How has the data center opportunity in the Permian changed over the last 6-12 months, especially with the Alpha Digital announcement?

Sentiment for West Texas as a data center hub has grown meaningfully, with LandBridge now engaged in discussions with virtually every hyperscaler. The Alpha Digital deal validates this thesis. “if you look at the last 6 to 12 months, we've seen sentiment just grow so meaningfully where we sit today, we're engaged with discussions and negotiations and documentations with virtually every hyperscaler that's out there in some capacity.”

What is the cadence for smaller bolt-on acreage acquisitions, and how does the price per acre compare to the broader market?

LandBridge will continue to focus on smaller tuck-in acquisitions to core up its footprint. The price per acre remains competitive and in line with historical values, with no expectation of change. “We have been and will continue to be focused on these smaller tuck-in acquisitions... the price per acre here kind of remains competitive and in line with what we paid historically for similar surface positions.”

What are the drivers for the higher Q2-Q4 run rate compared to Q1, and what is the mix of ratable vs. new commercial deal revenues?

Higher run rate is driven by better visibility on surface revenues, increased produced water volumes, and a more constructive E&P environment. Most revenue is recurring, with one-time damage payments often leading to perpetual royalty streams. “We've got 3 primary tailwinds. The first, obviously, just better visibility and conviction on the opportunity set, particularly on surface revenues... The second piece is just better visibility on produced water volumes... And then finally, obviously, it's a very different macro backdrop today.”

LandBridge (LB) Q1 FY26 earnings call: guidance and Q&A

Earnings call· Mar 2026 (Q1 FY26)· Energy· May 7, 2026

Source: earnings call transcript

Executive summary

LandBridge Q1 FY26 — Raised Full-Year Guidance on Strong Commercial Pipeline and Macro Tailwinds

LandBridge commenced FY26 with results consistent with internal plans, demonstrating robust year-over-year growth in revenue and adjusted EBITDA, driven by its fee-surface ownership model. The company raised its full-year guidance, citing increased visibility into its commercial pipeline and a more supportive macroeconomic environment, despite anticipated sequential softness in Q1 due to seasonality in commercial agreements. The PowerBridge data center deal validates the company's strategy of monetizing its acreage through long-duration leases without capital outlay.

Highlights

Raised full-year 2026 adjusted EBITDA guidance to $210M-$230M, an increase of $5M at both the low and high end of the range.
Q1 total revenue grew 16% year-over-year to $51M.
Q1 adjusted EBITDA grew 16% year-over-year to $44.9M, achieving an 88% margin.
Cash flow from operations was $41.1M and free cash flow was $40.9M, representing a 158% increase year-over-year and an 80% free cash flow margin.
Secured an agreement with PowerBridge for the Alpha Digital data center campus, including a $2.6M option payment for 3,400 acres.

Concerns

Q1 total revenue declined approximately 11% sequentially to $51M compared to $56.8M in Q4 FY25, due to anticipated seasonality.
Sequentially, surface use royalties and revenues were down 6%, resource sales and royalties declined 9%, and oil and gas royalties were down approximately 5%.

Guidance & targets

Category	Target	Timeline	Confidence
Full-year 2026 Adjusted EBITDA	$210M to $230M high materiality	Full-year 2026 · FY26	High
Project Speedway Phase 1 volume ramp	Ramp volumes medium materiality	Through 2028 · FY28	High
Project Speedway Phase 2 online timing	Online for back half 2027 operational needs medium materiality	H2 2027 · FY27	Medium
Share repurchase program deployment	Deploy opportunistically medium materiality	Through December 2027 · FY27	High
Long-term net leverage ratio target	2x to 2.5x high materiality	Long-term	High
PowerBridge Alpha Digital initial power delivery	Expected next year medium materiality	2027 · FY27	High
PowerBridge Alpha Digital large-scale generation	Coming online in 2028 medium materiality	2028 · FY28	High

Orderbook & backlog

PowerBridge Alpha Digital campus option 3,400 acres Q1 FY26

1-year option, initial power delivery expected 2027, large-scale generation 2028

Advanced commercial opportunities pipeline multiple opportunities Q1 FY26

primary basis for guidance raise

Deals & partnerships

PowerBridge Lease and development agreement for Alpha Digital data center campus long-duration lease

Option to lease up to 3,400 acres for a gigascale campus in Reeves County, Texas. Initial power delivery expected next year, large-scale generation in 2028. $2.6M option payment received in Q1 FY26.

WaterBridge Water midstream network operations

WaterBridge operates one of the largest water midstream networks in the Delaware Basin, with approximately 1.5 million barrels a day of infrastructure on LandBridge's land.

Various Strategic bolt-on acquisitions of surface acreage

Closed several bolt-on acquisitions, adding nearly 50,000 surface acres over the past year, focused on fee surface ownership at competitive prices (around $1,000 per acre).

Capital programs

Alpha Digital data center campus agreement announced

Funding: no capital outlay required from LandBridge

Benefit:up to 3,400 acres for a gigascale campus

Agreement with PowerBridge for the lease and development of the Alpha Digital data center campus in Reeves County, Texas. PowerBridge has the option to lease up to 3,400 acres for a gigascale campus.

Project Speedway Phase 1 online this summer

Speedway Phase 1 comes online this summer, with volumes expected to ramp effectively from this summer through 2028.

Project Speedway Phase 2 planned

Project Speedway Phase 2 is looking to be brought online to solve for back half of 2027 operational needs.

Risks & headwinds

Seasonality and lumpiness of service-related payments Q1 is typically slower commercially

Q1 revenue declined approximately 11% sequentially

Mitigation:model designed for year-over-year compounding growth, not quarter-over-quarter wins/losses

Commodity price exposure

oil and gas royalties representing approximately 6% of year-to-date revenue

Mitigation:direct commodity exposure remains limited regardless

What to watch in Q2 FY26

Speedway Phase 1 utilization ramp

through 2028

Current online this summer

Target ramping volumes

Why it matters

Indicates increasing royalty streams from WaterBridge's operations on LandBridge's land, contributing to revenue growth.

We expect volumes on Speedway to ramp effectively from this summer through 2028.

Find out whether LB delivers this. Inve re-checks your case every morning.

Q&A highlights

When will Project Speedway Phase 1 reach functional peak utilization, and when will Phase 2 start contributing to the outlook?

Speedway Phase 1 volumes are expected to ramp from summer 2026 through 2028, with Phase 2 targeting operational needs in the back half of 2027. Future guidance will detail Phase 2's contribution.

“We expect volumes on Speedway to ramp effectively from this summer through 2028. For Speedway Phase 2, really looking to bring that online to solve for back half of 2027 operational needs.”

asked by Derrick Whitfield · answered by Scott McNeely

2 min read 6 chapters

Detailed narrative

Strategic Advantage of Fee Surface Ownership

LandBridge emphasizes its structural advantage of owning surface acreage outright, now encompassing over 320,000 acres across the Delaware Basin. This fee surface ownership provides permanent control and long-duration optionality for various commercial uses, including produced water, data centers, and infrastructure. This model enables the company to offer multi-decade commitments to developers and operators, a key differentiator from leasehold positions that require periodic renewal.

Compounding Asset Base and Layered Monetization

The company views its surface as an active commercial platform, not a static asset, designed to maximize economic output through active land management. LandBridge monetizes its acreage by layering multiple commercial uses on the same land, such as oil and gas royalties, fiber corridors, electrical easements, and data centers.

This creates a compounding dynamic where each layer of development enhances the value of the next, growing revenue without requiring additional capital investment from LandBridge.

Texas Regulatory Advantage and WaterBridge Relationship

LandBridge's strategic positions in Texas benefit from a more consistent and favorable permitting environment for produced water disposal, which significantly drives commercial demand. The company's relationship with WaterBridge is a structural advantage, with approximately 1.5 million barrels a day of WaterBridge's midstream infrastructure located on LandBridge's land.

This partnership provides deep operator relationships and continuous commercial opportunities, allowing LandBridge's royalty base to grow without deploying capital.

Alpha Digital Data Center Campus Agreement

A significant milestone in Q1 was the agreement with PowerBridge for the Alpha Digital data center campus in Reeves County, Texas. This deal involves an option to lease up to 3,400 acres for a gigascale campus, validating LandBridge's thesis that West Texas is an ideal location for data centers due to low-cost power, abundant water, fiber connectivity, and a favorable permitting environment.

The agreement is structured as a long-duration lease with royalty economics that scale with development, requiring no capital outlay from LandBridge.

Capital Allocation and Balance Sheet Discipline

LandBridge's capital allocation priorities include accretive M&A focused on fee surface ownership, maintaining balance sheet strength with a long-term net leverage target of 2x to 2.5x, and shareholder returns. In Q1, the company repaid $25.2 million of debt, reducing total borrowings to $545 million and its net leverage ratio to 2.7x.

LandBridge also declared a $0.12 per share dividend and has a $50 million share repurchase program authorized through December 2027.

Seasonality of Commercial Agreements

The company noted anticipated sequential softness in Q1 results, attributing it to the typical seasonality in commercial agreements. This seasonality is influenced by customers wrapping up capital cycles and budgeting processes at year-end, leading to slower starts to the new year. Management emphasized that while this causes quarterly lumpiness, the focus remains on generating year-over-year compounding growth rather than short-term fluctuations.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.