LandBridge Co LLC (LB) 2025 Q4 法說會逐字稿

Ladies and gentlemen, thank you for joining us and welcome to the LandBridge fourth quarter 2025 results call. After today's prepared remarks, we will host a question-and-answer session. If you would like to ask a question, please press 1 to raise your hand.

To withdraw your question, press one again. I will now hand the conference over to May Harrington, Director of Investor relations. May, please go ahead.

Good morning and thank you for joining Lambridge's fourth quarter and fiscal year 2025 earnings call. I'm joined today by our Chief Executive Officer Jason Long and our Chief Financial Officer, Scott McNeilly.

Before we begin, I'd like to remind you that in this call and the related presentation, we will make forward-looking statements regarding our current beliefs, plans, and expectations, which are not guarantees of future performance and are subject to a number of known and unknown risks and uncertainties that could cause actual results to differ materially from results and events contemplated by such forward-looking statements. You are cautioned not to place undue reliance on forward-looking statements. Please refer to the risk factors and other cautionary statements included in our filings with the SEC.

I would also like to point out that our investor presentation in today's conference call will contain discussions of non-GAAP financial measures which we believe are useful in evaluating our performance. The supplemental measures should not be considered in isolation or as a substitute for financial measures prepared in accordance with GAAP. Reconciliations to the most directly comparable GAAP measures are included in our earnings release in the appendix of today's accompanying presentation. I'll now turn the call over to our CEO Jason Long.

Thank you, May, and good morning everyone. 2025 was a year of accreted expansion for LamBridge, with Q4 marking our seventh consecutive quarter of revenue growth as a public company. While Scott will delve more deeply into our operational and financial results, I'll start by highlighting the proven growth potential of our business model.

In 2025, we grew revenues by 81% and adjusted EBITDA by 83% year over year and achieved an adjusted EBITDA margin of 89%. Fourth quarter results strongly contributed to that growth, with revenue in EBITDA increasing 12% and 14% quarter over quarter respectively. We have many compelling organic growth opportunities before us, as well as accretive opportunities to expand our footprint, which now totals more than 315,000 mostly contiguous acres strategically located across the Delaware Basin.

We often talk about land bridge advancing the paradigm of active land management, and I want to spend a few minutes talking about what that means. And how we're able to demonstrate those results.

We are focused on acquiring strategic high-quality land positions that are well positioned for development across key industries such as energy, power, digital infrastructure, and broader industrial development. In parallel, we work to drive capital like growth on existing acreage through commercial efforts by leveraging our deep expertise in the Delaware Basin across multiple industries to attract and advance commercial opportunities on our acreage, maximizing each acre's revenue potential and creating compounding revenue across our position. Our active land management strategy is delivering long-term value across diversified revenue streams and driving gains in surface use economic efficiency or SUEE.

This metric, which we disclose on an annual basis for average with similar acquisition vintages, represents the average revenue per acre generated by our acreage portfolio over time. For example, our legacy acreage position of approximately 72,000 acres generated less than $465 per acre when we acquired it, and last year it averaged almost $1,160 per acre, representing nearly 150% growth since 2022.

For 2024 vintage acreage, including the East State Line and Wolf Bund Ranches, we achieved year over year growth of 145% in 2025. Across our full acreage portfolio of more than 315,000 acres, we delivered SUEE growth of 21% year over year, representing a dollar value growth of $543 per acre to $658 per acre on average.

Over the past year, this significant growth was accompanied by increased diversification of our customer base across revenue categories, accelerating commercial growth with a record of approximately 450 new easements and agreements on our acreage, including large scale agreements with blue chip partners. In the energy space we executed two battery energy storage systems, or BESS facility development agreements with Samsung CNT Renewables in December granting exclusive rights to develop BESS facilities with an aggregate capacity of 350 megawatts.

These BESS facilities, which could achieve commercial operation as soon as year end 2028, are designed to enhance grid stability, support renewable energy integration, deliver clean power to the local grid, and unlock more potential opportunities with Samsung in the future.

Additional energy developments in 2025, including finalizing the sale of a 3,000 acre solar energy project with the proposed generation capacity of up to 250 megawatts and entering into a long-term lease with a subsidiary of One Oak for a natural gas processing facility.

We also entered into strategic agreement with NRG Energy for the potential construction of a 1.1 gigawatt grid-connected natural gas power generation facility intended to power our data center. Our agreements with Samsung, One Oak, and NRG reflect and emphasize our commitment to securing development across conventional and renewable energy, while also positioning Landridge as a key enabler of digital infrastructure development across West Texas, a geography that has all the necessary components for such development.

In particular, low cost energy, abundant water volumes, proximity to fiber, and favorable regulatory environment. These data center projects represent large, long-term capital intensive investments, and we support any potential counterparties in their due diligence on West Texas opportunities.

Our team has significant experience with data center project underwriting and extensive relationships with West Texas counterparties who provide power, water, and other key infrastructure to facilitate complex multi-party agreements and shorten time to value for our customers.

Overall, our conviction in the West Texas value proposition for data centers has never been stronger, and we look forward to the ultimate broader industrial impact of such important projects on West Texas and land bridge specifically.

Another key growth driver continues to be produced water royalties, where our ample high-quality pore space is an important differentiator as forward-looking and capital efficient EMPs increasingly value the flow assurance offered by large scale out of basin solutions.

We expect that our synergistic relationship with WaterBridge will continue to contribute to growth as Waterbridge expands its water infrastructure across our acreage through projects like the Speedway pipeline. Where they recently announced an open season for its second phase. As we look ahead to 2026, we look forward to advancing our critical role in multi-industry development throughout the region. We are confident in our proven business strategy and are well positioned to continue delivering differentiated value for our shareholders.

And now I'll turn the call over to Scott, our Chief Financial Officer.

Thank you, Jason, and good morning to everyone joining today. As Jason noted, we entered 2026 from a position of strength with the momentum of a strong fourth quarter and a full year of growth. In the fourth quarter, we delivered total revenue of $56.8 million, up 12% sequentially and 56% year over year. And for the year we delivered revenue of $199.1 million, representing 81% year over year growth.

Sequential growth for the fourth quarter was driven by surface use royalties and revenues, which increased 12%, primarily driven by increased royalties from Waterbridge's BPX Kraken development, as well as new project easement payments. Resource sales and royalties revenues also rose 12%, attributable to water and sand sales. This growth came in spite of a 6% quarterly decline in revenue from oil and gas royalties driven by lower activity levels on our acreage.

Our direct exposure to commodity prices remains limited. For the full year, oil and gas royalties represented less than 10% of Lambridge's total revenues.

Our advantage margins are evident in our adjusted EBITDA of $51.1 million for the quarter, up 14% sequentially and 61% year over year, representing a 90% margin.

For the full year we delivered $177 million in adjusted EBITDA above the upper end of our guidance range, reflecting an 83% sequential increase in a margin of 89%. We generated free cash flow of $36.4 million for the quarter, representing a 64% margin.

For the full year we generated free cash flow of $122 million, representing a 61% margin. In November we further optimized our balance sheet through an inaugural $500 million senior notes offering accompanied by a new $275 million revolving credit agreement.

These new agreements enhance our balance sheet strength by improving our cost of capital, increasing our liquidity, reducing our interest expense, and overall providing a more scalable and efficient financing solution to support any future accretive M&A.

We ended the year with total liquidity of $236 million, including $31 million of cash and cash equivalents and $205 million undrawn under our revolving credit facility. Our covenant net leverage ratio was 2.8 times at the end of Q4 as a result of the financing of the 1918 ranch acquisition, and our long-term net leverage ratio target remains between 2 times and 2.5 times.

We will continue to deploy our free cash flow in a disciplined manner focused on creating long-term shareholder value across 3 priorities. First, we continue to prioritize value enhancing M&A as we execute on our proven active land management strategy. We see significant opportunities in the market to acquire underutilized and under commercialized land.

Second, we are intent on maintaining a strong balance sheet with an appropriate capital structure. Our notes offering help to further optimize our balance sheet and provides us with financial flexibility as we execute on our goals.

And finally, we intend to return capital to shareholders over time through dividends and opportunistic share repurchases. This quarter we declared a 20% increase to our quarterly dividend, bringing it up to $0.12 per share. Our board also authorized a share repurchase program of up to $50 million in shares through December 2027, increasing the flexibility with which we can opportunistically buy back shares.

Looking ahead for full year 2026, we are excited to announce our 2026 adjusted EBITDA guidance of $205 million to $225 million, which represents over 20% year over year growth at the midpoint.

We are proud to have delivered another strong quarter and year of growth. We are focused on continuing to advance development, expand our partnerships and customer base, and deliver compelling value to our shareholders.

Finally, I would like to highlight our upcoming investor day scheduled for the afternoon of March 19th in New York City. The event will include presentations by our CEO Jason Long, Chairman of the board and Five Points CEO and managing partner David Capobianco, and myself, along with other members of the Landbridge team.

We expect to present an overview of West Texas macro backdrops across our key growth industries, detail how we view our surface acreage as a perpetual call option on growth opportunities, and provide insight into the value proposition of our unique business model.

In addition, the event will include a fireside chat with subject matter experts, deep diving into the nuances and implications of the data center thesis for West Texas, as well as insights from experienced data center leaders such as Power Bridge founder and CEO Alex Hernandez. We encourage all investors to attend. Please contact ir at Landbridgecode.com to register, and we look forward to welcoming you.

Thank you. We would now like to open the line for questions, operator.

We will now begin the question-and-answer session. (Operator Instructions) Keith Beckman, Pickering Energy Partners. Your line is open. Please go ahead.

Hey, thanks for taking my question. I just wanted to get a sense on what the moving pieces were that drove the really strong sequential growth and produced water and maybe how you expect that the trend looking forward based on some of the projects we expect to come online here over the next year.

Hey, good morning, Keith, and I appreciate the question. Yeah, so, in the third quarter, we saw BPX Kraken bring, Water bridge brings the BPX Kraken project online and continue to see volumes ramp through, the end of the year. So, that was a major contributor as well as just increased activity, on the East State Line Ranch. So, obviously great momentum kind of stepping into 26. As we kind of look forward to 2026 and what is driving the increase in expectations for this year relative to 25, that's really going to be around both surface use royalties as well as the other surplus use revenues.

As a reminder, WaterBridge's BPX Kraken project expects increased volumes through the course of the year. And additionally, the Speedway pipeline comes online mid-year, which will add a step change in volumes over the course of, over the summer. So, great drivers there related to that water bridge activity and then taking a step back, just kind of broader surface use expectations related primarily to oil and gas activity, really kind of serving as the two drivers in 2026 uptake and expectations.

That's very helpful. Thank you. And then my second question just stems around, we saw the dividend increase in the buyback authorization which were great. I think I noticed in the presentation you guys are still prioritizing M&A, as it comes. I just wanted to get a sense of kind of the current landscape of how deals are looking. Is it easier or harder to get things done right now, in West Texas, and then maybe is. Sort of follow-up to that, do you ever look at anything outside of West Texas, that could potentially make sense? Thanks.

Yeah, we, the opportunity pipeline for M&A still is incredibly robust. I mean, we're actively pursuing a number of opportunities of different sizes, so we have not really seen a slowdown in that environment, whatsoever. I think we're incredibly well positioned to continue to grow through M&A, and that remains our top capital allocation priority here for 2026.

As it relates to looking outside of the Delaware Basin, we absolutely look at everything that comes across our plate. I think if we step into another region, we want to be very thoughtful about that, but we are actively looking and exploring, kind of creative ways to continue to grow the platform here, and stepping out of the Delaware Basin is obviously one of those ways.

Awesome, that's very helpful. I'll turn it back.

John Annis, Texas Capital.

Hey, good morning, all, and thanks for taking my questions. For my first one regarding 2026 EBITDA guidance, are there one or two drivers in your assumptions that could lead you to the high end versus low end of your guide?

Yeah, hey, good morning, John. Appreciate the question. No, absolutely. I think when we thought that we're kind of putting together our guidance for the year, really wanted to be thoughtfully conservative around ultimately what was baked in there.

And so I mentioned on Keith's question, the step change really resulting from both Speedway and BPX cracking kind of growing through the course of the year. There are a number of other projects that that Waterbridge has in the pipeline that continue to, could continue to grow, produce water volumes meaningfully above expectations, or if we just stay in kind of this mid-60s and above commodity price environment, I think the activity levels driven by that, will easily exceed the expectations kind of baked into the forecast.

And so, wanted to be mindful of kind of the macro environment, the movement and that kind of through the course of our budgeting cycle, but I would say there's substantial, call it asymmetric upside in terms of opportunities for us to outperform, which is by design.

That makes sense. For my follow-up, the 2024 vintage acreage saw surface use economic efficiency grow from $204 an acre to $499 in one year, which is an impressive jump. While the 42,000 acres acquired in 2025 sits at 20,208 an acre. Based on what you know about the commercial opportunities on that acreage today, do you think a similar trajectory is possible?

Look, absolutely. I mean, I think this is a, it's such a powerful metric because it really reflects, the financial results of the active land management strategy as well as the opportunity set that exists, coming off of a heavy M&A year. And so, we saw obviously great growth, from 2024 through 2025 on that vintage, as you kind of point out, when you think through the opportunity set for 2026 to outperform, I would point to 1918 ranch that we just closed on in the fourth quarter, we have not baked in any kind of substantial uplift due to the commercialization of 1918 in that 2026 guidance.

And so the opportunity set. Is there. We are kind of actively working through those efforts today, and that serves as a really obvious example of a potential upside driver, relative to that baseline and guidance that we provided. So, the punchline is yes, we go out, we buy land that we think that we can commercialize quickly, and that is going to be a quick growth driver. And again, 1918 is a great example of of one of those opportunities that we have in front of us for 2026.

I appreciate it. I'll turn it back.

Yeah, thanks so.

Alexander Goldfarb, Piper Sandler.

Sure, hey, morning down there, maybe just switching quickly to, the data centers and power plants, when you guys IPOed versus now it would seem like the political conversation has definitely sharpened on the power needs of data centers versus, a few years, a year or two ago when you IPOed as you look at the opportunity set to expand or add, data centers and all that.

Is your view that the the political process, the approval process, and everything involved is just as you imagined that the IPO, a little under 2 years ago, or has the process become either more difficult or require more approval? Just trying to understand, how this may have changed now versus, what you originally planned.

Yeah, hey, good morning, Alex, and I appreciate the thoughtful question. I mean, I think if you look at just the approval of the broader regulatory landscape, what we've really seen is the benefit of, Texas's more business friendly regulatory environment. I mean, as it relates to data centers.

I want to say 2025 by orders of magnitude saw more canceled data centers in other states than has ever been seen in history and there's been a number of articles that have come out on, challenges facing other states and proposed legislation to make future data centers that much more challenging because of this whole, not in my backyard dynamic around the impact of power consumption and water consumption in major metropolitan areas.

And so, the more we see that getting out there, I think the more it just kind of further reinforces just West Texas appeal as it relates to data centers. I mean, it's easy to point to the fundamentals around water availability, power generation, and so on, all of those things that really make West Texas such an attractive place for these folks to operate.

The regulatory side doesn't get as much credit as it should because I mean, Texas is eager to find ways to bring data centers. And I would say it's just so much more receptive than what we're seeing kind of evolve in so many of these other states that have been more traditional footprints for deaths.

Okay, and then the second question is just sort of piggybacks on the others who have asked about the guidance in the EBITDA for 26. You guys talked about Speedway coming online. There're the Water bridge contributions, the 1918 ranch. How much, if we think about sort of your 4Q run rate.

How much additional revenue is factored in the EBITDA guides, the 205 to 225 versus, potentially upside to that just trying to because it seems like you guys have done a tremendous amount of activity and therefore would have expected more EBITD growth, but it may just be, sort of timing of when these things come online or uncertainty. So, just trying to understand how much of these additional items that you outlined are in the number versus. Not in the number and potentially upside to the range.

Yeah, it's a good question. So, we've baked in, I could call it. The majority of the impact coming from Speedway and BPX Kraken, and both of those either Speedway comes online over the course of the summer and BPX Kraken is expected to increase in volumes over the summer. Then the one other component, obviously 1918 closing and 4th quarter, we'd see the benefit of a full year of that contribution.

Although I flagged earlier on Keith and John's questions that we're not really baking in much in the way of upside commercialization of that asset, which I think we would, certainly expect and are actively actioning at the moment. And so, when we think through just, what else could happen, we've been conservative around new development expectations, we've been conservative on volumes, as I've mentioned, conservative on 1918 commercialization and have not baked in.

Any of these other, kind of in process projects that we've kind of alluded to on this call, and so, there is just an ample amount of commercial opportunity and opportunity sets that we're working through at the moment that aren't included there. And so as we continue to kind of notch those wins, we would expect to come. Back to the market and voice over, what is driving, hopefully the beat in expectations and the increased guidance, but wanted to be mindful stepping into the year in terms of, where we are setting our expectations initially and as we continue to get those wins, we'll continue to message that to the street.

Thank you.

Yeah, thanks.

(Operator Instructions) John McKay, Goldman Sachs.

Hey guys, thank you for the time. I just want to go back to the revenue per acre metric, because we agree they're pretty important thing to watch when you're talking, when you're looking at the 24 and 25, acquisition sitting at, I guess [500] and [200] right now.

Versus where the legacy ones are, is that $1,000 an acre kind of structurally possible for those 24 and 25 packages and maybe not to to push you on a on a time frame for that, but maybe again just walk us through kind of structurally what the overall platform could look like over time, let's say precluding larger items like, data centers thanks.

Yeah, hey, good morning, John, and I appreciate the questions. Absolutely, $1000 plus is very, not just a achievable, but I would say actionable in the near term. I mean, as a reminder, when we bought that legacy acreage, I know we speak to that 465 number being the jumping off point in 2022, but when we actually acquired that surface in 2021, it was meaningfully below 465, and that acreage is now sitting at 11. 59 over the course of what has effectively been four years, we don't see any reason why that same trajectory is impossible in the 2024 and 2025 acreage that we bought. We think the acreage itself and the opportunities that Parallels that legacy acreage, at a minimum, and we think that there's kind of incremental opportunities that we can continue to pursue, kind of incremental to that.

So, no, look, we feel great about kind of that. Now, where can this go in totality from here, we've spoken to kind of that $2,500 to $3500 an acre range as a good thought, medium to long-term target. We still very much believe that that is attainable and over call it a 7-to-10-year time period, there's the expectation of just the continued compounding called commercial activity that's baked into that.

And so, there are different ways we can go about achieving that $2,500 to $3,500 an acre and to plug our upcoming investor day, I'll just wrap up by saying we plan on walking through a number of different ways and a number of different permutations in terms of the commercial bed down on our acreage that can ultimately get us there.

That's great. I'll leave it there.

Thank you, guys.

Yeah, thanks, John.

Charles Meade, Johnson Rice.

It's good morning, guys and, apologies. I hopped on the call a little late, so if I ask something that has already been covered, my apologies in the, in advance, but I'm curious. I really like this new SUEE metric and I suspect it's something you guys have been talking about, internally for a while, but it's great to get the.

The view, great that you're sharing that that be with us. I'm curious. The, how is your, how's the competition, changed for acquiring new assets and I'm particularly thinking about it if you guys are other competitors able to drive or what differentiates you and your ability to drive more SUEE and is that, does that make you more competitive or is it, is this the kind of thing that's, alternatively. Attracting a lot of other capital to the space that maybe is competing away some opportunities.

Yeah, hey, good morning, Charles, and I appreciate the thoughtful questions. I'll tackle it in two different pieces. I mean, first, as we think through the competitive landscape for acquisitions, there's obviously just an element of being called a victim of our own success where you do have more folks looking to see if this is a strategy that they can replicate. .

I would just, I would point out to all of the advantages of our platform and kind of as part of the answer to the second question on why it's so tough for others to step in and be effective here. I mean, I think first, every land position is unique and irreplicable, and you think through just the land positions that we're sitting on today.

Particularly along the Texas side of the state line, I mean, not just gives us an enormous advantage as we think for capturing oil and gas activity, particularly water, but serves as a fantastic platform to continue to scale that is, near impossible to continue to replicate. And so just a great kind of moat in and of itself in that regard. But second, the partnership we have with our sister company WaterBridge is incredibly valuable.

And it's not just a byproduct of called WaterBridge bringing activity to LandBridge in exchange LandBridge serving as the force space provider to WaterBridge, but the nature of having an operating team out there, boots on the ground, just provides a kind of competitive intelligence that we can get day to day, macro update that we can get day to day on a very granular level that would be impossible for a land-only company to be able to replicate.

There. Yeah, I mean, the one thing I would add to that is not only everything that Scott just mentioned there on the water bridge side, but also Being able to really leverage the technical side of it, the geological and electrical engineering and really understanding where infrastructure is, where these opportunities exist, a lot of that, skill set is not there, on a lot of these startups.

Yeah, that's exactly right. And so ultimately like having a sophisticated operation of scale kind of married with an operating company with that in-house technical expertise just makes it very tough for a new entrant to come in. Even above and beyond that competitive mode we have from our existing asset base. And so, look, we feel very good about continuing to affect both, the commercial strategy that we have today as well as the acquisition strategy that we've effectively, I think, worked through to date, and we don't see that changing going forward.

Got it. That's helpful. Thanks guys.

Yeah, thanks.

Thank you.

There are no further questions at this time. I will now turn the call back to Scott McNeilly for closing remarks.

Yeah, thank you, operator, and thanks for everyone joining us today. Again, very happy with the quarter, Fantastic momentum stepping into 2026. We're incredibly excited about a myriad of opportunities we have to work through. And then my final plug again, we look forward to outline just the broader strategy, in a lot more detail in the upcoming investor day. So, we hope to see you all there.

Thank you again.

This concludes today's call. Thank you for attending. You may now disconnect.