, confers certain benefits upon the Continuing Equity Owners that will not benefit the holders of our Class A common stock to the same extent that it will benefit the Continuing Equity Owners. We entered into the Tax Receivable Agreement with Flowco LLC and each of the TRA Participants in connection with the completion of the IPO and the Transactions, which provides for the payment by us to the TRA Participants of 85% of the amount of tax benefits, if any, that we actually realize, or in some circumstances are deemed to realize, as a result of: (i) Flowco’s allocable share of existing tax basis acquired in connection with the Transactions and increases to such allocable share of existing tax basis; (ii) Flowco Holdings’s utilization of certain tax attributes of the Blocker Companies (including the Blocker Companies’ allocable share of existing tax basis); (iii) the increases in our share of the tax basis of assets of Flowco LLC resulting from (a) the purchase of LLC Interests directly from Flowco LLC in connection with the IPO, (b) any future redemptions or exchanges of LLC Interests from the Continuing Equity Owners as described under “Certain Relationships and Related Party Transactions - Flowco LLC Agreement - Flowco LLC Agreement in Effect Upon Consummation of the Transactions -— Common Unit Redemption Right” in our Annual Report on Form 10-K for 2024 (and equivalent section in our Definitive Proxy Statement for our 2026 Annual Meeting of Shareholders to be incorporated by reference herein) and (c) certain distributions (or deemed distributions) by Flowco LLC; and (iv) certain other tax benefits arising from payments under the Tax Receivable Agreement. See “Certain Relationships and Related Party Transactions—Tax Receivable Agreement.Agreement” in our Annual Report on Form 10-K for 2024 (and equivalent section in our Definitive Proxy Statement for our 2026 Annual Meeting of Shareholders to be incorporated by reference herein). Although we will retain 15% of the amount of such tax benefits, this and other aspects of our organizational structure may adversely impact the future trading market for the Class A common stock.

In addition to rights relating to the nomination of directors and our Board of Directors, the Stockholders Agreement includes certain consent rights with respect to actions by the company and our subsidiaries as long as GEC Affiliates or White Deer Affiliates, respectively, beneficially own, directly or indirectly, at least 10% of the Deemed Outstanding Class A Shares. The interests of GEC and White Deer may be different than the interests of other stockholders, and such consent rights could limit our ability to engage in certain transactions in a way that is adverse to your interests. For more information, see “Certain Relationships and Related Party Transactions—Stockholders Agreement.”

Further, our amended and restated certificate of incorporation, which became effective upon the consummation of the Transactions, provides that the doctrine of “corporate opportunity” does not apply with respect to any director or stockholder who is not employed by us or any of our subsidiaries. GEC, White Deer and their respective affiliates have investments in other oilfield services companies that may compete with us, and GEC, White Deer and their respective affiliates may invest in such other companies in the future. By renouncing our interest and expectancy in any business opportunity that may be from time to time presented to any member of a GEC or White Deer affiliated entity or any of our directors or officers who is also an employee, partner, member, manager, officer or director of any GEC or White Deer affiliated entity, our business or prospects could be adversely affected if attractive business opportunities are procured by such parties for their own benefit rather than for ours. See “Risk Factors – Risk Factors Related to the IPO and Ownership of Our Class A Common Stock – Our amended and restated certificate of incorporation provides that the doctrine of “corporate opportunity” will not apply with respect to any director or stockholder who is not employed by us or our subsidiaries.”

We cannot predict whether our dual classdual-class structure will result in a lower or more volatile market price of our Class A common stock, in adverse publicity,publicity or other adverse consequences. ForThe example, certain index providers have announced restrictions on including companies with multiple-class share structures in certain of their indices. In July 2017, FTSE Russell announced that it plans to require new constituents of its indices to have greater than 5% of the company’s voting rights in the hands of public stockholders, and S&P Dow Jones announced that it will no longer admit companies with multiple-class share structures to certain of its indices. Affected indices include the Russell 2000 and the S&P 500, S&P MidCap 400, and S&P SmallCap 600, which together make up the S&P Composite 1500. Also in 2017, MSCI, a leading stock index provider, opened public consultations on their treatment of no-vote and multi-class structures and temporarily barred new multi-class listings from certain of its indices; however, in October 2018, MSCI announced its decision to include equity securities “with unequal voting structures” in its indices and to launch a new index that specifically includes voting rights in its eligibility criteria. Under such announced policies, the dual classdual-class structure of our common stock wouldmay make us ineligible for inclusion in certain indices and, as a result, mutual funds, exchange-traded funds and other investment vehicles that attempt to passively track those indices would not invest in our Class A common stock. TheseIn policies are relatively new, andaddition, it is unclear what effect, if any, theysuch policies will have on the valuations of publicly-traded companies excluded from such indices, but it is possible that they may depressadversely affect valuations, as compared to similar companies that are included. Due to the dual-class structure of our common stock, we may be excluded from certain indices and we cannot assure you that other stock indices will not take similar actions. Given the sustained flow of investment funds into passive strategies that seek to track certain indices, exclusion from certain stock indices would likelymay preclude investment by many of these funds and could make our Class A common stock less attractive to other investors. As a result, the market price of our Class A common stock couldmay be adversely affected.

In addition, we have opted out of Section 203 of the General Corporation Law of the State of Delaware (the “DGCL”), but our amended and restated certificate of incorporation provides that engaging in any of a broad range of business combinations with any “interested” stockholder (any stockholder with 15% or more of our voting stock) for a period of three years following the date on which the stockholder became an “interested” stockholder is prohibited, subject to certain exceptions, including an exclusion for GEC, White Deer and their affiliates. See “Description of Capital Stock” section included in the Final Prospectus.

Our ability to declare and pay dividends in the future will be made at the discretion of our Board of Directors and will depend on, among other things, general and economic conditions, our results of operations and financial condition, our available cash and current and anticipated cash needs, capital requirements, contractual, legal, tax and regulatory restrictions, and such other factors that our Board of Directors may deem relevant. In addition, our ability to pay dividends is, and may be, limited by covenants of existing and any future outstanding indebtedness we or our subsidiaries incur, including under our Credit Agreement. Therefore, any return on investment in our Class A common stock iswill solelylikely dependentdepend primarily upon the appreciation of the price of our Class A common stock on the open market, which may not occur. See “Part II. Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities - Dividends” for more detail.

Our amended and restated certificate of incorporation provides that the Court of Chancery of the State of Delaware will be the sole and exclusive forum for certain stockholder litigation matters and the federal district courts of the United StatesU.S shall be the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers, employees or stockholders.

Our amended and restated certificate of incorporation provides (A) (i) any derivative action or proceeding brought on behalf of the Company, (ii) any action asserting a claim of breach of a fiduciary duty owed by any current or former director, officer, other employee or stockholder of the Company to the Company or the Company’s stockholders, (iii) any action asserting a claim arising pursuant to any provision of the DGCL, our amended and restated certificate of incorporation or our amended and restated bylaws (as either may be amended or restated) or as to which the DGCL confers jurisdiction on the Court of Chancery of the State of Delaware or (iv) any action asserting a claim governed by the internal affairs doctrine of the law of the State of Delaware shall, to the fullest extent permitted by law, be exclusively brought in the Court of Chancery of the State of Delaware or, if such court does not have subject matter jurisdiction thereof, the federal district court of the State of Delaware; and (B) the federal district courts of the United StatesU.S. shall be the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act. Notwithstanding the foregoing, the exclusive forum provision shall not apply to claims seeking to enforce any liability or duty created by the Exchange Act. The choice of forum provision may limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with us or our directors, officers, or other employees, which may discourage such lawsuits against us and our directors, officers, and other employees. Alternatively, if a court were to find the choice of forum provision contained in our amended and restated certificate of incorporation to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could harm our business, results of operations, and financial condition. Any person or entity purchasing or otherwise acquiring any interest in shares of our capital stock shall be deemed to have notice of and consented to the forum provisions in our amended and restated certificate of incorporation.

Prior to and following our IPO in 2025, we incurred costs to implement and improve our internal audit and compliance function. We expect to incur additional costs related to implementingmaintaining anour internal audit and compliance function in the upcoming yearsand to further improve our internal control environment. If we identify future deficiencies in our internal control over financial reporting or if we are unable to comply with the demands that will be placed upon us as a public company, including the requirements of Section 404 of the Sarbanes-Oxley Act, in a timely manner, we may be unable to accurately report our financial results, or report them within the timeframes required by the SEC. We also could become subject to sanctions or investigations by the SEC or other regulatory authorities. In addition, if we are unable to assert that our internal control over financial reporting is effective, or if our independent registered public accounting firm is unable to express an opinion as to the effectiveness of our internal control over financial reporting, when required, investors may lose confidence in the accuracy and completeness of our financial reports, we may face restricted access to the capital markets and our stock price may be adversely affected.

Upon consummationAs of theFebruary Transactions,26, 2026, we had a total of 25,721,62029,647,189 outstanding shares of Class A common stock, of which the 20,470,000 shares of outstanding Class A common stock sold in the IPO are freely tradable without restriction or further registration under the Securities Act, other than shares held by our affiliates. In addition, as of February 10, 2026, we have registered on Form S-3 the 5,251,620resale of up to 57,530,845 shares of Class A common stock issuedby selling stockholders, as well as the sale by us of up to the$500 Blockermillion Shareholdersof inshares theof TransactionsClass areA common stock and certain other equity-related securities. Certain holders of such registered shares, as well as other holders of shares of Class B common stock and LLC Units, may also be eligible forto resaleresell shares of Class A common stock pursuant to Rule 144 without restriction or further registration under the Securities Act, other than affiliate restrictions under Rule 144. Any shares of Class A common stock held by our affiliates are eligible for resale pursuant to Rule 144 under the Securities Act, subject to the volume, manner of sale, holding period and other limitations of Rule 144. The market price of our shares of Class A common stock could drop significantly if we or the holders of these shares sell them or are perceived by the market as intending to sell them. These factors could also make it more difficult for us to raise additional funds through future offerings of our shares of Class A common stock or other securities We have reserved shares of Class A common stock equal to approximately 6.6% of the total number of outstanding LLC Interests following the IPO for issuance under the Equity Plan (as defined below in this Annual Report). Any Class A common stock that we issue under the Equity Plan or other equity incentive plans that we may adopt in the future would dilute the percentage ownership held by the investors in our Class A common stock.

Background and BusinessCompany Overview

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

Production Solutions: segment is comprised of our artificial lift operations, including digital solutions and methane abatement technologies; and 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 producingproduction 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 United States.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.

General Trends and Company Outlook

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. InCommencing in early 2025, the Trump administration has introduced new and significant trade policies and has 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.

As our business is closely aligned with wellswell 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.

Selling, general and administrative expenses. WeDuring expect2025, towe incurincurred 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 reporting,financial reporting with the SEC, tax preparation expenses, Sarbanes-Oxley (“SOX”) compliance expenses, audit fees, legal fees, directors and officers insurance, investor relations expenses, Tax Receivable Agreement administration expenses and registrar and transfer agent fees. These increases in selling, general and administrative expenses are not reflected in our historical financial statements, other than a portion of these costs incurred in 2024 in contemplation and preparation of the IPO.

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 a periodperiods 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. In addition, we entered into a Tax Receivable Agreement with the TRA Participants. This agreement generally provides for the payment by us to the TRA Participants of 85% of the net cash savings, if any, in U.S. federal, state and local income tax or franchise tax that we actually realize or are deemed to realize in certain circumstances as a result of certain increases in tax basis and imputed interest. We will retain the benefit of the remaining 15% of such net cash savings. For additional information regarding the Tax Receivable Agreement, see “Part 1. Item 1A. Risk Factors – Risk Factors Related to our Organizational Structure.”

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, wethe prior years’ financial information do not reportreflect any income tax benefit or expense attributable to us. Subsequent to the IPO, we arebecame 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.

Noncontrolling Interests. As a result of the IPO and a series of related reorganization transactions in connection with the IPO (the “Transactions”), Flowco Holdingswe became the sole managing member of Flowco LLC and consolidatesconsolidate entities in which itwe hashave 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 periodsthe period after the completion of our 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 Flowco Holdings.us. Additionally, all shares of our Class B common stock are held by noncontrolling interest owners. The noncontrolling interests will only impact future financial statements presentations as of December 31, 2025 and notfor the financialyear statementsended includedDecember in31, this Annual Report.2025.

Predecessor Consolidated Results of Operations

The historical consolidated financial information included in the following tables and discussions present the historical financial information of our Predecessor.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. The discussions related to historical financial information for the year ended December 31, 2023 compared to the year ended December 31, 2022, have been reported previously in the Final Prospectus, under the heading Management's Discussion and Analysis of Financial Condition and Results of Operations, and is also included 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.

In addition to the other information set forth in this Quarterly Report (including the risk factor set forth below), you should carefully consider the factors discussed under Part I, Item 1A. Risk Factors in our Annual Report.Report and Part II, Item 1A. Risk Factors in our Quarterly Report on Form 10-Q for the three months ended March 31, 2026. These factors could materially adversely affect our business, financial condition, liquidity, results of operations and capital position, and could cause our actual results to differ materially from our historical results or the results contemplated by any forward-looking statements contained in this Quarterly Report. Except as set forth below, there have been no material changes in the risks affecting the Company since the filing of our Annual Report.

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited condensed consolidated financial statements and related notes included elsewhere in this Quarterly Report. The following discussion includes forward-looking statements that involve certain risks and uncertainties. For further information on items that could impact our future operating performance or financial condition, see the sections entitled “Risk Factors” section of our Annual Report on Form 10-K for the fiscal year ended December 31, 2025, and in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2026, and “Cautionary Note Regarding Forward-Looking Statements” in this Quarterly Report. We assume no obligation to update any of these forward-looking statements, except as required by law. Unless otherwise indicated or the context otherwise requires, the historical financial information in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” reflects only the historical financial results of Flowco Holdings Inc. and its consolidated subsidiaries and references to the “Company,” “we,” “our,” or “us” are to Flowco Holdings Inc. and its consolidated subsidiariessubsidiaries.

We are a leading provider of production optimization, artificial lift and emissions management and monetization solutions for the oil and natural gas industry. The Company’s core technologies include high pressure gas lift (“HPGL”), electric submersible pumppumps (“ESP”), conventional gas lift, plunger lift, and vapor recovery units (“VRUs”), all supported by proprietary digital tools that enable real-time remote monitoring and control to enhance efficiency and performance.

As of MarchJune 31,30, 2026, our Production Solutions and Natural Gas Technologies segments operated a combined fleet of over 5,4005,500 active systems, generating consistent, recurring revenues through the long production life of wells. For a more detailed overview of our business, see Part 1.I, Item 1.1, BusinessBusiness, and Part 1.I, Item 2.2, PropertiesProperties, included in our Annual Report.

Over the mid to long-term, we expect demand for oil and natural gas exploration and production as well as new energy platforms to continue to require more advanced technology from the energy services industry. While uncertainty remains due to the ongoingfactors uncertainties persist for reasons mentioneddiscussed above, we believe our integrated portfolio of products and services, differentiated technologies and strong market position us to capitalize on opportunities across our end markets. Accordingly, we remain cautiously optimistic thatregarding our integrated scope of products and service offerings, our differentiated technologies and a strong market presence will enable us to achieve a sustained long-term growth.growth prospects.

Three Months Ended MarchJune 31,30, 2026 Compared to Three Months Ended MarchJune 31,30, 2025

Revenue – rentals. Rental revenue was $121.9$132.7 million for the three months ended MarchJune 31,30, 2026, an increase of $24.6$30.6 million, or 25%,30%, from $97.3$102.1 million for the three months ended MarchJune 31,30, 2025. This increase in rental revenue was driven primarily by three factors as follows:

Surface equipment fleet size experienced an increase of 188179 average active systems per month from 1,4801,491 during the three months ended MarchJune 31,30, 2025, to 1,6681,670 average active surface equipment systems per month during the three months ended MarchJune 31,30, 2026. Additionally, average rental rate also had a $1,511$1,073 increase in average monthly price from $12,397$12,950 per unit during the three months ended MarchJune 31,30, 2025 to $13,908$14,023 per unit during the three months ended MarchJune 31,30, 2026. These increases approximate 13%12% and 12%8% for fleet size and average rental rate per unit, respectively, and contribute to a total increase in surface equipment rental revenue of $14.6$13.0 million, or approximately 26%.23%.

Vapor recovery fleet size experienced an increase of 6963 average active systems per month from 2,9522,973 during the three months ended MarchJune 31,30, 2025 to 3,0213,036 average active vapor recovery units per month during three months ended MarchJune 31,30, 2026. Additionally, average rental rate had a $353$280 increase in average monthly price from $4,718$4,848 per unit during the three months ended MarchJune 31,30, 2025 to $5,071$5,128 per unit during the three months ended MarchJune 31,30, 2026. These increases approximate 2% and 7%6% for fleet size and average rental rate per unit, respectively, and contribute to a total increase in vapor recovery rental revenue of $4.2$3.1 million, or approximately 10%.7%.

Downhole component fleets are new additions to our fleet footprint resulting from the Valiant Acquisition on March 2, 2026, as discussed above. Due to the timing of this acquisition, our rental revenues include one month of operations of these downhole component fleets. During the three months ended MarchJune 31,30, 2026, the downhole component fleets consistconsisted of 802826 average active systems.

In addition to sales to our external customers, we sell our natural gas systems to our Production Solutions segment through intercompany transactions for further use in theits Productionoperations. SolutionsIntercompany segment. Approximately $11.2 millionsales of intercompany natural gas system salessystems to the Production Solutions segment were recognizedapproximately in$13.7 million for the three months ended MarchJune 31,30, 2026, ana increasedecrease of approximately $2.1$3.4 million in intercompany revenues from approximately $9.1$17.1 million in the three months ended MarchJune 31,30, 20252025. dueThe decrease was primarily attributable to continuedcertain growthHPGL incustomers ourtaking Productionfewer Solutionsnew segment.units than previously anticipated and delaying the timing of deliveries relative to their original schedules. All intercompany revenues have been eliminated in consolidation.

Cost of rentals. Rental cost was $32.6$35.2 million in the three months ended MarchJune 31,30, 2026, an increase of $5.7$7.6 million, or approximately 21%,28%, from $26.9$27.6 million for the three months ended MarchJune 31,30, 2025. The increase was primarily due to higher costs of approximately $5.0$6.9 million associated with surfacethe equipmentSurface Equipment rental fleetfleet, reflecting increased rental units.activity, higher maintenance expenditures and operating costs on the rental fleet, and increased labor costs resulting from higher headcount. The 20% increase ofin totalrental costcosts ofwas rentalsgenerally contributedconsistent with the growth in rental revenues discussed above, although costs increased at a higher rate due to the increaseadditional inmaintenance totaland rentallabor revenues of 25% discussed above.expenses.

Depreciation and amortization. Depreciation and amortization was $41.5$49.4 million for the three months ended MarchJune 31,30, 20262026, an increase of $7.4$16.2 millionmillion, or approximately 22%,49%, from $34.1$33.2 million for the three months ended MarchJune 31,30, 2025. The increase was primarily attributable additionalto approximately $8.1 million of depreciation and amortization expense relatedassociated towith the Valiant Acquisition, which was completed in March 2026 and therefore was not reflected in the three months ended June 30, 2025. Excluding the impact of the Valiant Acquisition, depreciation and amortization expense increased by approximately $8.1 million, primarily due to the organiccontinued growthexpansion of ourthe Company's rental fleet, theincluding additional assets placed into service and assets acquired in the Archrock acquisitionacquisition, principally within the Estis and theFlogistix assets acquired from the Valiant Acquisition. The depreciation and amortization expenses associated with the assets acquired from these acquisitions are not reflected in the depreciation and amortization expenses for the three months ended March 31, 2025, as these acquisitions occurred subsequently.businesses.

Interest expense. Interest expense was $4.3$5.6 million in the three months ended MarchJune 31,30, 2026 compared to $5.4$6.4 million in the three months ended MarchJune 31,30, 2025. This decrease in interest expense of $1.0$0.8 million, or approximately 19%,13%, was primarily due to decreasedlower average borrowings outstanding in the three months ended MarchJune 31,30, 2026 compared to the three months ended MarchJune 31,30, 20252025, primarily attributable toreflecting our ability to maintain and, from time-to-time,time reduce,to time, reduce outstanding debt using cash flows providedfrom byoperations operations, an overall average daily borrowings outstanding throughout the remainder of 2025 afterfollowing the IPO and intothrough the three months ended MarchJune 31,30, 2026,2026. This decrease was partially offset with increasedby borrowings outstandingincurred in March 2026 to fund the Valiant Acquisition.

Income tax provision. Income tax provision was $4.0$4.6 million for the three months ended MarchJune 31,30, 2026, an increase of $1.4$0.8 million, or approximately 52%,20%, compared to $2.6$3.9 million for the three months ended MarchJune 31,30, 2025. This increase in income tax provision is primarily attributable to the impact on the tax rate due to the Company’s increased ownership in Flowco LLC in the three months ended MarchJune 31,30, 2026 compared to the three months ended MarchJune 31,30, 2025.

As of MarchJune 31,30, 2026, we had $17.3$19.2 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 fundfunded 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, inat 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 5.51%5.43% 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.

As of MayAugust 1,7, 2026, we had $332.9$274.1 million outstanding borrowings and $387.5$446.4 million available borrowing capacity under our Credit Agreement.

OnIn JanuaryFebruary 30,and May 2026, our Board of Directors declared and paid a cash dividend of $0.08 per share and $0.09 per share payable to holders of Class A common stock of record as of the close of business on February 13, 2026 and May 15, 2026, respectively (the “Common Stock Dividend”). In conjunction with the Common Stock Dividend, Flowco LLC declared a distribution on its units of $0.08 and $0.09 per unit to all unitholders of record of Flowco LLC as of the close of business on February 13, 2026.2026 and May 15, 2026, 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.

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 three months ended MarchJune 31,30, 2026, we repurchased no shares under the Repurchase Program. During the six months ended June 30, 2026, we repurchased and subsequently retired 780,000 shares of our Class A common stock at an average price of $21.18 per share, excluding commissions.

As of MarchJune 31,30, 2026, the remaining total available authorization under the Repurchase Program was approximately $18.2$18.5 million.

Operating Cash Flows– Net cash provided by operating activities was $78.7$173.9 million in the threesix months ended MarchJune 31,30, 2026 compared to $42.5$124.7 million in the threesix months ended MarchJune 31,30, 2025, an increase of approximately $36.2$49.2 million. Operating cash flows increased primarily due to timing of payments to vendors, suppliers and other third parties.

Investing Cash Flows – Net cash used in investing activities was $188.3$233.9 million and $27.7$63.4 million for the threesix months ended MarchJune 31,30, 2026 and 2025, respectively. The approximately $160.6$170.5 million increase in net cash used was primarily attributable to the cash paid for the Valiant acquisition during the threesix months ended MarchJune 31,30, 2026.

Financing Cash Flows – Cash from financing activities had a favorable swing of $141.2$131.2 million from a net cash used of $18.8$56.6 million in the threesix months ended MarchJune 31,30, 2025 to net cash provided by financing activities of $122.4$74.6 million in the threesix months ended MarchJune 31,30, 2026. This $141.2$131.2 million change was primarily attributable to (i) $615.0$599.5 million cashfavorable proceedsyear-over-year from,change in net ofcash repaymentsflows to, ourfrom long-term debt, consisting of higher borrowings and lower repayments during the six months ended June 30, 2026, (ii) the absence of $20.9 million purchase of LLC Interests from the Continuing Equity Owners immediately following the IPO, partially offset by (i) the absence of $461.8 million IPO proceeds in January 2025, (ii) $16.5$16.7 million of repurchase of Class A common stock in March 2026 and2026, (iii) $14.8$6.2 million additional distributions to the members of Flowco LLC in the threesix months ended MarchJune 31,30, 2026.2026 compared to the six months ended June 30, 2025, and (iv) $4.0 million additional dividends paid to the shareholders of the Company’s Class A common stock.

We are in the process of evaluating the benefits of relying on other exemptions and reduced reporting requirements provided by the JOBS Act. Subject to certain conditions set forth in the JOBS Act, if as an emerging growth company we choose to rely on such exemptions, we may not be required to, among other things, (i) provide an auditor’s attestation report on our systems of internal controls over financial reporting pursuant to Section 404, (ii) provide all the compensation disclosure that may be required of non-emerging growth public companies under the Dodd-Frank Act, (iii) comply with the requirement of the PCAOB regarding the communication of critical audit matters in the auditor’s report on the financial statements, and (iv) disclose certain executive compensation-related items, such as the correlation between executive compensation and performance and comparisons of the Chief Executive Officer’s compensation to median employee compensation. These exemptions will apply until we no longer meet the requirements of being an emerging growth company. We will remain an emerging growth company until the earlierearliest of: (i) the last day of the fiscal year in which it has total annual gross revenues of $1.235 billion or more; (aii) the last day of the fiscal year following the fifth anniversary of the completion of our initial public offering,IPO; (biii) the date on which the Company has issued more than $1 billion in whichnon-convertible wedebt haveduring totalthe annualprevious grossthree-year revenue of at least $1.235 billionperiod; or (civ) inthe date on which wethe areCompany is deemed to be a “large accelerated filer,” which means the market value of ourthe Company’s Class A common stock that is held by non-affiliates exceeds $700.0 million as of the last business day of ourthe priormost recently completed second fiscal quarter, andquarter (ii)following twelve months from the date on which we have issued more than $1 billion in non-convertible debt during the prior three-year period.IPO).