ENERFLEX LTD. ANNOUNCES FIRST QUARTER 2026 FINANCIAL AND OPERATIONAL RESULTS

CONTINUED STRONG OPERATIONAL EXECUTION REFLECTED IN ADJUSTED EBITDA OF $137 MILLION AND RECORD RETURN ON CAPITAL EMPLOYED OF 17.3%

MANAGING FINANCIAL FLEXIBILITY; BANK ADJUSTED NET DEBT-TO-EBITDA RATIO TO 0.9x AT THE END OF Q1/26

SOLID OPERATIONAL VISIBILITY WITH ES BOOK-TO-BILL RATIO OF 1.5X, ES AND EI BACKLOGS OF $1.3 BILLION

NEWS RELEASE

CALGARY, Alberta, May 07, 2026 – Enerflex Ltd. (TSX: EFX) (NYSE: EFXT) (“Enerflex” or the “Company”) today reported its financial and operational results for the three months ended March 31, 2026.

All amounts presented are in U.S. Dollars unless otherwise stated.

Q1/26 FINANCIAL OVERVIEW

•

Generated revenue of $584 million compared to $552 million in Q1/25 and $627 million in Q4/25

Higher revenue compared with prior year reflects strong execution and a high level of operational activity in the Engineered Systems (“ES”) product line. The sequential decline relates primarily to lower parts sales and service utilization in the After-Market Services (“AMS”) product line

•

Recorded gross margin before depreciation and amortization of $179 million, or 31% of revenue, compared to $161 million, or 29% of revenue in Q1/25 and $177 million, or 28% of revenue during Q4/25

Energy Infrastructure (“EI”) and AMS product lines generated 65% of consolidated gross margin before depreciation and amortization during Q1/26

ES gross margin before depreciation and amortization increased to 19% in Q1/26 compared to 18% in Q1/25, and 18% in Q4/25 primarily related to product mix

•

SG&A was $79 million for the three months ended March 31, 2026, up $22 million from the prior year period, due to higher stock-based compensation. On a sequential basis, SG&A decreased from $83 million, primarily due to lower core SG&A from cost-saving initiatives, partially offset by higher stock-based compensation

•

Adjusted earnings before finance costs, income taxes, depreciation, and amortization (“adjusted EBITDA”) of $137 million compared to $113 million in Q1/25 and $123 million in Q4/25

•

Cash provided by operating activities before changes in working capital (“FFO”) increased to $95 million in Q1/26 compared to $60 million in Q4/25 and $62 million in Q1/25, a function of higher adjusted EBITDA and lower net finance costs. Cash provided by operating activities was $32 million, which included net working capital investment of $63 million. This compares to $96 million in Q1/25 and $179 million in Q4/25

•

Free cash flow decreased to $15 million in Q1/26 compared to $85 million during Q1/25 and $141 million during Q4/25, with higher FFO offset by investments in net working capital

•

Return on capital employed (“ROCE”)1 was 17.3% in Q1/26, a new record for the Company, compared to 14.2% in Q1/25 and 16.9% during Q4/25. Higher ROCE is a function of the increase in trailing 12-month EBIT and lower average capital employed, predominantly due to a decline in net debt


	Q1/26 Earnings News Release

1 ROCE is calculated by taking EBIT for the 12-month trailing period divided by capital employed. Capital employed is average debt and Shareholders’ equity less average cash for the trailing four quarters.

•

Net earnings (loss) of $43 million or $0.35 per share in Q1/26 compared to $24 million or $0.19 per share in Q1/25 and ($57) million or ($0.47) per share in Q4/25. Compared to Q1/25, profitability benefited from higher gross margin, and lower net finance costs partially offset by higher SG&A expense

•

Invested $16 million in the business, comprised of $7 million for growth, primarily allocated to expand the Company’s contract compression fleet in the U.S., and $9 million for maintenance and PP&E

STRATEGIC AND OPERATIONAL HIGHLIGHTS

•

ES backlog as at March 31, 2026 of $1.3 billion provides strong visibility into future revenue generation and business activity levels. Bookings of $483 million during Q1/26 compared to $205 million in Q1/25, $377 million in Q4/25 and a trailing eight quarter average of $344 million. ES book-to-bill ratio (calculated as bookings divided by revenue), was 1.5x during Q1/26 and 1.0x on a trailing eight quarter average, highlighting that the Company is consistently replenishing its backlog in line with project execution

•

Enerflex is advancing its electric power generation business, including opportunities associated with data centers. During the quarter, the Company was awarded a behind-the-meter power generation project for a data center utilizing reciprocating engine generator sets and secured additional projects supporting island power applications. Enerflex continues to see strong demand across its Engineered Systems business line and emerging opportunities for After-Market Services support

•

Enerflex’s U.S. contract compression business continues to perform well, led by increasing natural gas production in the Permian. Utilization remained stable at 94% across a fleet size of 486,000 horsepower. Enerflex increased its marketed fleet by 13% over the course of 2025 and continues to expect growth capital expenditures will deliver growth at a similar pace or greater during 2026. Enerflex is also securing long-lead time components to support further growth in 2027

•

Enerflex is closely monitoring the conflict in the Middle East, and to date, the Company’s operations in the region have operated uninterrupted. Local teams are actively managing with established response processes and contingency planning, ensuring continued safety of our people and reliability of the Company’s operations. Enerflex’s operations which are principally in Bahrain and Oman comprise 17 distinct natural gas and produced water projects, and an installed compression and power generation fleet of approximately 350,000 horsepower

BALANCE SHEET AND LIQUIDITY

•

Enerflex exited Q1/26 with net debt of $505 million, which included $47 million of cash and cash equivalents, a reduction of $59 million compared to Q1/25. Since the beginning of 2023, Enerflex has repaid approximately $550 million of long-term debt through Q1/26

•

Enerflex’s bank-adjusted net debt-to-EBITDA ratio was approximately 0.9x at the end of Q1/26, down from 1.3x at the end of Q1/25 and 1.0x at the end of Q4/25

MANAGEMENT COMMENTARY

Paul Mahoney, Enerflex’s President and Chief Executive Officer stated: “Enerflex delivered solid operational performance in the first quarter of 2026, reflecting continued disciplined execution across our global footprint as well as ongoing efforts to optimize and streamline our business. Results continue to be underpinned by the Energy Infrastructure and After-Market Services business lines, which generated 65% of adjusted gross margin before depreciation and amortization in the quarter. The Engineered Systems business is demonstrating strong execution and commercial momentum, supported by healthy backlog levels and ongoing bidding activity across key markets, particularly in North America.

We continue to see steady demand in our core markets, underpinned by increasing natural gas and liquids production volumes. We are also advancing strategic opportunities in emerging power generation markets, including data center-related projects and other distributed power applications, with our current scope of opportunities now exceeding five gigawatts.

In the Middle East, our focus remains on ensuring the safety of our people and reliability of the Company’s operations. Enerflex owned infrastructure is integral to the reliable operation of regional energy systems and we continue to work closely with our client partners to navigate a dynamic situation.”



	Q1/26 Earnings News Release

Preet Dhindsa, Enerflex’s Senior Vice President and Chief Financial Officer, added: “Enerflex generated solid financial results in the first quarter, which included improvement in both gross margin and cash conversion. We are on track with our 2026 capital plan and continue to allocate capital in a balanced manner across growth investments, shareholder returns and managing our financial position. The Company’s focus remains on enhancing profitability in our core operations, executing on our Engineered Systems backlog, and maintaining a strong and flexible balance sheet to support long-term value creation.”

SUMMARY RESULTS


	Three months ended March 31,
($ millions, except percentages and ratios)	2026			2025
Revenue	$	584		$	552
Gross margin ("GM")		145			128
GM as a percentage of revenue ("GM %")		24.8	%		23.2	%
Selling, general and administrative expenses (“SG&A”)		79			57
Operating income		68			71
EBITDA1		110			105
EBIT1		73			66
Net earnings		43			24
Long-term debt		552			639
Net debt2		505			564
Cash provided by operating activities		32			96

Key Financial Performance Indicators (“KPIs”)
ES backlog3	$	1,265		$	1,206
ES bookings3		483			205
EI contract backlog4		1,283			1,497
GM before depreciation and amortization (“GM before D&A”)5		179			161
GM before D&A as a percentage of revenue ("GM before D&A %")5		30.7	%		29.2	%
Adjusted EBITDA6		137			113
Free cash flow7		15			85
Bank-adjusted net debt to EBITDA ratio7		0.9	x	1.3x
Return on capital employed (“ROCE”)7,8		17.3	%		14.2	%

1 EBITDA is defined as earnings before net finance costs, income taxes, depreciation and amortization. EBIT is defined as earnings before net finance costs and income taxes.

2 Net debt is defined as total long-term debt, less cash and cash equivalents as presented in the Financial Statements.

3 Refer to the “ES Backlog and Bookings” section of the MD&A for further details.

4 Refer to the “EI Contract Backlog” section of the MD&A for further details.

5 Refer to the “Gross Margin before D&A by Product Line and Recurring Gross Margin before D&A” section of the MD&A for further details

6 Refer to the “Adjusted EBITDA” section of the MD&A for further details.

7 Refer to the “Non-IFRS Measures” section of the MD&A for further details.

8Determined by using the trailing 12-month ("TTM") period.

Enerflex’s consolidated financial statements and notes (the “Financial Statements”) and Management’s Discussion and Analysis (“MD&A”) as at March 31, 2026, can be accessed on the Company’s website at www.enerflex.com and under the electronic profile of the Company on SEDAR+ and EDGAR at www.sedarplus.ca and www.sec.gov/edgar, respectively.

OUTLOOK



	Q1/26 Earnings News Release

Market Services (“AMS”). The EI product line is supported by customer contracts expected to generate approximately $1.3 billion of revenue over their remaining terms.

Performance for Enerflex's ES product line is expected to remain steady, supported by a backlog of approximately $1.3 billion as at March 31, 2026, the majority of which is expected to convert into revenue over the next 12 months. The medium-term outlook for ES products and services continues to be attractive, driven by expected increases in natural gas and electric power generation across Enerflex’s core operating countries.

Enerflex’s priorities in 2026 include:

leveraging our leading position in core operating countries to capitalize on expected increases in demand for Enerflex’s solutions;

enhancing the profitability of core operations; and

maximizing free cash flow, positioning the Company to invest in customer supported growth opportunities and provide meaningful direct shareholder returns.

Capital Allocation

Enerflex continues to target organic capital expenditures of $175 million to $195 million during 2026. This includes: (1) organic growth capital expenditures of $90 million to $100 million; (2) maintenance capital expenditures of $70 million to $80 million; and (3) PP&E and infrastructure investments of approximately $15 million to support the Company’s ES business and activity in adjacent markets, including electric power generation.

Organic growth capital spending will continue to focus on customer supported opportunities and primarily allocated to expand the Company’s contract compression fleet in the U.S. Notably, the fundamentals for contract compression in the U.S. remain strong, led by expected increases in natural gas production and capital spending discipline from market participants.

Virtual Investor Update

Enerflex will host a virtual Investor Update on Wednesday, May 27, 2026 at 8:00 am MT (10:00am ET). Enerflex’s President and CEO, Paul Mahoney, will highlight the company’s outlook and strategic priorities with a Q&A period to follow.

Registration for the Investor Day can be made using the following link: https://edge.media-server.com/mmc/p/eyz29mbq. Participants can join by webcast to follow along with the presentation. The presentation will be made available on Enerflex’s website prior to the start. Questions can be submitted via the webcast or asked on the dial-in.

Dial-in numbers: https://register-conf.media-server.com/register/BI8e02cded3fae4a3dbb8d89234ae4be38

Shortly after the live webcast, an archived version will be available.

DIVIDEND DECLARATION

Enerflex is committed to paying a sustainable quarterly cash dividend to shareholders. The Board of Directors has declared a quarterly dividend of CAD $0.0425 per share, payable on June 3, 2026 to shareholders of record on May 20, 2026.

CONFERENCE CALL AND WEBCAST DETAILS

Investors, analysts, members of the media, and other interested parties, are invited to participate in a conference call and audio webcast on Thursday, May 7, 2026 at 8:00 a.m. (MDT), where members of senior management will discuss the Company’s results. A question-and-answer period will follow.



	Q1/26 Earnings News Release

To participate, register at https://register-conf.media-server.com/register/BI6515d65feedd4a68be887d88f452621e. Once registered, participants will receive the dial-in numbers and a unique PIN to enter the call. The audio webcast of the conference call will be available on the Enerflex website at www.enerflex.com under the Investors section or can be accessed directly at https://edge.media-server.com/mmc/p/jpr3iwfx/.

NON-IFRS MEASURES

Throughout this news release and other materials disclosed by the Company, Enerflex employs certain measures to analyze its financial performance, financial position, and cash flows, including net debt-to-EBITDA ratio, ES backlog and bookings, EI contract backlog, free cash flow, GM before depreciation and amortization and bank-adjusted net debt-to-EBITDA ratio. These non-IFRS measures are not standardized financial measures under IFRS and may not be comparable to similar financial measures disclosed by other issuers. Accordingly, non-IFRS measures should not be considered more meaningful than generally accepted accounting principles measures as indicators of Enerflex’s performance. Refer to “Non-IFRS Measures” of Enerflex’s MD&A for the three months ended March 31, 2026, for information which is incorporated by reference into this news release and can be accessed on Enerflex’s website at www.enerflex.com and under the electronic profile of the Company on SEDAR+ and EDGAR at www.sedarplus.ca and www.sec.gov/edgar, respectively.

Adjusted EBITDA


	Three months ended March 31, 2026
($ millions)		NAM		LATAM		EH		Total
Net earnings1								$	43
Income taxes1									20
Net finance costs1,2									10
EBIT3		$	38	$	18	$	12	$	73
Depreciation and amortization			15		10		12		37
EBITDA		$	53	$	28	$	24	$	110
Share-based compensation			15		3		4		22
Impact of finance leases
Principal payments received			-		-		10		10
Unrealized gain on redemption options3									(5	)
Adjusted EBITDA		$	68	$	31	$	38	$	137

1The Company included net earnings, income taxes, and net finance costs on a consolidated basis to reconcile to EBIT.

2Net finance costs are considered corporate expenditure and therefore have not been allocated to reporting segments.

3EBIT includes $5 million unrealized gain on redemption options associated with the 2031 Notes. Debt is managed within Corporate and is not allocated to reporting segments.


	Three months ended March 31, 2025
($ millions)		NAM			LATAM			EH		Total
Net earnings 1										$	24
Income taxes1											19
Net finance costs1,2											23
EBIT3		$	38		$	19		$	12	$	66
Depreciation and amortization			16			11			12		39
EBITDA		$	54		$	30		$	24	$	105
Share-based compensation			(2	)		(1	)		-		(3	)
Impact of finance leases
Principal payments received			-			-			8		8
Unrealized loss on redemption options3											3
Adjusted EBITDA		$	52		$	29		$	32	$	113

1The Company included net earnings, income taxes, and net finance costs on a consolidated basis to reconcile to EBIT.

2Net finance costs are considered corporate expenditure and therefore have not been allocated to reporting segments.

3EBIT includes $3 million unrealized loss on redemption options associated with the 2027 Notes. Debt is managed within Corporate and is not allocated to reporting segments.



	Q1/26 Earnings News Release

FREE CASH FLOW

The Company defines free cash flow as cash provided by (used in) operating activities, less total capital expenditures (growth and maintenance) for EI assets - operating leases and PP&E, mandatory debt repayments, and lease payments, while proceeds on disposals of PP&E and EI assets - operating leases are added back. Free cash flow may not be comparable to similar measures presented by other companies as it does not have a standardized meaning under IFRS. Management uses this non-IFRS measure to assess the level of free cash generated to fund other non-operating activities. These activities could include dividend payments, share repurchases, and non-mandatory debt repayments. Free cash flow is also used in calculating the dividend payout ratio.


	Three months ended March 31,
($ millions)	2026			2025
Funds from operations ("FFO")1	$	95		$	62
Net change in working capital and other		(63	)		34
Cash provided by operating activities ("CFO")2	$	32		$	96
Less:
CAPEX - Maintenance and PP&E		(9	)		(8	)
CAPEX - Growth		(7	)		(6	)
Lease payments		(6	)		(6	)
Add:
Proceeds on disposals of PP&E and EI assets - operating leases		5			9
Free cash flow	$	15		$	85

1Enerflex also refers to cash provided by operating activities before net change in working capital and other as “Funds from Operations” or “FFO”.

2Enerflex also refers to cash provided by operating activities as “Cash flow from Operations” or “CFO”.

BANK-ADJUSTED NET DEBT-TO-EBITDA RATIO

Enerflex defines bank-adjusted net debt to EBITDA as borrowings under the Revolving Credit Facility (“RCF”) and Notes less cash and cash equivalents, divided by EBITDA for the trailing 12-months, as defined by the Company’s lenders. In assessing the Company's compliance with financial covenants related to its debt, certain adjustments are made to EBITDA to determine Enerflex's bank-adjusted net debt to EBITDA ratio. These adjustments, and Enerflex's bank-adjusted net debt to EBITDA ratio, are calculated in accordance with, and derived from, the Company's financing agreements.

ADVISORY REGARDING FORWARD-LOOKING INFORMATION

This news release contains “forward-looking information” within the meaning of applicable Canadian securities laws and “forward-looking statements” (and together with “forward-looking information”, “FLI”) within the meaning of the safe harbor provisions of the US Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact are FLI. The use of any of the words “anticipate”, “believe”, “could”, “expect”, “future”, “may”, “potential”, “should”, “will” and similar expressions, (including negatives thereof) are intended to identify FLI.

In particular, this news release includes (without limitation) FLI pertaining to:

•

anticipated business activity levels based on the ES backlog and that such backlog will drive future revenue generation, the timing associated therewith, if at all;

•

expectations that growth capital expenditures will deliver growth of at least 13% during 2026 and the ability of Enerflex to secure long-lead time components, if at all, to support such growth;

•

Enerflex’s ongoing efforts to optimize and streamline its business and the timing associated there with;



	Q1/26 Earnings News Release

•

the ability of the Company to capitalize on opportunities within its electric power generation business, including opportunities associated with data centers;

•

Enerflex’s ability to enhance the profitability of its core operations, execute on its ES backlog, and maintain a strong and flexible balance sheet to support long-term value creation, and the time required in connection therewith, if at all;

•

disclosures under the heading “Outlook” including:

expectations for continued steady demand across our business lines and geographic regions;

the highly contracted EI product line and the recurring nature of AMS will continue to underpin operating results;

customer contracts within Enerflex’s EI product line will generate approximately $1.3 billion of revenue over their remaining terms;

expectations that performance of Enerflex’s ES product line will remain steady, with the majority of the backlog of approximately $1.3 billion as at March 31, 2026, expected to convert into revenue over the next 12 months;

expected increases in natural gas and electric power generation across Enerflex’s core operating countries will drive an attractive medium-term outlook for ES products and services;

Enerflex’s ability to deliver on its priorities in 2026 and the time required in connection therewith, if at all;

targeted organic capital expenditures during 2026 of $175 million to $195 million, including (i) organic growth capital expenditures of $90 million to $100 million; (2) maintenance capital expenditures of $70 million to $80 million; and (3) PP&E and infrastructure investments of approximately $15 million;

selective customer supported growth investments continuing to be made in the US contract compression business;

continued strength in the fundamentals for contract compression in the U.S., led by expected increases in natural gas production and capital spending discipline from market participants; and

the Company's expectation to hold a virtual investor update, the date and time of such update, and the content of such update and when such content will be made available, if at all;

•

the availability of free cash generated and that such cash may be used to fund non-operating activities including dividend payments, share repurchases, and other non-mandatory debt repayments, if any.

FLI reflect Management's current beliefs and assumptions with respect to such things as the impact of general economic conditions; commodity prices; the markets in which Enerflex's products and services are used; general industry conditions, forecasts, and trends; changes to, and introduction of new, governmental regulations, laws, and income taxes; increased competition; availability of qualified personnel; political unrest and geopolitical conditions; and other factors, many of which are beyond the control of Enerflex. More specifically, Enerflex’s expectations in respect of its FLI are based on a number of assumptions, estimates and projections developed based on past experience and anticipated trends, including but not limited to:

•

potential impacts of the situation in the Middle East on Enerflex’s operations in Bahrain and Oman and the broader region;

•

the ability of the Company to proactively manage the ES business line in response to near-term risks and uncertainties, including tariffs and commodity price volatility;

•

natural gas and associated liquids and produced water volumes across Enerflex’s global footprint will increase in line with expectations;

•

market conditions, customer activity, and industry fundamentals will support stable demand across Enerflex’s product lines and geographic regions throughout 2026;

•

the high level of contractual commitments within the EI product line and the predictable, recurring revenue from AMS will continue;

•

existing customer contracts within the EI product line will remain in effect and with no material cancellations or renegotiations over their remaining terms;



	Q1/26 Earnings News Release

•

risks related to lawsuits, arbitrations or other legal proceedings;

•

the execution of projects within the ES product line will proceed as scheduled and the conversion to revenue will proceed without significant delays or cancellations;

•

the Company’s backlog providing strong visibility into future revenue generation and business activity levels;

•

no significant unforeseen cost overruns or project delays;

•

Enerflex will maintain sufficient cash flow, profitability, and financial flexibility to support the ongoing payment of a sustainable quarterly cash dividend, subject to market conditions, operational performance, and board approval.

As a result of the foregoing, actual results, performance, or achievements of Enerflex could differ and such differences could be material from those expressed in, or implied by, the FLI. The principal risks, uncertainties and other factors affecting Enerflex and its business are identified under the heading "Risk Factors"in: (i) Enerflex's Annual Information Form for the year ended December 31, 2025, dated February 25, 2026; and (ii) in other filings with Canadian securities regulators and the SEC, copies of which are available under the electronic profile of the Company on SEDAR+ and EDGAR at www.sedarplus.ca and www.sec.gov/edgar, respectively. Other unpredictable or unknown factors not discussed in this news release could have material adverse effects on the actual results, performance, or achievements of Enerflex expressed in, or implied by, the FLI.

The FLI included in this news release are made as of the date of this news release and are based on the information available to the Company at such time and, other than as required by law, Enerflex disclaims any intention or obligation to update or revise any FLI, whether as a result of new information, future events, or otherwise. This news release and its contents should not be construed, under any circumstances, as investment, tax, or legal advice.

The outlook provided in this news release is based on assumptions about future events, including economic conditions and proposed courses of action, based on Management's assessment of the relevant information currently available. The outlook is based on the same assumptions and risk factors set forth above and is based on the Company's historical results of operations. The outlook set forth in this news release was approved by Management and the Board of Directors. Management believes that the prospective financial information set forth in this news release has been prepared on a reasonable basis, reflecting Management's best estimates and judgments, and represents the Company's expected course of action in developing and executing its business strategy relating to its business operations. The prospective financial information set forth in this news release should not be relied on as necessarily indicative of future results. Actual results may vary, and such variance may be material.

ABOUT ENERFLEX

Enerflex is a leading provider of modular natural gas, power technology and treated water solutions, delivering value through disciplined execution and a deliberate approach to where we compete. Our customer focused delivery model supports operational excellence, innovation, and scalability across our global footprint with a focus on creating long-term shareholder value.

With approximately 4,400 engineers, manufacturers, technicians, professionals, and innovators, Enerflex is bound together by a shared vision: Transforming Energy for a Sustainable Future. The Company remains committed to the future of natural gas and the critical role it plays, while focused on sustainability offerings to support the world’s energy needs.

Enerflex’s common shares trade on the Toronto Stock Exchange under the symbol “EFX” and on the New York Stock Exchange under the symbol “EFXT”. For more information about Enerflex, visit www.enerflex.com.

For investor and media enquiries, contact:



	Q1/26 Earnings News Release

Paul Mahoney

President and Chief Executive Officer

E-mail: [email protected]

Preet S. Dhindsa

Senior Vice President and Chief Financial Officer

E-mail: [email protected]

Jeff Fetterly

Vice President, Corporate Development and Capital Markets

E-mail: [email protected]



	Q1/26 Earnings News Release

Interim Condensed Consolidated Financial Statements

Interim Condensed Consolidated Statements of Financial Position (unaudited)


($ United States millions)	Notes	March 31, 2026			December 31, 2025
Assets
Current assets
Cash and cash equivalents		$	47		$	81
Accounts receivable	2a		384			345
Unbilled revenue	2b		145			164
Energy infrastructure (“EI”) assets - finance leases receivable	3a		58			58
Inventories			279			280
Income taxes receivable			4			11
Derivative financial instruments			1			1
Prepayments			58			52
Assets held for sale	4		77			-
Total current assets			1,053			992
Unbilled revenue	2b		1			1
Property, plant and equipment ("PP&E")			100			102
EI assets - finance leases receivable	3a		171			180
EI assets - operating leases	3b		672			686
Lease right-of-use assets			57			61
Deferred tax assets			21			21
Intangible assets			28			29
Goodwill			412			430
Other assets			197			192
Total assets		$	2,712		$	2,694

Liabilities and Shareholders’ Equity
Current liabilities
Accounts payable and accrued liabilities	5	$	363		$	396
Provisions			25			25
Income taxes payable			91			80
Deferred revenue			353			355
Lease liabilities			21			22
Derivative financial instruments			2			1
Liabilities held for sale	4		19			-
Total current liabilities			874			879
Deferred revenue			13			13
Long-term debt	6		552			582
Lease liabilities			48			50
Deferred tax liabilities			50			51
Other liabilities			35			26
Total liabilities		$	1,572		$	1,601

Shareholders’ equity
Share capital		$	501		$	498
Contributed surplus			663			664
Retained earnings			169			130
Accumulated other comprehensive loss			(193	)		(199	)
Total shareholders’ equity			1,140			1,093
Total liabilities and shareholders’ equity		$	2,712		$	2,694

See accompanying notes to the consolidated financial statements, including Note 13 “Guarantees, Commitments, and Contingencies”


	F-1

Interim Condensed Consolidated Statements of Earnings and Comprehensive Income (unaudited)


		Three months ended March 31,
($ United States millions, except per share amounts)	Notes	2026			2025
Revenue	7,9	$	584		$	552
Cost of goods sold ("COGS")	9		439			424
Gross margin			145			128
Selling, general and administrative expenses ("SG&A")	8,9		79			57
Foreign exchange (gain) loss			(2	)		-
Operating income			68			71
Equity earnings from associates and joint ventures			1			-
(Loss) on financial instruments			(1	)		(2	)
Unrealized gain (loss) on redemption options			5			(3	)
Earnings before net finance costs and income taxes (“EBIT”)			73			66
Net finance costs	10		10			23
Earnings before income taxes (“EBT”)			63			43
Current income taxes			22			22
Deferred income taxes			(2	)		(3	)
Income taxes			20			19
Net earnings		$	43		$	24

Other comprehensive income

Items that may be reclassified to profit or loss in subsequent periods:
Unrealized (loss) on translation of foreign- denominated debt			(1	)		-
Unrealized gain on translation of financial statements of foreign operations			7			5
Other comprehensive income			6			5
Total comprehensive income		$	49		$	29

Earnings per share – basic		$	0.35		$	0.19
Earnings per share – diluted		$	0.35		$	0.19

Weighted average number of shares outstanding – basic			121,874,052			124,145,322
Weighted average number of shares outstanding – diluted			122,086,573			124,480,239

See accompanying notes to the unaudited interim condensed consolidated financial statements.


F-2 Interim Condensed Consolidated Financial Statements

Interim Condensed Consolidated Statements of Cash Flows (unaudited)


		Three months ended March 31,
($ United States millions)	Notes	2026			2025
Operating Activities
Net earnings		$	43		$	24
Adjustments for:
Depreciation and amortization			37			39
Equity earnings from associates and joint ventures			(1	)		-
Deferred income taxes			(2	)		(3	)
Share-based compensation expense (recovery)	8		22			(3	)
Loss on financial instruments			1			2
Unrealized (gain) loss on redemption options			(5	)		3
			95			62
Net change in working capital and other	12		(63	)		34
Cash provided by operating activities		$	32		$	96

Investing Activities
Additions to:
PP&E		$	(3	)	$	(2	)
EI assets - operating leases	3b		(13	)		(12	)
Proceeds on disposal of:
EI assets - operating leases			5			9
Net (purchases) of financial instruments			(1	)		(7	)
Net change in working capital associated with investing activities			(7	)		(14	)
Cash used in investing activities		$	(19	)	$	(26	)

Financing Activities
Net repayment of the revolving credit facility ("RCF")	6	$	(29	)	$	(74	)
Lease liability principal repayment			(6	)		(6	)
Dividends			(4	)		(6	)
Stock option exercises			2			-
Cash used in financing activities		$	(37	)	$	(86	)
Effect of exchange rate changes on cash and cash equivalents denominated in foreign currencies		$	1		$	(1	)
Decrease in cash and cash equivalents			(23	)		(17	)
Cash and cash equivalents reclassified to assets held for sale	4		(11	)	-
Cash and cash equivalents, beginning of period			81			92
Cash and cash equivalents, end of period		$	47		$	75

See accompanying notes to the unaudited interim condensed consolidated financial statements.


	F-3

Interim Condensed Consolidated Statements of Changes in Equity (unaudited)


									Accumulated other comprehensive losses
($ United States millions)	Share capital		Contributed surplus			Retained earnings			Foreign currency translation adjustments			Hedging reserve			Total
At January 1, 2026	$	498	$	664		$	130		$	(198	)	$	(1	)	$	1,093
Net earnings		-		-			43			-			-			43
Other comprehensive income		-		-			-			6			-			6
Effect of stock option plans		3		(1	)		-			-			-			2
Dividends		-		-			(4	)		-			-			(4	)
At March 31, 2026	$	501	$	663		$	169		$	(192	)	$	(1	)	$	1,140
At January 1, 2025	$	505	$	678		$	80		$	(214	)	$	-		$	1,049
Net earnings		-		-			24			-			-			24
Other comprehensive income		-		-			-			5			-			5
Dividends		-		-			(3	)		-			-			(3	)
At March 31, 2025	$	505	$	678		$	101		$	(209	)	$	-		$	1,075

See accompanying notes to the unaudited interim condensed consolidated financial statements.


F-4 Interim Condensed Consolidated Financial Statements

Notes to the Interim Condensed Consolidated

Financial Statements (unaudited)

(All amounts in millions of United States dollars, except per share amounts or as otherwise noted.)

Note 1. Summary of Material Accounting Policies

(a)

Statement of Compliance

These unaudited interim condensed consolidated financial statements (“Financial Statements”) have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”) applicable to the preparation of interim financial statements, and were approved and authorized for issue by the Board of Directors (the “Board”) on May 6, 2026.

(b)

Basis of Presentation and Measurement

The Financial Statements for the three months ended March 31, 2026 and 2025 were prepared in accordance with IAS 34 “Interim Financial Reporting” and do not include all the disclosures included in the annual consolidated financial statements for the year ended December 31, 2025. Accordingly, these Financial Statements should be read in conjunction with the annual consolidated financial statements. Certain comparative figures have been reclassified to conform to the current period’s presentation.

Preparation of these Financial Statements requires Management to make judgments, estimates, and assumptions based on existing knowledge that affect the application of accounting policies and reported amounts and disclosures. Actual results could differ from these estimates and assumptions. In particular, the impact of geopolitical events, such as imposed tariffs in the North American market and ongoing conflict in the Middle East, could materially impact customer and supplier arrangements, as well as interest and inflation rates, resulting in increased volatility and near-term uncertainty. Management has, to the extent reasonable, incorporated known facts and circumstances into estimates made, however actual results could differ from those estimates, and those differences could be material. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future periods affected.

The Financial Statements are presented in United States dollars ("USD"), Enerflex Ltd. ("Enerflex" or the "Company") presentation currency, rounded to the nearest million except per share amounts or as otherwise noted. Transactions of the Company’s individual entities are recorded in their own functional currency based on the primary economic environment in which it operates. The Financial Statements are prepared on a going concern basis under the historical cost basis, with certain financial assets and financial liabilities recorded at fair value. There have been no significant changes in accounting policies compared to those described in the annual consolidated financial statements for the year-ended December 31, 2025, except for the change as per note 1(c) below.

(c)

Change in Accounting Policies

Amendments to Existing Standards

The following amendment, effective for annual periods beginning on or after January 1, 2026, was adopted by the Company as of January 1, 2026. There were no adjustments or additional disclosures that resulted from the adoption of this amendment.

IFRS 9 Financial Instruments (“IFRS 9”) and IFRS 7 Financial Instruments: Disclosures (“IFRS 7”)

In May 2024, the IASB issued amendments to IFRS 9 and IFRS 7 to clarify that financial assets and financial liabilities are recognized and derecognized at settlement date except for regular way purchases or sales of financial assets and financial liabilities meeting conditions for new exception. The new exception permits companies to elect to derecognize certain financial liabilities settled via electronic payment systems earlier than the settlement date.


	F-5

They also provide guidelines to assess contractual cash flow characteristics of financial assets, which apply to all contingent cash flows, including those arising from environmental, social, and governance (ESG)-linked features. Additionally, these amendments introduce new disclosure requirements for financial instruments with contingent cash‑flow features and equity instruments designated at fair value through other comprehensive income.

Note 2. Accounts Receivable and Unbilled Revenue

(a) Accounts Receivable

Accounts receivable consisted of the following:


	March 31, 2026			December 31, 2025


Trade receivables	$	377		$	338

Less: allowance for doubtful accounts		(8	)		(9	)


Trade receivables, net	$	369		$	329

Other receivables		15			16


Accounts receivable	$	384		$	345

Aging of trade receivables:


	March 31, 2026		December 31, 2025


Current to 90 days	$	311	$	280

Over 90 days		66		58


Trade receivables	$	377	$	338

(b) Unbilled Revenue

Movement in Unbilled Revenue was as follows:


	Three months ended			Twelve months ended
	March 31, 2026			December 31, 2025
Opening balance	$	165		$	159
Unbilled revenue recognized		176			818
Amounts billed		(194	)		(813	)
Assets held for sale		(1	)		-
Currency translation effects		-			1
Closing balance	$	146		$	165

Current unbilled revenue	$	145		$	164
Non-current unbilled revenue		1			1
Total unbilled revenue	$	146		$	165


F-6 Notes to the Interim Condensed Consolidated Financial Statements

Note 3. Energy Infrastructure Assets

The Company’s EI assets are comprised of Build-Own-Operate-Maintain (“BOOM”) assets and contract compression assets which are leased to client partners. At the inception of a lease contract, all leases are classified as either an operating lease or a finance lease in accordance with IFRS.

(a) EI Assets - Finance Leases Receivable

Lease arrangements for certain EI assets are considered finance leases when the risks and rewards of ownership are transferred to the lessee, which generally occurs in the following circumstances; ownership of the lease is transferred to the lessee by the end of the lease term; the lessee has the option to purchase the leased asset at a price that is sufficiently lower than the fair value at the date the option becomes exercisable for it to be reasonably certain, at the inception date, that option will be exercised; the term of the lease is for the major part of the economic life of the asset; or the present value of the lease payments amounts to substantially all of the fair value of the asset.

The majority of Enerflex's finance leases, which are primarily attributable to the EH reporting segment, have an initial term ranging from five to 10 years.

A summary of the gross and present value of future lease payments to be received under the Company's finance leases is shown below:


	Minimum lease payments and unguaranteed residual value						Present value of minimum lease payments and unguaranteed residual value
	March 31, 2026			December 31, 2025			March 31, 2026		December 31, 2025
Less than one year	$	61		$	60		$	58	$	58
Between one and five years		192			201			156		164
Greater than five years		25			29			15		16
	$	278		$	290		$	229	$	238
Less: Unearned interest revenue		(54	)		(57	)		-		-
Add: Unguaranteed residual value		5			5			-		-
Closing balance	$	229		$	238		$	229	$	238


	Three months ended			Twelve months ended
	March 31, 2026			December 31, 2025
Opening balance	$	238		$	238
Additions		-			38
Interest revenue		5			19
Payments (principal and interest)		(15	)		(57	)
Other		1			-
Closing balance	$	229		$	238

The average interest rates implicit in the leases are fixed at the contract date for the entire lease term. At March 31, 2026, the average interest rate was 7.6% per annum (December 31, 2025 – 7.6%). The finance leases receivable at the end of the reporting period were neither past due nor impaired.


	F-7

(b) EI Assets – Operating Leases

EI assets under lease arrangements that are classified and accounted for as operating leases are stated at cost less accumulated depreciation and impairment losses. The estimated useful lives of these assets are generally between five and 30 years.

Changes in the carrying amount of EI assets - operating leases was as follows:


	Three months ended
	EI assets			Assets under construction			Total EI assets
Cost
January 1, 2026	$	1,105		$	27		$	1,132
Additions		-			13			13
Reclassification		14			(14	)		-
Disposals		(3	)		-			(3	)
Assets held for sale		(1	)		-			(1	)
Currency translation effects		5			-			5
March 31, 2026	$	1,120		$	26		$	1,146
Accumulated depreciation
January 1, 2026	$	(446	)	$	-		$	(446	)
Depreciation charge		(26	)		-			(26	)
Disposals		1			-			1
Assets held for sale		1			-			1
Currency translation effects		(4	)		-			(4	)
March 31, 2026	$	(474	)	$	-		$	(474	)
Net book value – March 31, 2026	$	646		$	26		$	672


	Twelve months ended
	EI assets			Assets under construction			Total EI assets
Cost
January 1, 2025	$	1,026		$	33		$	1,059
Additions		-			96			96
Reclassification		100			(102	)		(2	)
Disposals		(31	)		-			(31	)
Currency translation effects		10			-			10
December 31, 2025	$	1,105		$	27		$	1,132
Accumulated depreciation
January 1, 2025	$	(346	)	$	-		$	(346	)
Depreciation charge		(108	)		-			(108	)
Impairment		(3	)		-			(3	)
Disposals		20			-			20
Currency translation effects		(9	)		-			(9	)
December 31, 2025	$	(446	)	$	-		$	(446	)
Net book value – December 31, 2025	$	659		$	27		$	686

Depreciation of EI assets - operating leases included in COGS for the three months ended March 31, 2026 was $26 million (March 31, 2025 – $26 million).

During the three months ended March 31, 2026, the Company recognized $48 million of revenue related to operating leases in its Latin America (“LATAM”) and Eastern Hemisphere (“EH”) segments (March 31, 2025 – $50 million), and $40 million of revenue related to its North America (“NAM”) contract compression fleet (March 31, 2025 – $37 million).


F-8 Notes to the Interim Condensed Consolidated Financial Statements

Summary of the carrying amount of EI assets - operating leases by reporting segment was as follows:


	March 31, 2026		December 31, 2025
NAM	$	311	$	310
LATAM		160		166
EH		201		210
EI assets - operating leases	$	672	$	686

Note 4. Assets and Liabilities Held for sale

During the year, Enerflex entered into a definitive agreement to divest the majority of its operations in the Asia Pacific ("APAC") region to INNIO Group (“INNIO”). This business which is reported within the Eastern Hemisphere (EH) segment, operates principally in Australia, Indonesia and Thailand and is primarily focused on the AMS product line. The APAC region does not represent a significant component of the EH segment and is therefore not presented as a discontinued operation.

Completion of the transaction is subject to standard closing conditions and regulatory approvals and is expected to close during the second half of 2026.

The assets and liabilities of the operations held for sale as at March 31, 2026 were as follows:


	Three months ended
	March 31, 2026
Cash and Cash equivalents	$	11
Accounts receivable		16
Unbilled revenue		1
Inventories		21
Income taxes receivable		1
Prepayments		1
Property, plant and equipment		1
Lease right-of-use assets		3
Deferred tax assets		2
Goodwill		20
Assets held for sale	$	77

Accounts payable and accrued liabilities	$	13
Provisions		1
Income taxes payable		1
Deferred revenue		2
Lease liabilities		2
Liabilities held for sale	$	19

Note 5. Accounts Payable and Accrued Liabilities

Accounts payable and accrued liabilities consisted of the following:


	March 31, 2026		December 31, 2025

Trade payables and accrued liabilities	$	346	$	384
Cash-settled share-based payments		17		12
Total accounts payable and accrued liabilities	$	363	$	396


	F-9

Note 6. Long-Term Debt

Long-term debt comprised of USD denominated senior unsecured notes (the "2031 Notes") and the three-year secured RCF with both USD and Canadian dollar ("CAD") components.

Composition of the borrowings was as follows:


	Maturity Date	March 31, 2026			December 31, 2025
2031 Notes	January 15, 2031	$	400		$	400
Drawings on the RCF	July 11, 2028		162			193
			562			593
Deferred transaction costs			(10	)		(11	)
Long-term debt		$	552		$	582

Non-current portion of long-term debt		$	552		$	582
Long-term debt		$	552		$	582

The 2031 Notes bear interest at 6.875% per annum payable semi-annually in arrears.

The Company's limit under the RCF is $800 million, which may be increased by $50 million at the request of the Company, subject to the lenders’ consent. The maturity date of the RCF may be extended annually on or before the anniversary date with the consent of the lenders.

As part of the RCF, the Company may request issuance of up to $150 million in letters of guarantee, standby letters of credit, performance bonds, counter guarantees, import documentary credits, counter standby letters of credit, or similar credits to finance the day-to-day operations of the Company. As at March 31, 2026, the Company utilized $75 million of this $150 million limit. The Company has an additional $70 million unsecured credit facility (“LC Facility”) with one of the lenders in its RCF. This LC Facility allows the Company request the same forms of credits as under the RCF. This LC Facility is supported by performance security guarantees provided by Export Development Canada. As at March 31, 2026, the Company had utilized $26 million of the $70 million available limit.

The weighted average interest rate on the RCF for the three months ended March 31, 2026 was 5.0% (December 31, 2025 – 5.6%).

At March 31, 2026, without considering renewal at similar terms, the USD equivalent principal payments due over the next five years are $562 million.

The Company is required to maintain certain covenants on the RCF and the 2031 Notes. As at March 31, 2026, the Company was in compliance with its covenants, as shown below:


		Three months ended March 31
	2026				2025
	Requirement	Performance			Performance
Senior secured net funded debt to EBITDA ratio1 – Maximum	2.5x		0.2	x	0.1x
Bank-adjusted net debt to EBITDA ratio2 – Maximum	4.0x		0.9	x	1.3x
Interest coverage ratio3 – Minimum	2.5x		5.1	x	5.1x

1 Senior secured net funded debt to EBITDA is defined as borrowings under the RCF less cash and cash equivalents divided by trailing 12-months EBITDA, as defined by the Company’s lenders.

2 Bank-adjusted net debt to EBITDA is defined as borrowings under the RCF and 2031 Notes less cash and cash equivalents divided by the trailing 12-months EBITDA, as defined by the Company’s lenders.

\3 Interest coverage ratio is calculated by dividing the trailing 12-months EBITDA by interest expense over the same timeframe, as defined by the Company’s lenders.

Redemption Options

The 2031 Notes contain optional redemption features that allow the Company to redeem all or part of the Notes at prices set forth in the agreement, following certain dates specified. These redemption features constitute an embedded derivative asset that is required to be separated from the 2031 Notes and measured at fair value.

The embedded derivative components of the 2031 Notes are measured at fair value at each reporting date with gains or losses in fair value recognized through profit or loss. Management has assessed the fair value of the redemption options at March 31, 2026 and recognized an embedded derivative asset of $5 million in Other assets on the interim consolidated statement of financial position (December 31, 2025 – nil).


F-10 Notes to the Interim Condensed Consolidated Financial Statements

Note 7. Revenue

Revenue by product line was as follows:


	Three months ended March 31,
	2026		2025
Energy Infrastructure ("EI")	$	149	$	153
After-Market Services ("AMS")		107		120
Engineered Systems ("ES")		328		279
Total revenue	$	584	$	552

Revenue by geographic location, which is based on destination of sale, was as follows:


	Three months ended March 31,
	2026		2025
United States	$	318	$	246
Canada		56		76
Argentina		39		57
Nigeria		38		28
Oman		36		32
Brazil		19		14
Australia		18		18
Mexico		15		16
Bahrain		13		15
Thailand		7		6
Others		25		44
Total revenue	$	584	$	552

For the three months ended March 31, 2026, the Company had no individual customer which accounted for more than 10% of its revenue (March 31, 2025 – nil).

The following table outlines the Company’s unsatisfied performance obligations, by product line, as at March 31, 2026:


	Less than one year		One to two years		Greater than two years		Total
EI	$	417	$	306	$	560	$	1,283
AMS		105		30		58		193
ES		1,196		69		-		1,265
Total	$	1,718	$	405	$	618	$	2,741

Note 8. Selling, General & Administrative Expenses

SG&A expenses comprised of costs incurred by the Company to support the business operations that are not directly attributable to the production of goods or services.


	Three months ended March 31,
	2026			2025
Core SG&A1	$	55		$	54
Share-based compensation		22			(3	)
Depreciation and amortization		3			6
Bad debt recovery		(1	)		-
Total SG&A	$	79		$	57

1 Core SG&A is primarily comprised of compensation, third-party services, and information technology expenses.


	F-11

Note 9. Segmented Information

The Company has identified three reporting segments for external reporting:

•

NAM consists of operations in Canada and the USA.

•

LATAM consists of operations in core countries of Argentina, Brazil, and Mexico, and also includes operations within the Andean regions of Bolivia, Colombia, and Peru.

•

EH consists of operations in the Middle East, Africa, Europe, and APAC.

Each segment generates revenue from the EI, AMS, and ES product lines.

The accounting policies, determination of reportable operating segments, and allocation of corporate overheads are consistent with those disclosed in Note 3 "Summary of Material Accounting Policies" and Note 24 "Segmented Information" of the Company's annual consolidated financial statements for the year-ended December 31, 2025.

The following table provides operating results for the Company’s reportable segments:


	NAM						LATAM					EH						Total
Three months ended March 31,	2026			2025			2026			2025		2026			2025			2026			2025
Segment revenue	$	419		$	368		$	78		$	102	$	89		$	89		$	586		$	559
Intersegment revenue		(1	)		(6	)		-			-		(1	)		(1	)		(2	)		(7	)
Revenue		418			362			78			102		88			88			584			552
EI		40			36			63			74		46			43			149			153
AMS		55			60			13			20		39			40			107			120
ES		323			266			2			8		3			5			328			279
Revenue		418			362			78			102		88			88			584			552
EI		21			18			39			51		24			27			84			96
AMS		47			52			9			14		31			30			87			96
ES		264			222			2			6		2			4			268			232
COGS1		332			292			50			71		57			61			439			424
EI		19			18			24			23		22			16			65			57
AMS		8			8			4			6		8			10			20			24
ES		59			44			-			2		1			1			60			47
Gross Margin		86			70			28			31		31			27			145			128
SG&A1		49			32			11			10		19			15			79			57
Foreign exchange (gain) loss		(1	)		-			(1	)		-		-			-			(2	)		-
Operating income	$	38		$	38		$	18		$	21	$	12		$	12		$	68		$	71

1 Depreciation and amortization for the reporting segments are recorded in COGS and SG&A. During the three months ended March 31, 2026, the amount of depreciation and amortization in NAM was $15 million (March 31, 2025 – $16 million); LATAM was $10 million (March 31, 2025 – $11 million); and EH was $12 million (March 31, 2025 – $12 million).

Note 10. Finance Costs and Income

Net finance costs comprised of the following:


	Three months ended March 31,
	2026		2025
Interest on debt	$	9	$	16
Accretion of Notes discount and deferred transaction costs		1		2
Lease interest expense		1		1
Other interest expense		-		5
Total finance costs	$	11	$	24

Finance Income
Interest income	$	1		1
Net finance costs	$	10	$	23


F-12 Notes to the Interim Condensed Consolidated Financial Statements

Note 11. Financial Instruments

The Company's financial instruments consist of cash and cash equivalents, accounts receivable, unbilled revenue, project asset, derivatives, redemption options, accounts payable and accrued liabilities, and long-term debt.

Designation and Fair Value of Financial Instruments

The Company's financial instruments at March 31, 2026 were designated and valued in the same manner as they were at December 31, 2025. Accordingly, with the exception of borrowings under the long-term debt, the estimated fair values of the Company's financial instruments approximated their carrying values at March 31, 2026.

The carrying value and estimated fair value of borrowings under the long-term debt as at March 31, 2026, was $552 million and $582 million, respectively (December 31, 2025 – $582 million and $607 million, respectively). The fair value of the 2031 Notes at March 31, 2026, was determined on a discounted cash flow basis with a weighted average discount rate of 6.2% (December 31, 2025 – 6.2%), while the fair value of the RCF approximates the amount outstanding under the RCF.

The Company’s embedded derivative asset related to its redemption options of its 2031 Notes was measured at fair value determined using a valuation model based on inputs from observable market data, including independent price publications and third-party pricing services; accordingly, the measurement is classified as level 2 within the fair value hierarchy. Changes in fair value are recorded as gains or losses on the consolidated statements of earnings.

Derivative Financial Instruments and Hedge Accounting

Foreign exchange contracts are transacted with financial institutions to hedge foreign currency denominated obligations and cash receipts related to purchases of inventory and sales of products.

The following table summarizes the Company’s commitments to buy and sell foreign currencies at March 31, 2026:


		Notional amount			Maturity
Canadian Dollar Denominated Contracts
Purchase contracts	USD	$	65		April 2026 - September 2027
Purchase contracts	EUR	$	13		April 2026 - December 2027
Sales contracts	USD	$	(93	)	April 2026 - April 2027

At March 31, 2026, the fair value of derivative financial instruments classified as financial assets was approximately $1 million and as financial liabilities was approximately $2 million (December 31, 2025 – $1 million and $1 million).

Foreign Currency Exposure

In the normal course of operations, the Company is exposed to movements in the CAD, USD, the Australian dollar, the Brazilian real, and the Argentine peso (“ARS”).

The types of foreign exchange risk and the Company’s related risk management strategies are as follows:

Transaction Exposure

The functional currency of Enerflex Ltd. on a stand-alone basis (the "Parent Company") and Canadian operations is CAD. The operations are primarily exposed to changes in the exchange rates on financial instruments denominated in USD.

The Parent Company has intercompany receivables and payables denominated in the USD. The Canadian operations of the Company sources the majority of its products and major components from the USA; consequently, reported inventory costs and the transaction prices charged to customers for equipment are impacted by the relative strength of the CAD. The Canadian operations also sells compression and processing packages in foreign currencies, primarily the USD. Most of Enerflex’s international orders are manufactured in the USA if the contract is denominated in USD, which minimizes the Company’s foreign currency exposure on these contracts. The Company identifies and hedges all significant transactional currency risks and has implemented a hedging policy applicable primarily to the Canadian operations, with the objective of securing the margins earned on awarded contracts denominated in currencies other than the CAD. In addition, the Company may hedge input costs that are paid in a currency other than the home currency of the subsidiary executing the contract. If the CAD weakens by five percent, the Company could experience foreign exchange loss recorded in the consolidated statements of earnings of less than $1 million on its USD denominated financial instruments.


	F-13

Translation Exposure

The Company and its subsidiaries are exposed to translation risk of monetary items denominated in a currency different from their functional currency. The currencies with the most significant impact are the CAD, USD, and ARS.

The functional currency of the Parent Company is CAD while the functional currency of the majority of the Company's subsidiaries is USD. The Parent Company is therefore exposed to fluctuations of the CAD against the USD on its net investment in USD functional subsidiaries. The Company hedges this exposure via a net investment hedge by designating a portion of the Company's USD borrowings in the Parent Company as a hedging instrument. During the three months ended March 31, 2026, the Company recognized foreign exchange loss of $1 million on translation of the designated USD borrowings in the Parent Company in other comprehensive income. As at March 31, 2026, $56 million of USD borrowings in the Parent Company was designated as a hedging instrument. Management has determined that the Company's hedging relationships remain effective.

If the CAD were to weaken by five percent, the Company could experience additional foreign exchange losses on its USD borrowings in the Parent Company of approximately $3 million, which would be recorded in the consolidated statement of comprehensive income.

The functional currency of the Argentinian operation is the USD. The operation has cash and cash equivalents, and certain financial instruments denominated in its local currency ARS. With the expected devaluation of the ARS, caused by high inflation, the Company is at risk of foreign exchange losses on its financial instruments denominated in ARS. During the three months ended March 31, 2026, the Company had foreign exchange gains in Argentina of $1 million. The Company continues to utilize cash management strategies to mitigate foreign exchange losses, primarily by minimizing cash available to sustain operations. If the ARS weakens by five percent, the Company could experience foreign exchange losses of $1 million on its ARS denominated financial instruments.

Note 12. Supplemental Cash Flow Information

Changes in working capital and other during the period:


	Three months ended March 31,
	20261			2025
Accounts receivable	$	(55	)	$	20
Unbilled revenue		18			(6	)
EI assets - finance leases receivable		9			8
Inventories		(20	)		(11	)
Inventories - WIP related to EI assets - finance leases receivable		-			(19	)
Income taxes receivable		6			(1	)
Prepayments		(7	)		10
Accounts payable and accrued liabilities and provisions2		(22	)		13
Income taxes payable		12			(6	)
Deferred revenue		-			26
Foreign currency and other		(4	)		-
Net change in working capital and other	$	(63	)	$	34

1 Includes working capital changes associated with the APAC divestiture. Refer to Note 4 - "Assets and liabilities held for sale".

2 Change in accounts payable and accrued liabilities and provisions represent only the portion relating to operating activities.

Cash interest and taxes paid and received during the period:


	Three months ended March 31,
	2026		2025
Interest paid – long-term borrowings	$	3	$	4
Interest paid – lease liabilities		1		1
Total interest paid	$	4	$	5
Interest received		1		1

Income taxes paid		3		28


F-14 Notes to the Interim Condensed Consolidated Financial Statements

Note 13. Guarantees, Commitments, and Contingencies

Guarantees

At March 31, 2026, the Company had outstanding letters of credit of $101 million (December 31, 2025 – $103 million). Of the total outstanding letters of credit, $75 million (December 31, 2025 – $77 million) are funded from the RCF and $26 million (December 31, 2025 – $26 million) are funded from the $70 million LC Facility.

Commitments

The Company has purchase obligations over the next three years as follows:


2026	$	596
2027		179
2028		138

Legal Proceedings

In the normal course of business, the Company and certain of its subsidiaries are involved in or subject to lawsuits, claims, and other legal proceedings that seek, among other things, compensation for alleged personal injury, breach of contract, property damage or other losses, punitive damages, civil penalties, or injunctive or declaratory relief. Some lawsuits, claims, and legal proceedings involve acquired or disposed assets with respect to which a third party, the Company, or its subsidiary retains liability or indemnifies the other party for conditions that existed prior to the transaction. In accordance with applicable accounting guidance, Enerflex and its subsidiaries accrue reserves for outstanding lawsuits, claims, and proceedings when it is probable that a liability has been incurred and the liability can be reasonably estimated. The Company does not currently expect that any of the outstanding lawsuits, claims, or legal proceedings will have a material adverse effect on Enerflex, including its consolidated financial position, results of operations or cash flows. Although Enerflex’s expectations and estimates are based on information known about the legal matters and its experience in contesting, litigating and settling similar matters, the results of any outstanding lawsuits, claims, and other legal proceedings are inherently uncertain, and there can be no assurance that monetary damages, fines, penalties, or injunctive relief resulting from adverse judgments or settlements in some or all of these outstanding lawsuits, claims, or legal proceedings will not have a material adverse effect on Enerflex, including its consolidated financial position, results of operations or cash flows. The Company will reassess the probability and estimability of contingent losses as new information becomes available in these proceedings or otherwise.

As previously disclosed, in response to a fatal attack at an adjacent site in Q2 2024, Enerflex declared Force Majeure on an international ES project, suspended activity at the project site, and demobilized its personnel. Enerflex subsequently received notice from its customer purporting to terminate the project contract and commencing arbitration proceedings against Enerflex alleging breach of the project contract. In Q4 2024, Enerflex delivered notice to the customer terminating the project contract. As part of the arbitration proceedings, Enerflex has brought a counterclaim against the customer to recover amounts owing to Enerflex following Enerflex’s termination of the project contract. Pursuant to the rules for arbitration agreed between Enerflex and its customer, the content of the proceedings is confidential and not otherwise publicly available. In Q2 2025, the customer filed its Statement of Case in the arbitration asserting various claims against and seeking material monetary damages from Enerflex and in Q3 2025 the Company filed its Statement of Defence and Counterclaim against the customer. In Q4 2025, the customer filed its Statement of Reply and Defence to Counterclaim to which the Company responded to by filing its Statement of Rejoinder and Reply to Defence to Counterclaim on February 27, 2026 in accordance with the arbitration timeline.

Enerflex disputes the customer’s claims and asserts that it acted in accordance with the project contract and that its declaration of Force Majeure and its subsequent termination of the project were proper. Given the current stage of the arbitration and the inherent uncertainty of arbitration, the final outcome of the arbitration is unknown. While the Company is pursuing recovery of amounts it believes are owed, it is possible that the Company may not prevail on its counterclaims or in defending against the customer’s claims. In those circumstances, there can be no assurance that the outcome will not


	F-15

have a material adverse effect on Enerflex, including on its consolidated financial position, results of operations or cash flows. Enerflex intends to continue vigorously defending itself against the customer’s claims while pursuing its own counterclaims.

As at March 31, 2026, the carrying value of the remaining assets associated with the project on the Company’s consolidated statement of financial position was $161 million. Notwithstanding its termination of the project contract, Enerflex maintains a $31 million Letter of Credit in support of its obligation under the project contract. Enerflex would view any drawing of the financial security in the prevailing circumstances as improper and would be considered as an additional amount owed by the customer.

Note 14. Subsequent Events

Subsequent to March 31, 2026, Enerflex declared a quarterly dividend of CAD $0.0425 per common share, payable on June 3, 2026 to shareholders of record on May 20, 2026. The Board will continue to evaluate dividend payments on a quarterly basis based on availability of cash flow, anticipated market conditions, and the general needs of the business.


F-16 Notes to the Interim Condensed Consolidated Financial Statements

May 6, 2026

Management’s Discussion and Analysis

Management's Discussion and Analysis ("MD&A") for Enerflex Ltd. ("Enerflex" or the “Company") should be read in conjunction with the unaudited interim condensed consolidated financial statements (the "Financial Statements") for the three months ended March 31, 2026 and 2025, the Company’s 2025 Annual Report, the Annual Information Form (“AIF”) for the year ended December 31, 2025, and the cautionary statements regarding forward-looking information and statements in the “Forward-Looking Statements” section of this MD&A.

The MD&A focuses on information and material results from the Financial Statements and considers known risks and uncertainties relating to the energy sector. This discussion should not be considered exhaustive, as it excludes possible future changes that may occur in general economic, political, technological, and environmental conditions. Additionally, other factors and events may or may not occur, which could affect industry conditions and/or Enerflex in the future. Additional information relating to the Company can be found in the Management Information Circular dated March 20, 2026 and the AIF, both of which are available on the Company’s website at www.enerflex.com and under the Company’s SEDAR+ and EDGAR profiles at www.sedarplus.ca and www.sec.gov/edgar, respectively, as well as in the Annual Report on Form 40-F, which is available on the Company’s EDGAR profile at www.sec.gov/edgar.

The financial information reported herein has been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”) applicable to the preparation of interim financial statements, in particular IAS 34 “Interim Financial Reporting”, and is presented in United States dollars ("USD") unless otherwise stated.

Enerflex Strategy

Enerflex’s strategy for success is premised on:

•

Simplify: Focusing on what we do best. We’re honing our operations to strengthen our core markets, optimizing resources where they drive the most value. By streamlining our offerings and prioritizing high-impact opportunities, we create a stronger, more agile business.

•

Optimize: Maximizing efficiency, delivering more. We’re enhancing engineering, manufacturing, and operational processes to increase performance and create additional value. Every project, every system, and every workflow is an opportunity to fine-tune and do better.

•

Grow: Expanding where it matters most. With a focused and efficient foundation, we’re scaling in key markets or offerings – deepening our presence, increasing market share, and driving long-term success in energy infrastructure.

Outlook

Enerflex’s outlook for 2026 reflects steady demand across its business lines and geographic regions. Operating results will continue to be underpinned by the highly contracted Energy Infrastructure (“EI”) product line and the recurring nature of After Market Services (“AMS”). The EI product line is supported by customer contracts expected to generate approximately $1.3 billion of revenue over their remaining terms.


	M-1

Performance for Enerflex's Engineered Systems ("ES") product line is expected to remain steady, supported by a backlog of approximately $1.3 billion as at March 31, 2026, the majority of which is expected to convert into revenue over the next 12 months. The medium-term outlook for ES products and services continues to be attractive, driven by expected increases in natural gas and electric power generation across Enerflex’s core operating countries.

Enerflex’s priorities in 2026 include:

leveraging our leading position in core operating countries to capitalize on expected increases in demand for Enerflex’s solutions;

enhancing the profitability of core operations; and

maximizing free cash flow, positioning the Company to invest in customer supported growth opportunities and provide meaningful direct shareholder returns.

Capital Allocation

Organic growth capital spending will continue to focus on customer supported opportunities and primarily allocated to expand the Company’s contract compression fleet in the USA. Notably, the fundamentals for contract compression in the USA remain strong, led by expected increases in natural gas production and capital spending discipline from market participants.


M-2 Q1 2026 Report

Summary Results


	Three months ended March 31,
($ millions, except percentages and ratios)	2026			2025
Revenue	$	584		$	552
Gross margin ("GM")		145			128
GM as a percentage of revenue ("GM %")		24.8	%		23.2	%
Selling, general and administrative expenses (“SG&A”)		79			57
Operating income		68			71
EBITDA1		110			105
EBIT1		73			66
Net earnings		43			24
Long-term debt		552			639
Net debt2		505			564
Cash provided by operating activities		32			96

Key Financial Performance Indicators (“KPIs”)
ES backlog3	$	1,265		$	1,206
ES bookings3		483			205
EI contract backlog4		1,283			1,497
GM before depreciation and amortization (“GM before D&A”)5		179			161
GM before D&A as a percentage of revenue ("GM before D&A %")5		30.7	%		29.2	%
Adjusted EBITDA6		137			113
Free cash flow7		15			85
Bank-adjusted net debt to EBITDA ratio7		0.9	x	1.3x
Return on capital employed (“ROCE”)7,8		17.3	%		14.2	%

1 EBITDA is defined as earnings before net finance costs, income taxes, depreciation and amortization. EBIT is defined as earnings before net finance costs and income taxes.

2 Net debt is defined as total long-term debt less cash and cash equivalents, as presented in the Financial Statements.

3 Refer to the “ES Backlog and Bookings” section of this MD&A for further details.

4 Refer to the “EI Contract Backlog” section of this MD&A for further details.

5 Refer to the “Gross Margin before D&A by Product Line and Recurring Gross Margin before D&A” section of this MD&A for further details.

6 Refer to the “Adjusted EBITDA” section of this MD&A for further details.

7 Refer to the “Non-IFRS Measures” section of this MD&A for further details.

8Determined by using the trailing 12-month ("TTM") period.


	M-3

Results Overview

•

Enerflex generated revenue of $584 million for the three months ended March 31, 2026, an increase of $32 million compared to the same period in 2025. The increase was primarily driven by higher ES activity in North America (“NAM”), higher EI revenue from increased contracted horsepower related to prior year capital investments in NAM, and the Bisat‑C Expansion in the Eastern Hemisphere (“EH”) segment. These increases were partially offset by lower AMS revenue resulting from reduced parts sales in Latin America (“LATAM”) and NAM, and lower service utilization in NAM; lower EI revenue in LATAM primarily due to prior year asset sales; and reduced ES activity in LATAM.

•

Gross margin for the three months ended March 31, 2026 was $145 million, compared to $128 million in the same period of 2025. The increase was primarily attributable to increased operational activity and higher cost saving realized in the NAM ES business, higher EI margin contribution from the Bisat-C Expansion in EH and increased contracted horsepower in NAM resulting from prior year capital investments, partially offset by lower contribution from the AMS business in LATAM and the Middle East.

•

SG&A was $79 million for the three months ended March 31, 2026, an increase of $22 million compared to the same period in 2025, primarily driven by higher share-based compensation expense resulting from an increased share price.

•

During the three months ended March 31, 2026, the Company recognized an embedded derivative asset related to the redemption options on its 6.875% senior unsecured notes (the "2031 Notes"). These redemption features constitute an embedded derivative asset that is required to be separated from the 2031 Notes and measured at fair value. The Company recognized a gain of $5 million related to the redemption options.

•

Net earnings of $43 million or $0.35 per share for the three months ended March 31, 2026, increased from $24 million or $0.19 per share for the same period in 2025. The increase was primarily driven by higher gross margin, unrealized mark-to-market gain on the redemption options associated with the 2031 Notes, and lower net finance costs. These improvements were partially offset by higher share-based compensation expense in the first quarter of 2026.

•

Adjusted EBITDA of $137 million for the three months ended March 31, 2026, increased from $113 million in the same period of 2025, primarily attributable to higher gross margin.

•

Cash provided by operating activities of $32 million during the three months ended March 31, 2026, decreased compared to $96 million in the same period in 2025, mainly attributable to investment in working capital, partially offset by higher funds generated from operations before working capital during the three months ended March 31, 2026. Strong operating cash flows before working capital, demonstrated by increased adjusted EBITDA, allowed for continued investment in the business and debt repayment.

•

During the three months ended March 31, 2026, changes in net working capital resulted in approximately $63 million use of cash, compared to an approximately $34 million source of cash in the same period of 2025. The working capital investment was primarily driven by higher accounts receivable reflecting strong collections in the fourth quarter of 2025 as well as sustained strong ES activity levels in NAM, and timing of collections from a major customer in EH. Net working capital was also impacted by high vendor payments, a strategic inventory investment in NAM ES and a build in LATAM in preparation for scheduled EI maintenance activities. These impacts were partially offset by collections of finance lease receivables and higher net taxes payable during the quarter. Overall, the working capital investment reflects strong operational execution and planned positioning to support activity levels.

•

Enerflex generated free cash flow of $15 million during the three months ended March 31, 2026, compared to $85 million during the same period in 2025. The decrease is primarily attributable to the investment in working capital, higher capital expenditures, and lower proceeds from sale of EI assets in LATAM, partially offset by higher adjusted EBITDA for the three months ended March 31, 2026.


M-4 Q1 2026 Report

•

Return on capital employed (“ROCE”) increased to 17.3% in the three months ended March 31, 2026, a new record for the Company, compared to 14.2% in the same period in 2025. ROCE benefited on a year-over-year basis from increased EBIT for the past four quarters driven by operational improvements, and lower average capital employed, predominantly due to a decline in net debt.

•

Enerflex continues to manage its leverage ratio through strong performance and disciplined capital allocation, which resulted in a reduction of its net funded debt to EBITDA (“bank-adjusted net debt to EBITDA”) ratio to approximately 0.9x at the end of the first quarter of 2026. At March 31, 2026, the Company was in compliance with its covenants.

•

The Company invested $16 million in capital expenditures ("CAPEX") during the three months ended March 31, 2026, comprised of $9 million in maintenance expenditures across the global EI assets and PP&E, and $7 million in growth expenditures, primarily allocated to expand the Company's contract compression fleet in the USA.

•

Enerflex recorded ES bookings of $483 million during the three months ended March 31, 2026, compared to $205 million during the same period of 2025, primarily driven by bookings from a newly awarded behind-the-meter power generation project for a data center, as well as continued steady client demand for compression and processing products in NAM. ES bookings remained above the 8-quarter average of $344 million, reflecting continued strong bookings in NAM. The ES product line has realized a strong book-to-bill ratio (calculated as bookings divided by revenue) of 1.5x during the first quarter of 2026, indicating that new bookings well outpaced revenue recognition.

•

Enerflex's EI contract backlog of $1.3 billion at March 31, 2026, remained consistent with December 31, 2025.

•

During the three months ended March 31, 2026, Enerflex entered into a definitive agreement to divest the majority of its operations in the Asia Pacific (the "APAC") region to INNIO Group (“INNIO”). This business operates principally in Australia, Indonesia and Thailand and is primarily focused on the AMS product line. Completion of the transaction is subject to standard closing conditions and regulatory approvals, and is expected to close during the second half of 2026. The assets and liabilities associated with the divestiture are classified as held for sale on the interim consolidated statements of financial position. Refer to Note 4 of the Financial Statements.

•

Enerflex is closely monitoring the conflict in the Middle East, and to date, the Company’s operations in the region have operated uninterrupted. Local teams are actively managing with established response processes and contingency planning, ensuring continued safety of Enerflex's people and reliability of the Company’s operations. Enerflex’s operations, which are principally in Bahrain and Oman, comprise 17 distinct natural gas and produced water projects, and an installed compression and power generation fleet of approximately 350,000 horsepower.

•


	M-5

Adjusted EBITDA

Enerflex’s financial results include items that are unique, and items that Management and users of the Financial Statements adjust for when evaluating results. The Company removes the impact of these items when calculating Adjusted EBITDA. The presentation of Adjusted EBITDA should not be considered in isolation from EBIT or EBITDA or as a replacement for measures prepared as determined under IFRS. Adjusted EBITDA may not be comparable to similar non-IFRS measures disclosed by other issuers.

Enerflex believes adjustment of items that are unique or not in the normal course of continuing operations increases the comparability across items within the Financial Statements or between periods of the Financial Statements. Items the Company has adjusted for in the past include, but are not limited to, restructuring, transaction, and integration costs; share-based compensation which fluctuates based on share price that can be influenced by factors not directly relevant to the Company's operations; impact of finance leases to account for the lease principal payments received over the term of the related lease and removing the non-cash upfront selling profit; gain or loss on redemption options associated with the senior notes; and impairment of goodwill. These items are considered either unique, non-recurring, or non-cash transactions, and not indicative of the ongoing normal operations of the Company.

Adjusted EBITDA is presented by reporting segment as follows:


	Three months ended March 31, 2026
($ millions)		NAM		LATAM		EH		Total
Net earnings1								$	43
Income taxes1									20
Net finance costs1,2									10
EBIT3		$	38	$	18	$	12	$	73
Depreciation and amortization			15		10		12		37
EBITDA		$	53	$	28	$	24	$	110
Share-based compensation			15		3		4		22
Impact of finance leases
Principal payments received			-		-		10		10
Unrealized gain on redemption options3									(5	)
Adjusted EBITDA		$	68	$	31	$	38	$	137

1The Company included net earnings, income taxes, and net finance costs on a consolidated basis to reconcile to EBIT.

2Net finance costs are considered corporate expenditure and therefore have not been allocated to reporting segments.

3EBIT includes $5 million unrealized gain on redemption options associated with the 2031 Notes. Debt is managed within Corporate and is not allocated to reporting segments.


	Three months ended March 31, 2025
($ millions)		NAM			LATAM			EH		Total
Net earnings 1										$	24
Income taxes1											19
Net finance costs1,2											23
EBIT3		$	38		$	19		$	12	$	66
Depreciation and amortization			16			11			12		39
EBITDA		$	54		$	30		$	24	$	105
Share-based compensation			(2	)		(1	)		-		(3	)
Impact of finance leases
Principal payments received			-			-			8		8
Unrealized loss on redemption options3											3
Adjusted EBITDA		$	52		$	29		$	32	$	113

1The Company included net earnings, income taxes, and net finance costs on a consolidated basis to reconcile to EBIT.

2Net finance costs are considered corporate expenditure and therefore have not been allocated to reporting segments.

3EBIT includes $3 million unrealized loss on redemption options associated with the 2027 Notes. Debt is managed within Corporate and is not allocated to reporting segments.

Refer to the section “Segmented Results” of this MD&A for information about results by reporting segment.


M-6 Q1 2026 Report

ES Backlog and Bookings

Enerflex monitors its ES backlog and bookings as indicators of future revenue generation and business activity levels for the ES product line. ES bookings are recorded in the period when a firm commitment or order is received from clients. Bookings increase backlog in the period they are received, while revenue recognized on ES projects decrease backlog in the period the revenue is recognized. Accordingly, ES backlog is an indication of revenue to be recognized in future periods. In the event a project is cancelled, the remaining contract price associated with the unsatisfied performance obligation is derecognized from the backlog. ES backlog represents unsatisfied performance obligations related to the ES product line, and further information on recognition of revenue from the ES backlog is included in Note 7 of the Financial Statements.

Revenue from contracts that have been classified as finance leases for newly built equipment is recorded as ES bookings. The full amount of revenue is removed from backlog at commencement of the lease.

ES backlog was $1.3 billion at March 31, 2026, increasing from $1.1 billion at December 31, 2025, and above the 8-quarter average ES backlog of approximately $1.2 billion. The increase was primarily attributable to new bookings secured in NAM and LATAM segments, partially offset by advancement of ES projects in NAM for the three months ended March 31, 2026. This sustained level of backlog over a two-year period reflects stable demand for Enerflex's ES solutions across global energy infrastructure markets. The 8-quarter average also serves as a key indicator of operational consistency and revenue visibility, smoothing out short-term fluctuations in ES bookings and project timings. This trend demonstrates that the ES product line continues to benefit from a diversified portfolio of gas compression and processing projects, reinforcing management's confidence in the ES product line's ability to generate predictable revenue and margin performance in the near-term.

ES backlog for the past 8 quarters are illustrated below in millions:

Enerflex recorded ES bookings of $483 million during the three months ended March 31, 2026, an increase compared to $205 million during the same period of 2025, primarily driven by bookings from a newly awarded behind-the-meter power generation project for a data center, as well as continued steady client demand for compression and processing products in NAM. ES bookings remained above the 8-quarter average of $344 million, reflecting continued strong bookings in NAM.

The ES product line has realized a strong book-to-bill ratio of 1.5x during the three months ended March 31, 2026, indicating that new bookings well outpaced revenue recognition. The current balance between bookings and revenue supports near-term revenue visibility and reflects a stable demand environment. The 8-quarter average book-to-bill ratio has also remained at 1.0x, an indication that the Company is consistently replenishing its backlog in line with project execution.

ES backlog and bookings by reporting segment are disclosed in the “Segmented Results” section of this MD&A.


	M-7

EI Contract Backlog

The Company’s EI contract backlog is recognized from lease agreements executed with clients for leasing and operations and maintenance of the Company’s EI assets. Lease agreements executed during the period increase EI contract backlog while revenue recognized on EI assets decreases the EI contract backlog in the period the revenue is recognized. EI contract backlog represents unsatisfied performance obligations related to the EI product line, and further information on recognition of revenue from the EI contract backlog is included in Note 7 of the Financial Statements.

Enerflex has lease agreements with clients for EI assets with initial terms ranging from one to 10 years.

The following table sets forth EI contract backlog by reporting segment:


($ millions)	March 31, 2026		December 31, 2025
NAM	$	153	$	160
LATAM		375		361
EH		755		800
Total EI contract backlog	$	1,283	$	1,321

Segmented Results

Enerflex has three reporting segments: NAM, LATAM, and EH, each of which are supported by Enerflex’s corporate functions. Corporate overhead is allocated to operating segments based on revenue. In assessing its reporting segments, the Company considers geographic locations, economic characteristics, the nature of products and services provided, the nature of production processes, the types of clients for its products and services, and distribution methods used.


M-8 Q1 2026 Report

NAM


	Three months ended March 31,
($ millions, except percentages)	2026			2025
ES backlog	$	1,228		$	1,022
ES bookings		463			169
EI contract backlog		153			152
Segment revenue	$	419		$	368
Intersegment revenue		(1	)		(6	)
Revenue	$	418		$	362
EI	$	40		$	36
AMS		55			60
ES		323			266
Revenue		418			362

EI		19			18
AMS		8			8
ES		59			44
GM		86			70
GM %		20.6	%		19.3	%

EI		30			26
AMS		9			10
ES		61			46
GM before D&A		100			82
GM before D&A %		23.9	%		22.7	%

SG&A		49			32
Foreign exchange (gain)		(1	)		-
Operating income		38			38
EBIT		38			38
EBITDA		53			54
Adjusted EBITDA		68			52

ES backlog increased to $1.2 billion at March 31, 2026. ES bookings of $463 million for the three months ended March 31, 2026, increased by $294 million compared to the same period in 2025, primarily driven by bookings for a newly awarded behind-the-meter power generation project for a data center, as well as continued steady client demand for compression and processing products. The high level of bookings also reflects sustained demand within the energy sector across the segment.

EI contract backlog of $153 million at March 31, 2026, decreased slightly from December 31, 2025, attributable to revenue recognized during the period, partially offset by management's investment in assets deployed under longer term rental contracts.

Revenue increased by $56 million during the three months ended March 31, 2026, compared to the same period in 2025. The increase was primarily driven by higher operational activity in the ES business and higher EI revenue driven by additional horsepower deployed from prior year capital investments, partially offset by lower parts sales and service utilization in the AMS business during the first quarter of 2026.

Gross margin increased by $16 million during the three months ended March 31, 2026, compared to the same period in 2025, primarily attributable to increased operational activity and higher cost savings realized in the ES business, as well as increased EI horsepower driven by prior year capital investments.

SG&A expenses increased by $17 million for the three months ended March 31, 2026, compared to the same period in 2025, primarily driven by higher share-based compensation resulting from an increased share price in the current period.

At March 31, 2026, the USA contract compression fleet totaled 486,000 horsepower. The average utilization for the three months ended March 31, 2026 of 94% is consistent with the three months ended March 31, 2025.


	M-9

LATAM


	Three months ended March 31,
($ millions, except percentages)	2026			2025
ES backlog	$	18		$	13
ES bookings		17			5
EI contract backlog		375			438
Segment revenue	$	78		$	102
Intersegment revenue		-			-
Revenue	$	78		$	102
EI	$	63		$	74
AMS		13			20
ES		2			8
Revenue		78			102

EI		24			23
AMS		4			6
ES		-			2
GM		28			31
GM %		35.9	%		30.4	%

EI		34			33
AMS		4			6
ES		-			2
GM before D&A		38			41
GM before D&A %		48.7	%		40.2	%

SG&A		11			10
Foreign exchange (gain)		(1	)		-
Operating income		18			21
EBIT		18			19
EBITDA		28			30
Adjusted EBITDA		31			29

ES backlog of $18 million at March 31, 2026 reflects new bookings in the current quarter and ongoing projects near completion. ES bookings were $17 million for the three months ended March 31, 2026, an increase of $12 million compared to the same period in 2025, primarily driven by expansion of existing projects.

EI contract backlog of $375 million at March 31, 2026, increased compared to $361 million at December 31, 2025, primarily due to new bookings in the first quarter of 2026, partially offset by revenue recognition on existing contracts.

Revenue decreased by $24 million for the three months ended March 31, 2026, compared to the same period in 2025, primarily driven by lower EI revenue resulting from asset sales in 2025, lower AMS parts sales, and lower ES revenue driven by timing of new bookings and ongoing projects near completion.

Gross margin decreased by $3 million during the three months ended March 31, 2026, compared to the same period in 2025, primarily due to lower contribution from the ES and AMS product lines, partially offset by a shift towards a higher-margin project mix and higher cost savings realized in the EI business in the current quarter.

SG&A of $11 million for the three months ended March 31, 2026, increased slightly compared with the same period in 2025, primarily driven by higher shared-based compensation.


M-10 Q1 2026 Report


	Three months ended March 31,
($ millions, except percentages)	2026			2025
ES backlog	$	19		$	171
ES bookings		3			31
EI contract backlog		755			907
Segment revenue	$	89		$	89
Intersegment revenue		(1	)		(1	)
Revenue	$	88		$	88
EI	$	46		$	43
AMS		39			40
ES		3			5
Revenue		88			88

EI		22			16
AMS		8			10
ES		1			1
GM		31			27
GM %		35.2	%		30.7	%

EI		31			27
AMS		9			10
ES		1			1
GM before D&A		41			38
GM before D&A %		46.6	%		43.2	%

SG&A		19			15
Operating income		12			12
EBIT		12			12
EBITDA		24			24
Adjusted EBITDA		38			32

ES backlog of $19 million at March 31, 2026, remained consistent with December 31, 2025, attributable to new bookings, offset by progression of ongoing projects. ES backlog of $19 million at March 31, 2026 decreased compared to $171 million at March 31, 2025, primarily attributable to completion of construction and commencement of the Bisat-C Expansion project in the third quarter of 2025. ES bookings for the three months ended March 31, 2026 were $3 million, compared to $31 million during the same period in 2025.

EI contract backlog of $755 million at March 31, 2026, decreased from $800 million at December 31, 2025, attributable to revenue recognition from existing contracts.

Revenue for the three months ended March 31, 2026 remained consistent with the same period in 2025, primarily attributable to ES projects nearing completion, offset by increased EI revenue contribution from the Bisat-C Expansion.

Gross margin and gross margin percentage were $31 million and 35.2% for the three months ended March 31, 2026, increasing from the same period of 2025, primarily attributable to higher margin contribution from the EI business resulting from the Bisat-C Expansion.

SG&A increased by $4 million for the three months ended March 31, 2026, compared to the same period in 2025, primarily attributable to higher share-based compensation. SG&A for the first quarter of 2025 also benefited from receipt of a non-recurring input tax refund.


	M-11

Non-IFRS Measures

Enerflex measures its financial performance using several key financial performance indicators, some of which do not have standardized meanings as prescribed by IFRS and therefore may not be comparable to similar measures presented by other issuers. These non-IFRS measures include Adjusted EBITDA, ES bookings, ES book-to-bill ratio, GM before D&A, recurring GM before D&A, free cash flow, dividend payout ratio, bank-adjusted net debt to EBITDA ratio, and ROCE. These measures should not be considered as alternatives to net earnings or any other measure of performance under IFRS. Reconciliation of these non-IFRS measures to the most directly comparable IFRS measure is provided below and in the relevant sections where appropriate. ES bookings and ES book-to-bill ratio do not have a directly comparable IFRS measure.

Gross Margin before D&A by Product Line and Recurring Gross Margin before D&A

Enerflex’s three reporting segments oversee execution of three main product lines:

▪

EI: Infrastructure solutions under contract for natural gas processing, compression, treated water, and electric power.

▪

AMS: Provision of after-market services such as mechanical maintenance, parts distribution, operations and maintenance solutions, equipment optimization and maintenance programs, manufacturer warranties, exchange components, and long-term service agreements.

▪

ES: Engineer, design, and manufacture processing, compression, cryogenic, electric power, and treated water solutions.

EI and AMS product lines are considered recurring, as they are typically contracted and extend into future periods, generating ongoing revenue for the Company. While the EI and AMS contracts may vary in duration and are subject to cancellation, the Company believes they exhibit characteristics consistent with recurring business activities. In contrast, the ES product line is non-recurring, as individual sales do not typically generate repeat revenue after delivery of products, However, the Company does benefit from repeat business with many ES customers over time.

The Company uses GM before D&A to evaluate operational performance of each product line. GM before D&A is defined as gross margin excluding depreciation and amortization, which can vary based on the nature and origin of assets. The Company also presents recurring GM before D&A to evaluate its recurring business, and it is defined as GM before D&A from the EI and AMS product lines.

Presentation of GM before D&A and recurring GM before D&A improves transparency into the profitability and capital intensity across the Company's product lines, and should not be considered in isolation from gross margin or as a replacement for measures prepared as determined under IFRS.

Reconciliation of GM before D&A to the most comparable IFRS measure, and recurring GM before D&A is presented in the tables below.


	Three months ended March 31, 2026
($ millions, except percentages)		EI			AMS			Recurring Product Lines			ES			Total
Revenue		$	149		$	107		$	256		$	328		$	584
Cost of goods sold:
Operating expenses			54			85			139			266			405
Depreciation and amortization			30			2			32			2			34
Gross margin		$	65		$	20		$	85		$	60		$	145
Gross margin %			43.6	%		18.7	%		33.2	%		18.3	%		24.8	%
Gross margin before D&A		$	95		$	22		$	117		$	62		$	179
Gross margin before D&A %			63.8	%		20.6	%		45.7	%		18.9	%		30.7	%
% of total Gross margin before D&A			53.1	%		12.3	%		65.4	%		34.6	%


M-12 Q1 2026 Report


	Three months ended March 31, 2025
($ millions, except percentages)	EI			AMS			Recurring Product Lines			ES			Total
Revenue	$	153		$	120		$	273		$	279		$	552
Cost of goods sold:
Operating expenses		67			94			161			230			391
Depreciation and amortization		29			2			31			2			33
Gross margin	$	57		$	24		$	81		$	47		$	128
Gross margin %		37.3	%		20.0	%		29.7	%		16.8	%		23.2	%
Gross margin before D&A	$	86		$	26		$	112		$	49		$	161
Gross margin before D&A %		56.2	%		21.7	%		41.0	%		17.6	%		29.2	%
% of total Gross margin before D&A		53.4	%		16.1	%		69.6	%		30.4	%

Free Cash Flow and Dividend Payout Ratio

The Company defines free cash flow ("FCF") as cash provided by (used in) operating activities, less total capital expenditures (growth and maintenance) for EI assets - operating leases and PP&E, mandatory debt repayments, and lease principal repayment, while proceeds on disposals of EI assets - operating leases and PP&E are added back. Management uses this non-IFRS measure to assess the level of free cash generated to fund other non-operating activities. These activities could include dividend payments, share repurchases, and non-mandatory debt repayments. FCF is also used in calculating the dividend payout ratio.

Reconciliation of FCF to the most directly comparable IFRS measure, cash provided by operating activities:


	Three months ended March 31,
($ millions)	2026			2025
Funds from operations ("FFO")1	$	95		$	62
Net change in working capital and other		(63	)		34
Cash provided by operating activities ("CFO")2	$	32		$	96
Less:
CAPEX - Maintenance and PP&E		(9	)		(8	)
CAPEX - Growth		(7	)		(6	)
Lease payments		(6	)		(6	)
Add:
Proceeds on disposals of PP&E and EI assets - operating leases		5			9
Free cash flow	$	15		$	85

1Enerflex also refers to cash provided by operating activities before net change in working capital and other as “Funds from Operations” or “FFO”.

2Enerflex also refers to cash provided by operating activities as “Cash flow from Operations” or “CFO”.

The Company defines dividend payout ratio as dividends paid divided by free cash flow. Dividend payout ratio is used to assess the proportion of free cash flow returned to shareholders.

Dividend payout ratio for the trailing 12-months was as follows:


	Three months ended March 31,
($ millions, except percentages)	2026			2025
Trailing 12-months dividends paid	$	15		$	13
Trailing 12-months free cash flow		160			235
Dividend payout ratio		9.4	%		5.5	%


	M-13

Bank-Adjusted Net Debt to EBITDA Ratio

Enerflex defines bank-adjusted net debt to EBITDA as borrowings under the revolving credit facility (“RCF”) and senior notes less cash and cash equivalents, divided by EBITDA for the trailing 12-months, as defined by the Company’s lenders. In assessing the Company's compliance with financial covenants related to its debt, certain adjustments are made to EBITDA to determine Enerflex's bank-adjusted net debt to EBITDA ratio. These adjustments, and Enerflex's bank-adjusted net debt to EBITDA ratio, are calculated in accordance with, and derived from, the Company's financing agreements.

ROCE

ROCE is a measure used to analyze operating performance and efficiency of the Company’s capital allocation process. The ratio is calculated by taking TTM EBIT divided by capital employed. Capital employed is average debt and shareholders’ equity less average cash for the trailing four quarters.


	Three months ended March 31,
($ millions, except percentages)		2026			2025

Trailing 12-months EBIT		$	290		$	242
Average capital employed
Average net debt1		$	550		$	659
Average shareholders’ equity1			1,129			1,051
Average capital employed		$	1,679		$	1,710
ROCE			17.3	%		14.2	%

1Based on a trailing four-quarter average.

Liquidity

The Company expects that cash flows from operations in 2026, together with cash and cash equivalents on hand and currently available credit facilities, will be more than sufficient to fund its requirements for investments in working capital and capital assets.


($ millions)				March 31, 2026
Cash and cash equivalents	$				47
RCF		800
Less: Drawings on the RCF		(162	)
Less: Letters of Credit1		(75	)		563
Available liquidity	$				610

1Represents letters of credit that the Company has funded with the RCF. Additional letters of credit of $26 million are funded from the $70 million LC Facility. Refer to Note 6 “Long-Term Debt” of the Financial Statements for further details.

Covenant Compliance

As at March 31, 2026, the Company met the covenant requirements of its funded debt, comprised of the secured RCF and the 2031 Notes, reflecting strong performance and cash flow generation, and Enerflex’s focus of repaying debt and lowering finance costs.

The following table sets forth a summary of the covenant requirements and the Company’s performance:


		Three months ended March 31
	2026				2025
	Requirement	Performance			Performance
Senior secured net funded debt to EBITDA ratio1 – Maximum	2.5x		0.2	x	0.1x
Bank-adjusted net debt to EBITDA ratio2 – Maximum	4.0x		0.9	x	1.3x
Interest coverage ratio3 – Minimum	2.5x		5.1	x	5.1x

1Senior secured net funded debt to EBITDA is defined as borrowings under the RCF less cash and cash equivalents divided by TTM EBITDA, as defined by the Company’s lenders.

2Refer to the "Bank-Adjusted Net Debt to EBITDA Ratio" section of this MD&A.

3Interest coverage ratio is calculated by dividing the TTM EBITDA by interest expense over the same timeframe, as defined by the Company’s lenders.


M-14 Q1 2026 Report

Credit Rating

Enerflex’s credit ratings affect the cost and ability to access the capital markets, and it is the Company’s objective to maintain high quality credit ratings. As at May 6, 2026, S&P Global Ratings ("S&P"), Moody’s Investors Service, Inc. ("Moody’s"), and Fitch Ratings, Inc. ("Fitch") assigned the following credit ratings to Enerflex and the 2031 Notes:


	S&P	Moody’s	Fitch
Corporate Credit Rating	BB (stable outlook)	Ba2 (stable outlook)	BB (stable outlook)
2031 Notes	BB (stable outlook)	Ba3 (stable outlook)	BB (stable outlook)

Summarized Statements of Cash Flow


	Three months ended March 31,
($ millions)	2026			2025
Cash and cash equivalents, beginning of period	$	81		$	92
Cash provided by (used in):
Operating activities		32			96
Investing activities		(19	)		(26	)
Financing activities		(37	)		(86	)
Effect of exchange rate changes on cash and cash equivalents denominated in foreign currencies		1			(1	)
Cash and cash equivalents reclassified to assets held for sale		(11	)	-
Cash and cash equivalents, end of period	$	47		$	75

Operating Activities

Cash provided by operating activities was $32 million during the three months ended March 31, 2026, compared to $96 million in the same period in 2025. The decrease primarily reflects the investment in working capital, partially offset by higher net earnings for the three months ended March 31, 2026.

Investing Activities

Cash used in investing activities of $19 million for the three months ended March 31, 2026, decreased compared to $26 million in the same period in 2025, primarily attributable to lower use of working capital for investing activities and lower purchase of financial instruments, partially offset by increased capital expenditures and lower proceeds on sale of EI assets in the first quarter of 2026.

Financing Activities

During the three months ended March 31, 2026, cash used in financing activities was $37 million, compared to $86 million used in the same period in 2025, primarily due to lower net repayment of the RCF in the current quarter.


	M-15

Capital Expenditures and Expenditures for Finance Leases

Enerflex distinguishes CAPEX invested in EI assets - operating leases as either maintenance or growth. Maintenance expenditures are necessary costs to continue utilizing existing EI assets - operating leases, while growth expenditures are intended to expand the Company’s EI assets - operating leases. The Company may also incur costs related to the construction of EI assets determined to be finance leases. These costs are accounted for as work-in-progress related to finance leases, and once the project is completed and enters service, it is reclassified to cost of goods sold.

CAPEX and expenditures for finance leases are shown in the table below:


	Three months ended March 31,
($ millions)	2026		2025
Maintenance and PP&E	$	9	$	8
Growth		7		6
Total CAPEX		16		14
Expenditures for finance leases		-		19
Total CAPEX and expenditures for finance leases	$	16	$	33

Selling, General & Administrative Expenses

SG&A expenses are comprised of costs incurred by the Company to support business operations that are not directly attributable to the production of goods or services.


	Three months ended March 31,
($ millions)		2026			2025
Core SG&A1		$	55		$	54
Share-based compensation			22			(3	)
Depreciation and amortization			3			6
Bad debt recovery			(1	)		-
Total SG&A		$	79		$	57

1 Core SG&A is primarily comprised of compensation, third-party services, and information technology expenses.

Income Taxes

The Company reported income tax expense of $20 million for the three months ended March 31, 2026, which is consistent with the $19 million for the same period in 2025.


M-16 Q1 2026 Report

Financial Position

The following table outlines significant changes in the consolidated statements of financial position as at March 31, 2026, compared to December 31, 2025:


($ millions)	Increase (Decrease)	Explanation
Current assets	61	Current assets increased primarily due to higher accounts receivable reflecting strong collections in the fourth quarter of 2025 with sustained strong ES activity levels in NAM, and the timing of collections from a major customer in EH. The increase also reflected a strategic inventory investment in the ES business in NAM and a build of inventory for scheduled EI maintenance activities in LATAM, as well as reclassification of non‑current assets associated with the APAC divestiture as held for sale. These increases were partially offset by decreases in cash and cash equivalents, unbilled revenue, and income tax receivable.
EI assets - operating leases	(14)	Decrease in EI assets - operating lease is primarily due to depreciation and sale of certain EI assets in the LATAM segment, partially offset by capital expenditures during the quarter.
Goodwill	(18)	Goodwill decreased due to the classification of goodwill allocated to the APAC divestiture as held for sale.
Long-term debt	(30)	Long-term debt has decreased due to net repayment of the RCF, partially offset by amortization of deferred transaction costs.
Total shareholders' equity	47	Total shareholders' equity increased primarily due to net earnings for the three months ended March 2026, partially offset by dividend payments in the first quarter of 2026.

Quarterly Summary


($ millions, except per share amounts and ratios)	Q1 2026		Q4 2025			Q3 2025		Q2 2025			Q1 2025		Q4 2024		Q3 2024		Q2 2024
ES backlog	$	1,265	$	1,110		$	1,071	$	1,227		$	1,206	$	1,280	$	1,271	$	1,251
ES book-to-bill ratio		1.5		1.1			0.7		1.1			0.7		1.1		1.1		1.0
ES bookings		483		377			339		365			205		301		349		331
EI contract backlog		1,283		1,321			1,370		1,462			1,497		1,545		1,601		1,604
Revenue		584		627			777		615			552		561		601		614
GM		145		143			172		139			128		140		141		136
GM before D&A		179		177			206		175			161		174		176		173
SG&A		79		83			71		61			57		92		82		75
EBIT		73		43			82		92			66		47		74		55
EBITDA		110		83			122		134			105		92		122		103
Adjusted EBITDA		137		123			145		130			113		121		120		122
Net earnings (loss)		43		(57	)		37		60			24		15		30		5
Earnings (loss) per share – basic		0.35		(0.47	)		0.30		0.49			0.19		0.12		0.24		0.04
Earnings (loss) per share – diluted		0.35		(0.47	)		0.30		0.49			0.19		0.12		0.24		0.04
FFO1		95		60			115		89			62		74		63		63
CFO2		32		179			74		(4	)		96		113		98		12
Free cash flow		15		141			43		(39	)		85		76		78		(4	)
Cash dividends declared per share (CAD $)3		0.0425		0.0425			0.0375		0.0375			0.0375		0.0375		0.0250		0.0250
CAPEX – Maintenance & PP&E		9		20			18		11			8		21		14		9
CAPEX – Growth		7		14			15		23			6		11		2		1

1 FFO or “Funds from Operations” is also referred to by Enerflex as “Cash provided by operating activities before net change in working capital and other”.

2 CFO or “Cash flow from Operations” is also referred to by Enerflex as “Cash provided by (used in) operating activities”.

3 Cash dividend declared represents the declaration in the quarter.


	M-17

Capital Resources

On April 30, 2026, Enerflex had 122,066,954 common shares outstanding. Enerflex has not established a formal dividend policy. Subsequent to March 31, 2026, Enerflex declared a quarterly dividend of CAD $0.0425 per common share, payable on June 3, 2026 to shareholders of record on May 20, 2026. The Board will continue to evaluate dividend payments on a quarterly basis based on availability of cash flow, anticipated market conditions, and the general needs of the business.

At March 31, 2026, the Company had drawings of $162 million against the RCF (December 31, 2025 – $193 million). The weighted average interest rate on the RCF for the three months ended March 31, 2026 was 5.0% (December 31, 2025 – 5.6%).

The composition of the borrowings on the 2031 Notes and RCF were as follows:


	Maturity Date	March 31, 2026			December 31, 2025
2031 Notes	January 15, 2031	$	400		$	400
Drawings on the RCF	July 11, 2028		162			193
			562			593
Deferred transaction costs			(10	)		(11	)
Long-term debt		$	552		$	582

Non-current portion of long-term debt		$	552		$	582
Long-term debt		$	552		$	582

At March 31, 2026, without considering renewal at similar terms, the USD equivalent principal payments due over the next five years was $562 million.

Legal Proceedings


M-18 Q1 2026 Report

following Enerflex’s termination of the project contract. Pursuant to the rules for arbitration agreed between Enerflex and its customer, the content of the proceedings is confidential and not otherwise publicly available. In Q2 2025, the customer filed its Statement of Case in the arbitration asserting various claims against and seeking material monetary damages from Enerflex and in Q3 2025 the Company filed its Statement of Defence and Counterclaim against the customer. In Q4 2025, the customer filed its Statement of Reply and Defence to Counterclaim to which the Company responded to by filing its Statement of Rejoinder and Reply to Defence to Counterclaim on February 27, 2026 in accordance with the arbitration timeline. Enerflex disputes the customer’s claims and asserts that it acted in accordance with the project contract and that its declaration of Force Majeure and its subsequent termination of the project were proper. Given the current stage of the arbitration and the inherent uncertainty of arbitration, the final outcome of the arbitration is unknown. While the Company is pursuing recovery of amounts it believes are owed, it is possible that the Company may not prevail on its counterclaims or in defending against the customer’s claims. In those circumstances, there can be no assurance that the outcome will not have a material adverse effect on Enerflex, including on its consolidated financial position, results of operations or cash flows. Enerflex intends to continue vigorously defending itself against the customer’s claims while pursuing its own counterclaims.

Disclosure Controls and Procedures

Management is responsible for establishing and maintaining adequate disclosure controls and processes (“DC&P”). DC&P are designed to ensure that information required to be disclosed in Enerflex’s financial reports is recorded, processed, summarized and reported to the Company’s Management, including its Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. Management recognizes that any system of controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. Due to the inherent limitations of control systems, not all misstatements may be detected. For example, there may be faulty judgments in decision-making or breakdowns can occur because of a simple error or mistake. Additionally, controls can be circumvented by the acts of individuals, by collusion of two or more people, or by Management override of the control. Controls and procedures can only provide reasonable, not absolute, assurance that the desired control objectives have been met.

Based on the Company’s evaluation, Management concluded that its DC&P were effective as of March 31, 2026.

Internal Control Over Financial Reporting

Management is also responsible for establishing and maintaining adequate internal control over financial reporting (“ICFR”). ICFR is a framework designed to provide reasonable assurance regarding the preparation and reliability of the unaudited interim condensed consolidated financial statements for external reporting in accordance with IFRS.

Under the supervision, and with the participation of Enerflex’s Management, including the Chief Executive Officer and Chief Financial Officer, the Company conducted an evaluation of the effectiveness of its ICFR and DC&P as of March 31, 2026, the end of the period covered by this MD&A. In conducting this evaluation, Management used the criteria described in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (the “COSO 2013 Framework”).

Based on the Company’s evaluation, Management concluded that its ICFR were effective as of March 31, 2026.


	M-19

Changes in Internal Control Over Financial Reporting:

Management regularly reviews its system of ICFR and makes changes to the Company’s processes and systems to improve controls and increase efficiency. There have been no changes in the design of the Company’s ICFR during the three months ended March 31, 2026, that would materially affect, or is reasonably likely to materially affect, the Company’s ICFR.

Subsequent Events

Forward-Looking Statements

This MD&A contains “forward-looking information” within the meaning of applicable Canadian securities laws and “forward-looking statements” (and together with “forward-looking information”, “FLI”) within the meaning of the safe harbor provisions of the US Private Securities Litigation Reform Act of 1995. FLI relates Management’s expectations about future events, results of operations, and the future performance (both financial and operational) and business prospects of Enerflex. All statements other than statements of historical fact are FLI. FLI may contain, but is not limited to, words such as "anticipate", "future", “create”, “continue”, “expect”, “intend”, “propose”, “might”, “may”, “will”, “generate”, "should", "could", "would", "believe", "predict", "forecast", “future”, “opportunity”, "pursue", "potential", "objective", “focus”, “endeavor”, “commit”, “target”, “growth”, or “ensure”, or the inverse of such terms or similar expressions suggesting future conditions, events, or expectations. In particular, this MD&A includes (without limitation) FLI pertaining to:

•

Enerflex’s ability to implement its strategy for success, premised on simplifying, optimizing, and growing its business, and the time required in connection therewith, if at all;

•

disclosures under the heading “Outlook” including:

expectations for continued steady demand across our business lines and geographic regions;

the highly contracted EI product line and the recurring nature of AMS will continue to underpin operating results;

customer contracts within Enerflex’s EI product line will generate approximately $1.3 billion of revenue over their remaining terms;

expectations that performance of Enerflex’s ES product line will remain steady, with the majority of the backlog of approximately $1.3 billion as at March 31, 2026 expected to convert into revenue over the next 12 months;

expected increases in natural gas and electric power generation across Enerflex’s core operating countries will drive an attractive medium-term outlook for ES products and services;

Enerflex’s ability to deliver on its priorities in 2026 and the time required in connection therewith, if at all;

selective customer supported growth investments continuing to be made in the USA contract compression business;


M-20 Q1 2026 Report

continued strength in the fundamentals for contract compression in the USA, led by expected increases in natural gas production and capital spending discipline from market participants;

•

the anticipated completion of the divestiture of a majority of the Company’s operations in the APAC region (the “APAC Divestiture”), and the timing thereof, if at all;

•

that the Board will set the Company’s quarterly dividends based on the availability of cash flow, anticipated market conditions, and the general needs of the business and that this will support expectations regarding the ability of the Company to continue to pay a quarterly sustainable dividend;

•

ES backlog, the impact of project cancellations on ES backlog, and the ability to secure future bookings;

•

the 8-quarter average ES backlog serves as a key indicator of operational consistency and revenue visibility, and ES backlog generally provides strong visibility into future revenue generation, business activity levels, and margin performance in the near-term;

•

expectations that cash flows from operations in 2026, together with cash and cash equivalents on hand and currently available credit facilities, will be more than sufficient to fund Enerflex’s requirements for investments in working capital and capital assets;

•

the ability of the Company to continue to meet its covenant requirements of its funded debt, including the secured RCF and 2031 Notes;

•

the potential for the Company to incur costs related to the construction of EI assets determined to be finance leases;

•

the ability of the Company to capitalize on opportunities should they proceed, if at all; and

•

expectations that potential liabilities that may arise in connection with outstanding lawsuits, arbitrations or other legal proceedings will not have a material adverse effect on Enerflex, including its consolidated financial position, results of operations or cash flows.

FLI is based on assumptions, estimates, and analysis made in light of the Company’s experience and its perception of trends, current conditions, and expected developments, including assumptions and estimates as to associated timing and costs, as well as other factors that are believed by the Company to be reasonable and relevant in the circumstances. FLI involves known and unknown risks and uncertainties and other factors which are difficult to predict, including, without limitation:

•

that all conditions to completion of the APAC Divestiture will be satisfied or waived in a timely manner, that all regulatory and other approvals required for completion of the APAC Divestiture will be obtained and obtained in a timely manner, that the transaction to effect the APAC Divestiture will be completed on the agreed terms, and that the expected benefits of the APAC Divestiture will be realized within the expected timeframes;

•

potential impacts of the situation in the Middle East on Enerflex’s operations in Bahrain and Oman and the broader region;

•

the ability of the Company to proactively manage the ES business line in response near-term risks and uncertainties, including tariffs and commodity price volatility;

•

natural gas and associated liquids and produced water volumes across Enerflex’s global footprint will increase in line with expectations;

•

the impact of general economic and industry conditions on the Company’s business, including its existing product offerings and the potential for growth and expansion of the business;

•

the ES product line continuing to benefit from a diversified portfolio of gas compression and processing projects and continuing to generate predictable revenue and margin performance;

•

existing customer contracts within the EI product line will remain in effect and with no material cancellations or renegotiations over their remaining terms;


	M-21

•

risks related to lawsuits, arbitrations or other legal proceedings;

•

the execution of projects within the ES product line will proceed as scheduled and the conversion to revenue will proceed without significant delays or cancellations;

•

the Company’s backlog providing strong visibility into future revenue generation and business activity levels;

•

no significant unforeseen cost overruns or project delays;

•

supply chain interruptions leading to delays in receiving materials and parts to produce equipment and/or the impact of tariffs and/or retaliatory tariffs on the supply chain;

•

interest rates and foreign exchange rates;

•

new environmental, taxation, and other laws and regulations;

•

continued capital spending discipline from market participants;

•

the fulfillment by our customer partners of the terms of their contracts;

•

the ability to continue to build and improve on proven manufacturing capabilities and innovate into new product lines and new and emerging markets;

•

increased competition across all business lines;

•

sufficiency of funds to support capital investments required to grow the business;

•

availability of qualified personnel or management and difficulties in retaining qualified personnel;

•

political unrest; and

•

other factors, many of which are beyond the control of Enerflex.

Readers are cautioned that the foregoing list of assumptions and risk factors should not be construed as exhaustive. While the Company believes that there is a reasonable basis for the FLI included in this MD&A, as a result of known and unknown risks, uncertainties, and other factors, Enerflex’s actual results, performance, or achievements could differ and such differences could be material from those expressed in, or implied by, these statements. The FLI included in this MD&A should not be unduly relied upon as a number of factors could cause actual results to differ materially from the results discussed in these forward-looking statements, including but not limited to: the ability to maintain desirable financial ratios; the ability to access various sources of debt and equity capital, generally, and on acceptable terms, if at all; the ability to utilize tax losses in the future; the ability to maintain relationships with partners and to successfully manage and operate the business; risks associated with technology and equipment, including potential cyber attacks; the occurrence of unexpected events such as pandemics, war, terrorist threats, and the instability resulting therefrom; risks associated with existing and potential future lawsuits, arbitrations or other legal proceedings, shareholder proposals, and regulatory actions; and those factors referred to under the heading "Risk Factors" in (i) Enerflex's AIF for the year ended December 31, 2025 and Enerflex’s 2025 Annual Report; and (ii) in other filings with Canadian securities regulators and the SEC, copies of which are available under the electronic profile of the Company on SEDAR+ and EDGAR at www.sedarplus.ca and www.sec.gov/edgar, respectively.

This MD&A contains information that may constitute future-oriented financial information or financial outlook information ("FOFI") about Enerflex and its prospective financial performance, financial position, or cash flows, all of which is subject to the same assumptions, risk factors, limitations, and qualifications as set forth above. Except as otherwise stated herein, the FOFI included in this MD&A was made and approved by Management and the Board as of the date hereof. Readers are cautioned that the assumptions used in the preparation of such information, although considered reasonable at the time of preparation, may prove to be imprecise or inaccurate and, as such, undue reliance should not be placed on FOFI. The Company’s actual results, performance and achievements could differ materially from those expressed in, or implied by, FOFI.


M-22 Q1 2026 Report

The inclusion of FOFI in this MD&A is to provide readers with a more complete perspective on the Company’s future operations and Management's current expectations regarding the Company’s future performance. Readers are cautioned that such information may not be appropriate for other purposes.

The FLI and FOFI contained herein is expressly qualified in its entirety by the above cautionary statement and are given as of the date of this MD&A. Other than as required by law, Enerflex disclaims any intention or obligation to update or revise any FLI or FOFI, whether as a result of new information, future events, or otherwise.


	M-23


Exhibit		Description

99.1		Enerflex Ltd. Press Release dated May 7, 2026, reporting 2026 First Quarter Financial and Operational Results

99.2		Unaudited Interim Condensed Consolidated Financial Statements of Enerflex Ltd. as at and for the three months ended March 31, 2026, together with the notes thereto

99.3		Management Discussion and Analysis of Financial Condition and Results of Operations of Enerflex Ltd. as at and for the three months ended March 31, 2026

99.4		Report of Voting Results, dated May 7, 2026

99.5		Shareholder Approval Press Release, dated May 7, 2026

99.6		Certification of the Chief Executive Officer pursuant to National Instrument 52-109

99.7		Certification of the Chief Financial Officer pursuant to National Instrument 52-109



Dated: May 7, 2026	Enerflex Ltd.

	By:	/s/ Justin D. Pettigrew
	Name:	Justin D. Pettigrew
	Title:	Corporate Secretary and Associate General Counsel, Corporate


	Description of the Matter	Outcome	Votes For	Votes Against

1.	The number of directors of the Company to be elected at the Meeting was fixed at ten (10).	Passed	90,208,854 (99.96%)	34,109 (0.04%)
2.	Each of the following nominees was elected to serve as a director of the Company:
	Fernando R. Assing	Passed	86,602,468 (97.65%)	2,088,077 (2.35%)
	Benjamin Cherniavsky	Passed	86,622,946 (97.67%)	2,067,599 (2.33%)
	Joanne Cox	Passed	86,155,032 (97.14%)	2,535,513 (2.86%)
	Céline B. Gerson	Passed	86,706,678 (97.76%)	1,983,867 (2.24%)
	James C. Gouin	Passed	88,278,871 (99.54%)	411,674 (0.46%)
	Mona Hale	Passed	86,475,109 (97.50%)	2,215,436 (2.50%)
	Paul Mahoney	Passed	88,451,140 (99.73%)	239,405 (0.27%)
	Kevin J. Reinhart	Passed	86,516,043 (97.55%)	2,174,502 (2.45%)
	Thomas B. Tyree, Jr.	Passed	86,003,820 (96.97%)	2,686,725 (3.03%)
	Juan Carlos Villegas	Passed	86,375,516 (97.39%)	2,315,029 (2.61%)

			Votes For	Votes Withheld
3.	Ernst & Young LLP, Chartered Accountants, were reappointed as auditors of the Company for the ensuing year at a remuneration to be fixed by the directors of the Company.	Passed	90,379,083 (99.19%)	739,381 (0.81%)


			Votes For	Votes Against
4.	An advisory resolution was passed to accept the Company’s approach to executive compensation.	Passed	84,828,302 (95.65%)	3,862,242 (4.35%)
5.	The Company’s new omnibus incentive plan was approved and awards to the officers and other eligible participants under the omnibus incentive plan were ratified.	Passed	84,386,866 (95.15%)	4,303,679 (4.85%)


	Approval		Against
Director	Votes For	Percentage	Votes Against	Percentage
Fernando R. Assing	86,602,468	97.65%	2,088,077	2.35%
Benjamin Cherniavsky	86,622,946	97.67%	2,067,599	2.33%
Joanne Cox	86,155,032	97.14%	2,535,513	2.86%
Céline B. Gerson	86,706,678	97.76%	1,983,867	2.24%
James C. Gouin	88,278,871	99.54%	411,674	0.46%
Mona Hale	86,475,109	97.50%	2,215,436	2.50%
Paul Mahoney	88,451,140	99.73%	239,405	0.27%
Kevin J. Reinhart	86,516,043	97.55%	2,174,502	2.45%
Thomas B. Tyree, Jr.	86,003,820	96.97%	2,686,725	3.03%
Juan Carlos Villegas	86,375,516	97.39%	2,315,029	2.61%


(signed) "Paul Mahoney"
Paul Mahoney
President and Chief Executive Officer


(signed) "Preet S. Dhindsa"
Preet S. Dhindsa
Senior Vice President and Chief Financial Officer