LandBridge Raises 2026 EBITDA Guidance as Q3 Revenue Climbs 39%

LandBridge (NYSE: LB) increased its full-year 2026 adjusted EBITDA guidance to $220 million to $235 million after third-quarter revenue rose 39% year over year and its high-margin land-use business generated stronger earnings and cash flow. The company also expanded its Delaware Basin acreage and advanced a powered data center project, broadening the commercial activity supported by its land portfolio.

Revenue totaled $70.9 million for the third quarter, up 6% sequentially. Net income increased 68% from a year earlier and 10% from the second quarter to $34.0 million, representing a 48% net income margin.

Adjusted EBITDA, a non-GAAP measure, rose 42% year over year and 7% sequentially to $63.7 million. The adjusted EBITDA margin was 90%, compared with 88% in the prior-year period and 89% in the second quarter.

Operating cash flow reached $49.6 million, up 42% year over year and 20% sequentially, with a 70% margin. Free cash flow increased 45% from a year earlier and 22% from the previous quarter to $49.0 million, while the free cash flow margin was 69%. LandBridge announced a quarterly cash dividend of $0.12 per share and said its $50 million share-repurchase program remains active.

Surface-use activity remains the main revenue source

Surface-use royalties and related revenue contributed $54.3 million, or about 77% of quarterly revenue. This category includes payments for land used for water infrastructure, roads, drilling sites, pipelines, power transmission and other operational facilities.

Resource sales and royalties generated $12.5 million, or 18% of revenue, reflecting activities involving resources such as brackish water, caliche and sand. Oil and gas royalties contributed $4.1 million, or approximately 6%. Overall, non-oil-and-gas royalty revenue accounted for 94% of LandBridge’s third-quarter revenue.

LandBridge owns or manages more than 350,000 surface acres in the Delaware Basin. Its strategy is to increase commercial use of that acreage across oil and gas infrastructure, produced-water handling, power generation, digital infrastructure and other industrial applications.

The company’s relationship with WaterBridge Infrastructure remains central to that model. WaterBridge pays royalties and surface-use fees for access to LandBridge acreage while bearing the costs of constructing, maintaining and operating its water infrastructure. LandBridge said the prevailing royalty rate for new contracts is approximately $0.15 per barrel, while legacy arrangements carry lower rates.

Acquisitions and digital infrastructure expand the development pipeline

During the quarter, LandBridge acquired approximately 25,000 acres across the Delaware Basin, adding contiguous acreage, undeveloped pore space and contracted royalty cash flows. Through the first nine months of 2026, it acquired about 34,000 acres for a cumulative purchase price of approximately $275 million, including transaction costs. The acquired properties had about $27 million of associated last-12-month adjusted EBITDA as calculated under the company’s credit facility.

LandBridge said year-to-date EBITDA was not materially affected by those acquisitions, but it expects acquired EBITDA to contribute beginning in the fourth quarter of 2026 and beyond. Management also identified potential uses for the acquired acreage including pore-space monetization, power and digital infrastructure, alternative energy and broader industrial development.

In digital infrastructure, PowerBridge LLC converted an option into a lease covering part of the Alpha Digital Campus acreage and began construction on the first phase of a powered data center campus. LandBridge also highlighted access to an estimated 13.4 million acre-feet of brackish water through its surface portfolio, which it said could help support data centers and other industrial developments both on and beyond its footprint. Those estimates are based on independently verified recoverable volumes and remain subject to depletion and other assumptions.

Liquidity rises as leverage remains above the long-term target

LandBridge increased its revolving credit facility by $100 million to $375 million during the quarter and reduced applicable pricing margins by 25 basis points. On Oct. 1, it issued an additional $125 million of 6.25% senior notes due in 2030 and used the proceeds to repay revolving-credit borrowings.

After reflecting those transactions, the presentation showed $765 million of total debt, $17 million of cash and cash equivalents, and $252 million of liquidity. Net debt was $748 million, while net debt to covenant EBITDA stood at 3.0 times. The company maintained its long-term net leverage target of 2.0 to 2.5 times and said it intends to preserve flexibility for acquisitions and shareholder returns.

LandBridge also completed its conversion from a Delaware limited liability company to a Texas corporation, a change the company said could enable participation in a broader range of market indices.

The outlook remains exposed to customer demand for LandBridge’s acreage and resources, WaterBridge’s ability to build and operate infrastructure, and the pace of customer development. Other identified uncertainties include reliance on a limited number of customers and the Delaware Basin, energy prices and production levels, regulatory changes affecting water disposal and land use, acquisition execution, financing conditions, cybersecurity threats and natural disasters. The company’s plans for data centers, power projects and other nontraditional uses also depend on attracting developers and successfully executing longer-term commercial projects.