LandBridge Q1 Earnings Call Highlights

Key Points

• LandBridge reported first-quarter revenue of $51 million and adjusted EBITDA of $44.9 million, both up 16% year over year, and generated strong free cash flow of $40.9 million. The company also raised its full-year 2026 adjusted EBITDA guidance to $210 million to $230 million.
• Growth was driven mainly by surface use royalties and revenues, which climbed 41% from a year ago, while the company said most of its revenue is tied to surface-related streams rather than direct commodity prices. Management emphasized its fee-based model and expanding commercial pipeline as key supports for future results.
• LandBridge highlighted major long-term opportunities in the Delaware Basin, including data center and power-related projects such as the PowerBridge Alpha Digital campus. The company also said it continues to expand its surface acreage through bolt-on acquisitions and has more than 320,000 acres under ownership.

LandBridge NYSE: LB reported higher first-quarter revenue and adjusted EBITDA and raised its full-year 2026 outlook, citing improved visibility into commercial activity, stronger basin conditions and momentum tied to surface-use opportunities in the Delaware Basin.

Chief Executive Officer Jason Long said the company began 2026 “consistent with our plan,” with revenue and adjusted EBITDA each increasing about 16% year over year. He said the first quarter was softer than the fourth quarter, but that the sequential decline was expected because certain surface-related payments tend to follow operator activity that is more heavily weighted toward the second half of the year.

“Q2 commercial activity is already tracking ahead of Q1,” Long said. “Our second-half catalysts are developing as planned, and the macroeconomic environment has become meaningfully more supportive since we last provided guidance.”

Guidance Raised as Commercial Pipeline Improves

Chief Financial Officer Scott McNeely said LandBridge increased its full-year 2026 adjusted EBITDA guidance to a range of $210 million to $230 million, up $5 million at both ends of the range. He said the higher outlook reflects better visibility into committed and near-committed commercial activity for the remainder of the year, as well as a more supportive macroeconomic backdrop for basin activity.

McNeely said the company’s “fee-based model provides the floor,” while its commercial pipeline offers the upside supporting the raised guidance.

For the first quarter, LandBridge reported total revenue of $51 million, up 16% from a year earlier but down about 11% from $56.8 million in the fourth quarter. Net income was $17.9 million, up 16% year over year, with a net income margin of 35%.

Adjusted EBITDA was $44.9 million, also up 16% from the prior-year period, with an adjusted EBITDA margin of 88%. Cash flow from operations was $41.1 million, and free cash flow was $40.9 million, representing a 158% year-over-year increase and a free cash flow margin of 80%.

Surface Revenue Leads Growth

The main driver of revenue growth was surface use royalties and revenues, which rose 41% year over year to $37 million. McNeely said that increase reflected royalties from WaterBridge’s BPX Kraken development, new easement payments and broader commercial activity across LandBridge’s surface acreage.

Sequentially, revenue declined across all three major categories. Surface use royalties and revenues fell 6%, resource sales and royalties declined 9%, and oil and gas royalties were down about 5%.

McNeely said oil and gas royalties represented about 6% of year-to-date revenue, limiting the company’s direct commodity exposure. In response to an analyst question, Long said roughly 72% of revenue is tied to surface-related streams, while about 22% is tied to the resource side, which is more directly linked to new upstream development activity.

LandBridge ended the quarter with total liquidity of $259.7 million, including $29.7 million in cash and about $230 million of available borrowing capacity under its revolving credit facility. Borrowings outstanding were $545 million as of March 31, down from $570 million at year-end. The company’s net leverage ratio was 2.7 times, compared with 2.8 times in the prior quarter.

The company also repaid $25.2 million of debt during the quarter, reported capital expenditures of $0.2 million and declared a quarterly dividend of $0.12 per share.

Fee Surface Strategy and Acquisitions

Long said LandBridge’s position now includes more than 320,000 surface acres across the Delaware Basin after several bolt-on acquisitions. He described the company’s fee surface ownership model as a structural advantage because it provides permanent control and long-duration optionality for commercial uses including produced water, pipelines, power generation and data centers.

McNeely said the company has added nearly 50,000 surface acres over the past year while maintaining disciplined underwriting standards. In response to a question from Goldman Sachs analyst John Mackay, McNeely said the smaller tuck-in acquisitions are intended to fill gaps and expand contiguous positions. He said pricing remains competitive and in line with what LandBridge has historically paid for similar surface positions.

Asked by Johnson Rice analyst Charles Meade whether increased competition has affected acquisition opportunities, McNeely said LandBridge has not yet seen much impact. He said the company remains focused on fee surface acreage rather than BLM or state leases, which he said are not a focus for LandBridge.

Data Center and Power Opportunities Advance

LandBridge highlighted its agreement with PowerBridge for the Alpha Digital data center campus in Reeves County, Texas. Long said PowerBridge has the option to lease up to 3,400 acres for a giga-scale campus, with initial power deliveries expected next year and large-scale generation expected in 2028.

McNeely said during the question-and-answer session that PowerBridge paid $2.6 million for a one-year option, which was recognized in the first quarter. He said PowerBridge is planning to bring on up to 2 gigawatts of initial power generation capacity, with the ability to scale beyond that. If PowerBridge exercises the option, the payment structure would convert to a lease, but LandBridge did not disclose the lease economics.

Long said West Texas is well suited for data centers because of low-cost power, water availability, fiber connectivity and a favorable permitting environment. He said about 10 gigawatts of capacity has been announced in the region over the past two years, including Alpha Digital.

In response to Texas Capital Securities analyst Derrick Whitfield, McNeely said sentiment around West Texas data center opportunities has improved significantly over the past six to 12 months. He said LandBridge is engaged in “discussions and negotiations and documentation with virtually every hyperscaler” in some capacity, while emphasizing that the company is being deliberate about when to announce additional details.

WaterBridge and Speedway Projects

LandBridge also pointed to its relationship with WaterBridge as a key contributor to its model. Long said about 1.5 million barrels per day of WaterBridge infrastructure sits on LandBridge land, with additional permitted capacity continuing to grow.

Asked about WaterBridge’s Project Speedway, McNeely said Speedway Phase I is expected to come online this summer, though it will not be fully utilized immediately. He said volumes are expected to ramp from this summer through 2028, with potential for additional interruptible volumes that could increase royalties to LandBridge.

McNeely said Speedway Phase II is being considered to address operational needs in the back half of 2027, but the company has not yet detailed its expected contribution to future guidance.

Management said quarterly results may remain uneven because some surface agreements and payments depend on timing. McNeely said LandBridge is not focused on which quarter a particular agreement is signed, but on generating year-over-year compounding growth.

About LandBridge NYSE: LB

LandBridge Company LLC owns and manages land and resources to support and enhance oil and natural gas development in the United States. It owns surface acres in and around the Delaware Basin in Texas and New Mexico. The company holds a portfolio of oil and gas royalties. It also sells brackish water and other surface composite materials. The company was founded in 2021 and is based in Houston, Texas. LandBridge Company LLC operates as a subsidiary of LandBridge Holdings LLC.

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