LandBridge (LB -8.15%), a land and resource management firm focused on the Permian Basin, reported earnings for the quarter ended June 30, 2025, on August 6, 2025. The big news was a sharp 83% year-over-year jump in GAAP revenue, reaching $47.5 million. However, GAAP revenue came in below the consensus estimate of $49.2 million, missing by $1.7 million or 3.5%. Adjusted EBITDA (non-GAAP) grew strongly. Free cash flow (non-GAAP) more than doubled from $15.7 million in Q2 fiscal 2024 to $36.1 million. While the company set segment records in its core operations, the quarter saw standout growth but was dampened by a revenue shortfall and sequential declines in some areas. Management also revised annual guidance lower, citing a shift in the timing of revenue recognition for the DBR Solar project.
| Metric | Q2 2025 | Q2 2025 Estimate | Q2 2024 | Y/Y Change |
|---|---|---|---|---|
| EPS (GAAP) | N/A | $0.37 | ($1.22) | — |
| Revenue (GAAP) | $47.5 million | $49.2 million | $26.0 million | 83% |
| Adjusted EBITDA | $42.5 million | $23.4 million | 81% | |
| Net Income (GAAP) | $18.5 million | ($57.7 million) | N/A | |
| Free Cash Flow | $36.1 million | $15.7 million | 130.1% |
Source: Analyst estimates for the quarter provided by FactSet.
Business overview and key success factors
LandBridge operates in the Permian Basin, managing surface and subsurface land assets for a wide range of commercial uses. Its primary business is monetizing land through surface use royalties, resource sales, and oil and gas royalties, with a shift in focus toward fee-based and infrastructure-related segments over pure oil and gas revenue. The company generates most of its income by charging other companies for use of its land, handling produced water, and providing access for infrastructure projects such as pipelines and power solutions.
In recent years, LandBridge has prioritized growing fee-based surface revenues. The strategy includes securing long-term agreements with key industry players and enabling commercial activity that is less exposed to oil price swings. The biggest success drivers are the ability to renew major contracts, diversify revenue streams beyond oil and gas, and maintain high margins with modest capital spending. Securing deals in power and digital infrastructure, in addition to water handling, has become increasingly important for future growth.
Quarterly highlights and segment performance
LandBridge set a new record in its Surface Use Royalties and Revenue segment, which accounted for about 72% of total revenue and rose 31% from the prior quarter. The increase was driven by large easements and surface-related projects, including renewed contracts and new commercial activity involving WaterBridge and other partners. The surge in surface income offset declines in other parts of the business.
Resource Sales and Royalties, which include brackish water and other resources, showed mixed results, but the segment declined 26% from the previous quarter. Management attributed this sequential drop to lower brackish water sales and a decrease in royalty volumes.
Oil and Gas Royalties continued a downward trend, with revenues falling 40% from Q2 2024 to Q2 2025 and 19% from the previous quarter. Production volumes also dropped from 923 barrels of oil equivalent per day in Q1 2025 to 814 barrels per day. Despite this, the company’s exposure to oil and gas markets is shrinking.
Profitability rebounded sharply. Net income (GAAP) swung from a large loss last year to positive $18.5 million, with the net income margin (GAAP) at 39%, up from 35% in the prior quarter. Adjusted EBITDA margin (non-GAAP) was 89%. This followed the unwinding of temporary margin headwinds and reduced working capital needs. Capital expenditures stayed low at $1.2 million, consistent with LandBridge’s asset-light model.
Strategic moves included signing a 10-year surface use and pore space deal with Devon Energy. The agreement secured a long-term customer, tied to a minimum water volume commitment and significant pore space capacity, helping to lock in multi-year revenue streams. LandBridge moved into new territory by partnering to develop power infrastructure aligned with rising digital infrastructure demand in West Texas—a growing opportunity as data centers and related industries require land, water, and grid connections.
The company declared a $0.10 per share dividend, payable September 18, 2025, with a record date of September 4, 2025.
Financial outlook and investor considerations
Looking ahead, management lowered its guidance for Adjusted EBITDA (non-GAAP) to a range of $160 million to $180 million. The main cause was the delay of revenue recognition tied to a major solar project. Leadership emphasized that the core business remains solid, and the guidance change reflects timing issues rather than material weakness in operations. Investors should note that revised figures change from previous optimism about reaching the high end of forecasts.
The company ended the quarter with $95.3 million in liquidity, including $20.3 million in cash and a $75.0 million untapped credit revolver, with long-term debt at $374.3 million. High free cash flow generation strengthens the ability to fund dividends and invest for future growth. Key themes for upcoming periods include timing of commercial project revenue, continued volatility in resource-driven segments, and the ability to sign and renew major surface agreements in the Permian Basin.
Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.
