Flowco Holdings Inc. Class A

Packer, Vice President, Finance, Corporate Development, and Investor Relations at FloCo. Thank you. You may begin.

Good morning, everyone, and thanks for joining us to discuss FloCo's third quarter results. 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, which can be found on our website at ir.floco-inc.com. We undertake no obligation to revise or update any forward-looking statements 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. With that, I'll turn the call over to Joe Bob.

Thank you, Andrew, and good morning, everybody, and thank you for joining us today. I'll start today by reviewing our third quarter results and operational performance, along with an update on the integration of the assets we acquired in August. John will then provide additional detail on our financial and segment results, our balance sheet, and thoughts on capital allocation. I'll wrap up with our perspective on the current market environment and our outlook for the remainder of the year before we open up the line for your questions. In the third quarter, FloCo delivered another period of strong operational and financial execution. We generated adjusted EBITDA of 76.8 million, exceeding expectations, And we saw a 382 basis point expansion in our adjusted EBITDA margin quarter over quarter. Excluding the capital associated with our recent asset acquisition, we generated approximately $43 million in free cash flow, underscoring the durability of our cash flow generation and our disciplined execution across the business. Our performance reflects a shift toward our high margin rental portfolio, which is growing through targeted investment and incremental customer demand for high pressure gas lift and vapor recovery systems. On HPGL, our solutions are delivering measurable improvements in production efficiency, uptime, and reliability, helping operators enhance recovery and returns. Customers continue to value the consistency and economic uplift these systems provide, particularly in an environment that rewards capital efficiency and sustained performance. On VRU, we are seeing continued momentum as operators recognize the financial and operational benefits of capturing and monetizing natural gas that would otherwise be vented or flared. Together, our HPGL and VRU fleets provide contracted, recurring cash flows that offer visibility and consistency across cycles. These technologies are strengthening FloCo's leadership in production optimization, and we believe there remains substantial runway ahead as customers broaden deployment across their assets and recognize the long-term value of these solutions. Our high margin rental portfolio was further bolstered by the acquisition of 155 high pressure gas lift and vapor recovery systems, which we completed in August and discussed on our second quarter call. The integration of these assets has gone extremely well and is now complete, with the units performing in line with expectations and contributing to our enhanced margin profile. The acquired systems all deployed in the Permian have also enabled us to establish new relationships with several blue chip customers while strengthening service to existing accounts. We will continue to evaluate inorganic opportunities within production optimization that complement our portfolio and align with our disciplined capital allocation framework. Spending a moment on sales. and consistent with what we discussed in our second quarter call, revenues declined sequentially in both our production solutions and natural gas technology segments. John will expand on this in his remarks, but much of this impact was driven by our natural gas systems business unit, which is our lowest margin business, but remains a critical part of our internal supply chain, and it also provides us operational flexibility. Within production solutions, Product sales were also impacted, but performance remained resilient considering the environment, and they exceeded our expectations for gross margin performance. This result underscores the sustained demand for our differentiated, high-quality products and highlights the emphasis operators continue to place on reliability and performance in the current environment. Overall, I am pleased with our operational and financial performance in the third quarter. We continue to execute well across the organization, expanding margins, generating strong free cash flow, and strengthening our high-margin rental portfolio through both organic growth and the integration of our acquired assets. These results highlight the resiliency of our business model and consistency of our execution in a dynamic market environment. With that, I'll turn it over to John to provide more detail on the third quarter. John?