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Flowco Holdings Inc. Stock Price: Quote, Forecast, Splits & News (FLOC)

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Company Profile

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Flowco Holdings Inc. Price & Performance (FLOC)

Stock Performance

Updated Mar 27, 1:51 PM UTC

FLOC:NYSE

$25.89USD

0.21% · $0.055

Open

$25.56

High

$25.89

Low

$25.56

Market Cap

$2.37B

P/E Ratio

28.5

Volume

2.21K

Year High

$30.50

Year Low

$21.31

News & Market Insights

Analysts Remain Optimistic About Flowco Holdings Amid Volatility
Mar 25, 2025
Flowco Holdings Inc. has seen mixed signals in its stock performance recently. While short-term technical indicators suggest potential gains, long-term forecasts remain cautious due to resistance levels. Analysts continue to maintain a "Buy" rating, with price targets as high as $35, reflecting a strong belief in the company's growth potential.12
Flowco Holdings Reports Record Revenue Growth for Q4
Mar 18, 2025
Flowco Holdings Inc. posted a 146% year-over-year revenue increase in Q4 2024, reaching $185.99 million. The company attributes its growth to strong performance in its Production Solutions and Natural Gas Technologies segments. Despite a slight quarterly revenue dip, the firm’s adjusted EBITDA margin of 39.7% highlights its operational efficiency.34
Insider Confidence in Flowco Boosts Market Sentiment
Flowco Holdings Inc. director Paul W. Hobby recently purchased $241,700 worth of shares, signaling confidence in the company’s valuation. Insider sentiment remains positive, aligning with analysts’ price targets of up to $35. This follows the company's strong financial performance and continued innovation in production optimization technologies.56

What's Happening

Earnings

Report Date

Mar 18, 2025

Reported Revenue

186M

Avg 1d Change

0.14%

Report Period

Q4 2024

Reported EPS

2.87

Implied Move 1d

—

Transcript

5m 2s

Before we begin, we would like to remind you that this conference call may include forward looking statements. These statements, which are subject to various risks, uncertainties and assumptions, could cause our actual results to differ materially from these statements. These risks, uncertainties and assumptions are detailed in this morning's press release as well as our filings with the SEC, can be found on our website at ir.flowcoinc.com. We undertake no obligation to revise or update any forward looking or information except as required by law. During our call today, we will also reference certain non GAAP financial information. We use non GAAP measures as we believe they more accurately represent the true operational performance and underlying results of our business. The presentation of this non GAAP financial information is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with GAAP. Reconciliations of GAAP to non GAAP measures can be found in this morning's press release and in our SEC filings. Joining me on the call today is our President and Chief Executive Officer, Joe Bob Edwards and our Chief Financial Officer, John Byers. Following our prepared remarks, we'll open the call for your questions.

6m 15s

With that, I'll turn the call over to Joe Bob. Thank you, Andrew, and good morning, everyone. It is my pleasure and an honor to welcome you to our first investor call as a publicly traded company. For the benefit of the group, and in particular, all of the investors on the phone with whom we have not met, I'd like to begin the call with a little bit of Flowco history. And an overview of our operations and position in the energy market. Flowco was formed in June of twenty twenty four via the merger of three private companies, [indiscernible] and Flowco Production Solutions, Each of these three companies was formed over ten years ago and has built market leading positions in the production optimization sector of the domestic oilfield service market. Each company has also demonstrated a culture of innovation, a customer focused approach to problem solving, and an emphasis on investing in strategies that produce consistent high rates of return on investment. This common culture and a shared vision for the future led to the merger and, importantly, has guided our integration efforts. By far, the easiest part of our integration was choosing a name for the combined company, The name Flowco not only is the name, of one of our notable brands, but it also perfectly describes what we do every day.

7m 39s

We help our customers flow their oil and gas wells more efficiently and economically. Flowco participates in the production phase of the industry, which is much more stable than either the drilling phase or the fracking phase of the oilfield service market. Our revenues are derived from oil and gas company nondiscretionary OpEx rather than their CapEx. More broadly, our results can be traced to the absolute levels of oil and gas production in The United States as well as the number of actively producing oil and gas wells themselves. Rather than the number of active drilling rigs or frac spreads. We sit at the critical path of operations for our energy company partners. And quite simply, if our equipment is not working properly, our clients' wells do not produce to their optimum level. We are proud to offer a range of solutions that work for the entire lifespan of the well which in most cases is more than twenty years. Our company is organized and managed through two operating divisions. Production Solutions and Natural Gas Technologies. Production Solutions includes our artificial lift products. Which help oil and gas operators produce their wells after drilling and fracking operations are completed.

9m 2s

Our products include a mixture of surface equipment and downhole products which are designed and installed based on specific well production data. We enjoy market leading positions in high pressure gas lift or HPGL conventional gas lift, and plunger lift applications. And we count among our customers some of the largest and most well capitalized oil and gas companies in the world. Next, our Natural Gas Technologies division, provides our market leading vapor recovery solutions. Deployed at surface production locations for the entire life of the field. Our proprietary equipment, and patented technologies provide operators with a safe and highly profitable method of capturing methane vapors. That would otherwise be flared or vented to the atmosphere. These vapor recovery solutions provide some of the most environmental benefits to operators while also providing high value economic returns especially in today's current natural gas price environment. We help our oil company clients capture and sell hydrocarbon molecules that would otherwise be seen as a waste product. Our GAAP financials reflect a healthy mix of equipment rentals and product sales. At a high level, our equipment rentals are comprised of short term and long term rental contracts, on over 4,300 active systems across our fleet.

10m 34s

And include systems that provide high pressure gas lift, conventional gas lift, and vapor recovery applications. Our equipment sales are comprised of downhole equipment associated with conventional gas lift and plunger lift applications and, to a lesser extent, the sale of certain types of surface equipment packages. We service our diverse customer base with a dedicated workforce of approximately twelve seventy employees through a network of field service locations located in every major US shale basin. We also have a vertically integrated supply chain based in The United States which provides a competitive advantage while providing flexibility and stability in periods of geopolitical uncertainty. In 2024, we increased pro form a revenue 10% versus 2023. While US oil production increased 2% to 3%. This growth was achieved almost exclusively on an organic basis by investing growth capital to fund expanded offerings primarily in high pressure gas lift and vapor recovery. Our two fastest growing business lines. Based on identified customer demand, U. S. Production outlook, and current industry activity, we expect 2025 to be another year of profitable growth with a similar level of growth capital deployment compared to last year. More on this from our chief financial officer, John Byers, later in our presentation.

12m 2s

Finally, as we optimize and grow our business following the IPO, we will continue to market across our various solutions to our 300 plus customers and look for ways to cross collaborate. Our singular focus on production optimization and an emphasis on continuous technological innovation across our product lines sets us apart from our competition and should lead to increased market share gains over time. So with that, I'll turn the call over to John Byers, our CFO, who will take you through our 2024 results. Following his remarks, I will make a few closing comments and then open the lines for Q and A. John? Thanks, Jobam. Before reviewing some of the key financial metrics and results for the fourth quarter and for 2024. I'd like to provide a few reminders on our historical financial information given the combination of Flowco Logistics and Estes in June of twenty twenty four. For clarity, note that any financial information presented prior to the 06/20/2024 business combination reflects only the historical performance for Estes. Financial information in the third and fourth quarters reflects the financials for the consolidated entities. For those looking for pro form a financials for the first nine months of twenty twenty four, I would refer you to the pro form a financials on Page 25 of our January 16 prospectus.

13m 27s

Finally, note that our 2024 financials are presented for our operating subsidiary which was a privately held pass through entity for the entirety of 2024 therefore, incurred no federal income tax. Turning now to our financials. In the fourth quarter, we reported adjusted net income of $28,800,000 on revenues of 186,000,000 Revenue was down approximately 1.8% quarter over quarter as expected for reasons I'll discuss in a moment. Fourth quarter performance was in line with our expectations and was a result of the strong execution of our Production Solutions and Natural Gas Technology business segments.

14m 6s

Where we saw growth in both adjusted segment EBITDA and adjusted segment EBITDA margins. Fourth quarter production solutions revenue was 113,300,000.0 with adjusted segment EBITDA of $49,900,000 an increase of 1.55.2% respectively from the third quarter. Adjusted segment EBITDA margins increased roughly 150 basis points quarter over quarter. The increase in all metrics in the segment were the result of higher operating leverage combined with a slight shift in revenue mix change towards our Surface Equipment business unit from Downhole Solutions. Fourth quarter natural gas technologies revenue decreased 6.5% to $72,700,000 in comparison with the third quarter. The decrease in revenue was expected and was primarily attributable to the completion of a large customer project within the natural gas Systems business unit in the first half of the quarter. Utilization of our vertically integrated for third party sales is returning to normal levels. After several above average years, While revenues decreased, adjusted EBITDA grew 4.5 percent 27,800,000.0 over the same period for the segment. With adjusted EBITDA margins up 400 basis points due to strong performance of Vapor Recovery. Which offset the impact of the decline in revenues from natural gas systems. Overall, consolidated fourth quarter EBITDA was 73,800,000.0, which was roughly flat compared to the third quarter with adjusted EBITDA margins increasing by roughly 50 basis points.

15m 40s

Notably, absent the $3,900,000 of costs associated with standing up our public company infrastructure, adjusted EBITDA would have seen growth on a quarter over quarter basis. Highlighting the strong underlying performance of our business segments. On capital investments, the majority of our fourth quarter investment 35,400,000.0 was directed towards growing our surface equipment and vapor recovery rental fleet given the attractive payback periods and returns on capital employed. While we plan to provide an annual adjusted return on capital employed metric going forward, today we'll share our fourth quarter annualized adjusted ROCE is approximately 20%. When calculating adjusted ROCE, make adjustments for amortization and intangibles associated with the merger transaction given our merged entities were combined and not acquired. We define adjusted ROCE as operating income plus amortization, divided by total assets minus goodwill and intangible assets and minus current liabilities. As Joe Bob mentioned, we anticipate a similar level of capital investment in 2025 as in 2024. Mostly dedicated to a rental fleet. As we are achieving incremental returns in excess of 20%. These significant capital investments in our rental fleet will lead to a progressive increase in profitability into the second half of the year. Shifting to a few notes on corporate costs and reporting going forward.

17m 8s

As I mentioned previously, we had $3,900,000 of costs associated with the establishment of our public company infrastructure in the fourth quarter. This is primarily professional services and headcount additions related to our IPO, which we will continue to build out in 2025. Also, following the completion of our IPO, we've become a federal and state income taxpayer and anticipate a blended rate in the low to mid 20% range. Both the corporate cost and the increase in taxes will impact comparability in subsequent quarters. Turning to our balance sheet and liquidity. We're very pleased with our strong financial position following our successful IPO in January. Importantly, we utilized most of the primary proceeds from the offering to pay down borrowings on our revolving credit facility. As of 03/14/2025, borrowings on the revolving credit facility were 195,700,000.0 with a borrowing base of 723,500,000.0 We had availability under the revolving credit facility of 527,700,000.0. We're working to integrate the businesses post merger expect a near term increase in working capital in the first half of twenty twenty five. As we've stated before, we'll be thoughtful and maintain tight capital when considering any future investments. On the capital allocation front, as noted in our press release, we're considering the initiation of a small sustainable dividend to return capital to shareholders over time.

18m 36s

In summary, the business delivered solid performance in 2024. Ending the year with the fourth quarter in line with our expectations. As Joe Bob mentioned, we saw 10% pro form a revenue growth in 2024 versus 2023. Reviewing the EIA production data, this compares to only two to 3% growth in US oil production over the same period. Illustrating our thesis that our business can grow in a relatively flat production environment. As we continue to collaborate with our customers we're seeing new opportunities to grow our partnerships and business every day. On high pressure gas lift, we're seeing increased orders with multiyear contract terms as customers further prove out realize the significant benefits of our technology within their operations. In vapor recovery, we are uncovering new opportunities as more midstream customers are recognizing the value in capturing and selling methane from their operations. As a result, our expectations for 2025 as we laid out during the IPO are unchanged as we continue to against our strategy. Back to you, Joe Bob.

19m 42s

Thanks, John. As we've highlighted this morning, we accomplished a tremendous amount in 2024, And absent any significant unforeseen changes in the market, 2025 is setting up to be another strong year for Flowco. Turning now to guidance. For the first quarter of twenty twenty five, we expect adjusted EBITDA of $74,000,000 to $78,000,000 Before I open up the call to Q and A, want to acknowledge and thank a number of people that have been instrumental in our success and vital throughout the IPO process. Our advisors, the lawyers, bankers, consultants, and other people that work so incredibly hard to help us prepare the process and guided us through investor meetings and pricing. Thank you for your impressive work helping us execute our very successful IPO. To our private equity sponsors at GEC, White Deer and Genesis Park, Your unwavering support over the years is much appreciated. We look forward to many successful years of partnership in the next phase of Flowco's journey. For our customers, thank you supporting each of our industry leading brands our merger last year and your ongoing support as a combined company operating under the Flowco banner. And importantly, to my Flowco employee family, including the large number of Flowco employee owners.

21m 8s

Thank you for your friendship, Thank you for your trust. And thank you for your partnership. Together, let's continue to innovate and build upon Flowco's position as a pure play provider of production optimization solutions to the oil and gas industry. We accomplished a tremendous amount together in the last twelve months, but there's a lot of work still to be done. Lastly, to our new investors who made our IPO a reality, thank you for the confidence you have placed in our management team and the trust you have bestowed upon us to manage your investment in Flowco. We will work tirelessly to earn that trust every day and vow to never take that support for granted. We look forward to working with you along with our covering analysts. And I look forward to seeing many of you tonight and tomorrow at the Piper Sandler Conference in Las Vegas. So with that, I'll turn it back over to the operator for q and a.

22m 6s

Thank you. A. Thank you. Thank you. And our first question comes from the line of Arun Jayam with JPMorgan. Please proceed with your questions.

22m 40s

Good morning, gentlemen.

22m 43s

First question I'm doing well. Doing well. Good good to see your your report this morning.

22m 49s

Yeah. Just you know, general, you know, questions we've been getting from from the buy side on Flowco.

22m 55s

Is quite a bit has changed since the IPO in terms of the macro environment with some tariffs as well as the potential resolution of the Ukraine Russia conflict, So I guess our broader question, we heard the commentary on 1Q guidance essentially in line at least with our forecast. And John mentioned that your overall expectations are largely unchanged. From the IPO commentary. But I did want to see if we could dig into 2025 as a whole just in the contest as we have seen some softer forecast from your OFS peers and just general commodity price uncertainty for upstream operators? Yes. Happy to elaborate, Arun. Look, a lot has changed since we went public roughly, what, six weeks ago or so. But at the same time, a lot is the same. Right? Our story is the same. We are we are levered to production volumes, not the vagaries and volatility associated with drilling and completion expenditures. Commodity prices certainly matter. Geopolitical events certainly matter.

24m 6s

But what I am optimistic about is the durability of The US shale business. And we've gone from 5,000,000, 6,000,000 barrels a day ten years ago to where we are today, leading the world. And with the consolidation that's taken place among our customer base, the outlook seems much less volatile. I think the customers that are prosecuting the shale developments today are taking a manufacturing approach. They're taking a multiyear view. And so I'm encouraged by where we sit within the industry today. Certainly, like tariffs being put on and off inside of a matter of days.

24m 52s

Make it really hard to operate. But I would highlight actually our domestic supply chain as a as a as a defensive mechanism against volatility in the tariff regimes. And also the fact that we don't rely on far flung supply chains for critical materials. Everything is sourced here domestically. We maintain our own ability to ramp up and ramp down our growth capital expenditures because we we control our destiny through our manufacturing facility. So look, in a world that has undoubtedly become a little less little less stable, I like where we sit.

25m 32s

Great. Thanks for that. And my follow-up is just kind of on margins. Guys had strong margin performance, call it, 150 basis points of margin expansion in Production Solutions sequentially. And over 400 in Natural Gas Technologies. Could you give us a sense of how you think about margin progression over the balance of 2025? Yeah. Look, the margin progression is really a function of I'd say, two things, obviously, and, and and pricing. And the mix shift in our top line revenue, Arun, is is trending more toward rental, less toward sales. Product sales come at a lower margin than equipment rental. So I think you'll see margins continue to bleed higher. And that's just as a result of our growth capital investment in our surface equipment fleet across high pressure gas lift and vapor recovery systems. Great. Thanks a lot, gentlemen. Our next question is from the line of Lloyd Byrne with Jefferies. Please proceed with your questions.

26m 47s

Hey, good morning, Joe, Bob, John, team.

26m 51s

Morning.

26m 52s

I was wondering if you guys could just comment on administration policy and then how that impacts the VRU? Is there anything in the IRA or waste submissions that would change the nat gas tech trajectory going forward or the VRU?

27m 11s

Yeah. Lloyd, good to hear from you. Thanks for the question. And it's something obviously we track closely. Let me remind everyone what we do and why it matters and why we're not particularly concerned about the volatility that this new administration is introducing to to this sector. Our vapor recovery systems are deployed by oil companies to capture highly profitable molecules that were previously seen as waste product. [indiscernible] the presence of natural gas handling capability at the wellhead as well as natural gas takeaway capacity out of, in particular, the Permian. Has led to this this type of product, our vapor recovery system at these large pads that are being brought on, these are standard equipment nowadays. The, the equipment deployment is highly profitable. Virtually at any gas price. But at today's gas price in particular, gas with a four handle on it actually feels a lot better than down in the 2s where we were a year ago.

28m 17s

The Inflation Reduction Act enacted by the Biden administration did have a waste emissions charge in it, was scheduled to to come into play in 2025. We saw that We continue to see that should it actually survive as a tailwind on top of the economic benefits that our vapor recovery systems provide. Because with waste emissions charges come effectively taxation on operators. And so that would just increase demand for products that would eliminate fugitive methane emissions like vapor recovery systems. So to the extent those get rolled back, that does not impact at all the financial viability of our product. In many ways, it makes what we do a little less murky because we we then have, you know, a level playing field without any sort of government intervention. So we're going to continue to keep our head down and offer the industry's leading solution in that area. And our customers hopefully will continue to support us in deploying more units over time.

29m 24s

That's great. Thanks. And let me follow-up too with I think maybe as John had mentioned that, VRU is finding incremental customers in the midstream. Can you just talk about the potential there or the potential take it to other pieces of the of the oil infrastructure as well.

29m 47s

Yes. So historically, our business has been built on the back of upstream operators, utilizing this technique to capture vapors at central gathering facilities. Okay? So very much a a system, a business model that was built in and around upstream facilities operations.

30m 9s

Okay? Obviously, as you move further down the natural gas delivery system, you have various points of potential methane leakage all along pipeline systems, compressor stations, even all the way down to where gas is either being consumed or liquefied for export.

30m 27s

We're looking at that entire value chain today as additional end market demand centers. Particular, the midstream space, largely the pipeline operators that have lots of concentration of emissions around certain points in the delivery system. As a next leg of growth. For Flowco. We think that some of the largest operators in The U. S. Pipeline operators in The U. S. Will see value in this sort of technology deployment and and we're we're talking with all of them. So I I I hope to see some positive news on that sometime during 2025.

31m 9s

That's great. Thank you, team.

31m 15s

Thank you. The next question is from the line of Derek Ponizer with Piper Sandler. Please proceed with your question.

31m 27s

Hey, good morning guys.

31m 30s

Welcome to the to the public markets in the call. Congratulations.

31m 34s

Just wanted to, hey. Just wanted to dig into maybe about your customer base with HPGL. So, obviously, you talked about a little Joe, Bob, but we've seen that wave of E and P consolidation. Maybe could you you talk to how that impacts Flowco and the adoption of HPGL?

31m 50s

Then maybe how we should think about incremental or new customer adds for 2025. So just some thoughts around your customer base for HPGL specifically.

32m

Yes. So let me start at a high level, Derek. And remind everyone kind of what we're what we're talking about and what we're looking at. So the Reichstad, which is I think one of the better research groups out there, sizes the North American excuse me, The U. S. Onshore, artificial lift market at roughly 6,000,000,000 to $7,000,000,000. Okay? And only only half of that market is serviced by Flowco. Okay? So that's high pressure gas lift, gas lift, traditional gas lift, and plunger lift. The other half is serviced by ESP and Rod Lift. Okay? So we happen to be in and among the faster growing sectors of artificial lift and, we're really, really happy to to be market leaders in each of the forms of lift that we actually offer our customer base. Our high pressure gas lift offering in particular is our fastest growing offering. We were pioneers in developing this technique alongside a couple of oil company clients. And we enjoy a market leading position and a customer base of sort of everyone that you would know.

33m 9s

And what we have done to build that business, Derek, is what we're going to continue to do to expand it.

33m 14s

And that is we're going to push the technical envelope in terms of what the system can do where it's applicable, how it can actually expand on what it's good at, which is producing high flow shale wells in really tough situations, lots of sand, lots of gas. These are areas and operating environments where ESPs are not comfortable. Right? So we'll continue to push that operating envelope every day. Okay, through through technology development as well as through just good old trial and error with customers. And the customer base, is is sort of who you would expect. It's it's the tech technology leaders in The U. S. Onshore. We count among our customers the 60 largest and most financially secure oil companies in The U. S. But we have over 300 customers as a as a company. So we continue to go to the customers that are not users of HPGL and tell them the benefits of it specifically against DSPs. Now we built a a heck of a mousetrap, if you if you will, with an HPGL, but I wanna be very clear that there's a big market out there for ESPs, where HPGL is not the right technical solution.

34m 34s

Okay? We think that today, we have pushed the envelope enough to where we can penetrate roughly 40% of the total available market for ESPs and HPGL.

34m 48s

There's gonna be a sector of the market, Derek, where ESP is always gonna be the right solution. Okay? Conventional reservoirs, water floods, areas where they just you don't have the flow rates that an HPGR requires to actually be be deployed. So we're going to continue to look at that market. We're going to continue to look at our and how we can expand it. And yes, get after it one customer at a time to try to have additional penetration.

35m 17s

Great. No, that's good color. I appreciate that.

35m 20s

This question might be for John, but just wanted to talk about the free cash flow outlook or maybe the moving pieces as we look into 2025. Obviously, you said similar CapEx year over year increase of working capital in the first half. And maybe if you can break it down how we should think about growth versus maintenance CapEx? And then maybe the conversion rates from EBITDA down into free cash flow for 2025? Yes. So we're not going to give any full year guidance. I think everything still in line with the expectations that we kind of we had laid out in the road show.

35m 54s

Got it. Okay. Fair enough. I'll turn it back. Thanks, guys.

36m

Thank you. The next question comes from the line of Philip Jungler with BMO Capital Markets. Please proceed with your questions.

36m 15s

Yeah, thanks. Good morning, guys. Wondering if you could discuss the e Grizzly unit, you called out in the press release. First electric multi well high pressure gas lift unit and just what what's the opportunity set here? And what what are the benefits to customers from either an electric motor or multi well model, which in this case is both? Hey, Phil. Thanks for the question and good to hear from you.

36m 44s

So you know this, but just to level set for everybody.

36m 50s

A compressor can be powered by either electricity or natural gas fired engine.

36m 55s

Right? And, we have a mix of both throughout our fleet. And as we developed the high pressure gas lift capability, we developed both the ability to deploy compression and our technique of high pressure gas lift via either an electric motor or a natural gas engine. And the technique was developed for one wellbore. Okay? So one point of compression, one well bore.

37m 21s

Yeah. One one unit, one wellbore. Okay? Over time, through technology development, we learned how to use one point of compression to lift multiple wellbores. And we first deployed that capability with a natural gas fired engine, and then over time developed the ability to to provide that solution with an electric motor.

37m 46s

So it's going to be fit for purpose for places where operators have embedded power infrastructure. They have the ability to actually utilize an electric fired compression unit. And we're just in the early days of rolling that out, and we're getting good customer reception. As we do so. But it's going to be customer by customer based on power availability and also obviously the size of the well pad that they're bringing online.

38m 16s

Okay. Great. And then wondering if you could also talk through the company's vertically integrated manufacturing ops operations and supply chain logistics? Just how does this help you reduce execution risk? And then anything to note in terms of inflationary pressures across the key components and how that's managed? So we manufacture all of our equipment.

38m 42s

In The United States. We really have four centers of excellence Kilgore, Texas El Reno, Oklahoma Lafayette, Louisiana and Houston, Texas.

38m 52s

Where we manufacture everything from downhole components to surface equipment packages. Critical components that we have Philip, are sourced from domestic sources largely. Those domestic sources, of course, have their own supply chains, some of which have some international exposure But as we think about tariff exposure, as we think about supply chain risk, we've all lived through situations where the risk on both of those are way higher.

39m 20s

Okay? I think we have a little bit of an embedded benefit among around two fronts. Number one, we can ramp up and ramp down capital investment very quickly based on the fact that we control it all in house. Okay? We estimate at any given time, we have about six months of capital at risk. In our delivery schedule. Okay? Number two, we think that our competitive our competitors, whether it's a competitive technology or a similar technology source overseas, think our competitors have more exposure on the tariff front. Okay? So we think that in a very dynamic market, we sit at a place that's pretty comfortable and we like where we sit.

40m 8s

Great. Thanks, guys. The next question is from the line of David Smith with Pickering Energy Partners. Please proceed with your question.

40m 21s

Hey, good morning and thank you for taking my question. Hey, David.

40m 27s

A lot of good questions have been asked already, so I'll I'll go in a different direction. Given your history of successful m and a as as well as the lower valuations we're seeing across at least the the public OFS space year to date, Wanted to ask for for any color on how you're thinking about potential acquisition opportunities or whether you've seen any any meaningful changes in the, the the yeah, asking levels, across the private space.

40m 58s

Yeah. Look. This this business, I think, is very well positioned to be, a market leader in one market niche, which is the ability to handle production, the ability to sustain production, the ability to work with oil and gas companies to increase and maintain production with innovative technologies. Importantly, we don't offer every unique technology to every oil company on the planet. Right? So there's a there is a large there's a big world out there David, as you know, and we're constantly on the lookout for innovative technologies like minded management teams that see the world the same way we do. Customer focused technology oriented businesses. M and A has always been part of our strategy. The business was really formed via M and A and combining three companies that checked all those boxes that I just mentioned. And yes, we have an M and A pipeline. It will be part of our strategy. As we said on our road show, and I want to repeat now, we want to want to get through today. We want to get through the ability to report earnings.

42m 5s

And then certainly, M and A will be part of of a process. I also want to be real clear though [indiscernible] We are fortunate to be traded at what I think is a very nice attractive valuation level. It can never be high enough.

42m 27s

And you're right, you've alluded to it, David. The M and A markets are significantly below that. We are going to be very disciplined with capital. Okay? We are a returns oriented management team. Our Board incentivizes us and we've all built our careers around being good stewards of capital. So as I said on the road, I'll say it again here, just because something is accretive to earnings doesn't mean it's accretive to returns. And we want to do returns accretive M and A in areas that make sense. And if we can find situations like that, with like minded management teams, we're all in.

43m 4s

Really appreciate that color.

43m 6s

I guess the the only related question I have is you know, if if you could please remind us on your your comfort level around, you know, the the leverage, you know, particularly, you know, with with that m and a m and a question in mind.

43m 25s

Yeah. We really like where our balance sheet sits today. We've got plenty of availability. We also are not we understand financial engineering and the ability to utilize leverage to drive returns. But none of us are excited to try out the limits of that. We are envious of other balance sheets that have less leverage than us. But we're going to continue to be prudent, David. We've lived through enough of this industry to know that leverage really get you into hot water and none of us are looking forward to getting that getting into that boat.

44m 3s

Great. That's all I have.

44m 3s

Thank you. Thank you. We'll pause the moment to assemble the queue. Thank you. Thank you. At this time, I'll turn the floor back to Joe von Edwards for closing remarks.

44m 33s

Excellent. Well, thank you all. Appreciate you tuning in. Look forward to seeing you all in the weeks to come. Appreciate it.

44m 40s

Thank you. This will conclude today's teleconference. Disconnect your lines at this time. Thank you for your participation.

Key Insights

Flowco reported strong financial performance for 2024, with a 10% pro forma revenue growth compared to 2023, significantly outpacing the 2-3% growth in U.S. oil production. Adjusted EBITDA for Q4 2024 was $73.8 million, with margins increasing by 50 basis points quarter-over-quarter.
The company anticipates continued profitable growth in 2025, with similar levels of capital investment as in 2024, primarily focused on expanding its rental fleet for high-pressure gas lift (HPGL) and vapor recovery systems. Adjusted EBITDA guidance for Q1 2025 is $74-78 million.
Flowco's vertically integrated manufacturing and domestic supply chain provide a competitive advantage, reducing execution risk and mitigating exposure to tariff volatility. The company highlighted its ability to ramp up or down capital investments quickly, with approximately six months of capital at risk at any given time.
The Natural Gas Technologies division, particularly vapor recovery systems, is seeing increased demand from both upstream and midstream customers. The Inflation Reduction Act's waste emissions charge could further drive demand for these systems, though their profitability is not dependent on regulatory incentives.
Management emphasized a disciplined approach to capital allocation and M&A, focusing on returns-accretive opportunities. The company maintains a strong balance sheet with significant liquidity and plans to remain prudent with leverage while exploring growth opportunities.

Recent Transcripts

FlowCo achieved 10% pro forma revenue growth in 2024, outperforming industry trends.

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OverviewOverview
News & Market InsightsNews & Market Insights
EarningsEarnings
RelatedRelated

Earnings

Report Date

Mar 18, 2025

Reported Revenue

186M

Avg 1d Change

0.14%

Report Period

Q4 2024

Reported EPS

2.87

Implied Move 1d

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Transcript

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Thank you. A. Thank you. Thank you. And our first question comes from the line of Arun Jayam with JPMorgan. Please proceed with your questions.

22m 40s

Good morning, gentlemen.

22m 43s

First question I'm doing well. Doing well. Good good to see your your report this morning.

22m 49s

Yeah. Just you know, general, you know, questions we've been getting from from the buy side on Flowco.

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Hey, good morning, Joe, Bob, John, team.

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Morning.

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That's great. Thank you, team.

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Thank you. The next question is from the line of Derek Ponizer with Piper Sandler. Please proceed with your question.

31m 27s

Hey, good morning guys.

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Welcome to the to the public markets in the call. Congratulations.

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Then maybe how we should think about incremental or new customer adds for 2025. So just some thoughts around your customer base for HPGL specifically.

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And what we have done to build that business, Derek, is what we're going to continue to do to expand it.

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Okay? We think that today, we have pushed the envelope enough to where we can penetrate roughly 40% of the total available market for ESPs and HPGL.

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Great. No, that's good color. I appreciate that.

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Got it. Okay. Fair enough. I'll turn it back. Thanks, guys.

36m

Thank you. The next question comes from the line of Philip Jungler with BMO Capital Markets. Please proceed with your questions.

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So you know this, but just to level set for everybody.

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A compressor can be powered by either electricity or natural gas fired engine.

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In The United States. We really have four centers of excellence Kilgore, Texas El Reno, Oklahoma Lafayette, Louisiana and Houston, Texas.

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Great. Thanks, guys. The next question is from the line of David Smith with Pickering Energy Partners. Please proceed with your question.

40m 21s

Hey, good morning and thank you for taking my question. Hey, David.

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Really appreciate that color.

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Great. That's all I have.

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Thank you. Thank you. We'll pause the moment to assemble the queue. Thank you. Thank you. At this time, I'll turn the floor back to Joe von Edwards for closing remarks.

44m 33s

Excellent. Well, thank you all. Appreciate you tuning in. Look forward to seeing you all in the weeks to come. Appreciate it.

44m 40s

Thank you. This will conclude today's teleconference. Disconnect your lines at this time. Thank you for your participation.

Key Insights

Flowco reported strong financial performance for 2024, with a 10% pro forma revenue growth compared to 2023, significantly outpacing the 2-3% growth in U.S. oil production. Adjusted EBITDA for Q4 2024 was $73.8 million, with margins increasing by 50 basis points quarter-over-quarter.
The company anticipates continued profitable growth in 2025, with similar levels of capital investment as in 2024, primarily focused on expanding its rental fleet for high-pressure gas lift (HPGL) and vapor recovery systems. Adjusted EBITDA guidance for Q1 2025 is $74-78 million.
Flowco's vertically integrated manufacturing and domestic supply chain provide a competitive advantage, reducing execution risk and mitigating exposure to tariff volatility. The company highlighted its ability to ramp up or down capital investments quickly, with approximately six months of capital at risk at any given time.
The Natural Gas Technologies division, particularly vapor recovery systems, is seeing increased demand from both upstream and midstream customers. The Inflation Reduction Act's waste emissions charge could further drive demand for these systems, though their profitability is not dependent on regulatory incentives.
Management emphasized a disciplined approach to capital allocation and M&A, focusing on returns-accretive opportunities. The company maintains a strong balance sheet with significant liquidity and plans to remain prudent with leverage while exploring growth opportunities.

Flowco Holdings Inc. Price & Performance (FLOC)

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Recent Transcripts

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Recent Transcripts

News & Market Insights

Go Deeper

Earnings

Report Date

Reported Revenue

Avg 1d Change

Report Period

Reported EPS

Implied Move 1d

Transcript

Key Insights