LandBridge Company LLC Q3 FY2025 earnings call

• The company reported sixth consecutive quarter of revenue and EBITDA growth. Q3 revenue increased 7% sequentially, adjusted EBITDA rose 6%.
• Core advantages: control over 300,000 highly contiguous acres insulated from pore pressure issues; partnerships with WaterBridge for produced water transportation; development strategy aligning with Texas Railroad Commission's guidance.
• Recent commercial developments: finalized sale of 3,000 acre solar energy project in Reeves County; entered into new long-term lease with ONEOK for natural gas processing facility; acquired ~37,500 acres for Mike's 1918 Ranch & Royalty, expected to contribute ~$20 million in EBITDA from 2026.
• Progress on power infrastructure and data center initiatives accelerating, with ongoing commercial developments across energy, infrastructure, and environmental sectors.

Total revenue for the quarter reached $50.8 million, up 7% sequentially and 78% year-over-year. Surface used royalties and revenue increased 2% due to higher commercial activity, new project easements, and increased royalties from WaterBridge's BPX cracking development. Resource sales and royalties also rose 2% supported by a rebound in water sales. Oil and gas royalties posted a 22% sequential increase with net royalty production rising from 814 barrels of oil equivalent per day in Q2 to 912 in Q3. Adjusted EBITDA for the quarter was $44.9 million, up 6% sequentially. Surface used royalties and revenue contributed ~2% to revenue, resource sales and royalties ~2%, and oil and gas royalties represented approximately 7% of year-to-date revenue.

• Reaffirmed midpoint of full year 2025 adjusted EBITDA guidance between $165 million and $175 million.
• 2026 expectations exceed prior year, with surface use royalties and other revenues expected to be key growth drivers.

• Forward-looking statements subject to known and unknown risks and uncertainties that could cause actual results to differ.
• Commercial sensitivities, contractual obligations, and legal constraints may limit transparency.

Q: Can we talk about the new acquisition a little bit?

A: Excited about 1918, conservatively expecting $20 million EBITDA from it, discussing acquisition framework and land management strategy.

Q: Broader on power and data center projects?

A: Further along in existing conversations, engaged with blue-chip counterparties, excited about progress.

Q: Follow-up on 1918 transaction and power/data center visibility?

A: Actively engaged on Western side, longer timeline for energy transition projects, excited about solar project milestone payments.

Q: Power data centers in West Texas, field of dreams or hyperscalers already committing?

A: More sophisticated packaged approach now, hyperscalers partnering directly with power providers.

Q: Update on existing data center deal with Five Point?

A: 2-year option period still active, no specifics on process.

Q: Natural gas processing lease with ONEOK?

A: Usually upfront payments, long-term, with recurring revenue from infrastructure.

Q: Slide on Delaware Basin disposal capacity shortfall?

A: Shows produced water growth and existing infrastructure losing capacity, highlighting need for more pore space access.

Q: Outlook for 2026 EBITDA?

A: Surface use royalties and other revenues key growth drivers, 2026 expectations exceed prior year.

Q: Power and data center opportunity set?

A: Number of opportunities in pipeline, ecosystem compounding creating secondary opportunities.

Q: Drivers of easement and other surface-related revenues growth?

A: High demand for access, intentional conservatism in expectations leading to outperformance.

Q: Produced water royalty rates and market recognition?

A: No meaningful shift in rates recently, market recognizes pore space constraints, validated by Devon's agreement.