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    LB
    Earnings call· Mar 2026(Q1 FY26)

    LandBridge Co Q1 FY26 earnings call LB

    May 7, 2026 Source

    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

    5

    • 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

    2

    • 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

    7
    CategoryTargetConfidence
    Full-year 2026 Adjusted EBITDA
    $210M to $230M
    high materiality
    High
    Project Speedway Phase 1 volume ramp
    Ramp volumes
    medium materiality
    High
    Project Speedway Phase 2 online timing
    Online for back half 2027 operational needs
    medium materiality
    Medium
    Share repurchase program deployment
    Deploy opportunistically
    medium materiality
    High
    Long-term net leverage ratio target
    2x to 2.5x
    high materiality
    High
    PowerBridge Alpha Digital initial power delivery
    Expected next year
    medium materiality
    High
    PowerBridge Alpha Digital large-scale generation
    Coming online in 2028
    medium materiality
    High

    Operational metrics

    22
    Free cash flow margin
    80%
    Q1 FY26

    free cash flow margin of 80%

    Total revenue
    $51M16% increase year-over-year
    Q1 FY26

    In the first quarter, we reported total revenue of $51 million, a 16% increase year-over-year.

    Net income
    $17.9Mup 16% year-over-year
    Q1 FY26

    Net income was up $17.9 million, also up 16% year-over-year

    Net income margin
    35%
    Q1 FY26

    with a net income margin of 35%

    Adjusted EBITDA
    $44.9Mup 16% year-over-year
    Q1 FY26

    Adjusted EBITDA for the quarter was $44.9 million, up 16% year-over-year

    Adjusted EBITDA margin
    88%consistent with the prior year quarter
    Q1 FY26

    with an adjusted EBITDA margin of 88%, consistent with the prior year quarter

    Capital expenditures
    $0.2M
    Q1 FY26

    Capital expenditures were $0.2 million

    Net cash used in investing activities
    $2.1M
    Q1 FY26

    net cash used in investing activities was $2.1 million

    Debt repaid
    $25.2M
    Q1 FY26

    we repaid $25.2 million of debt in the quarter

    Total liquidity
    $259.7M
    Q1 FY26

    We ended the quarter with total liquidity of $259.7 million

    Cash
    $29.7M
    Q1 FY26

    comprising $29.7 million of cash

    Available borrowing capacity
    $230M
    Q1 FY26

    approximately $230 million of available borrowing capacity under our revolving credit facility

    Total borrowings outstanding
    $545Mdown from $570 million at year-end
    Q1 FY26

    Total borrowings outstanding were $545 million as of March 31, down from $570 million at year-end.

    Net leverage ratio
    2.7xcompared to 2.8x last quarter
    Q1 FY26

    Our net leverage ratio was 2.7x at the end of the quarter compared to 2.8x last quarter

    Dividend per share
    $0.12
    Q1 FY26

    we declared a $0.12 per share dividend

    Share repurchase program authorization
    $50M
    FY26-FY27

    our Board authorized a $50 million share repurchase program, which we were able to deploy opportunistically through December 2027.

    Surface use royalties and revenues
    $37Mincreased 41% year-over-year
    Q1 FY26

    The primary revenue growth driver was surface use royalties and revenues, which increased 41% year-over-year to $37 million... Surface use royalties and revenues were down 6%

    Acreage acquired
    nearly 50,000
    past year

    added nearly 50,000 surface acres over the past year

    Total surface acres
    more than 320,000
    Q1 FY26

    now encompasses more than 320,000 surface acres across the heart of the Delaware Basin

    WaterBridge infrastructure on land
    approximately 1.5 million
    Q1 FY26

    approximately 1.5 million barrels a day of that infrastructure sits on our land today

    PowerBridge option payment
    $2.6M
    Q1 FY26

    They paid $2.6 million for that option.

    Oil and gas royalties as % of revenue
    6%
    YTD FY26

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

    Industry KPIs

    4
    MetricValueDetails
    Leasing revenue growth41%%
    Free cash flow conversion80%%
    Development in process pipeline3,400 acresacres
    Resilient vs transactional revenue split72% surface use / 22% resource%

    Orderbook & backlog

    2
    PowerBridge Alpha Digital campus option3,400 acresQ1 FY26

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

    Advanced commercial opportunities pipelinemultiple opportunitiesQ1 FY26

    primary basis for guidance raise

    Deals & partnerships

    3
    PowerBridgeLease and development agreement for Alpha Digital data center campuslong-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.

    WaterBridgeWater 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.

    VariousStrategic 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

    3
    Alpha Digital data center campusagreement 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 1online this summer

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

    Project Speedway Phase 2planned

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

    Risks & headwinds

    2
    Seasonality and lumpiness of service-related paymentsQ1 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

    5

    Speedway Phase 1 utilization ramp

    through 2028
    Currentonline this summer
    Targetramping 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.

    Q&A highlights

    8

    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 read6 chapters

    Detailed Narrative

    01

    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.

    02

    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.

    03

    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.

    04

    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.

    05

    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.

    06

    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.

    AI-generated summary of the company’s earnings call. Not investment advice.