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Ladies and gentlemen, thank you for joining us, and welcome to the LandBridge first quarter 2026 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 star one to raise your hand. To withdraw your question, please press star one again. I will now hand the conference over to Mae Herrington, Director of Investor Relations. Maeve, please go ahead.

Good morning, thank you for joining LandBridge's first quarter 2026 earnings call. I'm joined today by our Chief Executive Officer, Jason Long, and our Chief Financial Officer, Scott McNeely. 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 and today's conference call will contain discussions of non-GAAP financial measures which we believe are useful in evaluating our performance. These supplemental measures should not be considered in isolation or as a substitute for financial measures presented in accordance with GAAP. Reconciliations to the most directly comparable GAAP measures are included in our earnings release and the appendix of today's accompanying presentation. I'll now turn the call over to our CEO, Jason Long.

Thank you, Maeve, and good morning, everyone. I'm pleased to report that we began 2026 consistent with our plan and our confidence in the model, with strong year-over-year growth and commercial momentum heading into Q2. Our second half 2026 growth drivers are on track, as Scott will further detail, we are also raising our Full Year 2026 guidance. This decision is grounded in increased visibility and conviction in our commercial pipeline for the remainder of the year, combined with a more supportive macroeconomic environment. In the first quarter, we grew both revenue and adjusted EBITDA by approximately 16% year-over-year, achieving an adjusted EBITDA margin of 88%. Sequentially, results were softer, that was anticipated.

Q4 was a strong quarter. Q1 is typically slower commercially, as certain surface-related payments, including easement payments and new SUA execution, follow the rhythm of operator activity, which is naturally weighted toward the second half of the year as E&P programs ramp. We execute commercial deals with the goal of reaching the best and most accretive terms for our business over the long term, and we remain committed to that approach. Q2 commercial activity is already tracking ahead of Q1. Our second-half catalysts are developing as planned, and the macroeconomic environment has become meaningfully more supportive since we last provided guidance. That combination, accelerating internal momentum and more constructive external backdrop, gives us the conviction to raise our full-year outlook, not simply reaffirm it. The softer Q1 was anticipated. The confidence behind the raise is driven by what we can see in our pipeline today.

On the commercial front, we closed several bolt-on acquisitions that further enhance the scale of our position, which now encompasses more than 320,000 surface acres across the heart of the Delaware Basin, a portfolio we have intentionally built around fee surface ownership. Owning the surface outright, whether than relying on leasehold or access rights that require renewal, gives us permanent control, long-duration optionality for every commercial use from produced water to data centers, and a compounding asset base that doesn't erode over time. That is a structural advantage, not an incidental one. That permanence is what allows us to offer multi-decade commitments to data center developers, long-duration infrastructure rights to pipeline operators, and deep commercial certainty to operators who need to plan multi-year development programs.

Our strategy is focused on maximizing the economic output of our surface through active land management, a fundamentally different model from the traditional passive or minerals-focused landowner. We think of the surface as an active commercial platform, not a static asset. Surface acreage is critical for oil and gas development, power generation, digital infrastructure, and more. The same acre that generates produced water royalties from an oil and gas operator may also support a fiber corridor, an electrical transmission easement, and eventually a data center campus. Each layer of development makes the next more valuable, better access, more infrastructure, and greater certainty for the next user. That is the compounding dynamic at the heart of our model. In addition, our state line and southern positions are located on the Texas side of the Texas-New Mexico regulatory divide, an advantage that translates directly into commercial demand.

Texas provides a more consistent and favorable permitting environment for produced water disposal, which means operators and midstream companies prioritize Texas-side surface acreage. We are structurally positioned to benefit from this dynamic for the foreseeable future. Our relationship with WaterBridge is a genuine structural advantage. WaterBridge operates one of the largest water midstream networks in the Delaware Basin, and approximately 1.5 million barrels a day of that infrastructure sits on our land today, with additional permitted capacity on our land continuing to grow to enable future development. That gives us a front-row seat to basin activity, deep operator relationships, and the ability to continuously identify and convert commercial opportunities that others simply cannot see. It's a compounding dynamic. As WaterBridge grows, so does our royalty base, and that growth does not require us to deploy capital.

Beyond oil and gas, our active management approach continues to open new commercial opportunities. This quarter, we announced an 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 giga-scale campus, a category of hyperscale digital infrastructure that requires hundreds to thousands of acres of contiguous land, co-located power, and long-duration site control. Initial power deliveries is expected next year, with large-scale generation coming online in 2028. We aren't disclosing specific economic terms at this stage, but the structure is consistent with our model, a long-duration lease with royalty economics that scale with the development, with no capital outlay required from LandBridge. This is an important milestone and a clear validation of our thesis.

West Texas is an ideal location for data centers, low-cost power, abundant water, fiber connectivity, and a favorable permitting environment. Critically, data center developers require certainty of long-term land control, utility corridor access, and the ability to expand the footprint as their needs grow. Our fee surface ownership model provides exactly that. Leasehold positions or acreage held on shorter term or renewable tenors cannot offer a multi-decade campus commitment. We can. Approximately 10 GW of capacity has been announced in the region over the past two years, including the Alpha Digital Campus. We have higher conviction than ever that West Texas is on its way to becoming the next major data center hub in the United States. The PowerBridge agreement demonstrates the value of our acreage and commercial relationships and reflects our capital-efficient asset-light model.

We retain ownership of the surface and monetize it through long-duration lease economics that scale with development. By layering multiple commercial uses on the same acreage, we grow revenue without additional capital investment. Alpha Digital is one of several advanced commercial opportunities in our pipeline, and the state of the pipeline today is the primary basis for our guidance raise. Our model is designed for exactly this moment, the convergence of energy infrastructure demand, digital growth, and land-constrained development in the Permian Basin, and the macro environment is, if anything, accelerating that convergece. I look forward to sharing more as these partnerships develop. Now let me hand it over to Scott, who will walk through the numbers behind our updated outlook.

Thank you, Jason, and good morning, everyone. As Jason discussed, we delivered strong year-over-year growth in Q1 and are building momentum as we move through 2026. That momentum, combined with the state of our commercial pipeline and an improved macroeconomic backdrop, gives us the confidence to raise our Full Year 2026 adjusted EBITDA guidance to $210 million to $230 million, an increase of $5 million at both the low and high end of the range. This reflects two key considerations. First, increased visibility and conviction in our commercial pipeline for the remainder of the year, as we have better line of sight into committed and near-committed activity in Q2 through Q4 than we did when we initially set guidance. Second, a macroeconomic environment that has become more supportive of basin activity levels since our last communication.

The structural resilience of our fee-based model provides the floor, and our commercial pipeline provides the upside that justifies taking the range higher. First, the clearest demonstration of our model's quality this quarter was cash generation. Cash flow from operations was $41.1 million, and free cash flow was $40.9 million, representing a 158% increase year-over-year and a free cash flow margin of 80%. $0.80 of every revenue dollar converting to free cash flow, our minimal capital investment, is the structural output of a business built around owning the surface and letting our customers fund the infrastructure. That dynamic does not change with commodity prices or quarterly activity patterns. In the first quarter, we reported total revenue of $51 million, a 16% increase year-over-year.

Net income was up $17.9 million, also up 16% year-over-year, with a net income margin of 35%. The primary revenue growth driver was surface use royalties and revenues, which increased 41% year-over-year to $37 million, reflecting royalties from WaterBridge's BPX Kraken development, new easement payments, and broader commercial activity across our surface. Sequentially, revenue declined approximately 11%, coming in at $51 million compared to $56.8 million in Q4. As Jason discussed, this was anticipated and reflects three factors: the strength of Q4 2025, the general quarterly lumpiness of certain surface-related payments, and the seasonally slower pace of commercial agreement activity in Q1. Revenue declined modestly across all three categories. Surface use royalties and revenues were down 6%, resource sales and royalties declined 9%, and oil and gas royalties were down approximately 5%.

The operating commercial environment in the basin has improved, and while we expect that to support activity levels over the mid to longer term, our direct commodity exposure remains limited regardless, with oil and gas royalties representing approximately 6% of year-to-date revenue. Adjusted EBITDA for the quarter was $44.9 million, up 16% year-over-year, with an adjusted EBITDA margin of 88%, consistent with the prior year quarter and reflective of the durable, high-margin nature of our model. On a sequential basis, adjusted EBITDA declined broadly in line with revenue. Capital expenditures were $0.2 million, and net cash used in investing activities was $2.1 million. On the financing side, we repaid $25.2 million of debt in the quarter, demonstrating continued balance sheet discipline.

We ended the quarter with total liquidity of $259.7 million, comprising $29.7 million of cash and approximately $230 million of available borrowing capacity under our revolving credit facility. Total borrowings outstanding were $545 million as of March 31st, down from $570 million at year-end. Our net leverage ratio was 2.7x at the end of the quarter, compared to 2.8x last quarter, and we have no near-term maturities. On capital allocation, we remain focused on three priorities. Our first priority is accretive M&A. We closed strategic bolt-on acquisitions this quarter and have added nearly 50,000 surface acres over the past year, all while maintaining disciplined underwriting criteria. Our M&A criteria are anchored on fee surface ownership. We are building a compounding permanent asset base.

We are not interested in acreage that requires periodic renewal or provides only temporary commercial control. That discipline may mean we pass on transactions that others pursue, but it means every acre we add strengthens our long-term platform rather than simply growing our headline acreage count. Secondly, we are focused on maintaining balance sheet strength, where we continue to target a long-term net leverage ratio of 2x - 2.5x. Third, and finally, we are committed to shareholder returns. This quarter, we declared a $0.12 per share dividend, continuing our track record of quarterly distributions since our IPO. As a reminder, we previously announced that our board authorized a 50 million share repurchase program, which we are able to deploy opportunistically through December 2027. In closing, LandBridge delivered strong year-over-year growth across revenue, net income and adjusted EBITDA in Q1, consistent with our internal plan.

We are raising full-year guidance to $210 milion to $230 million, reflecting increased confidence in our commercial pipeline and a more supportive macroeconomic backdrop. The foundation we have built, fee and surface, durable contracted cash flows, a model that requires minimal capital to grow, is what makes that confidence sustainable. Thank you. Operator, please open the line for questions.

We will now begin the question-and-answer session. If you would like to ask a question, please press star one to raise your hand. To withdraw your question, please press star one again. We ask that you pick up your handset when asking a question to allow for optimum sound quality. If you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Your first question comes from the line of Derrick Whitfield with Texas Capital. Your line is open. Please go ahead.

Good morning, all, and thanks for your time.

Good morning, Derrick.

With your increased 2026 guidance and the updates coming out of WaterBridge today, it's clear you guys are very excited about the opportunity you have ahead of you this year. As we think about really Project Speedway phase I and the timing for which you guys would reach functional peak utilization, could you offer some color around that? Also, just when you think about Project Speedway phase II, when could that really start to contribute into your outlook?

Hey, again, good morning, Derrick. Good to hear from you. Speed 1, Speedway phase I comes online this summer. Certainly far from being 100% utilized at that point in time. We expect volumes on Speedway to ramp effectively from this summer through 2028. As we sit today, you know, back half of the year, obviously excited about the traction we have with Speedway phase I, and we see continued demand for that pipeline, including new interruptible call-up volumes that we could potentially capture on the WaterBridge side, which would feed, you know, increased royalties over to LandBridge. But there's a lot of room to grow beyond the back half of this year. For Speedway phase II, you know, really looking to bring that online to solve for back half of 2027 operational needs.

You know, clearly nothing has been kind of voiced over or contemplated as we think through the guidance of the messaging of the street on just on that just yet. Obviously as we're forming up our expectations for 2027 and it's time to deliver guidance, we'll certainly speak to the contribution from that project and the expectations.

Great. Maybe shifting over to the power gen and data center macro environment for the Permian. You guys have been very intentional with your releases to date. Given the recent Alpha Digital announcement and some of your peers' messaging heightened urgency year-over-year among the hyperscalers, could you help frame how that opportunity has changed for you guys over the last six months, last year?

Absolutely. You know, we stepped out and started speaking to the benefits of West Texas as it relates to data centers, you know, late 2023, early 2024, working through the IPO process. You know, we engaged in outreach with all of the major players, hyperscalers and data center developers kind of coming off of our efforts there. It was a bit of an education effort, but if you look at the last six-12 months, we've seen sentiment just grow so meaningfully, where, you know, where we sit today, we're engaged with discussions and negotiations and documentation with virtually every hyperscaler that's out there in some capacity.

West Texas has certainly been validated as the place to go for these large scale data center projects, and we're very happy with where we are in the mix. As you put it, we're being very thoughtful about making sure that we get to those right milestones before we step out and speak publicly, particularly as it relates to engagements with some of these larger counterparties, but we're excited to do that when we get to that point.

Great update, guys. Thanks for your time.

Yeah. Thanks, Derrick.

Your next question comes from the line of John Mackay with Goldman Sachs. Your line is open. Please go ahead.

Hey, team. Thank you for the time. I wanted to start on the acreage acquisitions, maybe two parts of this one. First, we've seen the larger deals from you guys, but these are kind of newer, smaller bolt-on. Is there a right cadence to think about for what you guys can do on this smaller deal size? And on a related note, you paid, you know, something around $1,000 an acre, let's say, on average for this. Just any commentary on, you know, what that looks like against the broader market would be helpful. Thanks.

Yeah. Hey, good morning, John. Good to hear from you. You know, we have been and will continue to be focused on these smaller tuck-in acquisitions as we think through coring up critical areas of our footprint. You know, when there's opportunities to fill in the gaps or expand the contiguous nature of certain positions we have, we're absolutely going to execute on that, and we'll continue to do so. As you mentioned, the price per acre here kind of remains competitive and in line with what we've paid historically for similar surface positions. You know, as it sits today, we have no reason to believe that's going to change.

All right. That's clear. Appreciate that one. Second for me is just going back to kind of the quarter versus the full year guide, understand there's some timing dynamics here. It does still imply a kind of, you know, decently higher, let's say, 2Q through 4Q run rate versus first quarter. Are there any kind of bigger, chunkier pieces you want us to have an eye on? More broadly, as part of that, you know, if you think about the run rate for the balance of the year, how much of that is actually kind of ratable quarter in, quarter out revenues that you get from your contracts versus, let's say, you know, cycling on new commercial deals each quarter?

Yeah. Ben, you cut out there for a second. I think you were implying, you know, effectively you're asking what is driving Q2 through Q4 expectations. You know, we've got three primary tailwinds. The first, obviously, just better visibility and conviction on the opportunity set, particularly on surface revenues relative to where we're at at the beginning of the year. Coupled with that is just growth in that opportunity set. There's no discrete call it chunky or lumpy projects that I would call out just yet to the extent or when we get those across the finish line, we'll obviously be eager to share that with the market. It is a pretty, call it, mixed and diverse group of opportunities and customers there that we're working through.

The second piece is just better visibility on produced water volumes and the read-through on royalties there for LandBridge. We've seen, you know, just greater demand both on the WaterBridge side as it relates to produced water handling volume needs for the back half of the year, but also with our third-party partners. Again, that's just more read-through on the royalty piece that'll provide some upside for LandBridge. Finally, you know, obviously, just a very different macro backdrop today relative to where we were at the beginning of the year during budgeting. That more constructive E&P environment over the near to medium term is just driving an increased demand on the resource side, both on sand and supply water.

There are a number of different items feeding, called our increased enthusiasm for the year, and we, you know, we would expect that to continue. Now, you know, as you kind of think through the cadence or kind of the regular way or repeatability of these revenue streams, the vast majority of the revenue we get is going to be recurring in some fashion. You know, we obviously do get those surface damage payments that sometimes can be these one-time payments. You know, the point we've made in the past, and it certainly still holds true today, is, you really need to think of that as a great call it forward-looking indicator of repeatable revenue to come.

A good example of that is gonna be improved water handling infrastructures installed on our surface, whether it's by WaterBridge or others. You know, there will be those one-time upfront damage payments, but that's gonna translate into recurring revenue and royalty streams, you know, hopefully perpetually over time. The same holds true for a lot of other types of infrastructure on our land. Again, while a lot of this is going to be repeatable, kind of recurring revenue to the extent we do get those one-time payments, I would be, I would encourage you to remember that that is typically just one piece of what is going to be a very recurring revenue stream thereafter.

Okay. Appreciate the comments, and we'll get some more in on the WaterBridge call.

Great.

Thanks, guys.

Thanks.

Your next question comes from the line of Alexander Goldfarb with Piper Sandler. Your line is open. Please go ahead.

Thank you, and good morning down there. Jason, just a question on, you know, production down there in the Delaware and Permian. Or I guess I should say Midland. Clearly there's a demand for U.S. production with what's going on over in Iran. As people ramp up production, how quickly does it flow through to you guys as far as revenue? Meaning like if there's suddenly a lot more drilling, a lot more, you know, use of sand and clutch and all the fun stuff, how quickly does that translate to revenue for you?

The second part of that question is, how much of your, you know, when you look at your different revenue businesses, how many of them do you think are directly related to increased energy production versus other uses that, you know, happen longer over, you know, a longer period of time versus instantly like, "Hey, we need more oil to ship overseas," what have you?

Appreciate that, Alex. I'll take the first one. If you think about just the payments associated with increased oil and gas activity, you've got damages right off the bat. When they're moving a rig on location, they're paying damages. You've got fees for pipelines, right of ways, et cetera, and then that obviously gets accelerated into the produced water once the wells are completed. We start to see that revenue trickle in over time and then, you know, a large portion of it on the latter part of the well's life.

I would just add, when you look at our revenue mix today, roughly 22% of our revenue is gonna be on that resource side. That is gonna be the piece that's most meaningfully kind of tied to that new development on the upstream side. That's somewhat by design because the remainder of our business or rather on the surface side in particular, which is 72% of our revenue, that is gonna be the more recurring rent, lease, production type exposed royalty and revenue streams, that just have much more longevity to it. As we've said from the beginning, we've always been very, very focused on maximizing those surface use revenues and royalties, just given the stickiness and the longevity.

While, you know, we certainly like that 22% we get on the resource side, you know, at the end of the day, you know, that has always been secondary to the surface given, we like having that long-term production exposure, not that short-term development exposure.

Okay. If I understand you correctly, you know, basically round numbers, 20% of your revenue could, you know, see an impact of increased production, you know, in terms of what's going on over in Iran, whereas 70% is more stable and less likely to be near term impacted by that. Is that correct?

I would frame it more as about 20% of our revenue is going to see an immediate impact due to an increase in development activity. The remaining 70% could see some uptick, the benefit of that uptick is it is more prolonged because it is production driven. Even if development starts to taper back a bit, you still get the benefit of that long-term kind of rent royalty stream that comes from the production exposure versus that drill bit exposure.

Okay. The next question is on PowerBridge. I don't think you guys disclosed any, you know, economics or what the upfront deposit was. You know, can you just give a little bit more color on some of the terms and, you know, what the upfront payment is and, you know, how long they have to engage?

Happy to. It is a one-year option. They paid $2.6 million for that option. It is for 3,400 acres, in Reeves County on one of our positions there. You know, they are planning to bring on up to 2 GW of initial power generation capacity with the ability to scale beyond that. It's something we're very happy about. They're targeting bringing first power online late next year. You know, it is quite quick to move. Again, I think this is a real reflection of the benefit of the ecosystem. It's a real reflection, I think, of PowerBridge's kind of capabilities, obviously led by Alex Hernandez, who's an incredibly well-known, capable leader in the space. We're really happy to partner with him on this.

Okay. The $2.6 million, that was recognized in the first quarter?

That's right.

Okay. Are there any lease payments from now until late 2027, or there's no payments until late 2027?

The payment structure will pivot should they execute on the option and it converts to a lease. When that time comes, we will obviously circle back to the market and speak to the terms there.

Awesome. Thank you very much, Scott.

Yeah. Thanks, Alex.

As a reminder, if you would like to ask a question, please press star one to raise your hand. To withdraw your question, please press star one again. We ask that you pick up your handset when asking a question to allow for optimum sound quality. If you're muted locally, please remember to unmute your device. Your next question comes from the line of Charles Meade with Johnson Rice. Your line is open. Please go ahead.

Good morning, Jason and Scott.

Good morning.

To the rest of your team there. I wondered, Scott, you approached this question in an earlier answer, but on the subject of acquisition. You guys have attracted a lot of, I guess, you know, copycats or competitors with the success you've had in the Delaware Basin. I'm wondering if you could talk about how the complexion maybe has or hasn't changed on the acquisition front and whether I think you said that the price hasn't really gone up, but maybe are there more people in the room or just, you know, what are you seeing change on the acquisition front?

Yeah. No. Hey, Charles, good to hear from you. We haven't seen much in the way of impact just yet. I mean, just as a reminder, we alluded to this in the prepared remarks, you know, we've been very focused from day one on acquiring that fee surface acreage. It's very important to us to get, you know, to get that title rather than, like, BLM or state leases as an alternative. When you think of just the focus that we've had on that, there really just hasn't been, call it, many counterparties that have stepped in and really looked to compete in that regard. You know, it's put us in a good spot today, though.

We think that there's just. You know, the economics of that position is just going to be much better than the alternative, and we've been able to build that position obviously to over 300,000 acres. You know, I think if we were to step into a situation where, you know, we were looking to acquire BLM or state leases, there are others kind of looking to grow that a bit. For all the reasons we've discussed over the last several years, that's just not a focus of ours.

Got it. That makes sense. Then, Scott, you also alluded, I believe you alluded earlier in your prepared comments about the normal seasonality in commercial agreements. Can you kind of decompose what's going on there? Is this just companies that maybe it takes them a while to organize their priorities with the new capital budget, or is this what's the seasonality there and is that something we should expect going forward?

Yeah. You know, we, you know, we often see seasonality kind of exiting the year, stepping into a new year as our customers kind of wrap up their capital cycles for the year and start working through the budgeting process. It's not atypical to see slower starts to the year. You know, that was what we saw this year just and to some extent that obviously influenced kind of Q1 results. The second piece I'd kind of flag there, and I do think this is important, is, you know, at the end of the day, when we work through really driving and creating value for this company, particularly on the surface side, you know, ultimately we're not focused on what quarter, you know, a particular agreement gets signed.

That's going to lead to, you know, a little bit of ebb and flow in terms of when that revenue is recognized, and there's going to be times where that very clearly works to our advantage. We saw a fantastic fourth quarter exiting the year. You know, there's going to be times just depending on when contracts are signed. If it's, you know, on the next quarter that it just ends up having a little bit of lumpiness to it. I think what's important to keep in mind, and something that we've said from the get-go, is the wins and losses at this company are not measured quarter-over-quarter. This is about generating year-over-year compounding growth. I think we've continued to do that.

We'll continue to do that going forward regardless of the seasonality, and other kind of shorter term nuances that we just talked through.

Great color. Thank you.

Yeah. Thanks, Charles.

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

Yeah. Thanks again for everyone's participation this morning. We, as always, appreciate your thoughtful questions and your support. Looking forward to staying synced up, and please feel free to reach out if we can be helpful.

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