LandBridge Company LLC Q2 FY2025 earnings call

• Business is capital-light with an 89% adjusted EBITDA margin in Q2, and land holdings increased by over 50,000 acres in the past 12 months. • Owning surface acreage provides optionality, with development agreements for data centers and solar projects, including a 10-year surface use and pore space reservation agreement with Devon Energy and an option agreement with a large public IPP for a natural gas-fired CCGT plant. • Diversified revenue streams reduce commodity risk, with fee-based arrangements now 94% of total revenues. • Symbiotic relationship with WaterBridge drives reliable recurring revenue. • Recent regulatory developments in Texas support their responsible pore space management strategy, highlighting sustainable use and differentiated value proposition.

Second quarter revenues were $47.5 million, up 8% sequentially and 83% year-over-year. Surface use royalties and revenue increased 31% sequentially, driven by easements, service-related revenue, and renewal payments. Resource sales royalties declined 26% sequentially due to lower brackish water sales, and oil and gas royalties declined 19% sequentially from lower net royalty production. Fee-based arrangements now account for a record 94% of total revenues. Adjusted EBITDA was $42.5 million, a sequential increase of 9% and 81% year-over-year, with an 89% adjusted EBITDA margin. Free cash flow was approximately $36.1 million, with a free cash flow margin of 76%.

• Adjusted EBITDA guidance for full year 2025 adjusted to $160 million to $180 million due to DBR Solar revenue recognition shifting to after year-end 2025. • Continuing to evaluate value-enhancing land acquisitions in the second half of the year.

• Forward-looking statements are subject to known and unknown risks and uncertainties that could cause actual results to differ materially from forward-looking statements. • Timing of project revenues and commercial progress can impact EBITDA and cash flow projections.

Q: Charles Meade asked about the DBR Solar project timeline shift and reasons for the adjustment.

A: Scott McNeely explained the DBR Solar project was punted to market after finalizing the data center option agreement, with revenue recognition shifting to after year-end 2025 due to timing.

Q: Derrick Whitfield inquired about the Aris acquisition and power announcement.

A: Scott McNeely stated the Aris acquisition reinforces the value of pore space, and the power project with a large public IPP will have more details in coming weeks.

Q: John Mackay asked about Devon deal pore space availability and land acquisitions.

A: Jason Long said over 5 million barrels a day of potential pore space is identified, and the company continues to look for additional pore space and land.

Q: Kevin MacCurdy questioned Texas Railroad Commission guidelines and Devon deal EBITDA impact.

A: Jason Long and Scott McNeely discussed the new regulations support their responsible pore space management, and the Devon deal will have a significant financial impact when online in 2027.

Q: Alexander Goldfarb asked about the power generation deal EBITDA ramp and project timing.

A: Scott McNeely and Jason Long explained EBITDA ramp varies by project, with power projects having longer timelines and water infrastructure projects having quicker timelines.

Q: Lawrence Goldstein inquired about data centers in the Permian Basin.

A: Scott McNeely and Jason Long stated data centers in Permian are inevitable but take time due to unfamiliarity with the region, but fundamentals like land, power, and water access make it a logical opportunity.