Flowco Holdings Inc. Goodwill & Intangibles Disclosure
Note 6 – Goodwill and Intangible Assets
The following table summarizes the activity in goodwill balance for periods presented below (in thousands):
|
|
Natural Gas Technologies |
|
|
Production Solutions |
|
|
Total |
|
||||||||||||||||||||||||||
|
|
Goodwill |
|
|
Accumulated |
|
|
Goodwill, net of |
|
|
Goodwill |
|
|
Accumulated |
|
|
Goodwill, net of |
|
|
Goodwill, net of |
|
||||||||||||||
Balance as of December 31, 2023 |
|
$ |
|
— |
|
|
$ |
|
— |
|
|
$ |
|
— |
|
|
$ |
|
7,596 |
|
|
$ |
|
(5,372 |
) |
|
$ |
|
2,224 |
|
|
$ |
|
2,224 |
|
Additions to goodwill |
|
|
|
66,325 |
|
|
|
|
— |
|
|
|
|
66,325 |
|
|
|
|
181,143 |
|
|
|
|
— |
|
|
|
|
181,143 |
|
|
|
|
247,468 |
|
Goodwill impairment |
|
|
|
— |
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
— |
|
Balance as of December 31, 2024 |
|
$ |
|
66,325 |
|
|
$ |
|
— |
|
|
$ |
|
66,325 |
|
|
$ |
|
188,739 |
|
|
$ |
|
(5,372 |
) |
|
$ |
|
183,367 |
|
|
$ |
|
249,692 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Balance as of December 31, 2024 |
|
$ |
|
66,325 |
|
|
$ |
|
— |
|
|
$ |
|
66,325 |
|
|
$ |
|
188,739 |
|
|
$ |
|
(5,372 |
) |
|
$ |
|
183,367 |
|
|
$ |
|
249,692 |
|
Additions to goodwill |
|
|
|
— |
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
— |
|
Goodwill impairment |
|
|
|
— |
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
— |
|
Balance as of December 31, 2025 |
|
$ |
|
66,325 |
|
|
$ |
|
— |
|
|
$ |
|
66,325 |
|
|
$ |
|
188,739 |
|
|
$ |
|
(5,372 |
) |
|
$ |
|
183,367 |
|
|
$ |
|
249,692 |
|
Intangible assets, net, consist of the following as of December 31, 2025 and 2024 (in thousands):
|
|
December 31, 2025 |
|
|
December 31, 2024 |
|
||||||||||||||||||||||||
|
|
Gross |
|
|
Accumulated |
|
|
Net |
|
|
Gross |
|
|
Accumulated |
|
|
Net |
|
||||||||||||
Developed technology |
|
$ |
|
97,354 |
|
|
|
|
(16,584 |
) |
|
$ |
|
80,770 |
|
|
$ |
|
97,350 |
|
|
$ |
|
(9,221 |
) |
|
$ |
|
88,129 |
|
Trade name |
|
|
|
61,010 |
|
|
|
|
(11,946 |
) |
|
|
|
49,064 |
|
|
|
|
61,010 |
|
|
|
|
(5,845 |
) |
|
|
|
55,165 |
|
Customer relationships |
|
|
|
170,264 |
|
|
|
|
(28,659 |
) |
|
|
|
141,605 |
|
|
|
|
168,340 |
|
|
|
|
(11,350 |
) |
|
|
|
156,990 |
|
Non-compete agreement |
|
|
|
2,048 |
|
|
|
|
(796 |
) |
|
|
|
1,252 |
|
|
|
|
2,048 |
|
|
|
|
— |
|
|
|
|
2,048 |
|
Patent |
|
|
|
764 |
|
|
|
|
(18 |
) |
|
|
|
746 |
|
|
|
|
193 |
|
|
|
|
(3 |
) |
|
|
|
190 |
|
Total |
|
$ |
|
331,440 |
|
|
$ |
|
(58,003 |
) |
|
$ |
|
273,437 |
|
|
$ |
|
328,941 |
|
|
$ |
|
(26,419 |
) |
|
$ |
|
302,522 |
|
Amortization expense totaled $31.7 million, $17.2 million and $2.1 million for the years ended December 31, 2025, 2024 and 2023, respectively.
As of December 31, 2025, the weighted average remaining useful lives for the Company's intangible assets are as follows:
Developed technology |
|
12.8 Years |
Trade name |
|
8.1 Years |
Customer relationships |
|
8.5 Years |
Non-compete agreement |
|
1.9 Years |
Patent |
|
18.5 Years |
Amortization expense is classified in operating expenses on the accompanying consolidated statements of operations. Estimated future amortization expense as of December 31, 2025 for each of the next five years and thereafter is as follows (in thousands):
2026 |
$ |
|
32,036 |
|
2027 |
|
|
31,922 |
|
2028 |
|
|
30,450 |
|
2029 |
|
|
29,432 |
|
2030 |
|
|
28,431 |
|
Thereafter |
|
|
121,166 |
|
|
$ |
|
273,437 |
|
About Goodwill & Intangibles Disclosures
Goodwill and intangible asset disclosures reveal the premium paid in acquisitions and how management assesses whether that premium retains its value. Since goodwill is no longer amortized under US GAAP, the annual impairment test is the only mechanism that adjusts carrying values downward — making the assumptions behind that test critically important for investors.
Key signals: a history of goodwill impairments suggests management consistently overpays for acquisitions. Watch the gap between reporting unit fair value and carrying amount — when fair value exceeds carrying amount by less than 10-20%, a small decline in business performance could trigger a write-down. For finite-lived intangibles, examine useful life assumptions across customer relationships, technology, and trade names; aggressive estimates inflate near-term earnings. Compare total intangibles-to-total-assets ratios against peers to assess acquisition dependency. Rising goodwill as a percentage of equity can signal balance sheet fragility.