FLOC Q3 2026 earnings call transcript, November 4, 2026

We've generated nearly a quarter billion dollars of free cash flow, representing 65% conversion of adjusted EBITDA into free cash flow. We believe our combination of strong margins and returns, consistent free cash flow generation, and capital efficient growth continues to differentiate FLOCO within our sector. With that, I'll turn it over to John.

Thanks, Joe, Bob. Turning to our financials, third quarter results exceeded our expectations.

We've managed to keep a pretty tight handle on working capital since we've gone public, and I don't really see that changing. I don't, you know, as we look at international opportunities, we don't see a need to significantly build our inventory to be able to deliver, to be able to deliver that. You know, working capital, I think, is around $150,000, $200 million, adding $5,000, $10 million to that to be able to. Service international opportunities as they arise, I don't think it's going to have a significant impact on our overall free cash flow. So yes, to kind of answer your final question, I expect our free cash flow conversion from EBITDA to stay in that 50% neighborhood.

Okay, awesome. And then my follow up is really around capital deployment and around that, which, you know, obviously you guys kind of mentioned in commentary that, you know, M&A continue to be active there between different geographies and technologies. But we also saw the additional buyback authorization, just trying to get a sense on how you guys are thinking about capital allocation heading into next year as well.

Yeah, Keith, we are a base. A very focused, ROSI-driven capital allocation team. Okay, so we literally look at every dollar of capital that goes out against a rigorous analysis. What sort of return? We're getting on this investment, whether it's an investment in a new series of systems to help with high-pressure gas lift, or VRU, is the customer demand there to justify that sort of six-month lead time? On getting units built through our shop. And the M&A markets are dynamic, right? We've executed a couple since going public at expected rates of return that rise to the level of competitiveness against what we have internally. The reason for the increased buyback is because where we're trading today. In particular, based on the free cash flow metrics that we look at our company and just the more basic EBITDA valuations of FLOCO versus the alternatives out there for us to go invest in, it looks pretty compelling. So, we'll obviously continue to monitor it. We're going to resist putting out a programmatic share repurchase guide. That's not, I think, in the cards for us in the intermediate period. But as a team, we... We love the additional flexibility that that increased buyback authorization gives us. Because as we look at where we're trading, as we look at other places to deploy capital, it's nice to have the various opportunities in front of us.

Awesome. I really appreciate it. I'll turn it back.

Our next question.

Our next question is from Jeff LeBlanc with TPH Research. Please proceed.

Can they fit with what we have? Can they buy into the way that we go to market? And so that's really at the top of the list in terms of our M&A screening efforts. The market's deep and robust. In terms of M&A, but we're highly selective. So we'll continue to look. Hopefully add to the portfolio over time, but not buying companies just for acquisition's sake.

There are no further questions at this time. I would like to turn the conference back over to Joe Bob for closing remarks. Well, thank you all for tuning in and look forward to continued dialogue in the... in the quarter to come. Thank you. Thank you. This will conclude today's conference. You may disconnect at this time and thank you for your participation.