LandBridge (NYSE: LB) grows Q1 2026 cash flow and OKs $50M buyback
Rhea-AI Filing Summary
LandBridge Company LLC reported solid first-quarter 2026 growth driven by higher surface and royalty revenue on its Permian Basin acreage. Revenue reached $51.0 million, up 16% year over year, as easements and other surface-related revenues and surface use royalties both increased sharply.
Net income rose 16% to $17.9 million, with basic EPS of $0.31 per Class A share and an Adjusted EBITDA of $44.9 million, reflecting an 88% margin. Operating cash flow jumped to $41.1 million, supporting $40.9 million of Free Cash Flow and funding dividends of $0.12 per share plus distributions to OpCo unitholders.
LandBridge ended the quarter with $29.7 million in cash, total debt of $545.5 million and liquidity of about $259.7 million, including undrawn revolver capacity. The company acquired additional surface acreage in Reeves County and the board authorized a $50 million Class A share repurchase program running through December 2027.
Positive
- None.
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Insights
LandBridge delivered steady growth, strong cash generation and managed leverage within covenant limits.
LandBridge grew Q1 2026 revenue to $51.0M, up 16%, mainly from higher surface-related fees and surface use royalties on its Delaware Basin acreage. Net income increased to $17.9M with a stable 35% net margin, while Adjusted EBITDA of $44.9M preserved an 88% margin.
Cash generation was notable: operating cash flow reached $41.1M and Free Cash Flow $40.9M, both up 158% versus the prior year quarter. That supported dividends of $0.12 per Class A share and tax distributions to OpCo unitholders while funding $2.0M of acquisitions.
On the balance sheet, LandBridge carried $500.0M of 6.25% senior notes due 2030 and $45.0M drawn on its $275.0M revolving credit facility, with total debt of $545.5M. Liquidity stood at about $259.7M. The company reported compliance with leverage and coverage covenants, and the new $50M share repurchase authorization adds capital allocation flexibility, though actual repurchase levels will depend on future conditions.
Key Figures
Key Terms
Adjusted EBITDA financial
Free Cash Flow financial
Noncontrolling interest financial
Term SOFR Loans financial
variable interest entity financial
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
Commission File Number:
(Exact Name of Registrant as Specified in its Charter)
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
(Address of principal executive offices) |
(Zip Code) |
Registrant’s telephone number, including area code: (
Securities registered pursuant to Section 12(b) of the Act:
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NYSE Texas, Inc. |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No
As of May 6, 2026, the registrant had
TABLE OF CONTENTS
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PART I — FINANCIAL INFORMATION
Glossary |
3 |
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Cautionary Note Regarding Forward-Looking Statements |
4 |
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Item 1. |
Financial Statements (Unaudited) |
6 |
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Condensed Consolidated Balance Sheets |
6 |
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Condensed Consolidated Statements of Operations |
7 |
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Condensed Consolidated Statements of Shareholders’ Equity |
8 |
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Condensed Consolidated Statements of Cash Flows |
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Notes to the Condensed Consolidated Financial Statements |
10 |
Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
19 |
Item 3. |
Quantitative and Qualitative Disclosures About Market Risk |
26 |
Item 4. |
Controls and Procedures |
26 |
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PART II — OTHER INFORMATION |
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Item 1. |
Legal Proceedings |
27 |
Item 1A. |
Risk Factors |
27 |
Item 2. |
Unregistered Sales of Equity Securities and Use of Proceeds |
27 |
Item 3. |
Defaults Upon Senior Securities |
27 |
Item 4. |
Mine Safety Disclosures |
27 |
Item 5. |
Other Information |
27 |
Item 6. |
Exhibits |
28 |
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Signatures |
29 |
2
GLOSSARY
The following are abbreviations and definitions of certain terms used in this document, many of which are commonly used in the industry:
1918 Acquisition. The acquisition of approximately 37,500 total acres across Reeves, Loving, Winkler and Ward counties, Texas, and certain related assets from 1918 Ranch & Royalty, LLC.
Bbl. One barrel of volume used for measuring oil.
Brackish water. Water with salinity levels between seawater and freshwater.
Completion. The process of preparing a well for the production of oil and gas by injecting high-pressure fluids mixed with proppants to create fractures in reservoir rock to enhance permeability.
Crude oil. A mixture of hydrocarbons that exists in liquid phase in natural underground reservoirs and remains liquid at atmospheric pressure after passing through surface separating facilities.
Delaware Basin. A geological depositional and structural basin in West Texas and southeastern New Mexico, which is a part of the Permian Basin.
E&P companies. Oil and natural gas exploration and production companies, including producers and/or operators.
Five Point. Five Point Infrastructure LLC, a Delaware limited liability company and our legacy financial sponsor.
GAAP. Accounting principles generally accepted in the United States of America.
Incentive Units. Management incentive units consisting of time-based awards of profits interests in LandBridge Holdings.
LandBridge. LandBridge Company LLC, a Delaware limited liability company (NYSE: LB; NYSE TX: LB), and its subsidiaries.
LandBridge Holdings. LandBridge Holdings LLC, a Delaware limited liability company and portfolio company of funds affiliated with Five Point.
MBbls. One thousand barrels.
MBbl/d. One thousand barrels per day.
Mineral interest. Real-property interests that grant ownership of oil and natural gas under a tract of land and the rights to explore for, develop, and produce oil and natural gas on that land or to lease those exploration and development rights to a third party.
NM. Not meaningful.
OpCo. DBR Land Holdings LLC, a Delaware limited liability company.
Operator. The individual or company responsible for the development and/or production of an oil or natural gas well.
Permian Basin. A large sedimentary basin located in West Texas and southeastern New Mexico.
Produced water. Water produced from an oil and natural gas well alongside crude oil and natural gas.
Produced water handling facilities. Facilities utilized for the treatment, handling and disposal of produced water.
Royalty. A real property interest that entitles the owner the right to receive a portion of the production (or the proceeds therefrom) produced from the underlying real property or a payment for the use of such underlying real property, and does not require the owner to pay any portion of the production or development costs.
SUAs. Surface use agreements.
SURAs. Surface use royalty agreements.
WaterBridge. WaterBridge Infrastructure LLC, a Delaware limited liability company (NYSE: WBI; NYSE TX: WBI), and its subsidiaries.
WTI. West Texas Intermediate, a grade of crude oil commonly used in reference to pricing for crude oil.
3
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
The information in this Quarterly Report on Form 10-Q (this “Quarterly Report”) includes “forward-looking statements” within the meaning of the federal securities laws that involve risks and uncertainties. All statements, other than statements of historical fact included in this Quarterly Report, regarding our strategy, future operations, estimated revenues and losses, projected costs, prospects, plans and objectives of management are forward-looking statements. When used in this Quarterly Report, words such as “assume,” “could,” “would,” “should,” “will,” “believe,” “anticipate,” “intend,” “estimate,” “expect,” “project,” “forecast,” “may,” “objective,” “plan,” “budget” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain such identifying words. These forward-looking statements are based on our current expectations and assumptions about future events and are based on currently available information as to the outcome and timing of future events at the time such statements were made. When considering forward-looking statements, you should keep in mind the risk factors and other cautionary statements described under the section entitled “Risk Factors” included elsewhere in this Quarterly Report and each of the other factors set forth in “Part I — Item 1A. Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025 (the “2025 Form 10-K”), and in other reports filed with the United States Securities and Exchange Commission (the “SEC”). By their nature forward-looking statements involve known and unknown risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. Although we believe that the forward-looking statements contained in this Quarterly Report are based on reasonable assumptions, you should be aware that many factors could affect our actual results of operations, cash flows and financial position and could cause actual results to differ materially from those in such forward-looking statements. Forward-looking statements may include, but are not limited to, statements about:
4
We caution you that these forward-looking statements are subject to all of the risks and uncertainties, most of which are difficult to predict and many of which are beyond our control, incident to the operation of business in our industry. We disclose important factors that could cause our actual results to differ materially from our expectations under “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and elsewhere in this Quarterly Report. Factors that could materially adversely affect our business, financial condition, operating results or liquidity and the trading price of our Class A shares are described under “Risk Factors,” included in our 2025 Form 10-K. This information should be considered carefully, together with other information in this report and other reports and materials we file with the SEC. Should one or more of the risks or uncertainties described in this Quarterly Report occur, or should underlying assumptions prove incorrect, our actual results and plans could differ materially from those expressed in any forward-looking statements. Moreover, we operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make.
All forward-looking statements, expressed or implied, included in this Quarterly Report are expressly qualified in their entirety by this cautionary note. This cautionary note should also be considered in connection with any subsequent written or oral forward-looking statements that we or persons acting on our behalf may issue. Except as otherwise required by applicable law, we disclaim any duty to update any forward-looking statements, all of which are expressly qualified by the statements in this section, to reflect events or circumstances after the date of this Quarterly Report.
5
Item 1. Financial Statements (Unaudited)
LandBridge Company LLC and Subsidiaries
Condensed Consolidated Balance Sheets
(in thousands)
(unaudited)
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March 31, |
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December 31, |
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2026 |
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2025 |
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Current assets: |
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Cash and cash equivalents |
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$ |
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$ |
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Accounts receivable, net |
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Related party accounts receivable |
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Prepaid expenses and other current assets |
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Total current assets |
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Non-current assets: |
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Property, plant and equipment, net |
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Intangible assets, net |
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Deferred tax assets |
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Other assets |
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Total non-current assets |
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Total assets |
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$ |
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$ |
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Liabilities and equity |
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Current liabilities: |
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Accounts payable |
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$ |
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$ |
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Taxes payable |
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Related party accounts payable |
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Accrued liabilities |
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Current portion of long-term debt |
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Contract liabilities |
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Other current liabilities |
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Total current liabilities |
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Non-current liabilities: |
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Long-term debt, net of debt issuance costs |
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Other long-term liabilities |
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Total non-current liabilities |
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Total liabilities |
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Class A shares, shares authorized and |
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Class B shares, shares authorized and |
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Retained earnings |
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Total shareholders’ equity attributable to LandBridge Company LLC |
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Noncontrolling interest |
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Total shareholders’ equity |
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Total liabilities and equity |
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$ |
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$ |
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See accompanying notes to the unaudited condensed consolidated financial statements
6
LandBridge Company LLC and Subsidiaries
Condensed Consolidated Statements of Operations
(in thousands, except share and per share amounts)
(unaudited)
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Three Months Ended March 31, |
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2026 |
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2025 |
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Revenues: |
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Easements and other surface-related revenues |
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$ |
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$ |
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Easements and other surface-related revenues - related party |
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Surface use royalties |
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Surface use royalties - related party |
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Resource sales |
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Resource sales - related party |
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Resource royalties |
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Resource royalties - related party |
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Oil and gas royalties |
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Other |
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Total revenues |
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Resource sales-related expense |
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Other operating and maintenance expense |
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General and administrative expense |
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Depreciation, depletion and amortization |
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Other operating expense, net |
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Operating income |
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Interest expense |
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Other loss |
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Income from operations before taxes |
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Income tax expense |
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Net income |
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Net income attributable to noncontrolling interest |
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Net income attributable to LandBridge Company LLC |
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$ |
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$ |
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Net income per share of Class A shares |
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Basic |
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$ |
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$ |
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Diluted |
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$ |
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$ |
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Weighted average shares outstanding of Class A shares |
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Basic |
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Diluted |
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See accompanying notes to the unaudited condensed consolidated financial statements
7
LandBridge Company LLC and Subsidiaries
Condensed Consolidated Statements of Shareholders’ Equity
(in thousands, except share amounts)
(unaudited)
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Class A |
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Class B |
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Retained Earnings |
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Non- |
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Total |
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Shares |
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Amount |
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Shares |
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Amount |
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Amount |
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Amount |
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Amount |
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Balance at December 31, 2025 |
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$ |
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$ |
- |
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$ |
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$ |
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$ |
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Net income |
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- |
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- |
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- |
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- |
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Deemed non-cash contributions |
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- |
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- |
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- |
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- |
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- |
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RSU share-based compensation expense |
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- |
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- |
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- |
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- |
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Class A Shares issued on vesting of RSUs, net of shares withheld for tax |
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( |
) |
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- |
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- |
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- |
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- |
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( |
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Cancellation of Class B shares |
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- |
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- |
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( |
) |
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- |
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- |
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Tax distributions |
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- |
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- |
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- |
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- |
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- |
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( |
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( |
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Dividends and distributions |
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- |
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- |
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- |
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- |
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( |
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( |
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( |
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RSU dividend equivalent rights |
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- |
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- |
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- |
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- |
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( |
) |
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( |
) |
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( |
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Changes in ownership interest adjustment |
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- |
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( |
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- |
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- |
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- |
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- |
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Tax impact of ownership interest adjustment |
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- |
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( |
) |
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- |
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- |
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- |
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- |
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( |
) |
Balance at March 31, 2026 |
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$ |
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$ |
- |
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$ |
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$ |
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$ |
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Class A |
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Class B |
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Retained Earnings |
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Non- |
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Total |
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Shares |
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Amount |
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Shares |
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Amount |
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Amount |
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Amount |
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Amount |
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Balance at December 31, 2024 |
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$ |
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$ |
- |
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$ |
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$ |
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$ |
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Net income |
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- |
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- |
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- |
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- |
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Deemed non-cash contributions |
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- |
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- |
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- |
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- |
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- |
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RSU share-based compensation expense |
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- |
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- |
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- |
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- |
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Cancellation of Class B shares |
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- |
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- |
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( |
) |
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- |
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- |
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- |
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- |
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Tax distributions |
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- |
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- |
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- |
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- |
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- |
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( |
) |
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( |
) |
Dividends and distributions |
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- |
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- |
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- |
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- |
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( |
) |
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( |
) |
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( |
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RSU dividend equivalent rights |
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- |
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- |
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- |
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- |
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( |
) |
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( |
) |
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( |
) |
Changes in ownership interest adjustment |
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- |
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- |
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- |
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- |
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( |
) |
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- |
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Offering costs |
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- |
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( |
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- |
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- |
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- |
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- |
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( |
) |
Balance at March 31, 2025 |
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$ |
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$ |
- |
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$ |
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$ |
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$ |
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||||||
See accompanying notes to the unaudited condensed consolidated financial statements
8
LandBridge Company LLC and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
|
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Three Months Ended March 31, |
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2026 |
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2025 |
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Cash flows from operating activities |
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Net income |
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$ |
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$ |
|
||
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
|
|
|
||
Depreciation, depletion and amortization |
|
|
|
|
|
|
||
Amortization of debt issuance costs |
|
|
|
|
|
|
||
Share-based compensation |
|
|
|
|
|
|
||
Deferred income tax expense |
|
|
|
|
|
|
||
Other |
|
|
( |
) |
|
|
|
|
Changes in operating assets and liabilities: |
|
|
|
|
|
|
||
Accounts receivable |
|
|
|
|
|
( |
) |
|
Related party accounts receivable |
|
|
( |
) |
|
|
( |
) |
Prepaid expenses and other assets |
|
|
|
|
|
|
||
Accounts payable |
|
|
( |
) |
|
|
|
|
Related party accounts payable |
|
|
|
|
|
|
||
Accrued liabilities and other liabilities |
|
|
|
|
|
( |
) |
|
Taxes payable |
|
|
|
|
|
( |
) |
|
Net cash provided by operating activities |
|
|
|
|
|
|
||
|
|
|
|
|
|
|
||
Cash flows from investing activities |
|
|
|
|
|
|
||
Acquisitions |
|
|
( |
) |
|
|
( |
) |
Capital expenditures |
|
|
( |
) |
|
|
( |
) |
Proceeds from disposal of assets |
|
|
|
|
|
|
||
Net cash used in investing activities |
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
|
|
||
Cash flows from financing activities |
|
|
|
|
|
|
||
Proceeds from debt |
|
|
|
|
|
|
||
Repayments of debt |
|
|
( |
) |
|
|
( |
) |
Dividends, dividend equivalents and distributions paid |
|
|
( |
) |
|
|
( |
) |
Offering costs |
|
|
|
|
|
( |
) |
|
Other |
|
|
( |
) |
|
|
( |
) |
Net cash used in financing activities |
|
|
( |
) |
|
|
( |
) |
Net decrease in cash and cash equivalents |
|
|
( |
) |
|
|
( |
) |
Cash and cash equivalents - beginning of period |
|
|
|
|
|
|
||
Cash and cash equivalents - end of period |
|
$ |
|
|
$ |
|
||
See accompanying notes to the unaudited condensed consolidated financial statements
9
LandBridge Company LLC and Subsidiaries
Notes to the Unaudited Condensed Consolidated Financial Statements
LandBridge Company LLC (the “Company,” “LandBridge,” “we,” “our” and “us”) is headquartered in Houston, Texas and was formed on September 27, 2023 as a Delaware limited liability company.
We are a holding company whose principal asset consists of membership interests (“OpCo Units”) in DBR Land Holdings LLC (“OpCo”). As the managing member of OpCo and its subsidiaries, we operate and control all of the business and affairs of OpCo and its subsidiaries, and through OpCo and its subsidiaries, conduct our business. The Company has no other operations, cash flows, or material assets or liabilities other than our investment in OpCo and certain deferred tax assets and liabilities. Refer to Note 6 — Income Taxes for additional information.
We generate revenue primarily from the use of our surface acreage, the sale of resources from our land and oil and natural gas royalties. The use of surface acreage generally includes easements or leases and various surface use royalties. Sale of resources generally includes sales of brackish water and other surface composite materials. Our assets consist mainly of fee surface acreage, oil and natural gas mineral interests, brackish water wells and ponds and related facilities.
We own surface acreage in the Delaware Basin and the adjacent Central Basin Platform in Texas and New Mexico and oil and natural gas mineral interests in the Delaware Basin in Texas.
Basis of Presentation
The accompanying unaudited condensed consolidated financial statements (the “Financial Statements”) of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and in accordance with Rule 10-01 of Regulation S-X and reflect all adjustments, consisting of normal recurring adjustments which are, in the opinion of management, necessary for a fair statement of the financial results for the interim periods presented. Accordingly, these Financial Statements should be read in conjunction with the Company’s annual audited financial statements and accompanying notes included in our Annual Report on Form 10-K for the year ended December 31, 2025 (the “2025 Form 10-K”). When necessary, certain reclassifications are made to prior period financial information to conform with current period presentation. All dollar amounts in the Financial Statements and tables in the notes are stated in thousands of dollars unless otherwise indicated.
Results of operations for the three months ended March 31, 2026 are not necessarily indicative of the results of operations that will be realized for the year ending December 31, 2026.
Consolidation
We have determined that the members with equity at risk in OpCo lack the authority, through voting rights or similar rights, to direct the activities that most significantly impact OpCo’s economic performance; therefore, OpCo is considered a variable interest entity. As the managing member of OpCo, we operate and control all of the business and affairs of OpCo and also have the obligation to absorb losses or the right to receive benefits that could be potentially significant to us. Therefore, we are considered the primary beneficiary and consolidate OpCo for accounting purposes.
Segment Information
The Company operates in a single operating and reportable segment. All of our assets are located in the United States. Accounting Standards Codification (“ASC”) Topic 280, Segment Reporting, defines characteristics of operating segments as being components of an enterprise in which separate discrete financial information is available for evaluation by the chief operating decision maker (“CODM”) in making decisions on how to allocate resources and assess performance. The Company’s
10
LandBridge Company LLC and Subsidiaries
Notes to the Unaudited Condensed Consolidated Financial Statements (Continued)
other metrics which are regularly provided to the CODM and used by the CODM to make decisions regarding the Company’s business, including resource allocation and performance assessment in our condensed consolidated statements of operations. The CODM does not receive additional expenses other than those presented within our condensed consolidated statements of operations.
Significant Accounting Policies
As of March 31, 2026, the Company’s significant accounting policies are consistent with those discussed in Note 2 — Summary of Significant Accounting Policies of its consolidated financial statements contained in the 2025 Form 10-K. There were no significant updates or revisions to our accounting policies during the three months ended March 31, 2026.
Recent Accounting Pronouncements Not Yet Adopted
In January 2025, the Financial Accounting Standards Board (“FASB”) issued ASU 2025-01, Income Statement — Reporting Comprehensive Income — Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date, which clarifies the effective date of ASU 2024-03 and does not change its underlying disclosure requirements. ASU 2024-03 requires tabular disclosure of specified natural expenses within certain income statement expense captions, a qualitative description of amounts not separately disaggregated and disclosure of our definition and total amount of selling expenses. We plan to adopt this guidance and comply with the disclosure requirements when it becomes mandatorily effective for annual periods beginning after December 15, 2026. The adoption of ASU 2024-03 is not expected to have any effect on the Company’s financial position, results of operations or cash flows as it modifies disclosure requirements only.
In December 2025, FASB issued ASU 2025-12, Codification Improvements, which includes updates for a broad range of Accounting Topics arising from technical corrections, unintended application of the Codification, clarifications and other minor improvements. We plan to adopt this guidance and comply with the disclosure requirements when it becomes mandatorily effective for annual periods beginning after December 15, 2026. We are currently assessing the impact of this standard on our Financial Statements and related disclosures.
Our contract liabilities primarily relate to revenue sharing arrangements or other surface use agreements where the Company may receive payments from customers in advance of the related performance obligation being satisfied. During the three months ended March 31, 2026, the Company recognized revenue of $
Supplemental cash flow information is as follows:
|
|
Three Months Ended March 31, |
|
|||||
|
|
2026 |
|
|
2025 |
|
||
Supplemental cash flow information: |
|
|
|
|
|
|
||
Cash (refunded) paid for income taxes, net |
|
$ |
( |
) |
|
$ |
|
|
Cash paid for interest |
|
$ |
|
|
$ |
|
||
During the first quarter of 2026, the Company acquired approximately
11
LandBridge Company LLC and Subsidiaries
Notes to the Unaudited Condensed Consolidated Financial Statements (Continued)
As of March 31, 2026 and December 31, 2025, property, plant and equipment, net of accumulated depreciation and depletion consisted of the following:
|
|
March 31, |
|
|
December 31, |
|
||
|
|
2026 |
|
|
2025 |
|
||
Oil and natural gas properties |
|
|
|
|
|
|
||
Proved |
|
$ |
|
|
$ |
|
||
Unproved |
|
|
|
|
|
|
||
Total oil and natural gas properties |
|
|
|
|
|
|
||
Land and land improvements |
|
|
|
|
|
|
||
Water wells, pipelines, facilities, ponds and related equipment |
|
|
|
|
|
|
||
Buildings, vehicles, equipment, furniture and other |
|
|
|
|
|
|
||
Construction in progress |
|
|
|
|
|
|
||
Total property, plant and equipment |
|
|
|
|
|
|
||
Less: accumulated depreciation and depletion |
|
|
( |
) |
|
|
( |
) |
Total property, plant and equipment, net |
|
$ |
|
|
$ |
|
||
Depreciation expense and depletion expense for the three months ended March 31, 2026 and 2025 are shown in the following table:
|
|
Three Months Ended March 31, |
|
|||||
|
|
2026 |
|
|
2025 |
|
||
Depreciation expense |
|
$ |
|
|
$ |
|
||
Depletion expense |
|
|
|
|
|
|
||
Total depreciation and depletion expense |
|
$ |
|
|
$ |
|
||
In calculating the provision for income taxes on an interim basis, the Company uses an estimate of the annual effective tax rate based upon currently known facts and circumstances and applies that rate to its year-to-date earnings or losses. The Company’s effective tax rate is based on expected income and statutory tax rates and takes into consideration permanent differences between financial statement and tax return income applicable to the Company in the various jurisdictions in which the Company operates. The effect of discrete items, such as changes in estimates, changes in enacted tax laws or rates or tax status, and unusual or infrequently occurring events, is recognized in the interim period in which the discrete item occurs. The accounting estimates used to compute the provision for income taxes may change as new events occur, additional information is obtained, or as the result of new judicial interpretations or regulatory or tax law changes.
The calculation of our effective tax rate was as follows for the three months ended March 31, 2026 and 2025:
|
|
Three Months Ended March 31, |
|
|||||
|
|
2026 |
|
|
2025 |
|
||
Income before income taxes |
|
$ |
|
|
$ |
|
||
Income tax expense |
|
$ |
|
|
$ |
|
||
Effective tax rate |
|
|
% |
|
|
% |
||
The effective tax rates for the three months ended March 31, 2026 and 2025 differed from the statutory rate of
12
LandBridge Company LLC and Subsidiaries
Notes to the Unaudited Condensed Consolidated Financial Statements (Continued)
As of March 31, 2026 and December 31, 2025, our debt consisted of the following:
|
|
March 31, |
|
|
December 31, |
|
||
|
|
2026 |
|
|
2025 |
|
||
Notes |
|
$ |
|
|
$ |
|
||
2025 Revolving Credit Facility |
|
|
|
|
|
|
||
Other |
|
|
|
|
|
|
||
Total debt |
|
|
|
|
|
|
||
Current portion of long-term debt |
|
|
( |
) |
|
|
( |
) |
Unamortized debt issuance costs |
|
|
( |
) |
|
|
( |
) |
Total long-term debt |
|
$ |
|
|
$ |
|
||
Notes
In November 2025, OpCo, as the issuer, issued $
In connection with the offering of the Notes, OpCo and each of the Guarantors (as defined below) entered into an indenture (the “Indenture”), with UMB Bank, N.A., as trustee, relating to the issuance of the Notes. The Indenture contains customary terms, events of default and covenants relating to, among other things, the incurrence of debt, the payment of dividends or similar restricted payments, undertaking transactions with OpCo’s unrestricted affiliates, and limitations on asset sales.
The Notes are guaranteed (the “Guarantees”), jointly and severally, on a senior unsecured basis by all of OpCo’s existing subsidiaries (collectively, the “Guarantors”).
At any time prior to December 1, 2027, OpCo may on any one or more occasions redeem up to
If a Change of Control (as defined in the Indenture) occurs with respect to any series of notes (along with a downgrade of the notes by two rating agencies), OpCo may be required to offer to purchase the Notes at a purchase price equal to
The Notes and the Guarantees rank equally in right of payment with all of OpCo’s and the Guarantors’ existing and future senior indebtedness and senior to all of the OpCo’s and the Guarantors’ future subordinated indebtedness. The Notes and the Guarantees are effectively subordinated in right of payment to all of OpCo’s and the Guarantors’ existing and future secured debt, including debt under OpCo’s 2025 Revolving Credit Facility (as defined below), to the extent of the value of the assets securing such debt, and will be structurally subordinated to all liabilities of any future subsidiaries of OpCo’s that do not guarantee the Notes.
|
|
March 31, 2026 |
|
|
December 31, 2025 |
|
||||||||||
|
|
Carrying Amount |
|
|
Estimated Fair Value (1) |
|
|
Carrying Amount |
|
|
Estimated Fair Value (1) |
|
||||
Notes |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
2025 Revolving Credit Facility
In November 2025, OpCo entered into a revolving credit agreement (the “2025 Revolving Credit Facility”) which provides for lender commitments of $
13
LandBridge Company LLC and Subsidiaries
Notes to the Unaudited Condensed Consolidated Financial Statements (Continued)
is also guaranteed by each of its subsidiaries. The weighted average interest rate on the total amount of borrowings under the 2025 Revolving Credit Facility for the three months ended March 31, 2026 was
Short-term debt issuance costs of $
The 2025 Revolving Credit Facility provides for revolving borrowings subject to compliance with various financial and other covenants common in such agreements that apply to OpCo and its restricted subsidiaries, including (i) a minimum interest coverage ratio of
These covenants are subject to exceptions and qualifications provided in the 2025 Revolving Credit Facility, including the ability to make unlimited restricted payments subject to (i) a maximum net total leverage ratio of less than
Principal amounts borrowed under the 2025 Revolving Credit Facility may be prepaid from time to time and commitments thereunder may be terminated without premium or penalty. Any principal amounts outstanding on the Maturity Date will become due and payable on such date.
At OpCo’s election, principal amounts under the 2025 Revolving Credit Facility may be borrowed as Term SOFR Loans or Base Rate Loans. Term SOFR Loans under the 2025 Revolving Credit Facility bear interest at a variable rate equal to Term SOFR for the applicable tenor plus a leverage-based applicable margin between
Shareholders’ Equity
Holders of Class A shares and Class B shares vote together as a single class on all matters presented to our shareholders, except as otherwise required by applicable law or by our First Amended & Restated Limited Liability Company Agreement, dated as of July 1, 2024. Class B shares are not entitled to participate in any dividends our Board may declare.
Share Repurchase Program
On February 24, 2026, our board of directors approved a share repurchase program. The program permits the repurchase of up to $
14
LandBridge Company LLC and Subsidiaries
Notes to the Unaudited Condensed Consolidated Financial Statements (Continued)
Cancellations
In lieu of the payment of tax distributions by OpCo to the Company in excess of the Company’s then-current income tax obligation, OpCo and the Company cancelled OpCo Units held by Class B shareholders, along with a corresponding number of Class B shares. The number of cancelled OpCo Units was determined based on the Company’s volume weighted average Class A share price for the
|
|
|
|
|
|
Three Months Ended March 31, |
|
|||||
Class B Share Cancellations Due to Tax Distributions |
|
|
|
2026 |
|
|
2025 |
|
||||
First Quarter |
|
|
|
|
|
|
|
|
|
|
||
Total |
|
|
|
|
|
|
|
|
|
|
||
Dividends and Distributions
(in thousands, except for per share amounts) |
|
Date of Record |
|
Dividends Paid to Class A Shareholders |
|
|
Distributions |
|
|
Rate Per |
|
|||
2026: |
|
|
|
|
|
|
|
|
|
|
|
|||
First Quarter |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Total |
|
|
|
$ |
|
|
$ |
|
|
|
|
|||
2025: |
|
|
|
|
|
|
|
|
|
|
|
|||
First Quarter |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Total |
|
|
|
$ |
|
|
$ |
|
|
|
|
|||
|
|
|
|
|
|
Three Months Ended March 31, |
|
|||||
Tax Distributions to OpCo Unitholders(1) |
|
|
|
|
|
2026 |
|
|
2025 |
|
||
First Quarter |
|
|
|
|
|
$ |
|
|
$ |
|
||
Total |
|
|
|
|
|
$ |
|
|
$ |
|
||
On
On May 5, 2026, our board of directors approved a payment for tax distributions from OpCo to OpCo unitholders (other than the Company) in the amount of $
A summary of the Company’s aggregate share-based compensation expense is shown below. Share-based compensation expense related to incentive units allocated to the Company is recognized as a deemed non-cash contribution to shareholders’ equity on the condensed consolidated balance sheets. Substantially all share-based compensation expense is included in general and administrative expense on the condensed consolidated statements of operations.
|
|
Three Months Ended March 31, |
|
|||||
|
|
2026 |
|
|
2025 |
|
||
Incentive Units |
|
$ |
|
|
$ |
|
||
Restricted Share Units |
|
|
|
|
|
|
||
Total share-based compensation expense |
|
$ |
|
|
$ |
|
||
15
LandBridge Company LLC and Subsidiaries
Notes to the Unaudited Condensed Consolidated Financial Statements (Continued)
Incentive Units
A summary of Incentive Unit activity during the three months ended March 31, 2026 is shown in the following table:
|
|
Incentive Units |
|
|
Weighted Average Grant Date Fair Value |
|
|
Weighted Average Remaining Contractual Term (years) |
|
|||
Outstanding at December 31, 2025 |
|
|
|
|
$ |
|
|
|
|
|||
Granted |
|
|
|
|
|
|
|
|
|
|||
Forfeited |
|
|
( |
) |
|
|
|
|
|
|
||
Outstanding at March 31, 2026 |
|
|
|
|
$ |
|
|
|
|
|||
As of March 31, 2026, remaining unrecognized compensation expense for the Incentive Units was $
Restricted Share Units
Under the LandBridge Company LLC Long Term Incentive Plan, participants were granted restricted share units (“RSUs”) which are subject to graded vesting generally ranging from one to three years. The fair value of the awards is based on our Class A share price on the date of grant with compensation expense recognized on a straight-line basis over the applicable vesting period.
A summary of RSU activity during the three months ended March 31, 2026 is shown in the following table:
|
|
RSUs |
|
|
Weighted Average Grant Date Fair Value |
|
||
Nonvested at December 31, 2025 |
|
|
|
|
$ |
|
||
Granted |
|
|
|
|
|
|
||
Forfeited |
|
|
( |
) |
|
|
|
|
Vested |
|
|
( |
) |
|
|
|
|
Nonvested at March 31, 2026 |
|
|
|
|
$ |
|
||
As of March 31, 2026, remaining unrecognized compensation expense for the RSUs was $
The Company’s unvested RSUs are deemed to be participating securities; therefore, the Company applies the two-class method for the calculation of basic earnings per share (“EPS”) for the Class A shares. Diluted EPS attributable to Class A shares is calculated under both the two-class method and the treasury stock method, and the more dilutive of the two calculations is presented.
Class B shares are considered potentially dilutive of Class A shares because they are convertible into Class A shares on a one-for-one basis; therefore, the Company applies the if-converted method for the calculation of diluted EPS for the Class A shares.
16
LandBridge Company LLC and Subsidiaries
Notes to the Unaudited Condensed Consolidated Financial Statements (Continued)
The following table sets forth the computation of basic and diluted EPS attributable to our Class A shares for the three months ended March 31, 2026 and 2025.
|
|
Three Months Ended March 31, |
|
|||||
(in thousands, except for share and per share amounts) |
|
2026 |
|
|
2025 |
|
||
Numerator |
|
|
|
|
|
|
||
Net income |
|
$ |
|
|
$ |
|
||
Less: Net income attributable to noncontrolling interest |
|
|
|
|
|
|
||
Net income attributable to LandBridge Company LLC |
|
|
|
|
|
|
||
Less: Earnings allocated to participating securities |
|
|
|
|
|
|
||
Basic net income attributable to LandBridge Company LLC |
|
$ |
|
|
$ |
|
||
Plus: Net income attributable to noncontrolling interest |
|
|
|
|
|
|
||
Plus: Undistributed earnings reallocation adjustment to participating securities |
|
|
|
|
|
|
||
Diluted net income attributable to shareholders |
|
$ |
|
|
$ |
|
||
|
|
|
|
|
|
|
||
Denominator |
|
|
|
|
|
|
||
Basic weighted average shares outstanding |
|
|
|
|
|
|
||
Dilutive Class B shares outstanding |
|
|
|
|
|
|
||
Diluted weighted average shares outstanding |
|
|
|
|
|
|
||
|
|
|
|
|
|
|
||
Basic net income per share of Class A shares |
|
$ |
|
|
$ |
|
||
Diluted net income per share of Class A shares |
|
$ |
|
|
$ |
|
||
Class B shares outstanding as of March 31, 2026 and 2025 were determined to be dilutive and have been included in the computation of diluted net income per share. In addition, weighted-average RSUs of
|
|
|
Three Months Ended March 31, |
|
|||||
|
Financial Statements Location |
|
2026 |
|
|
2025 |
|
||
Revenues - Related Party |
|
|
|
|
|
|
|
||
Affiliate facility access agreements |
Surface use royalties |
|
$ |
|
|
$ |
|
||
Lease development agreement |
Easements and other surface-related revenues |
|
|
|
|
|
- |
|
|
Affiliate facility access agreements |
Easements and other surface-related revenues |
|
|
|
|
|
|
||
Affiliate facility access agreements |
Resource royalties |
|
|
|
|
|
|
||
Affiliate facility access agreements |
Resource sales |
|
|
|
|
|
|
||
|
|
|
$ |
|
|
$ |
|
||
|
|
|
March 31, |
|
|
December 31, |
|
||
|
Financial Statements Location |
|
2026 |
|
|
2025 |
|
||
Accounts Receivable - Related Party |
|
|
|
|
|
|
|
||
Affiliate facility access agreements |
Related party accounts receivable |
|
$ |
|
|
$ |
|
||
Lease development agreement |
Related party accounts receivable |
|
|
|
|
|
|
||
|
|
|
$ |
|
|
$ |
|
||
|
|
|
|
|
|
|
|
||
Accounts Payable - Related Party |
|
|
|
|
|
|
|
||
Shared services agreement |
Related party accounts payable |
|
$ |
|
|
$ |
|
||
Shared Services Agreement
17
LandBridge Company LLC and Subsidiaries
Notes to the Unaudited Condensed Consolidated Financial Statements (Continued)
The Company is party to a services agreement with WaterBridge Operating LLC (“WaterBridge Operating”), an affiliate of the Company, and other affiliates pursuant to which the Company receives common management and general, administrative, overhead and operating services in support of the Company’s operations and development activities. The Company reimburses all fees incurred by WaterBridge Operating or its affiliates for services provided to the Company under the agreement. For shared services, the basis of allocation is an approximation of time spent on activities supporting the Company. For shared expenses paid on behalf of the Company, the costs are directly allocated to the Company based on its pro rata share of the expenses. For the three months ended March 31, 2026 and 2025, the Company paid approximately $
Affiliate Facility Access Agreements
DBR Land LLC, a Delaware limited liability company and subsidiary of the Company (“DBR”), is party to facility access, surface use agreements and easements and rights-of-way with subsidiaries of WaterBridge Infrastructure LLC (“WaterBridge”). Under these agreements, the Company has granted such subsidiaries of WaterBridge certain rights to construct, operate and maintain produced water, brackish water and waste reclamation facilities on our land, as applicable, in the ordinary course of business. Each of these agreements includes a standard fee schedule and provision for specified surface use activities. Each of these agreements also includes a provision for royalties related to certain specified activities.
Legacy Financial Sponsor Services Agreement
Five Point Infrastructure LLC (“Five Point”), our legacy financial sponsor, invoices the Company, and the Company reimburses Five Point in cash, for expenses associated with the Company’s use of Five Point’s geographic information system (“GIS”) and certain legal services provided by Five Point. The reimbursement includes allocated Five Point personnel costs and third-party software and hardware expenses and is determined based on the Company’s use of Five Point’s total services for such period. For the three months ended March 31, 2026 and 2025 the Company paid reimbursements to Five Point of $
PowerBridge Lease Development Agreement
DBR is party to a lease development agreement with PowerBridge LLC, a portfolio company of Five Point (“PowerBridge”). The lease development agreement provides PowerBridge the option to lease up to approximately
During April 2026, the Company used cash on hand to acquire approximately
18
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis of our financial condition and results of operations is based on, and should be read in conjunction with, the audited consolidated financial statements and related notes in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025 (the “2025 Form 10-K”) and the accompanying unaudited condensed consolidated financial statements (“Financial Statements”) and notes thereto in Part I, Item 1. “Financial Statements” of this Quarterly Report.
The following discussion contains “forward-looking statements” reflecting our current expectations, future plans, estimates, beliefs and assumptions concerning events and financial trends that may be outside our control and may affect our future results of operations, cash flows and financial position. Actual results and the timing of events may differ materially from those contained in these forward-looking statements due to a number of factors, which include those factors discussed below and elsewhere in this Quarterly Report, particularly in the sections titled “Risk Factors” in the 2025 Form 10-K and “Cautionary Note Regarding Forward-Looking Statements,” all of which are difficult to predict. In light of these risks, uncertainties and assumptions, actual results may differ materially from such forward-looking statements. We do not undertake any obligation to publicly update any forward-looking statements except as otherwise required by applicable law.
Overview
Land is a fundamental requirement for the development and production of energy and the construction and operation of critical infrastructure. As of March 31, 2026, we owned or managed more than 315,000 surface acres in the Delaware Basin and adjacent Central Basin Platform sub-regions in the prolific Permian Basin, which is the most active area for oil and gas exploration and development in the United States. Access to expansive surface acreage is necessary for oil and natural gas development, solar power generation, power storage, digital infrastructure and non-hazardous oilfield reclamation and solid waste facilities. Further, the significant industrial economy that exists to service and support energy and infrastructure development requires access to surface acreage to support those activities. Our strategy is to actively manage our land and resources to support and encourage energy and infrastructure development and other land uses that will generate long-term revenue and Free Cash Flow for us and returns to our shareholders.
We share a legacy financial sponsor, Five Point, and our management team with WaterBridge. WaterBridge is one of the largest water midstream companies in the United States and operates a large-scale network of pipelines and other infrastructure in the Delaware Basin. These relationships provide our shared management team visibility into key areas of oil and natural gas production and long-term trends, which we leverage to encourage and support the development of critical infrastructure on our land and generate additional revenue for us. We receive royalties for each barrel of produced water that WaterBridge handles on our land as well as surface use payments for infrastructure constructed on our land.
Market Condition and Outlook
Over the last several years, the global economy and the oil and natural gas industry in particular has faced substantial volatility. This has been driven by geopolitical conflicts, domestic political uncertainties, the enactment of the OBBBA, potential U.S. and foreign tariffs, evolving international trade policies and conflicts, OPEC+ production decisions, persistent elevated inflation, higher interest rates and capital costs and continued industry consolidation. In the Delaware Basin, sustained high levels of exploration and production activity have led to labor shortages and supply chain disruptions. These challenges have directly impacted drilling, completion and production efforts by E&P companies. Additionally, volatility in commodity prices — particularly WTI crude oil and Henry Hub natural gas benchmarks, with especially pronounced volatility in realized prices at the Waha Hub — have influenced E&P operators’ development plans, rig counts and overall activity levels. More recently, the ongoing conflict in Iran, including the disruption of the global oil supply through the Strait of Hormuz, has significantly driven up commodity prices, increased inflationary pressures and increased the volatility of oil and gas prices globally, which may influence E&P operators’ drilling and production decisions.
Broader macroeconomic and policy developments, including provisions in the OBBBA (which extended certain tax incentives beneficial to fossil fuels while introducing new uncertainties) and shifts in international trade policies (such as the imposition of tariffs or product restrictions), could impair our customers’ ability to secure raw materials, equipment or financing. This, in turn, may reduce their operational activity on or around our surface acreage in the Delaware Basin. Any escalation in U.S. trade disruptions or retaliatory measures from other nations could further adversely affect demand for our land.
Despite these challenges, we believe the outlook for energy and infrastructure development, particularly within the Permian Basin, remains positive. Additionally, such development may be aided by President Trump’s various Executive Orders relating to energy production, which include expedited approvals for energy resource infrastructure as well as the removal of various impediments to the development of domestic energy resources, including oil and gas. We are well-positioned to benefit from the continued build out of supporting infrastructure in the region which will require access to surface acreage. In addition, we expect to benefit from advancements in alternative forms of energy. Alternative energy technologies often require access to material surface acreage and supporting infrastructure, which we are also well positioned to provide and facilitate.
19
First Quarter Results
Significant financial and operating highlights for the first quarter of 2026 include:
Factors Affecting the Comparability of Our Results of Operations
Our future results of operations may not be directly comparable to our historical results of operations for the periods presented, primarily for the reasons described below.
Acquisitions
Subsequent to the first quarter of 2025, we acquired approximately 39,000 acres, inclusive of approximately 12,000 leasehold acres and approximately 3,600 acres subject to a long-term management agreement, through various acquisitions including the 1918 Acquisition, which will impact the comparability of our results of operations. We expect to pursue opportunistic future land acquisitions that complement or expand our current land position, which may impact the comparability of our results.
Credit Facility and Notes
During November 2025, OpCo entered into the 2025 Revolving Credit Facility with available capacity of $275.0 million which matures on the earlier of (a) June 30, 2030, and (b) the date that is 91 days prior to the stated maturity of the Notes, if, on such date, the outstanding principal amount of the Notes is greater than $50 million.
Additionally, during November 2025, OpCo issued $500.0 million aggregate principal amount of 6.25% fixed-rate senior unsecured notes due 2030.
Refer to Note 7 — Debt within the notes to our Unaudited Condensed Consolidated Financial Statements for additional information on our 2025 Revolving Credit Facility and Notes.
20
Results of Operations
Three Months Ended March 31, 2026 Compared to Three Months Ended March 31, 2025
|
Three Months Ended March 31, |
|
|
Variance |
|
||||||||||
|
2026 |
|
|
2025 |
|
|
Amount |
|
|
Percent |
|
||||
Revenues: |
|
|
|
|
|
|
|
|
|||||||
Easements and other surface-related revenues |
$ |
14,763 |
|
|
$ |
8,772 |
|
|
$ |
5,991 |
|
|
|
68 |
% |
Surface use royalties |
|
22,232 |
|
|
|
17,437 |
|
|
|
4,795 |
|
|
|
27 |
% |
Resource sales |
|
5,430 |
|
|
|
7,351 |
|
|
|
(1,921 |
) |
|
|
(26 |
%) |
Resource royalties |
|
5,543 |
|
|
|
7,005 |
|
|
|
(1,462 |
) |
|
|
(21 |
%) |
Oil and gas royalties |
|
2,972 |
|
|
|
3,386 |
|
|
|
(414 |
) |
|
|
(12 |
%) |
Other |
|
65 |
|
|
|
- |
|
|
|
65 |
|
|
NM |
|
|
Total revenues |
|
51,005 |
|
|
|
43,951 |
|
|
|
7,054 |
|
|
|
16 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Resource sales-related expense |
|
397 |
|
|
|
458 |
|
|
|
(61 |
) |
|
|
(13 |
%) |
Other operating and maintenance expense |
|
1,269 |
|
|
|
1,127 |
|
|
|
142 |
|
|
|
13 |
% |
General and administrative expense |
|
15,726 |
|
|
|
14,728 |
|
|
|
998 |
|
|
|
7 |
% |
Depreciation, depletion and amortization |
|
4,425 |
|
|
|
2,601 |
|
|
|
1,824 |
|
|
|
70 |
% |
Other operating expense, net |
|
10 |
|
|
|
- |
|
|
|
10 |
|
|
NM |
|
|
Operating income |
|
29,178 |
|
|
|
25,037 |
|
|
|
4,141 |
|
|
|
17 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Interest expense |
|
9,511 |
|
|
|
7,977 |
|
|
|
1,534 |
|
|
|
19 |
% |
Other loss |
|
10 |
|
|
|
- |
|
|
|
10 |
|
|
NM |
|
|
Income from operations before taxes |
|
19,657 |
|
|
|
17,060 |
|
|
|
2,597 |
|
|
|
15 |
% |
Income tax expense |
|
1,789 |
|
|
|
1,601 |
|
|
|
188 |
|
|
|
12 |
% |
Net income |
$ |
17,868 |
|
|
$ |
15,459 |
|
|
$ |
2,409 |
|
|
|
16 |
% |
Total revenues. Total revenues increased by $7.1 million. Please see our discussion below regarding comparative period variances in revenue sources.
Easements and other surface-related revenues. Easements and other surface-related revenues increased by $6.0 million. The increase was primarily attributable to oil and natural gas gathering and transportation pipelines and produced water handling infrastructure of $2.9 million, $2.6 million other surface income primarily related to a data center lease development agreement option period payment and $0.9 million related to road easements, partially offset by lower overhead electric easements of $0.2 million and surface and subsurface drilling location easements of $0.2 million for the three months ended March 31, 2026, as compared to the three months ended March 31, 2025.
Surface use royalties. Surface use royalties increased by $4.8 million. The increase was primarily attributable to increased produced water handling and associated skim oil royalties of $4.7 million and solid waste disposal and reclamation royalties of $0.1 million on our surface for the three months ended March 31, 2026, as compared to the three months ended March 31, 2025. The increase associated with produced water handling royalties is primarily driven by a significant increase in produced water handling volume of approximately 311 Mbbl/d. The volume and associated revenue increase was primarily attributable to the 1918 Acquisition in 2025 coupled with organic growth on our overall surface acreage.
Resource sales. Resource sales decreased by $1.9 million. Brackish water sales decreased $2.7 million for the three months ended March 31, 2026, as compared to the three months ended March 31, 2025. Brackish water sales volume decreased by 5.7 million barrels, or 47%, to 6.5 million barrels for the three months ended March 31, 2026, as compared to 12.2 million barrels for the three months ended March 31, 2025, partially offset by a per unit sales price increase of approximately 4%, primarily driven by the customer contract mix for the three months ended March 31, 2026, as compared to the three months ended March 31, 2025. Caliche sales increased $0.8 million for the same comparative period, primarily due to construction of energy infrastructure assets in the areas surrounding our surface acreage.
Resource royalties. Resource royalties decreased by $1.5 million. The decrease was primarily attributable to lower brackish water royalties of $1.2 million and sand mine royalties of $0.3 million primarily related to lower throughput volumes.
21
|
Three Months Ended March 31, |
|
|
Variance |
|
||||||||||
|
2026 |
|
|
2025 |
|
|
Amount |
|
|
Percent |
|
||||
General and administrative expense: |
|
|
|
|
|
|
|
|
|
|
|
||||
General and administrative expense, excluding share-based compensation |
$ |
4,528 |
|
|
$ |
3,647 |
|
|
$ |
881 |
|
|
|
24 |
% |
Share-based compensation |
|
11,198 |
|
|
|
11,081 |
|
|
|
117 |
|
|
|
1 |
% |
Total general and administrative expense |
$ |
15,726 |
|
|
$ |
14,728 |
|
|
$ |
998 |
|
|
|
7 |
% |
General and administrative expense. General and administrative expense, excluding share-based compensation expense, increased by $0.9 million. The increase was primarily attributable to increased professional services fees of $0.6 million primarily associated with legal expense related to commercial opportunities and personnel-related expenses of $0.3 million due to incremental personnel headcount for the three months ended March 31, 2026, as compared to the three months ended March 31, 2025.
Depreciation, depletion and amortization. Depreciation, depletion and amortization increased by $1.8 million. The increase was primarily attributable to amortization of intangibles acquired in the 1918 Acquisition during 2025.
|
Three Months Ended March 31, |
|
|
Variance |
|
||||||||||
|
2026 |
|
|
2025 |
|
|
Amount |
|
|
Percent |
|
||||
Interest on debt |
$ |
8,946 |
|
|
$ |
7,438 |
|
|
$ |
1,508 |
|
|
|
20 |
% |
Debt issuance costs amortization and write offs |
|
565 |
|
|
|
539 |
|
|
|
26 |
|
|
|
5 |
% |
Total interest expense |
$ |
9,511 |
|
|
$ |
7,977 |
|
|
$ |
1,534 |
|
|
|
19 |
% |
Interest expense. Interest expense, increased by $1.5 million. The increase was primarily attributable to a higher weighted average debt balance during the three months ended March 31, 2026, as compared to borrowings under our then-existing debt instruments for the three months ended March 31, 2025 partially offset by lower interest on the Notes and 2025 Revolving Credit Facility.
Non-GAAP Financial Measures
We use certain non-GAAP performance measures to evaluate current and past performance and prospects for the future to supplement our financial information presented in accordance with GAAP. Although these non-GAAP financial and liquidity measures are important factors in assessing our operating results, profitability and performance they should not be considered in isolation or as a substitute for net income or gross margin or any other measures presented under GAAP.
Adjusted EBITDA and Adjusted EBITDA Margin
Adjusted EBITDA and Adjusted EBITDA Margin are used by our management and by external users of our financial statements, such as investors, research analysts and others, to assess the financial performance of our assets over the long term to generate sufficient cash to return capital to equity holders or service indebtedness. We define Adjusted EBITDA as net income (loss) before interest; taxes; depreciation, depletion and amortization; share-based compensation; non-recurring transaction-related expenses; litigation settlements and expenses incurred outside of the ordinary course of business; debt modification and extinguishment costs; gains or losses on disposal of assets; and other non-cash or non-recurring expenses. We define Adjusted EBITDA Margin as Adjusted EBITDA divided by total revenues.
We exclude the items listed above from net income (loss) in arriving at Adjusted EBITDA and Adjusted EBITDA Margin because these amounts can vary substantially from company to company within our industry depending upon accounting methods, book values of assets, capital structures and the method by which the assets were acquired.
22
The following table sets forth a reconciliation of net income as determined in accordance with GAAP to Adjusted EBITDA and Adjusted EBITDA Margin for the periods indicated.
|
|
Three Months Ended March 31, |
|
|||||
|
|
2026 |
|
|
2025 |
|
||
Net income |
|
$ |
17,868 |
|
|
$ |
15,459 |
|
Adjustments: |
|
|
|
|
|
|
||
Depreciation, depletion and amortization |
|
|
4,425 |
|
|
|
2,601 |
|
Interest expense |
|
|
9,511 |
|
|
|
7,977 |
|
Income tax expense |
|
|
1,789 |
|
|
|
1,601 |
|
EBITDA |
|
|
33,593 |
|
|
|
27,638 |
|
Adjustments: |
|
|
|
|
|
|
||
Share-based compensation - Incentive Units |
|
|
9,002 |
|
|
|
8,945 |
|
Share-based compensation - RSUs |
|
|
2,262 |
|
|
|
2,195 |
|
Adjusted EBITDA |
|
$ |
44,857 |
|
|
$ |
38,778 |
|
Net income margin |
|
|
35 |
% |
|
|
35 |
% |
Adjusted EBITDA Margin |
|
|
88 |
% |
|
|
88 |
% |
Free Cash Flow and Free Cash Flow Margin
Free Cash Flow and Free Cash Flow Margin are used by our management and by external users of our financial statements, such as investors, research analysts and others, to assess our ability to repay our indebtedness, return capital to our shareholders and fund potential acquisitions without access to external sources of financing for such purposes. We define Free Cash Flow as cash flow from operating activities less investment in capital expenditures.
The following table sets forth a reconciliation of cash flows from operating activities determined in accordance with GAAP to Free Cash Flow and Free Cash Flow Margin, respectively, for the periods indicated.
|
|
Three Months Ended March 31, |
|
|||||
|
|
2026 |
|
|
2025 |
|
||
Net cash provided by operating activities |
|
$ |
41,120 |
|
|
$ |
15,913 |
|
Net cash used in investing activities |
|
|
(2,148 |
) |
|
|
(17,867 |
) |
Cash used in operating and investing activities |
|
|
38,972 |
|
|
|
(1,954 |
) |
Adjustments: |
|
|
|
|
|
|
||
Acquisitions |
|
|
1,995 |
|
|
|
17,818 |
|
Proceeds from disposal of assets |
|
|
(27 |
) |
|
|
(20 |
) |
Free Cash Flow |
|
$ |
40,940 |
|
|
$ |
15,844 |
|
Operating cash flow margin (1) |
|
|
81 |
% |
|
|
36 |
% |
Free Cash Flow Margin |
|
|
80 |
% |
|
|
36 |
% |
Liquidity and Capital Resources
Overview
Our primary sources of liquidity are cash flows from operating activities and, if required, proceeds from borrowings under the 2025 Revolving Credit Facility. Our primary liquidity and capital requirements will be for our operating expenses, servicing of our debt, the payment of dividends to our shareholders, general company needs and investing in our business, including the potential acquisition of additional surface acreage. Although we believe that we will be able to partially or fully fund our short-term and long-term capital expenditures, working capital requirements and other capital needs with cash on hand and cash flows from operating activities, we may elect to use borrowings under the 2025 Revolving Credit Facility to finance our operating and investing activities. Refer to Note 7 — Debt within the notes to our Unaudited Condensed Consolidated Financial Statements for more information.
We strive to maintain financial flexibility and proactively monitor potential capital sources, including equity and debt financing, to meet our target liquidity and capital requirements. If market conditions were to change and our revenues were to decline significantly or operating costs were to increase, our cash flows and liquidity could be reduced and we could be required to seek alternative financing sources.
23
As of March 31, 2026, the Company had $500.0 million of principal debt related to our 6.25% fixed-rate senior unsecured notes due 2030 and $45.0 million of outstanding borrowings under the 2025 Revolving Credit Facility. As of March 31, 2026, the Company had $259.7 million of liquidity comprised of the $230.0 million of available borrowing capacity under the 2025 Revolving Credit Facility, and $29.7 million of cash and cash equivalents.
Dividends and Distributions
(in thousands, except for per share amounts) |
Date of Record |
|
Dividends Paid to Class A Shareholders |
|
|
Distributions |
|
|
Rate Per |
|
|||
2026: |
|
|
|
|
|
|
|
|
|
|
|||
First Quarter |
March 5, 2026 |
|
$ |
3,341 |
|
|
$ |
5,910 |
|
|
$ |
0.12 |
|
Total |
|
|
$ |
3,341 |
|
|
$ |
5,910 |
|
|
|
|
|
2025: |
|
|
|
|
|
|
|
|
|
|
|||
First Quarter |
March 6, 2025 |
|
$ |
2,326 |
|
|
$ |
5,319 |
|
|
$ |
0.10 |
|
Total |
|
|
$ |
2,326 |
|
|
$ |
5,319 |
|
|
|
|
|
On May 5, 2026, our board of directors declared a dividend on our Class A shares of $0.12 per share, payable on June 18, 2026 to shareholders of record as of June 4, 2026, and a corresponding required cash distribution to OpCo unitholders.
On May 5, 2026, our board of directors approved a payment for tax distributions from OpCo to OpCo unitholders (other than the company) in the amount of $9.3 million. This amount is inclusive of OpCo unitholders’ (other than the Company) pro rata share of estimated federal income tax and an additional tax distribution in excess of the Company’s then-current income tax obligation as provided for under the OpCo LLC Agreement. This amount is expected to be paid during the second quarter of 2026.
Cash Flow
The following table summarizes our cash flow for the periods indicated:
Three Months Ended March 31, 2026 Compared to the Three Months Ended March 31, 2025
|
Three Months Ended |
|
|
Variance |
|
||||||||||
|
2026 |
|
|
2025 |
|
|
Amount |
|
|
Percent |
|
||||
Condensed Consolidated Statement of Cash Flow Data: |
|
|
|
|
|
|
|
|
|
|
|
||||
Net cash provided by operating activities |
$ |
41,120 |
|
|
$ |
15,913 |
|
|
|
25,207 |
|
|
|
158 |
% |
Net cash used in investing activities |
|
(2,148 |
) |
|
|
(17,867 |
) |
|
|
15,719 |
|
|
|
88 |
% |
Net cash used in financing activities |
|
(40,034 |
) |
|
|
(20,143 |
) |
|
|
(19,891 |
) |
|
|
(99 |
%) |
Net decrease in cash and cash equivalents |
$ |
(1,062 |
) |
|
$ |
(22,097 |
) |
|
$ |
21,035 |
|
|
|
95 |
% |
Net Cash Provided by Operating Activities. Net cash provided by operating activities increased $25.2 million. The increase was attributable to cash flow related to higher net income, net of adjustment items, of $4.3 million and an increase in cash flow attributable to working capital accounts of $20.9 million. The increase in net income, net of adjustment items, is primarily attributable to revenue growth related to continued commercialization of acreage, partially offset by higher adjustment items primarily related to higher intangibles amortization associated with the 1918 Acquisition in 2025. The increase in cash flow from working capital accounts is attributable to changes in accounts receivable primarily due to timing of acquisitions and higher interest expense accruals related to higher debt balances primarily as a result of funding acquisitions in 2025.
Net Cash Used in Investing Activities. Net cash used in investing activities decreased $15.7 million. The decrease was primarily attributable to lower acquisition and acquisition-related expenditures for the three months ended March 31, 2026 of $2.0 million as compared to $17.8 million for the three months ended March 31, 2025. See Note 4 — Asset Acquisitions within the notes to our Financial Statements.
Net Cash Used in Financing Activities. Net cash used in financing activities increased $19.9 million primarily attributable to an increase of $19.5 million in debt repayments net of borrowings. For the three months ended March 31, 2026, cash used in financing activities primarily consisted of $14.7 million of dividends, dividend equivalents and distributions paid to shareholders and $25.2 million of debt repayments. For the three months ended March 31, 2025, cash used in financing activities primarily consisted of $13.6 million of
24
dividends, dividend equivalents and distributions paid to shareholders, $5.8 million of debt repayments net of borrowings, and $0.6 million in offering costs.
Capital Requirements
We focus our business model on entering into agreements under which our customers bear substantially all of the operating and capital expenditures related to their operations on our land, while minimizing our capital requirements for both current and future commercial opportunities, resulting in the ability to create significant Free Cash Flows. Our contracts generally include inflation escalators, which, when combined with our relatively low operating and capital expenditures, may assist in mitigating our exposure to broader inflationary pressures. As a landowner, we incur the initial cost to acquire our acreage, but thereafter we incur modest development capital expenditures and operating expenses as it relates to operations on our land or our mineral and royalty interests, as such expenses are borne primarily by our customers. As a result, we expect that additional significant capital expenditures would be related to our acquisition of additional surface acreage, should we elect to do so.
The amount and allocation of future acquisition-related capital expenditures will depend upon a number of factors, including the size of the acquisition opportunity, our cash flows from operating activities and our investing and financing activities. For the three months ended March 31, 2026 and 2025, we incurred $2.0 million and $17.8 million in acquisition-related capital expenditures, respectively.
We periodically assess changes in current and projected cash flows, acquisition and divestiture activities and other factors to determine the effects on our liquidity. We believe that our cash on hand and cash flow from operating activities will provide us with sufficient liquidity to execute our current strategy. However, our ability to generate cash is subject to a number of factors that may directly or indirectly affect us, many of which are beyond our control, including commodity prices and general economic, financial, competitive, legislative, regulatory and other factors. If we require additional capital for acquisitions or other reasons, we may seek such capital through traditional borrowings under our debt instruments, offerings of debt and equity securities or other means. If we are unable to obtain funds when needed or on acceptable terms, we may not be able to complete acquisitions that may be favorable to us.
As our board of directors declares cash dividends to our Class A shareholders, we expect the dividend to be paid from Free Cash Flow. We do not currently expect to borrow funds or to adjust planned capital expenditures to finance dividends on our Class A shares. The timing, amount and financing of dividends, if any, will be subject to the discretion of our board of directors from time to time.
Share Repurchase Program
On February 24, 2026, our board of directors approved a share repurchase program. The program permits the repurchase of up to $50 million of the Company’s Class A shares through December 2027. The shares may be repurchased from time to time in open market transactions, block trades, accelerated share repurchases, or privately negotiated transactions or by any combination of such methods. The timing, as well as the number and value of shares repurchased under the program, will be determined by the Company at its discretion and will depend on a variety of factors, including management's assessment of the intrinsic value of the Company’s Class A shares, the market price of the Company’s Class A shares, general market and economic conditions, available liquidity, compliance with the Company’s debt and other agreements, applicable legal requirements, and other considerations. The Company is not obligated to purchase any shares under the share repurchase program, and the program may be suspended, modified or discontinued at any time without prior notice.
Critical Accounting Estimates
The preparation of the Financial Statements in conformity with GAAP requires management to make certain estimates and assumptions that affect the amounts reported in the Financial Statements and the accompanying notes. There have been no significant changes to our critical accounting estimates from those disclosed in our 2025 Form 10-K.
Recently Issued Accounting Pronouncements Not Yet Adopted
For a summary of recently issued accounting pronouncements, refer to Note 2 — Summary of Significant Accounting Policies within the notes to our Unaudited Condensed Consolidated Financial Statements.
Off-Balance Sheet Arrangements
We currently have no material off-balance sheet arrangements.
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Item 3. Quantitative and Qualitative Disclosures About Market Risk
Interest Rate Risks
Our ability to borrow and the rates offered by lenders can be adversely affected by deterioration in the credit markets and/or deterioration of our credit profile rating. We may elect for outstanding borrowings under the 2025 Revolving Credit Facility to accrue interest at a rate based on either the Term SOFR, or the base rate, plus an applicable margin, which exposes us to interest rate risk to the extent we have borrowings outstanding under the 2025 Revolving Credit Facility.
As of March 31, 2026, we had $45.0 million of outstanding borrowings under the 2025 Revolving Credit Facility. We are obligated to pay interest at variable rates and other customary fees on borrowings under this facility. For the three months ended March 31, 2026, the 2025 Revolving Credit Facility had a weighted average interest rate of 6.07%.
As of March 31, 2026, we also had aggregate principal amounts outstanding of $500.0 million under the Notes. Since our Notes bear interest at fixed rates and are carried at amortized cost, fluctuations in interest rates do not have any impact on our consolidated financial statements. However, the fair value of the Notes will fluctuate with movements in market interest rates, increasing in periods of declining interest rates and declining in periods of increasing interest rates.
Refer to Note 7 — Debt within the notes to our Unaudited Condensed Consolidated Financial Statements for more information.
Item 4. Controls and Procedures
Disclosure Controls and Procedures
As required by Rule 13a-15(b) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), we have evaluated, under the supervision and with the participation of management, including our principal executive officer and principal financial officer, the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of March 31, 2026. Based on such evaluation, our principal executive officer and principal financial officer have concluded that, as of such date, our disclosure controls and procedures were effective.
Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting identified in management’s evaluation pursuant to Rules 13a-15(d) or 15d-15(d) of the Exchange Act during the quarter ended March 31, 2026 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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PART II – OTHER INFORMATION
Item 1. Legal Proceedings
Due to the nature of our business, we may become, from time to time, involved in routine litigation or subject to disputes or claims related to our business activities. In the opinion of our management, there are no pending litigation, disputes or claims against us which, if decided adversely, would be expected to have a material adverse effect on our financial condition, cash flows or results of operations.
Item 1A. Risk Factors
This Quarterly Report on Form 10-Q should be read in conjunction with the risk factors disclosed under the heading “Risk Factors” in the 2025 Form 10-K. There have been no material changes to the risk factors disclosed under the heading “Risk Factors” in the 2025 Form 10-K.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
None.
Issuer Purchases of Equity Securities
Neither we nor any affiliated purchaser repurchased any of our equity securities during the period covered by this Quarterly Report.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
Not applicable.
Item 5. Other Information
(a) Disclosure in lieu of reporting on a Current Report on Form 8-K.
None.
(b) Material changes to the procedures by which security holders may recommend nominees to the board of directors.
None.
(c) Trading Arrangements and policies.
During the three months ended March 31, 2026, none of our officers (as defined in Rule 16a-1(f) under the Exchange Act) or directors
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Item 6. Exhibits
Exhibit Number |
Description |
2.1#+ |
Purchase, Sale and Contribution Agreement, dated October 3, 2025, by and among LandBridge Company LLC, DBR Land Holdings LLC, 1918 Ranch & Royalty, LLC and the other parties thereto (incorporated by reference to Exhibit 2.1 to the Company’s Quarterly Report on Form 10-Q (File No. 001-42150) filed with the SEC on November 12, 2025). |
3.1 |
Certificate of Formation of LandBridge Company LLC (incorporated by reference to Exhibit 3.1 to the Company’s Registration Statement on Form S-1 (File No. 333-279893) filed with the SEC on May 31, 2024). |
3.2 |
Amended and Restated Limited Liability Company Agreement of LandBridge Company LLC, dated as of July 1, 2024 (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K (File No. 001-42150) filed with the SEC on July 3, 2024). |
31.1* |
Certification of Chief Executive Officer of LandBridge Company LLC pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
31.2* |
Certification of Chief Financial Officer of LandBridge Company LLC pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
32.1** |
Certification of Chief Executive Officer of LandBridge Company LLC pursuant to 18 U.S.C. § 1350, as adopted pursuant to the Sarbanes-Oxley Act of 2002. |
32.2** |
Certification of Chief Financial Officer of LandBridge Company LLC pursuant to 18 U.S.C. § 1350, as adopted pursuant to the Sarbanes-Oxley Act of 2002. |
101.INS* |
XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. |
101.SCH* |
Inline XBRL Taxonomy Extension Schema With Embedded Linkbase Documents. |
104* |
Cover Page Interactive Data File (embedded within the Inline XBRL document). |
* |
Filed herewith. |
** |
Furnished herewith. |
# |
Certain schedules and exhibits to this agreement have been omitted in accordance with Item 601(a)(5) of Regulation S-K. A copy of any omitted schedule and/or exhibit will be furnished to the U.S. Securities and Exchange Commission on request. |
+ |
Certain portions of this exhibit (indicated by “[***]”) have been omitted pursuant to Item 601(b)(2) of Regulation S-K. The Company agrees to furnish supplementally a copy of any omitted information to the U.S. Securities and Exchange Commission or its staff upon request. |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
|
|
LandBridge Company LLC |
|
|
|
|
|
Date: |
May 6, 2026 |
By: |
/s/ Jason Long |
|
|
|
Jason Long |
|
|
|
Chief Executive Officer |
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