UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
(Mark One)
☒
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2025
OR
☐
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission File Number: 001-42150
LandBridge Company LLC
(Exact Name of Registrant as Specified in its Charter)
Delaware
93-3636146
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification No.)
5555 San Felipe Street, Suite 1200Houston, Texas
77056
(Address of principal executive offices)
(Zip Code)
Registrant’s telephone number, including area code: (713) 230-8864
Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class
Trading Symbol(s)
Name of Each Exchange on Which Registered
Class A shares, representing limited liability company interests
LB
New York Stock Exchange
NYSE Texas, Inc.
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
Accelerated filer
Non-accelerated filer
Smaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
As of November 12, 2025, the registrant had 25,338,199 Class A shares and 51,750,916 Class B shares, outstanding.
TABLE OF CONTENTS
Page
PART I — FINANCIAL INFORMATION
Glossary
3
Cautionary Note Regarding Forward Looking Statements
5
Item 1.
Financial Statements (Unaudited)
7
Condensed Consolidated Balance Sheets
Condensed Consolidated Statements of Operations
8
Condensed Consolidated Statements of Shareholders’ and Member’s Equity
9
Condensed Consolidated Statements of Cash Flows
11
Notes to the Unaudited Condensed Consolidated Financial Statements
12
1. Organization and Nature of Operations
2. Summary of Significant Accounting Policies
3. Asset Acquisitions
15
4. Property, Plant and Equipment
16
5. Income Taxes
6. Debt
17
7. Shareholders’ and Member’s Equity
19
8. Share-Based Compensation
20
9. Earnings Per Share
22
10. Related Party Transactions
23
11. Subsequent Events
24
Item 2.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
25
Item 3.
Quantitative and Qualitative Disclosures About Market Risk
41
Item 4.
Controls and Procedures
PART II — OTHER INFORMATION
Legal Proceedings
42
Item 1A.
Risk Factors
Unregistered Sales of Equity Securities and Use of Proceeds
Defaults Upon Senior Securities
Mine Safety Disclosures
Item 5.
Other Information
Item 6.
Exhibits
43
Signatures
44
2
GLOSSARY
The following are abbreviations and definitions of certain terms used in this document, many of which are commonly used in the industry:
1918 Acquisition. The acquisition of approximately 37,500 total acres across Reeves, Loving, Winkler and Ward counties, Texas, and certain related assets from 1918 Ranch & Royalty, LLC.
Bbl. One barrel of volume used for measuring oil.
Boe. A barrel of oil equivalent, which is used to express crude oil, NGL and natural gas volumes on a comparable crude oil equivalent basis. Gas equivalents are determined under the relative energy content method by using the ratio of 6.0 Mcf of natural gas to 1.0 Bbl of crude oil or NGL.
Brackish water. Water with salinity levels between seawater and freshwater.
Completion. The process of preparing a well for the production of oil and gas by injecting high-pressure fluids mixed with proppants to create fractures in reservoir rock to enhance permeability.
Crude oil. A mixture of hydrocarbons that exists in liquid phase in natural underground reservoirs and remains liquid at atmospheric pressure after passing through surface separating facilities.
Delaware Basin. A geological depositional and structural basin in West Texas and southern New Mexico, which is a part of the Permian Basin.
Division. The plan of division dividing NDB LLC into two Delaware limited liability companies, NDB LLC and LandBridge Holdings, pursuant to which the holders of NDB Incentive Units were issued an identical number of equity interests in LandBridge Holdings, including Incentive Units at LandBridge Holdings.
E&P companies. Oil and natural gas exploration and production companies, including producers and/or operators.
Five Point. Five Point Infrastructure LLC, a Delaware limited liability company and our legacy financial sponsor.
GAAP. Accounting principles generally accepted in the United States of America.
Incentive Units. Management incentive units consisting of time-based awards of profits interests in LandBridge Holdings.
LandBridge. LandBridge Company LLC, a Delaware limited liability company.
LandBridge Holdings. LandBridge Holdings LLC, a Delaware limited liability company and portfolio company of funds affiliated with Five Point that owns 100% of our Class B shares.
MBbls. One thousand barrels.
MBbl/d. One thousand barrels per day.
Mboe. One thousand BOE.
Mboe/d. One thousand BOE per day.
Mcf. One thousand cubic feet of natural gas.
Mineral interest. Real-property interests that grant ownership of oil and natural gas under a tract of land and the rights to explore for, develop, and produce oil and natural gas on that land or to lease those exploration and development rights to a third party.
MMcf. One million cubic feet of natural gas.
NDB Incentive Units. Incentive units consisting of time-based awards of profits interests in NDB LLC granted to certain individuals prior to the Division.
NDB LLC. WaterBridge NDB LLC, a Delaware limited liability company and portfolio company of funds affiliated with Five Point.
NGL. Natural gas liquid.
OpCo. DBR Land Holdings LLC, a Delaware limited liability company.
Operator. The individual or company responsible for the development and/or production of an oil or natural gas well.
Permian Basin. A large sedimentary basin located in West Texas and southeastern New Mexico with significant historical and current oil and gas exploration and production activity.
Produced water. Water produced from an oil and natural gas well alongside crude oil and natural gas.
Produced water handling facilities. Facilities utilized for the treatment, handling and disposal of produced water.
Rod. A rod is a unit of measure of 16.5 feet that is measured in linear feet.
Royalty. A real property interest that entitles the owner the right to receive a portion of the production (or the proceeds therefrom) produced from the underlying real property or a payment for the use of such underlying real property, and does not require the owner to pay any portion of the production or development costs.
WaterBridge. WaterBridge Infrastructure LLC, a Delaware limited liability company (NYSE: WBI), and its subsidiaries.
WTI. West Texas Intermediate, a grade of crude oil commonly used in reference to pricing for crude oil.
4
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
The information in this Quarterly Report on Form 10-Q (this “Quarterly Report”) includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). All statements, other than statements of historical fact included in this Quarterly Report, regarding our strategy, future operations, estimated revenues and losses, projected costs, prospects, plans and objectives of management are forward-looking statements. When used in this Quarterly Report, words such as “assume,” “could,” “would,” “should,” “will,” “believe,” “anticipate,” “intend,” “estimate,” “expect,” “project,” “forecast,” “may,” “objective,” “plan,” “budget” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain such identifying words. These forward-looking statements are based on our current expectations and assumptions about future events and are based on currently available information as to the outcome and timing of future events at the time such statements were made. These forward-looking statements are based on management’s current belief, based on currently available information, as to the outcome and timing of future events. When considering forward-looking statements, you should keep in mind the risk factors and other cautionary statements described under the section entitled “Risk Factors” included elsewhere in this Quarterly Report and each of the other factors set forth in “Part I - Item 1A. Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024 (the “2024 Form 10-K”), and in other reports filed with the United States Securities and Exchange Commission (the “SEC”). By their nature forward-looking statements involve known and unknown risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. Although we believe that the forward-looking statements contained in this Quarterly Report are based on reasonable assumptions, you should be aware that many factors could affect our actual results of operations, cash flows and financial position and could cause actual results to differ materially from those in such forward-looking statements. Forward-looking statements may include, but are not limited to, statements about:
We caution you that these forward-looking statements are subject to all of the risks and uncertainties, most of which are difficult to predict and many of which are beyond our control, incident to the operation of business in our industry. We disclose important factors that could cause our actual results to differ materially from our expectations under “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and elsewhere in this Quarterly Report. Factors that could materially adversely affect our business, financial condition, operating results or liquidity and the trading price of our Class A shares are described under “Risk Factors,” included in our 2024 Form 10-K. This information should be considered carefully, together with other information in this report and other reports and materials we file with the SEC. Should one or more of the risks or uncertainties described in this Quarterly Report occur, or should underlying assumptions prove incorrect, our actual results and plans could differ materially from those expressed in any forward-looking statements. Moreover, we operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make.
All forward-looking statements, expressed or implied, included in this Quarterly Report are expressly qualified in their entirety by this cautionary note. This cautionary note should also be considered in connection with any subsequent written or oral forward-looking statements that we or persons acting on our behalf may issue. Except as may otherwise be required by applicable law, we disclaim any duty to update any forward-looking statements, all of which are expressly qualified by the statements in this section, to reflect events or circumstances after the date of this Quarterly Report.
6
LandBridge Company LLC and Subsidiaries
(in thousands)
(unaudited)
September 30,
December 31,
2025
2024
Current assets:
Cash and cash equivalents
$
28,316
37,032
Accounts receivable, net
19,669
12,544
Related party accounts receivable
4,564
2,111
Prepaid expenses and other current assets
4,821
1,628
Total current assets
57,370
53,315
Non-current assets:
Property, plant and equipment, net
917,975
902,742
Intangible assets, net
41,845
45,265
Deferred tax assets
59,116
29,416
Other assets
1,614
1,741
Total non-current assets
1,020,550
979,164
Total assets
1,077,920
1,032,479
Liabilities and equity
Current liabilities:
Accounts payable
637
489
Taxes payable
702
2,286
Related party accounts payable
902
686
Accrued liabilities
7,322
7,185
Current portion of long-term debt
924
424
Deferred revenue
2,238
1,221
Other current liabilities
1,094
2,119
Total current liabilities
13,819
14,410
Non-current liabilities:
Long-term debt, net of debt issuance costs
366,081
380,815
Other long-term liabilities
192
183
Total non-current liabilities
366,273
380,998
Total liabilities
380,092
395,408
Class A shares, unlimited shares authorized and 25,337,028 shares issued and outstanding as of September 30, 2025. Unlimited shares authorized and 23,255,419 shares issued and outstanding as of December 31, 2024
254,007
208,427
Class B shares, unlimited shares authorized and 51,093,505 shares issued and outstanding as of September 30, 2025. Unlimited shares authorized and 53,227,852 shares issued and outstanding as of December 31, 2024
-
Retained earnings
17,981
3,349
Total shareholders’ equity attributable to LandBridge Company LLC
271,988
211,776
Noncontrolling interest
425,840
425,295
Total shareholders’ equity
697,828
637,071
Total liabilities and equity
See accompanying notes to the unaudited condensed consolidated financial statements
Three Months Ended September 30,
Nine Months Ended September 30,
Revenues:
Surface use royalties
8,235
4,227
27,775
9,129
Surface use royalties - Related party
10,152
5,627
24,743
11,902
Easements and other surface-related revenues
15,840
5,176
36,552
15,018
Easements and other surface-related revenues - Related party
807
1,465
6,388
4,224
Resource sales
4,501
4,874
17,122
11,908
Resource sales - Related party
731
57
1,098
329
Resource royalties
3,929
2,686
11,927
6,803
Resource royalties - Related party
1,604
1,472
5,558
2,579
Oil and gas royalties
3,332
2,903
9,452
11,563
Other
1,700
Total revenues
50,831
28,487
142,315
73,455
Resource sales-related expense
438
423
1,384
1,739
Other operating and maintenance expense
1,160
708
1,837
General and administrative expense
15,864
22,131
45,356
98,114
Depreciation, depletion, amortization and accretion
2,584
2,038
7,730
6,294
Other operating (income) expense, net
(100
)
71
Operating income (loss)
30,885
3,187
84,425
(34,529
Interest expense, net
7,889
7,071
23,745
16,235
Other income
(241
Income (loss) from operations before taxes
22,996
(3,884
60,680
(50,523
Income tax expense (benefit)
2,705
(1,128
6,455
(890
Net income (loss)
20,291
(2,756
54,225
(49,633
Net loss prior to the IPO
(46,877
Net income (loss) attributable to noncontrolling interest
12,184
(5,412
32,153
Net income attributable to LandBridge Company LLC
8,107
2,656
22,072
Net income (loss) per share of Class A shares
Basic
0.31
0.15
0.89
Diluted
0.26
(0.04
0.70
Weighted average shares outstanding of Class A shares
25,335,054
17,425,000
24,227,677
76,518,549
73,151,603
76,459,219
Class A
Class B
Retained Earnings
Non- controllingInterest
TotalShareholders’ Equity
Shares
Amount
Balance at January 1, 2025
23,255,419
53,227,852
Net income
6,464
8,995
15,459
Deemed non-cash contributions
8,945
RSU share-based compensation expense
668
1,527
2,195
Cancellation of Class B shares
(34,674
Tax distributions
(5,821
Dividends and distributions
(2,326
(5,336
(7,662
RSU dividend equivalent rights
(23
(52
(75
Changes in ownership interest adjustment
860
(860
Offering costs
(450
Balance at March 31, 2025
209,505
53,193,178
7,464
432,693
649,662
7,502
10,973
18,475
9,044
715
1,512
2,227
Redemption of Class B shares for Class A shares
1,900,000
(1,900,000
(79,686
(16,650
(2,515
(5,124
(7,639
(25
(51
(76
13,880
(13,880
Tax impact of ownership interest adjustment
30,123
(201
Balance at June 30, 2025
25,155,419
254,022
51,213,492
12,426
418,517
684,965
9,144
689
1,392
2,081
Class A Shares issued on vesting of RSUs, net of shares withheld for tax
181,609
(5,728
(119,987
(7,140
(2,534
(5,121
(7,655
(18
(37
(55
3,099
(3,099
1,843
82
Balance at September 30, 2025
25,337,028
51,093,505
Member's Equity
Total Shareholders' and Member’s Equity
Balance at January 1, 2024
150,747
Deemed non-cash contributions prior to reorganization
810
Net income prior to reorganization
10,776
Balance at March 31, 2024
162,333
Contribution from member
120,000
71,762
Net loss prior to reorganization
(57,653
Balance at June 30, 2024
296,442
Effect of Corporate Reorganization and IPO
(296,442
94,126
55,726,603
301,023
98,707
Deemed non-cash contributions subsequent to reorganization
9,830
RSU share-based compensation expense subsequent to reorganization
427
1,367
1,794
Net income (loss) subsequent to reorganization
Balance at September 30, 2024
94,553
306,808
404,017
10
Cash flows from operating activities
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Amortization of debt issuance costs
1,619
1,177
Share-based compensation
33,636
84,196
Deferred income tax expense (benefit)
2,265
(1,276
Changes in operating assets and liabilities:
Accounts receivable
(7,130
1,640
(2,452
(1,124
Prepaid expenses and other assets
(3,906
(341
65
(50
216
51
1,017
166
Accrued liabilities and other liabilities
(565
(387
1,432
(5
Net cash provided by operating activities
88,157
40,708
Cash flows from investing activities
Acquisitions
(18,767
(431,260
Capital expenditures
(2,496
(761
Proceeds from disposal of assets
210
Net cash used in investing activities
(21,053
(432,021
Cash flows from financing activities
Proceeds from issuance of Class A shares, net of underwriting discounts and fees
278,263
Taxes paid related to net share settlement of RSUs
Contributions from member
Dividends, dividend equivalents, and distributions paid
(52,773
(170,854
Proceeds from term loan
265,000
Repayments on term loan
(5,750
(93,750
Proceeds from revolver
15,000
Repayments on revolver
(25,000
(35,000
Debt issuance costs
(3,437
(1,110
(6,997
(404
(318
Net cash (used in) provided by financing activities
(75,820
367,907
Net decrease in cash and cash equivalents
(8,716
(23,406
Cash and cash equivalents - beginning of period
37,823
Cash and cash equivalents - end of period
14,417
LandBridge Company LLC (the “Company,” “LandBridge,” “we,” “our” or “us”) is headquartered in Houston, Texas and was formed on September 27, 2023 as a Delaware limited liability company to serve as the issuer in an initial public offering (the “IPO”) that occurred on July 1, 2024. We are governed by our First Amended & Restated Limited Liability Company Agreement, dated as of July 1, 2024 (the “A&R LLC Agreement”), which was entered into in connection with the IPO.
Our accounting predecessor is DBR Land Holdings LLC (“OpCo”) and its subsidiaries. OpCo was formed in September 2021. We are a holding company whose principal asset consists of membership interests in OpCo (“OpCo Units”). As the managing member of OpCo and its subsidiaries, we operate and control all of the business and affairs of OpCo and its subsidiaries, and through OpCo and its subsidiaries, conduct our business.
We generate revenue primarily from the use of our surface acreage, the sale of resources from our land and oil and natural gas royalties. The use of surface acreage generally includes easements or leases and various surface use royalties. Sale of resources generally includes sales of brackish water and other surface composite materials. Our assets consist mainly of fee surface acreage, oil and natural gas mineral interests, brackish water wells and ponds and related facilities.
We own surface acreage in and around the Delaware Basin across Andrews, Loving, Reeves, Pecos and Winkler Counties in Texas and Eddy and Lea Counties in New Mexico and we own oil and natural gas mineral interests in Loving and Reeves Counties, Texas.
The accompanying unaudited condensed consolidated financial statements (the “Financial Statements”) of the Company have been prepared in accordance with GAAP for interim financial information and in accordance with Rule 10-01 of Regulation S-X and reflect all adjustments, consisting of normal recurring adjustments which are, in the opinion of management, necessary for a fair statement of the financial results for the interim periods presented. Accordingly, these Financial Statements should be read in conjunction with the Company’s annual audited financial statements and accompanying notes included in our Annual Report on Form 10-K for the year ended December 31, 2024 (the “2024 Form 10-K”). When necessary, certain reclassifications are made to prior period financial information to conform with current period presentation. All dollar amounts in the Financial Statements and tables in the notes are stated in thousands of dollars unless otherwise indicated.
In these Financial Statements, periods prior to the IPO reflect the financial statements of OpCo and its subsidiaries. Periods subsequent to the IPO, reflect the financial statements of the consolidated Company, including LandBridge, OpCo and its subsidiaries.
Results of operations for the three and nine months ended September 30, 2025 are not necessarily indicative of the results of operations that will be realized for the year ending December 31, 2025.
Subsequent to the issuance of the Company’s Consolidated Financial Statements filed in our Annual Report on Form 10-K for the period ended December 31, 2024 and our Quarterly Report on Form 10-Q for the period ended March 31, 2025, the Company identified two errors in connection with its December 2024 private placement of Class A shares and the corresponding purchase of 2,498,751 OpCo Units from LandBridge Holdings, along with the cancellation of a corresponding number of Class B shares held by LandBridge Holdings. The Company did not correctly rebalance the carrying amount of the non-controlling interest (“NCI”) to reflect the ownership change at OpCo in connection with the December 2024 purchase of OpCo Units, resulting in an understatement of the NCI amount and an overstatement of the Class A amount of $253.2 million, respectively, on the consolidated balance sheets and the consolidated statement of shareholders’ and member’s equity as of December 31, 2024. Further, a cancellation of OpCo Units occurred during the three months ended March 31, 2025 resulting in an overstatement of the NCI and an understatement of the Class A amount for that period. Additionally, the Company did not reflect the deferred tax asset generated from the step-up in tax basis associated with the December 2024 purchase of OpCo Units, resulting in an understatement of deferred tax assets and Class A amount of $29.0 million, respectively, on the consolidated balance sheets and consolidated statement of shareholders’ and member’s equity as of December 31, 2024.
We assessed the materiality of the error, both quantitatively and qualitatively, in accordance with the SEC’s Staff Accounting Bulletin No. 99 and Staff Accounting Bulletin No. 108, and concluded the error was not material to any of our previously-issued quarterly or annual financial statements. However, we determined that it was appropriate to revise the applicable items in our previously-issued
Notes to the Unaudited Condensed Consolidated Financial Statements (Continued)
financial statements. The adjustment to deferred tax assets of $29.0 million adjusts the investment in partnership amount within Note 7 — Income Taxes of the Company’s consolidated financial statements contained in the 2024 Form 10-K. The error has no impact on the results of operations in our previously reported consolidated statements of operations, including net (loss) income or net income per share of Class A shares, or to cash flows in our previously reported consolidated statements of cash flows. The following tables reflect the effects of the correction on all affected line items of the Company’s previously reported consolidated financial statements:
Consolidated Balance Sheets
December 31, 2024
As Previously Reported
Adjustment
As Adjusted
411
29,005
950,159
1,003,474
Class A shares, unlimited shares authorized and 23,255,419 shares issued and outstanding as of December 31, 2024. None authorized, issued or outstanding as of December 31, 2023.
432,663
(224,236
436,012
172,054
253,241
Total shareholders’ and member’s equity
608,066
March 31, 2025 (Unaudited)
72
29,077
964,506
993,511
1,008,100
1,037,105
Class A shares, unlimited shares authorized and 23,255,419 shares issued and outstanding as of March 31, 2025 and December 31, 2024.
432,881
(223,376
440,345
216,969
180,312
252,381
620,657
Consolidated Statements of Shareholders’ and Member’s Equity
Class A Amount
Non-controlling interest amount
Total Shareholders’ and Member’s Equity
(253,241
Tax impact of interest adjustment
Balance at December 31, 2024
13
Consolidated Statements of Shareholders’ Equity
Total Shareholders’ Equity
Consolidation
We have determined that the members with equity at risk in OpCo lack the authority, through voting rights or similar rights, to direct the activities that most significantly impact OpCo’s economic performance; therefore, OpCo is considered a variable interest entity. As the managing member of OpCo, we operate and control all of the business and affairs of OpCo and also have the obligation to absorb losses or the right to receive benefits that could be potentially significant to us. Therefore, we are considered the primary beneficiary and consolidate OpCo.
The Financial Statements include the accounts of the Company, OpCo and its wholly owned subsidiaries. All intercompany transactions and balances have been eliminated upon consolidation.
Noncontrolling Interest
Our Financial Statements include a noncontrolling interest representing the percentage of OpCo Units not held by us. The noncontrolling interest is subject to change in connection with various equity transactions such as issuances of Class A shares, the redemption of OpCo Units (and corresponding cancellation of an equivalent number of Class B shares) for Class A shares, or the cancellation of OpCo Units (and corresponding cancellation of an equivalent number of Class B shares) in lieu of the payment of a tax distribution by OpCo to the Company in excess of the Company’s tax obligation for a given quarter.
The Company operates in a single operating and reportable segment. All of our long-lived assets are located in the United States. Accounting Standards Codification (“ASC”) Topic 280, Segment Reporting, defines characteristics of operating segments as being components of an enterprise in which separate discrete financial information is available for evaluation by the chief operating decision maker (“CODM”) in making decisions on how to allocate resources and assess performance. The Company’s one segment approach is consistent with the reporting structure of the Company’s internal organization, as well as with the financial information used by the Company’s CODM. The Company’s CODM is the Chief Executive Officer who allocates resources and assesses performance based upon financial information at the consolidated level. The financial measure regularly provided to the CODM that is most consistent with GAAP is net income (loss), as presented on our condensed consolidated statements of operations. The measure of segment assets is reported on the condensed consolidated balance sheets as total assets. The Company presents all of its significant segment expenses and other metrics as used by the CODM to make decisions regarding the Company’s business, including resource allocation and performance assessment in our Financial Statements.
As of September 30, 2025, the Company’s significant accounting policies are consistent with those discussed in Note 2 — Summary of Significant Accounting Policies of its consolidated financial statements contained in the 2024 Form 10-K. There were no significant updates or revisions to our accounting policies during the three and nine months ended September 30, 2025.
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Whenever available, fair value is based on or derived from observable market prices or parameters. When observable market prices or inputs are not available, unobservable prices or inputs are used to estimate the fair value. The three levels of the fair value measurement hierarchy are as follows:
14
The carrying value of the Company’s cash and cash equivalents, accounts receivable, net of current expected credit losses, and accounts payable and accrued liabilities reported on the condensed consolidated balance sheets approximate fair value due to their highly liquid nature or short-term maturity.
The Company adjusts the carrying amount of certain non-financial assets, property, plant and equipment and definite-lived intangible assets, to fair value on a non-recurring basis when impaired.
The fair value of debt is the estimated amount the Company would have to pay to transfer its debt, including any premium or discount attributable to the difference between the stated interest rate and market rate of interest at the balance sheet date. Refer to Note 6 — Debt for additional information.
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740). This guidance further enhances income tax disclosures, primarily through standardization and disaggregation of rate reconciliation categories and income taxes paid by jurisdiction. We plan to adopt this guidance and comply with the disclosure requirements when it becomes effective for our 2025 annual report. We are currently assessing the impact of this standard on our Financial Statements and related disclosures.
In November 2024, the FASB issued ASU 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40). This guidance requires tabular disclosure of specified natural expenses in certain expense captions, a qualitative description of amounts that are not separately disaggregated, and disclosure of the Company's definition and total amount of selling expenses. We plan to adopt this guidance and comply with the disclosure requirements when it becomes effective for annual periods beginning after December 15, 2026. We are currently assessing the impact of this standard on our Financial Statements and related disclosures.
On February 25, 2025, the Company acquired approximately 3,000 surface acres in Lea County, New Mexico, from a private third-party seller for total cash consideration of $17.1 million inclusive of $0.4 million in transaction costs. The purchase consideration was all attributed to land value.
On April 11, 2025, the Company acquired approximately 800 surface acres in Reeves County, Texas, from a private third-party seller for total cash consideration of $0.7 million, inclusive of $0.1 million in transaction costs. The purchase consideration was all attributed to land value.
During the nine months ended September 30, 2025, the Company paid approximately $1.0 million related to accrued costs for acquisitions completed in 2024.
As of September 30, 2025 and December 31, 2024, property, plant and equipment, net of accumulated depreciation and depletion consisted of the following:
Oil and natural gas properties
Proved
36,177
36,068
Unproved
2,934
3,043
Total oil and natural gas properties
39,111
Land and land improvements
872,363
855,092
Water wells, pipelines, facilities, ponds and related equipment
21,496
21,109
Buildings, vehicles, equipment, furniture and other
5,187
5,162
Construction in progress
1,834
939,991
920,488
Less: accumulated depreciation and depletion
(22,016
(17,746
Total property, plant and equipment, net
Depreciation expense and depletion expense for the three and nine months ended September 30, 2025 and 2024 are shown in the following table:
Three Months EndedSeptember 30,
Nine Months EndedSeptember 30,
Depreciation expense
761
638
2,308
1,881
Depletion expense
683
816
2,002
2,649
Total depreciation and depletion expense
1,444
1,454
4,310
4,530
Our predecessor, OpCo, is a Delaware limited liability company treated as a partnership and, therefore, has not been subject to U.S. federal income tax at an entity level. As a result, the consolidated net income in our historical financial statements does not reflect the tax expense we would have incurred if we were subject to U.S. federal income tax at an entity level during the periods prior to the IPO. Instead, taxable income is allocated to members, including the Company, and, except for Texas franchise tax, any taxable income of OpCo is reported in the respective tax returns of its members.
In calculating the provision for income taxes on an interim basis, the Company uses an estimate of the annual effective tax rate based upon currently known facts and circumstances and applies that rate to its year-to-date earnings or losses. The Company’s effective tax rate is based on expected income and statutory tax rates and takes into consideration permanent differences between financial statement and tax return income applicable to the Company in the various jurisdictions in which the Company operates.
The calculation of our effective tax rate was as follows for the three and nine months ended September 30, 2025 and 2024:
Income (loss) before income taxes
Effective tax rate
11.76
%
29.04
10.64
1.76
The effective tax rates for the three and nine months ended September 30, 2025 and the three months ended September 30, 2024 differed from the statutory rate of 21.0% primarily due to the impact of the noncontrolling interest. The effective tax rate for the nine
months ended September 30, 2024, was lower than the statutory rate of 21% primarily due to pre-IPO activities, during which the Company was not subject to federal income tax.
On May 23, 2025, LandBridge Holdings redeemed 1,900,000 OpCo Units (together with the cancellation of 1,900,000 of Class B shares) for an equivalent amount of Class A Shares and subsequently sold the Class A Shares in a private transaction pursuant to Rule 144 under the Securities Act through a broker-dealer. The Company did not receive any proceeds from the sale of the Class A Shares. The redemption and exchange of these OpCo Units is treated as a taxable purchase of the redeemed OpCo Units by the Company for U.S. federal and applicable state income tax purposes. As a result of this deemed purchase, the Company’s tax basis in its share of the assets of OpCo increased and the Company recorded a deferred tax asset of $30.1 million for this increase as it is expected to be recovered through future amortization deductions afforded to the Company. Because the deferred tax asset arose in connection with a transaction between the Company and its shareholders, the initial deferred tax asset is recorded in Class A shares on the condensed consolidated balance sheets.
The Company regularly evaluates all deferred tax assets as to their future realization using positive and negative evidence. As of September 30, 2025, the Company believes it is more likely than not that all deferred tax assets will be realized and as a result, the Company has not recorded a valuation allowance against its deferred tax assets.
On July 4, 2025, the BBB Act was signed into law which makes permanent many of the tax provisions enacted in 2017 as part of the Tax Cuts and Jobs Act that were set to expire at the end of 2025. The Company has evaluated the impact of the new legislation and has concluded it does not have a material impact on the results of operations.
As of September 30, 2025 and December 31, 2024, our debt consisted of the following:
Term loan
349,250
355,000
Revolving credit facility
20,000
30,000
973
496
Total debt
370,223
385,496
(924
(424
Unamortized debt issuance costs (1)
(3,218
(4,257
Total long-term debt
On July 3, 2023, the Company entered into (i) a four-year term loan (the “Term Loan”), and (ii) a four-year revolving credit facility (the “Revolving Credit Facility” and, together with the Term Loan, the “Credit Facilities”), which were subsequently amended to, among other things, increase the principal amount of the Term Loan to $355.0 million and increase the available capacity of the Revolving Credit Facility to $100.0 million. Principal amounts borrowed under the Credit Facilities may be repaid from time to time without penalty. Any principal amounts outstanding on the maturity date, July 3, 2027, become due and payable on such date.
On October 3, 2025 (the “Amendment Effective Date”), DBR Land LLC, a Delaware limited liability company and subsidiary of the Company (“Borrower”), entered into the Third Amendment to Credit Agreement (the “Amendment”), which amended the Term Loan. The Amendment provides for a new delayed draw term loan facility with total commitments of $200.0 million (the “DDTL Facility”). On November 10, 2025, Borrower borrowed $200.0 million under the DDTL Facility to partially fund the 1918 Acquisition and pay certain related expenses. The DDTL Facility included an unused commitment fee of 37.5 basis points that accrued from the Amendment Effective Date until November 10, 2025. See Note 11 — Subsequent Events for additional information regarding the 1918 Acquisition and exercise of the DDTL Facility.
We may elect for outstanding borrowings under our Credit Facilities to accrue interest at a rate based on either (i) a forward-looking term rate based on the secured overnight financing rate (“Term SOFR Loans”) plus 0.10%, or (ii) the base rate (“Base Rate Loans”), in each case plus an applicable margin. Borrowings under our Credit Facilities accrue interest based on a five-tiered pricing grid tied
to our current leverage ratio. The applicable margin ranges are:
Pre-IPO
Post-IPO
Term SOFR applicable margin
3.00% - 4.00%
2.75% - 3.75%
Base Rate applicable margin
2.00% - 3.00%
1.75% - 2.75%
Commitment fees
0.50
0.375% - 0.500%
Interest on all outstanding Term SOFR Loans is payable on the last day of each interest period. Interest on all outstanding Base Rate Loans is payable on the first day of each calendar quarter.
Our Credit Facilities are secured by a first priority security interest in substantially all of our assets and the assets of our restricted subsidiaries, which are party to our Credit Facilities as guarantors.
Subject to certain exceptions and materiality qualifiers, our Credit Facilities include customary affirmative and negative covenants, which, among other things, restrict our ability and our restricted subsidiaries’ ability, to incur debt, grant liens, make restricted payments, dividends and investments, issue equity, sell or lease assets, dissolve or merge with another entity, enter into transactions with affiliates or restrictive agreements, change our business, prepay debt and amend our organizational documents and material agreements. Our Credit Facilities allow us to make cash restricted payments to our shareholders in accordance with the Company’s constituent documents, subject to the following conditions: (i) if the Company’s pro forma leverage ratio is less than 3.50 to 1.00 for the most recently ended four-fiscal quarter period, so long as (A) no default or event of default exists or would result from such restricted payment and (B) the Company’s pro forma liquidity is at least $10.0 million, and (ii) if the Company’s pro forma leverage ratio is greater than 3.50 to 1.00 for the most recently ended four-fiscal quarter period, so long as (A) no default or event of default exists or would result from such restricted payment, (B) the Company’s pro forma liquidity is at least $25.0 million, and (C) the Company’s Distributable Free Cash Flow Amount is greater than $0 after giving effect to such restricted payment. “Distributable Free Cash Flow Amount” is the lesser of the Company’s free cash flow for (x) the most recently ended four-fiscal quarter period and (y) the most recently ended two-fiscal quarter period, in each case minus the aggregate amount of certain restricted payments made during or after each such period.
In addition, we are required to comply with the following financial maintenance covenants: (i) a maximum leverage ratio as of the last day of each fiscal quarter of 4.00:1.00 for the period of the last four consecutive fiscal quarters (subject, in either case, to (x) a 0.50:1.00 leverage step-up for any “qualified acquisition” for the fiscal quarter in which such acquisition occurs and the immediately following two fiscal quarters, at the Company’s election, and (y) a cap of 0.50:1.00 on such step-up regardless of the total number of “qualified acquisitions” consummated during such fiscal quarters and certain other limitations set forth therein); and (ii) a minimum interest coverage ratio of at least 2.75 to 1.00 as of the last day of each fiscal quarter following the IPO.
Our Credit Facilities contain customary events of default, including for our failure and the failure of other loan parties to comply with the various financial, negative and affirmative covenants under our Credit Facilities (subject to the cure provisions set forth therein). During the existence of an event of default (as defined under our Credit Facilities), the agent, with the consent of or at the direction of the required lenders thereunder, has a right to, among other available remedies, terminate the commitments and/or declare all outstanding loans and accrued interest and fees under our Credit Facilities to be immediately due and payable.
The Company was in compliance with these covenants as of September 30, 2025.
The estimated fair value of our Credit Facilities approximates the principal amount outstanding because the interest rates applicable to such amounts are variable and reflective of market rates and the debt may be repaid, in full or in part, at any time without penalty.
Debt issuance cost amortization
426
356
1,278
765
Interest expense incurred
6,686
5,951
20,202
12,912
Weighted average interest rate
7.49
8.56
7.62
8.49
18
Total facility size
100,000
Less:
Outstanding balance
Letters of credit issued
Available commitment
80,000
70,000
797
1,139
114
99
341
248
409
492
1,436
2,342
7.60
8.54
7.70
8.45
Shareholders’ Equity
Holders of Class A shares and Class B shares vote together as a single class on all matters presented to our shareholders, except as otherwise required by applicable law or by the A&R LLC Agreement. Class B shares are not entitled to participate in any dividends our Board may declare.
Redemptions
On May 23, 2025, LandBridge Holdings redeemed 1,900,000 OpCo Units (together with the cancellation of a corresponding number of Class B shares), for 1,900,000 Class A shares and subsequently sold such Class A shares at a price per share of $75.25 pursuant to Rule 144 under the Securities Act. The Company did not receive any proceeds or incur any material expenses from the sale of the Class A shares by LandBridge Holdings. See Note 5 — Income Taxes for additional information regarding the redemption.
During the year ended December 31, 2024, no Class B shares were redeemed for Class A shares.
Cancellations
In lieu of the payment of tax distributions by OpCo to the Company in excess of the Company's then-current income tax obligation, OpCo and the Company cancelled OpCo Units held by LandBridge Holdings, along with a corresponding number of Class B shares. The number of cancelled OpCo Units was determined based on the Company’s volume weighted average Class A share price for each of the 10 consecutive trading days ending on and including the last full trading day immediately prior to the tax distribution date.
Class B Share Cancellations
First Quarter
34,674
Second Quarter
79,686
Third Quarter
119,987
Dividends and Distributions
(in thousands, except for per share amounts)Cash Dividends
Date of Record
Dividends Paid to Class A Shareholders
Distributions Paid to OpCo Unitholders
Rate Per Share
March 6, 2025
2,326
5,319
0.10
June 5, 2025
2,515
5,124
September 4, 2025
2,534
5,121
Tax Distributions
Tax Distributions to LandBridge Holdings
5,821
16,650
7,140
On November 10, 2025, our board of directors declared a dividend on our Class A shares of $0.10 per share, payable on December 18, 2025 to shareholders of record as of December 4, 2025, and a corresponding required cash distribution to OpCo unitholders.
A summary of the Company’s aggregate share-based compensation expense is shown below. Share-based compensation expense related to incentive units allocated to the Company is recognized as a deemed non-cash contribution to or distribution from shareholders’ equity on the condensed consolidated balance sheets. Substantially all share-based compensation expense is included in general and administrative expense on the condensed consolidated statements of operations.
Incentive units
27,133
82,402
Restricted share units
6,503
Total share-based compensation expense
11,225
11,624
Share-based compensation expense related to incentive units for the three and nine months ended September 30, 2025, consists only of the Incentive Units. Share-based compensation expense related to incentive units for the three months ended September 30, 2024, consists of $9.8 million related to the Incentive Units, and for the nine months ended September 30, 2024, consists of $9.8 million related to the Incentive Units and $72.6 million related to the NDB Incentive Units. NDB Incentive Units were liability awards resulting in periodic fair value remeasurement prior to the Division. Following the Division, Incentive Units are equity awards and do not require periodic remeasurements. Any cash expense associated with Incentive Units will be borne solely by LandBridge Holdings LLC and not the Company. Such incentive units are not dilutive of public ownership.
A summary of Incentive Units activity during the nine months ended September 30, 2025 is shown in the following table:
Incentive Units
Weighted Average Grant Date Fair Value
Weighted Average Remaining Contractual Term (years)
Outstanding at December 31, 2024
30,020
5,130
Granted
Forfeited
Outstanding at September 30, 2025
1.2
As of September 30, 2025, remaining unrecognized compensation expense for the Incentive Units was $53.2 million, which the Company expects to recognize over a weighted average remaining period of approximately 1.7 years.
Under the LandBridge Company LLC Long Term Incentive Plan (the “LTIP”), participants were granted restricted share units (“RSUs”) which are subject to graded vesting generally ranging from one to three years. The fair value of the awards is based on our Class A share price on the date of grant with compensation expense recognized on a straight-line basis over the applicable vesting period.
A summary of RSU activity during the nine months ended September 30, 2025 is shown in the following table:
(in thousands, except fair value data)
RSUs
Aggregate Intrinsic Value
749,529
31.37
57,393
56.17
Vested(1)
(267,894
31.35
539,028
34.02
1.3
28,757
As of September 30, 2025, remaining unrecognized compensation expense for the RSUs was $16.2 million, which the Company expects to recognize over a weighted average remaining period of approximately 1.9 years.
21
The Company’s unvested RSUs are deemed to be participating securities; therefore, the Company applies the two-class method for the calculation of basic EPS for the Class A shares. Diluted EPS attributable to Class A shares is calculated under both the two-class method and the treasury stock method, and the more dilutive of the two calculations is presented.
Class B shares are considered potentially dilutive shares of Class A shares because Class B shares are convertible into Class A shares on a one-for-one basis; therefore, the Company applies the if-converted method for the calculation of diluted EPS for the Class A shares.
We determined that the presentation of EPS for the period prior to the IPO would not be meaningful due to the significant nature of the change to our capital structure as part of the IPO. Therefore, EPS information has not been presented for periods prior to the IPO.
The following table sets forth the computation of basic and diluted EPS attributable to our Class A shares for the three and nine months ended September 30, 2025, and the three months ended September 30, 2024, which represents the periods subsequent to the IPO.
Nine Months Ended
(in thousands, except for share and per share amounts)
September 30, 2025
Numerator
Less: Earnings allocated to participating securities
163
94
596
Basic net income attributable to LandBridge Company LLC
7,944
2,562
21,476
Plus: Net income (loss) attributable to noncontrolling interest
Plus: Undistributed earnings reallocation adjustment to participating securities
(8
(15
Diluted net income (loss) attributable to Class A shareholders
20,120
53,614
Denominator
Basic weighted average shares outstanding
Dilutive Class B shares outstanding
51,183,495
52,231,542
Diluted weighted average shares outstanding
Basic net income per share of Class A shares
Diluted net income (loss) per share of Class A shares
Class B shares outstanding as of September 30, 2025 and 2024 were determined to be dilutive and have been included in the computation of diluted net income per share. In addition, weighted-average RSUs were evaluated under the treasury stock method for potentially dilutive effects. For the three and nine months ended September 30, 2025, weighted-average RSUs of 507,889 and 669,343, respectively, were determined to be anti-dilutive and have been excluded from the computation of diluted net income per share. For the three months ended September 30, 2024, weighted-average RSUs of 637,877 were determined to be anti-dilutive and have been excluded from the computation of diluted net loss per share.
Financial Statements Location
Revenues - Related Party
Affiliate access agreements
13,294
8,621
37,787
19,034
Accounts Receivable - Related Party
Accounts Payable - Related Party
Shared services agreement
Shared Services Agreement
The Company is party to a services agreement with WaterBridge Operating LLC (“WaterBridge Operating”), an affiliate of the Company, and other affiliates pursuant to which the Company receives common management and general, administrative, overhead and operating services in support of the Company’s operations and development activities. The Company reimburses all fees incurred by WaterBridge Operating or its affiliates for services provided to the Company under the agreement. For shared services, the basis of allocation is an approximation of time spent on activities supporting the Company. For shared expenses paid on behalf of the Company, the costs are directly allocated to the Company based on its pro rata share of the expenses. For the three months ended September 30, 2025 and 2024 the Company paid approximately $2.5 million and $6.5 million for the shared services and direct cost reimbursements, respectively. For the nine months ended September 30, 2025 and 2024, the Company paid approximately $8.1 million and $8.6 million for the shared services and direct cost reimbursements, respectively.
Affiliate Access Agreements
The Company is party to facility access and surface use agreements and easements and rights-of-way with WaterBridge Infrastructure LLC and its subsidiaries (“WaterBridge”). Under these agreements, the Company has granted WaterBridge certain rights to construct, operate and maintain produced water, brackish water and waste reclamation facilities on our land, as applicable, in the ordinary course of business. Each of these agreements includes a standard fee schedule and provision for specified surface use activities. Each of these agreements also includes a provision for royalties related to certain specified activities.
Legacy Financial Sponsor Services Agreement
Five Point Infrastructure LLC (“Five Point”), our legacy financial sponsor, invoices the Company, and the Company reimburses Five Point in cash, for expenses associated with the Company’s use of Five Point’s geographic information system (“GIS”) and certain legal services provided by Five Point. The reimbursement includes allocated Five Point personnel costs and third-party software and hardware expenses and is determined based on the Company’s use of Five Point’s total services for such period. The Company paid reimbursements for GIS and legal services of $0.1 million in each of the three months ended September 30, 2025 and 2024 and $0.3 million for each of the nine months ended September 30, 2025 and 2024.
On November 12, 2025, OpCo acquired approximately 37,500 total acres across Reeves, Loving, Winkler and Ward counties, Texas, and certain related assets from 1918 Ranch & Royalty, LLC for total purchase consideration of $250.2 million, inclusive of $0.2 million in transaction costs. The acreage acquired consists of approximately 22,000 fee simple acres, approximately 12,000 leasehold acres and approximately 3,500 mineral classified acres subject to a long-term management agreement. The purchase consideration consisted of (i) approximately $208.3 million in cash, consisting of approximately $200.0 million drawn under the DDTL Facility, approximately $5.0 million drawn under the Revolving Credit Facility and approximately $3.3 million in available cash, and (ii) 657,411 OpCo Units (together with an equal number of Class B shares) valued at $41.7 million, based on a 10-day volume weighted average price of our Class A shares prior to closing. The Company applied a deposit of approximately $10.0 million against the purchase price for the 1918 Acquisition at closing.
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis of our financial condition and results of operations is based on, and should be read in conjunction with, the audited consolidated financial statements and notes thereto in the 2024 Form 10-K and our unaudited condensed consolidated financial statements (“Financial Statements”) and notes thereto in Part I, Item 1. “Financial Statements” of this Quarterly Report. Except as otherwise indicated or required by context, references to “LandBridge,” the “Company,” “we,” “us,” “our” and like terms refer (i) prior to the consummation of the reorganizations of entities under common control (the “Corporate Reorganization”) and the initial public offering that occurred on July 1, 2024 (the “IPO”), to OpCo and its subsidiaries, our predecessor for financial reporting purposes and (ii) subsequent to the consummation of the Corporate Reorganization and the IPO, to LandBridge and its subsidiaries, including OpCo and its subsidiaries.
The following discussion contains “forward-looking statements” reflecting our current expectations, future plans, estimates, beliefs and assumptions concerning events and financial trends that may be outside our control and may affect our future results of operations, cash flows and financial position. Actual results and the timing of events may differ materially from those contained in these forward-looking statements due to a number of factors, which include those factors discussed below and elsewhere in this Quarterly Report, particularly in the sections titled “Risk Factors” and “Cautionary Note Regarding Forward-Looking Statements,” all of which are difficult to predict. We assume no obligation to publicly update any of these forward-looking statements except as otherwise required by applicable law.
Our financial statements have been prepared in accordance with GAAP. The unaudited condensed consolidated financial statements included herein reflect all adjustments which, in the opinion of management, are necessary for a fair presentation of financial position, results of operations and cash flows for the interim periods on a basis consistent with the annual audited financial statements. All such adjustments are of a normal recurring nature. The results of operations for interim periods are not necessarily indicative of the results that may be expected for any other interim period or for a full year. The historical financial information in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” reflects only the historical financial results of us.
Overview
Land is a fundamental requirement for the development and production of energy and the construction of critical infrastructure. As of September 30, 2025, we owned approximately 277,000 surface acres in and around the Delaware Basin sub-region in the prolific Permian Basin, which is the most active area for oil and natural gas exploration and development in the United States. Access to expansive surface acreage is necessary for oil and natural gas development, solar power generation, power storage, digital infrastructure and non-hazardous oilfield reclamation and solid waste facilities. Further, the significant industrial economy that exists to service and support energy and infrastructure development requires access to surface acreage to support those activities. Our strategy is to actively manage our land and resources to support and encourage energy and infrastructure development and other land uses that will generate long-term revenue and Free Cash Flow for us and returns to our shareholders.
We share a legacy financial sponsor, Five Point, and our management team with WaterBridge. WaterBridge is a leading integrated, pure-play water infrastructure company that operates a large-scale network of pipelines and other infrastructure in the Delaware Basin. These relationships provide our shared management team visibility into key areas of oil and natural gas production and long-term trends, which we leverage to encourage and support the development of critical infrastructure on our land and generate additional revenue for us. We receive royalties for each barrel of produced water that WaterBridge handles on our land as well as surface use payments for infrastructure constructed on our land.
Recent Developments
Purchase, Sale and Contribution Agreement
On October 3, 2025, the Company, OpCo and 1918 Ranch & Royalty, LLC, a Texas limited liability company, (“Contributor”) entered into a Purchase, Sale and Contribution Agreement (the “Contribution Agreement”), pursuant to which OpCo agreed to acquire approximately 37,500 total acres across Reeves, Loving, Winkler and Ward counties, Texas, and certain related assets (the “1918 Acquisition”) for an aggregate purchase price of $250.0 million, consisting of approximately $208.3 million in cash and approximately $41.7 million in units representing limited liability company interests in OpCo (“OpCo Units”) (together with an equal number of Class B shares representing limited liability company interests in the Company (“Class B shares”), based on a 10-day volume weighted average price of Class A shares representing limited liability company interests in the Company prior to closing, subject to customary purchase price adjustments and closing conditions.
On November 12, 2025, OpCo completed the 1918 Acquisition. Pursuant to the Contribution Agreement, OpCo (i) paid Contributor approximately $208.3 million in cash, consisting of approximately $200.0 million drawn under the DDTL Facility, approximately $5.0 million drawn under the Revolving Credit Facility and approximately $3.3 million in available cash, and (ii) issued 657,411 OpCo Units to Contributor (together with an equal number of Class B shares). The Company applied a deposit of approximately $10.0 million against the purchase price for the 1918 Acquisition at closing.
The Contribution Agreement contains representations, warranties and other provisions that were made only for purposes of the Contribution Agreement and as of specific dates and were solely for the benefit of the parties thereto. The Contribution Agreement is a contractual document that establishes and governs the legal relations among the parties thereto and is not intended to be a source of factual, business or operational information about the Company, OpCo, the Contributor or the assets to be acquired from the Contributor. The representations and warranties made by the Company and the Contributor in the Contribution Agreement may be (i) qualified by disclosure schedules containing information that modifies, qualifies or creates exceptions to such representations and warranties and (ii) subject to standards of materiality applicable to the contracting parties that differ from those applicable to investors. Accordingly, investors and security holders should not rely on such representations and warranties as characterizations of the actual state of facts or circumstances.
Third Amendment to Credit Agreement
On October 3, 2025 (the “Amendment Effective Date”), DBR Land LLC, a Delaware limited liability company and a subsidiary of the Company (the “Borrower”), entered into the Third Amendment to Credit Agreement (the “Amendment”) with the guarantors party thereto, the lenders party thereto, and Texas Capital Bank, as administrative agent and letter of credit issuer (the “Administrative Agent”), which amends that certain credit agreement, dated July 3, 2023 (as amended prior to the date hereof, the “Existing Credit Agreement”, and the Existing Credit Agreement, as amended by the Amendment, the “Credit Agreement”) among the Borrower, the guarantors party thereto, the lenders party thereto, and the Administrative Agent. The Amendment provides for a new delayed draw term loan facility with total commitments of $200.0 million for the purpose of partially financing the 1918 Acquisition and to pay certain related costs and expenses (the “DDTL Facility”).
On November 10, 2025, the Borrower drew in full the $200.0 million available under the DDTL Facility to partially fund the 1918 Acquisition and pay certain related expenses. The DDTL Facility included an unused commitment fee of 37.5 basis points that accrued from the Amendment Effective Date until November 10, 2025, applied to the average daily unused amount of the DDTL Facility.
Market Condition and Outlook
Over the last several years, the global economy, and more specifically the oil and natural gas industry, has experienced significant volatility, impacted by global conflicts, such as the Russia-Ukraine war, heightened tensions in the Middle East, domestic political activity, including the potential for a prolonged U.S. federal government shutdown, the BBB Act, tariffs, foreign trade policies and international trade conflicts, the activities of OPEC, and elevated inflation, interest rates and costs of capital and industry consolidation. High levels of activity in the Delaware Basin have resulted in industry consolidation and labor and supply chain challenges, which has impacted drilling, completion and production activity. This volatility has driven material swings in WTI pricing, which has subsequently impacted development and production decisions of E&P companies.
Global macroeconomic developments, such as the aforementioned BBB Act and the development or change in international trade policies, including the imposition of U.S. and/or foreign tariffs, may adversely affect our customers’ ability to source raw materials and, as a result, reduce their activity on or around our land. As a result, any trading disruption (such as tariffs, product restrictions, etc.) in the trading relationships between the U.S. and other nations may adversely impact our business. A prolonged U.S. federal government shutdown may also impact our customers’ ability to access capital markets and/or acquire necessary governmental approvals or permits for the operation of their businesses.
Despite these challenges, we believe the outlook for energy and infrastructure development, particularly within the Permian Basin, remains positive. Additionally, such development may be aided by President Trump’s various Executive Orders relating to energy production, which include expedited approvals for energy resource infrastructure as well as the removal of various impediments to the development of domestic energy resources, including oil and gas. We are well-positioned to benefit from the continued build out of supporting infrastructure in the region which will require access to surface acreage. In addition, we expect to benefit from advancements in alternative forms of energy. While these incentives could further accelerate the transition of the U.S. economy away from the use of fossil fuels, alternative energy technologies often require access to material surface acreage and supporting infrastructure, which we are also well positioned to provide and facilitate.
26
Third Quarter Results
Significant financial and operating highlights for the third quarter of 2025 include:
(1) Adjusted EBITDA, Adjusted EBITDA Margin, Free Cash Flow and Free Cash Flow Margin are non-GAAP financial measures. See “Non-GAAP Financial Measures” for more information regarding these non-GAAP financial measures and reconciliations to the most comparable GAAP measures. See also “How We Evaluate Our Operations” for more information regarding Adjusted EBITDA, Adjusted EBITDA Margin, Free Cash Flow and Free Cash Flow Margin.
27
How We Generate Revenue
We generate revenue from multiple sources, including the use of our surface acreage, the sale of resources from our land and oil and gas and mineral royalties. The fees, royalty rates, payment structure and other related terms in our contracts are negotiated on a case-by-case basis, taking into account the surface use of our land, the type of resources extracted, the amount of use expected to be made of our land, and the amount of resources to be produced and/or extracted. In any given period, the amount and sources of revenues we receive from any particular customer can fluctuate based on the nature, timing and scope of such customer’s activities on our land. For example, during the initial phase of a customer’s activities on our land, we would generally expect to receive usage-based fees and revenues under our surface use royalty agreements (“SURAs”) and surface use agreements (“SUAs”) related to installation of infrastructure necessary to support long-term operations. Over time, these revenues would generally be expected to migrate to royalty revenue and resource sales based on such customer’s use of our land and resources. Our revenue consists of the principal components discussed below.
Surface Use Royalties and Revenues
Surface Use Royalties. We enter into SURAs and certain overarching SUAs with operators that require royalty payments to us based on a percentage of the customer’s gross revenues derived from use of our land and/or volumetric use of infrastructure installed on our land in exchange for rights of use of our land. Royalties we receive pursuant to SURAs include produced water transportation and handling operations, skim oil recovery and waste reclamation. Our SURAs generally have terms ranging from a minimum of five years to 10 years, impose only nominal obligations on us, typically do not include minimum purchase or use commitments by our customers and generally provide for automatic renewal-based increases in royalties that are tied to the Consumer Price Index (“CPI”) or are negotiated on a case-by-case basis.
Easements and other surface-related income. SUAs permit operators to install drilling sites, pipelines, roadways, electric lines and other facilities and equipment on land owned by us. We typically receive a per-rod or per-acre fee when the contract is executed, based on the aggregate amount of our land that is utilized under such SUA, and we often receive additional fees at the beginning of each renewal period or on a monthly or annual basis. Our SUAs generally require our customers to use the resources from our land, such as brackish water and sand, for their operations on our land, for which we receive our customary fees. Our SUAs generally have terms ranging from a minimum of five years to 10 years, with early termination rights for non-use over a pre-determined period of time, typically 12 to 18 months, typically do not include minimum commitments with respect to the type and amount of infrastructure to be installed on our property or the amount of revenue to be received by us and generally provide for automatic renewal-based increases in royalties that are tied to the CPI or negotiated on a case-by-case basis.
Resource Sales and Royalties
Resource Sales. Resource sales generally include brackish water to be used primarily in well completions in exchange for a per barrel fee, which is negotiated and varies depending on the destination of the brackish water. Similarly, our customers buy other surface composite materials from us for the construction of access roads and well pads for which we receive a fixed-fee per cubic yard extracted from our surface acreage. Our agreements related to the sale of resources generally have terms ranging from a minimum of five years to 10 years, with early termination rights for non-use over a pre-determined period of time, typically 12 to 18 months.
Resource Royalties. We lease our surface acreage to customers to construct and operate, at their expense, brackish water wells and sand mines to provide in-basin water and sand for use in oil and natural gas completion operations. Such customers hold the exclusive right to the water and sand extracted from the leased surface acreage and may be required to make minimum royalty payments as a result. The agreements pursuant to which we receive resource royalties have varying primary terms of at least one year, contain rights for renewal so long as the customer continues to operate on our land and generally do not impose minimum production requirements on our customers. We typically receive a fee when the contract is executed and a fixed royalty per barrel of water or ton of sand extracted. In situations where our customers do not operate brackish water wells on our surface but require the use of water for their operations, customers generally must acquire such water from us for our customary fee.
Oil and Gas Royalties
Oil and Gas Royalties. Oil and gas royalties are received in connection with oil and natural gas mineral interests owned by us. Oil and gas royalties are recognized as revenue as oil and gas are produced or severed from the mineral lease. The oil and gas royalties we receive are dependent upon producer-specific location, contractual price differences and market prices for oil and natural gas, which, given such prices’ volatility, may cause our oil and gas royalties to fluctuate. Oil and gas royalties also include mineral lease bonus revenues, which we receive by leasing our mineral interests to E&P companies. When we execute a mineral lease contract, the lease generally transfers the rights to any oil or natural gas discovered to the E&P company and grants us the right to a specified royalty interest payable on future production.
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We expect our fee-based revenues to grow over time relative to our oil and gas royalties. While our focus is on fee-based arrangements, our oil and gas royalties fluctuate with market prices for oil and natural gas. The following table presents the amount and relative percentage of each component of our revenues for the following periods:
Percent
Surface use royalties and revenues
18,387
36.2
9,854
34.6
52,518
36.9
21,031
28.6
16,647
32.7
6,641
23.3
42,940
30.2
19,242
26.2
Resource sales and royalties
5,232
10.3
4,931
17.3
18,220
12.8
12,237
16.7
5,533
10.9
4,158
14.6
17,485
12.3
9,382
6.6
10.2
15.7
3.3
0.0
Total revenue
100.0
Our revenues depend heavily on our customers’ activities on and around our land and may vary significantly from period to period as a result of the development of new revenue streams, fluctuations in commodity prices, regulatory developments, including policies related to tariffs and international trade, changes in volumes produced on our land and our acquisition strategy. For example, oil and natural gas prices have historically been volatile and highly susceptible to macroeconomic and geopolitical developments. Lower commodity prices may decrease our revenues as customers on and around our land decrease their activity levels in response to low commodity prices. Although we intend to pursue additional opportunities to increase our revenue streams and introduce additional revenue components, including through conventional and renewable power generation and storage projects, water treatment and desalination facilities, fueling stations, digital infrastructure, telecommunication towers and equipment and other opportunities, there can be no assurance that such revenue streams will materially diversify our revenue streams.
Costs of Conducting Our Business
Our costs consist primarily of resource sales-related expenses, other operating and maintenance expenses to maintain our surface acreage and general administrative expenses. Our principal costs are as follows:
Resource Sales-Related Expenses. Resource sales-related expenses are costs incurred for utilization and maintenance of our assets and facilities in the extraction or production of resources available on our land that are sold by us. These costs generally include utilities to operate our facilities and assets and repairs and maintenance expenses related to those assets.
Other Operating and Maintenance Expenses. Operating and maintenance expenses are costs incurred for maintaining our surface acreage and other assets, including field operating overhead and supervision, production taxes, insurance costs, ad valorem and property taxes, and repairs and maintenance expense.
General and Administrative Expenses. General and administrative expenses include a corporate shared services allocation from WaterBridge, directly incurred corporate costs and share-based compensation expense. Corporate shared services generally include the cost of shared management and administrative services. The corporate shared service allocation is based on an approximation of time spent on activities supporting us as well as by underlying business activities. The shared service allocation expense is reimbursed to WaterBridge through our shared services agreement. Direct corporate costs are incurred for direct corporate employees, including payroll, benefits and other employee-related expenses of our direct corporate staff, professional services that generally consist of audit, tax, legal and valuation services and expenses for corporate insurance policies.
Prior to the IPO, share-based compensation expense only included expense allocated to us for NDB LLC’s Incentive Unit plan. The NDB Incentive Unit awards were classified as liability awards by NDB LLC and required periodic remeasurement. On July 1, 2024, in accordance with the Division, in which NDB LLC was divided into two Delaware limited liability companies, the holders of the NDB Incentive Units were issued an identical number of Incentive Units at LandBridge Holdings. As of the date of the Division, the Incentive Units held at LandBridge Holdings are the only incentive units attributable to and allocated to the Company. The Incentive
29
Units are accounted for as a modification and have been transitioned to equity award accounting and, as such, do not require periodic remeasurements. The share-based compensation for the Incentive Units is fully allocated to the noncontrolling interest as the contractual obligation to satisfy the Incentive Units exists at LandBridge Holdings and any actual cash expense associated with such Incentive Units is borne solely by LandBridge Holdings and not the Company.
In connection with the IPO, our Board adopted the LandBridge Company LLC Long Term Incentive Plan (the “LTIP”), which allows for the grant of options, SARs, RSUs, share awards, dividend equivalents, other share-based awards, cash awards, substitute awards or any combination thereof. Under the LTIP, participants have been granted RSUs. Share-based compensation associated with RSUs is allocated between the Company and the noncontrolling interest based on relative ownership. Substantially all share-based compensation is included in general and administrative expense with an immaterial amount included in other operating and maintenance expense on the unaudited condensed consolidated statements of operations prior to allocation to the noncontrolling interest. See Note 8 — Share-Based Compensation within the notes to our Financial Statements for additional information regarding share-based compensation.
How We Evaluate Our Operations
We use a variety of financial and operational metrics to assess the performance of our business.
Revenue
Revenue is a key performance metric of our company. We analyze realized monthly, quarterly and annual revenues and compare the results against our internal projections and budgets. Results are used to validate, or when applicable update, existing assumptions on macroeconomic drivers of our business, contractual mix driving average unit-level revenues and E&P customer development activity and commodity pricing, absent the impact of our operating costs.
Adjusted EBITDA and Adjusted EBITDA Margin
Adjusted EBITDA and Adjusted EBITDA Margin are used by our management and by external users of our financial statements, such as investors, research analysts and others, to assess the financial performance of our assets over the long term to generate sufficient cash to return capital to equity holders or service indebtedness. We define Adjusted EBITDA as net income (loss) before interest; taxes; depreciation, amortization, depletion and accretion; share-based compensation; non-recurring transaction-related expenses and other non-cash or non-recurring expenses. We define Adjusted EBITDA Margin as Adjusted EBITDA divided by total revenues.
Management believes Adjusted EBITDA and Adjusted EBITDA Margin are useful because these supplemental non-GAAP financial measures allow us to more effectively evaluate our operating performance and compare the results of our operations from period to period, and against our peers, without regard to our financing methods or capital structure. We exclude the items listed above from net income (loss) in arriving at Adjusted EBITDA and Adjusted EBITDA Margin because these amounts can vary substantially from company to company within our industry depending upon accounting methods, book values of assets, capital structures and the method by which the assets were acquired. See “— Non-GAAP Financial Measures” for reconciliations and additional information regarding these non-GAAP financial measures.
Free Cash Flow and Free Cash Flow Margin
Free Cash Flow and Free Cash Flow Margin are used by our management and by external users of our financial statements, such as investors, research analysts and others, to assess our ability to repay our indebtedness, return capital to our shareholders and fund potential acquisitions without access to external sources of financing for such purposes. We define Free Cash Flow as cash flow from operating activities less investment in capital expenditures. We define Free Cash Flow Margin as Free Cash Flow divided by total revenues.
Management believes Free Cash Flow and Free Cash Flow Margin are useful because these supplemental non-GAAP financial measures allow for an effective evaluation of both our operating and financial performance, as well as the capital intensity of our business, and subsequently the ability of our operations to generate cash flow that is available to distribute to our shareholders, reduce leverage or support acquisition activities. See “— Non-GAAP Financial Measures” for reconciliations and additional information regarding these non-GAAP financial measures.
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Factors Affecting the Comparability of Our Results of Operations
Our future results of operations may not be comparable to our predecessor’s results of operations for the periods presented, primarily for the reasons described below.
Public Company Costs
As a result of the IPO, we incurred incremental, non-recurring costs related to our transition to a publicly traded and taxable entity, including the costs of the IPO and the costs associated with the implementation of Sarbanes-Oxley Act internal controls and testing. We have incurred and expect to continue to incur additional significant and recurring expenses as a publicly traded company, including costs associated with SEC reporting and compliance requirements, consisting of the preparation and filing of annual and quarterly reports, registrar and transfer agent fees, national stock exchange fees, audit fees, legal fees, investor relations expenses, incremental director and officer liability insurance costs and director and officer compensation expenses. These expenses are not included in our results of operations prior to the IPO. Additionally, we have hired additional employees and consultants, including accounting and legal personnel, in order to comply with the requirements of being a publicly traded company.
Corporate Reorganization
We were formed to serve as the issuer in the IPO and had no previous operations, assets or liabilities. The historical consolidated financial statements included in this Quarterly Report are based on the financial statements of our accounting predecessor, OpCo, prior to the Corporate Reorganization in connection with the IPO. As a result, the historical consolidated financial data may not give you an accurate indication of what our actual results would have been if the Corporate Reorganization had been completed at the beginning of the periods presented or of what our future results of operations are likely to be.
Long Term Incentive Plan
In order to incentivize individuals providing services to us or our affiliates, our Board adopted the LTIP for employees and directors. Any individual who is our officer or employee or an officer or employee of any of our affiliates, and any other person who provides services to us or our affiliates, including our directors, may be eligible to receive awards under the LTIP at the discretion of our Board or a committee thereof, as applicable. The LTIP provides for the grant, from time to time, at the discretion of our Board, or a committee thereof, of options, share appreciation rights, restricted shares, restricted share units, share awards, dividend equivalents, other share-based awards, cash awards, substitute awards and performance awards intended to align the interests of employees, directors and service providers with those of our shareholders. As such, our historical financial data may not present an accurate indication of what our actual results would have been if we had implemented the LTIP prior to the periods presented within.
Subsequent to the third quarter of 2024, we acquired approximately 78,900 surface acres through the consummation of various acquisitions, including the 1918 Acquisition, which will impact the comparability of our results of operations. We expect to pursue opportunistic future land acquisitions that compliment or expand our current land position, which may impact the comparability of our results.
Income Taxes
Prior to the IPO, OpCo and its subsidiaries were primarily entities that were treated as partnerships or disregarded entities for federal income tax purposes but were subject to certain minimal Texas franchise taxes. One of our subsidiaries is a qualified REIT for federal income tax purposes. There is no tax imposed on a REIT as long as the REIT complies with the applicable tax rules and avails itself of the opportunity to reduce its taxable income through distributions. A REIT must comply with a number of organizational and operational requirements, including a requirement that it must pay at least 90% of its taxable income to shareholders.
As a result of our predominately non-taxable structure historically, income taxes on taxable income or losses realized by our predecessor, OpCo, were generally the obligation of the individual members or partners. Accordingly, the financial data attributable to our predecessor, OpCo, contains no provision for U.S. federal income taxes or income taxes in any state or locality (other than margin tax in the State of Texas). Following consummation of the IPO, although we are a limited liability company, we have elected to be taxed as a corporation and are subject to U.S. federal, state and local income taxes on our allocable share of the income and loss of OpCo.
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Results of Operations
Three Months Ended September 30, 2025 Compared to Three Months Ended September 30, 2024
Variance
8,533
87
10,006
151
301
1,375
33
429
100
22,344
78
452
64
(6,267
(28
%)
546
Operating income
27,698
869
818
26,880
692
3,833
340
23,047
836
Total revenues. Total revenues increased by $22.3 million. Please see our discussion below regarding comparative period variances in revenue sources.
Surface use royalties. Surface use royalties increased by $8.5 million. The increase was primarily attributable to increased produced water handling and associated skim oil royalties of $8.4 million and industrial waste handling royalties of $0.1 million on our surface for the three months ended September 30, 2025, as compared to the three months ended September 30, 2024. The increase associated with produced water handling royalties is primarily driven by a significant increase in produced water handling volume of approximately 726 Mbbl/d related to our acquisitions in 2024 coupled with organic growth.
Easements and other surface-related revenues. Easements and other surface-related revenues increased by $10.0 million. The increase was primarily attributable to road easements of $4.5 million, oil and natural gas gathering and transportation pipelines and produced water handling infrastructure of $1.9 million, $1.8 million related to surface and subsurface drilling location easements and $1.8 million in other surface easements for the three months ended September 30, 2025, as compared to the three months ended September 30, 2024.
Resource royalties. Resource royalties increased by $1.4 million. The increase was primarily attributable to brackish water royalties of $0.9 million as a result of the Wolf Bone Ranch Acquisition in the fourth quarter of 2024. Additionally, sand mine royalties increased $0.5 million primarily related to higher throughput volumes.
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Oil and gas royalties. Oil and gas royalties increased by $0.4 million,
The table below provides operational and financial data by oil and gas royalty stream for the periods indicated.
Net royalty volumes:
Oil (MBbls)
35
Natural Gas (MMcf)
155
179
NGL (MBbls)
Equivalents (MBoe)
84
83
Equivalents (MBoe/d)
0.9
Oil and gas royalties (in thousands):
Oil royalties
2,704
2,574
Natural gas royalties
265
79
NGL royalties
299
361
3,268
3,014
Mineral lease income
(111
Total oil and gas royalties
Realized prices
Oil ($/Bbl)
64.38
73.54
Natural gas ($/Mcf)
1.71
0.44
NGL ($/Bbl)
18.69
20.06
Equivalents ($/Boe)
38.90
36.31
Other revenue. Other revenue increased by $1.7 million. The increase was attributable to deficiencies recognized under minimum revenue contracts.
Other operating and maintenance expense. Other operating and maintenance expense increased by $0.5 million. The increase was primarily due to higher field overhead, insurance and property tax related to acquisitions completed subsequent to the three months ended September 30, 2024.
General and administrative expense:
General and administrative expense, excluding share-based compensation
4,700
10,559
(5,859
11,164
11,572
(408
(4
Total general and administrative expense
General and administrative expense. General and administrative expense, excluding share-based compensation expense, decreased by $5.9 million. The decrease was primarily attributable to lower employee-related expenses of $4.6 million due to an IPO discretionary bonus and a $2.6 million contract termination payment made during the three months ended September 30, 2024, partially offset by increased corporate shared services allocation from WaterBridge of $0.7 million supporting underlying growth of the business and
higher professional services fees of $0.8 million associated with transitioning to a publicly-traded company and costs associated with commercial activities.
Income tax expense (benefit), net. Income tax expense increased by $3.8 million. The increase was primarily due to a shift from a $3.9 million loss from consolidated operations before taxes for the three months ended September 30, 2024, which resulted in an income tax benefit for the period, to $23.0 million in income from operations before taxes for the three months ended September 30, 2025.
Nine Months Ended September 30, 2025 Compared to Nine Months Ended September 30, 2024
31,487
150
23,698
123
5,983
49
8,103
86
(2,111
68,860
(355
(20
(52,758
(54
Other operating expense, net
118,954
345
7,510
46
241
111,203
220
7,345
825
103,858
209
Total revenues. Total revenues increased by $68.9 million. Please see our discussion below regarding comparative period variances in revenue sources.
Surface use royalties. Surface use royalties increased by $31.5 million. The increase was primarily attributable to increased produced water handling and associated skim oil royalties of $30.6 million and industrial waste handling royalties of $0.9 million on our surface for the nine months ended September 30, 2025, as compared to the nine months ended September 30, 2024. The increase associated with produced water handling royalties was primarily driven by a significant increase in produced water handling volume of approximately 852 Mbbl/d related to our acquisitions in 2024 coupled with organic growth.
Easements and other surface-related revenues. Easements and other surface-related revenues increased by $23.7 million. The increase was primarily attributable to $9.1 million related to oil and natural gas gathering and transportation pipelines and produced water handling infrastructure, $5.2 million related to road easements, $4.3 million related to surface and subsurface drilling location easements, $2.6 million related to the expansion of an existing industrial waste facility surface use agreement and $2.5 million in other surface easements for the nine months ended September 30, 2025, as compared to the nine months ended September 30, 2024.
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Resource sales. Resource sales increased by $6.0 million. Brackish water sales increased $3.5 million for the nine months ended September 30, 2025, as compared to the nine months ended September 30, 2024. Brackish water sales volume increased by 5.8 million barrels, or 21%, to 33.6 million barrels for the nine months ended September 30, 2025, as compared to 27.8 million barrels for the nine months ended September 30, 2024, primarily due to the timing of upstream drilling and completion operations in the area surrounding our surface acreage. Additionally, the per unit sales price increased by approximately 9%, primarily driven by the customer contract mix for the nine months ended September 30, 2025, as compared to the nine months ended September 30, 2024. Caliche sales increased $2.5 million for the same comparative period, primarily due to construction of energy infrastructure in the areas surrounding our surface acreage.
Resource royalties. Resource royalties increased by $8.1 million. The increase was primarily attributable to brackish water royalties of $7.1 million as a result of the acquisition of approximately 103,000 surface acres in Loving and Winkler Counties, Texas, and Lea County, New Mexico, from a private third-party (the “East Stateline Ranch Acquisition”) in the second quarter of 2024 and the acquisition of approximately 46,000 largely contiguous surface acres in the Southern Delaware Basin (the “Wolf Bone Ranch Acquisition”) in the fourth quarter of 2024. Additionally, sand mine royalties increased $1.0 million primarily related to higher throughput volumes.
Oil and gas royalties. Oil and gas royalties decreased by $2.1 million, which consists of decreased royalty income of $1.0 million attributable to lower volume and $0.8 million attributable to lower commodity prices as well as decreased mineral bonus payments of $0.3 million during the nine months ended September 30, 2025, as compared to the nine months ended September 30, 2024. The table below provides operational and financial data by oil and gas royalty stream for the periods indicated.
111
506
534
55
267
1.0
7,305
9,460
1,101
554
982
1,142
9,388
11,156
407
65.81
76.91
2.18
1.04
21.35
20.76
38.95
41.78
Other operating and maintenance expense. Other operating and maintenance expense increased by $1.5 million. The increase was primarily due to higher field overhead, insurance and property tax related to Wolf Bone Ranch and other acquisitions completed subsequent to the nine months ended September 30, 2024.
11,897
13,971
(2,074
33,459
84,143
(50,684
(60
General and administrative expense. General and administrative expense, excluding share-based compensation expense, decreased by $2.1 million. The decrease was primarily attributable to lower employee-related expenses of $4.2 million due to an IPO discretionary bonus in 2024, partially offset by increased corporate shared services allocation from WaterBridge of $2.2 million supporting underlying growth of the business.
Share-based compensation expense decreased by $50.7 million. The decrease was primarily attributable to decreased expense related to incentive unit expense of $55.4 million, partially offset by expense of $4.7 million related to RSU awards issued subsequent to the IPO in 2024. The incentive units expense decrease is primarily due to the periodic remeasurements of the NDB Incentive Units prior to the Division of $72.6 million when the awards were accounted for as liability awards and new issuances and post-modification equity award accounting amortization of $17.2 million. See Note 8 — Share-Based Compensation within the notes to our Financial Statements.
Interest on credit facilities
22,099
15,377
6,722
Debt issuance costs amortization and write offs
442
38
Interest on other
1
Total interest expense
16,580
7,165
Interest income
(345
Total interest expense, net
Interest expense, net. Interest expense, net, increased by $7.5 million. The increase was primarily attributable to higher weighted-average debt balances under our Credit Facilities during the nine months ended September 30, 2025, as compared to borrowings for the nine months ended September 30, 2024, partially offset by slightly lower interest rates. See “— Liquidity and Capital Resources” for additional information regarding the Company’s debt instruments and interest expense.
Income tax expense (benefit), net. Income tax expense increased by $7.3 million. The increase was primarily due to a shift from a $50.5 million loss from consolidated operations before taxes for the nine months ended September 30, 2024, which resulted in an income tax benefit for the period, to $60.7 million in income from operations before taxes for the nine months ended September 30, 2025. Additionally, for periods prior to the IPO the Company was not subject to federal income tax.
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Non-GAAP Financial Measures
Adjusted EBITDA, Adjusted EBITDA Margin, Free Cash Flow and Free Cash Flow Margin are supplemental non-GAAP financial measures that we use to evaluate current, past and expected future performance. Although these non-GAAP financial measures are important factors in assessing our operating results and cash flows, these supplemental non-GAAP financial measures should not be considered in isolation or as a substitute for net income or gross margin or any other measures presented under GAAP.
The following table sets forth a reconciliation of net income as determined in accordance with GAAP to Adjusted EBITDA and Adjusted EBITDA Margin for the periods indicated.
Adjustments:
EBITDA
33,469
5,225
92,155
(27,994
Share-based compensation - Incentive Units (1)
Share-based compensation - RSUs
Transaction-related expenses (2)
351
135
1,266
Non-recurring expenses (3)
7,825
156
(13
37
Adjusted EBITDA
44,850
25,012
126,082
65,330
Net income (loss) margin
40
(10
(68
Adjusted EBITDA Margin
88
89
The following table sets forth a reconciliation of cash flows from operating activities determined in accordance with GAAP to Free Cash Flow and Free Cash Flow Margin, respectively, for the periods indicated.
34,912
7,450
(1,107
(1,053
Cash provided by (used in) operating and investing activities
33,805
6,397
67,104
(391,313
750
18,767
431,260
(85
(210
Free Cash Flow
33,725
7,147
85,661
39,947
Operating cash flow margin (1)
69
62
Free Cash Flow Margin
66
60
54
Liquidity and Capital Resources
Our primary sources of liquidity are cash flows from operating activities and, if required, proceeds from borrowings under our Credit Facilities. Our primary liquidity and capital requirements will be for our operating expenses, servicing of our debt, the payment of dividends and distributions to our shareholders, if any, general company needs and investing in our business, including the potential acquisition of additional surface acreage. Although we believe that we will be able to partially or fully fund our short-term and long-term capital expenditures, working capital requirements and other capital needs with cash on hand and cash flows from operating activities, we may elect to use borrowings under our credit facilities to finance our operating and investing activities. See “— Debt Instruments — Credit Facilities.”
We strive to maintain financial flexibility and proactively monitor potential capital sources, including equity and debt financing, to meet our target liquidity and capital requirements. If market conditions were to change and our revenues were to decline significantly or operating costs were to increase, our cash flows and liquidity could be reduced and we could be required to seek alternative financing sources. As of September 30, 2025, we had a working capital surplus, defined as current assets less current liabilities, of $43.6 million and we had cash and cash equivalents of $28.3 million. As of December 31, 2024, we had a working capital surplus of $38.9 million and cash and cash equivalents of $37.0 million.
Cash Flow
The following tables summarizes our cash flow for the periods indicated:
Nine Months Ended September 30, 2025 Compared to the Nine Months Ended September 30, 2024
Condensed Consolidated Statement of Cash Flow Data:
47,449
117
410,968
95
(443,727
(121
14,690
63
Net Cash Provided by Operating Activities. Net cash provided by operating activities increased $47.4 million. The increase was attributable to cash flow related to higher net income, net of non-cash items, of $58.7 million partially offset by a decrease in cash flow attributable to working capital accounts of $11.3 million. The increase in net income, net of non-cash items, is primarily attributable to revenue growth related to continued commercialization of acreage, including land acquired during 2024. The decrease in cash flow from working capital accounts is attributable to higher accounts receivable related to growth in our revenues, and federal tax deposits made related to the 2025 tax year, partially offset by deferred revenues associated with timing of cash received for easements or easement renewals and the related effective dates of such agreements.
Net Cash Used in Investing Activities. Net cash used in investing activities decreased $411.0 million. The decrease was primarily attributable to lower acquisition and acquisition-related expenditures for the nine months ended September 30, 2025 of $18.8 million as compared to $431.3 million for the nine months ended September 30, 2024. See Note 3 — Asset Acquisitions within the notes to our Financial Statements.
Net Cash (Used In) Provided by Financing Activities. Net cash used in financing activities increased $443.7 million. For the nine months ended September 30, 2025, cash used in financing activities primarily consisted of $52.8 million of dividends, dividend equivalents and distributions paid to shareholders, $16.2 million of debt repayments, net of proceeds, $5.7 million of required tax withholding related to the net settlement of Class A shares, and $1.1 million of offering costs paid related to the December 2024 private placement. For the nine months ended September 30, 2024, cash provided by financing activities primarily consisted of $271.3 million of net proceeds from the IPO, and $147.5 million of debt proceeds, net of repayments and issuance costs. These proceeds were partially offset by net distributions to member prior to the Corporate Reorganization of $50.9 million.
Capital Requirements
We focus our business model on entering into agreements under which our customers bear substantially all of the operating and capital expenditures related to their operations on our land, while minimizing our capital requirements for both current and future commercial opportunities, resulting in the ability to create significant free cash flows. Our contracts generally include inflation escalators, which, when combined with our relatively low operating and capital expenditures, may assist in mitigating our exposure to broader inflationary pressures. As a landowner, we incur the initial cost to acquire our acreage, but thereafter we incur modest development capital expenditures and operating expenses as it relates to operations on our land or our mineral and royalty interests, as such expenses are borne primarily by our customers. As a result, we expect that additional significant capital expenditures would be related to our acquisition of additional surface acreage should we elect to do so.
The amount and allocation of future acquisition-related capital expenditures will depend upon a number of factors, including the size of the acquisition opportunity, our cash flows from operating activities and our investing and financing activities. There were no acquisition-related capital expenditures during the three months ended September 30, 2025 and $0.8 million during the three months ended September 30, 2024. There were $18.8 million and $431.3 million of acquisition-related capital expenditures during the nine months ended September 30, 2025 and 2024, respectively.
We periodically assess changes in current and projected cash flows, acquisition and divestiture activities and other factors to determine the effects on our liquidity. We believe that our cash on hand and cash flow from operating activities will provide us with sufficient liquidity to execute our current strategy. However, our ability to generate cash is subject to a number of factors that may directly or indirectly affect us, many of which are beyond our control, including commodity prices and general economic, financial, competitive, legislative, regulatory and other factors. If we require additional capital for acquisitions or other reasons, we may seek such capital through traditional borrowings under our debt instruments, offerings of debt and equity securities or other means. If we are unable to obtain funds when needed or on acceptable terms, we may not be able to complete acquisitions that may be favorable to us.
As our Board declares cash dividends to our Class A shareholders, we expect the dividend to be paid from Free Cash Flow. We do not currently expect to borrow funds or to adjust planned capital expenditures to finance dividends on our Class A shares, if any such dividends were to be declared by our Board. The timing, amount and financing of dividends, if any, will be subject to the discretion of our Board from time to time.
Debt Instruments
Credit Facilities
On July 3, 2023, the Company entered into (i) a four-year term loan (the “Term Loan”), and (ii) a four-year revolving credit facility (the “Revolving Credit Facility” and, together with the Term Loan, the “Credit Facilities”), which were subsequently amended. Our Credit Facilities are secured by a first priority security interest in substantially all of our assets and the assets of our restricted subsidiaries, which are party to our Credit Facilities as guarantors. Our Credit Facilities include certain customary affirmative and negative covenants, which, among other things, restrict our ability and our restricted subsidiaries’ ability, subject to certain exceptions, to incur debt, grant liens, make restricted payments and investments, issue equity, sell or lease assets, dissolve or merge with another entity, enter into transactions with affiliates or restrictive agreements, change our business, prepay debt and amend our organizational documents and material agreements. The Company was in compliance with these covenants as of September 30, 2025. See Note 6 — Debt within the notes to our Financial Statements for further information with respect to such affirmative and restrictive covenants.
As of September 30, 2025, we had $369.3 million of outstanding borrowings consisting of $20.0 million of revolving credit borrowings and $349.3 million of term loan borrowings. As of September 30, 2025, we have $80.0 million remaining in available commitments under the Revolving Credit Facility. The weighted average interest rate on the total amount of borrowings outstanding under the Credit Facilities for the three months ended September 30, 2025 was 7.60% in the case of the revolving credit borrowings and 7.49% in the case of term loan borrowings. The weighted average interest rate for the nine months ended September 30, 2025 was 7.70% in the case of revolving credit borrowings and 7.62% in the case of term loan borrowings.
39
On October 3, 2025, the Borrower entered into the Amendment with the guarantors party thereto, the lenders party thereto, and the Administrative Agent, which amends the Existing Credit Agreement, among the Borrower, the guarantors party thereto, the lenders party thereto, and the Administrative Agent. The Amendment provides for a new DDTL Facility for the purpose of partially financing the 1918 Acquisition and to pay certain related costs and expenses.
Critical Accounting Estimates
The preparation of the Financial Statements in conformity with GAAP requires management to make certain estimates and assumptions that affect the amounts reported in the Financial Statements and the accompanying notes. There have been no significant changes to our critical accounting estimates from those disclosed in our 2024 Form 10-K.
Recently Issued Accounting Pronouncements Not Yet Adopted
For a summary of recently issued accounting pronouncements, see Note 2 — Summary of Significant Accounting Policies within the notes to our Financial Statements.
Internal Controls and Procedures
We are required to comply with the SEC’s rules implementing Section 302 of the Sarbanes-Oxley Act, which requires our management to certify financial and other information in our quarterly and annual reports and provide an annual management report on the effectiveness of our internal control over financial reporting. We will not be required to make our first assessment of the effectiveness of our internal control over financial reporting under Section 404 until our second annual report on Form 10-K.
Further, our independent registered public accounting firm is not yet required to formally attest to the effectiveness of our internal controls over financial reporting and will not be required to do so for as long as we are an “emerging growth company” and/or a “smaller reporting company” under applicable federal securities laws.
Off Balance Sheet Arrangements
We currently have no material off-balance sheet arrangements.
Emerging Growth Company Status
We are an “emerging growth company,” as defined in the JOBS Act, and we may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth companies.” We may take advantage of these exemptions until we are no longer an “emerging growth company.” Section 107 of the JOBS Act provides that an “emerging growth company” can take advantage of the extended transition period afforded by the JOBS Act for the implementation of new or revised accounting standards. We have elected to use the extended transition period for complying with new or revised accounting standards and as a result of this election, our financial statements may not be comparable to companies that comply with public company effective dates. We may take advantage of these exemptions up until the last day of the fiscal year following the fifth anniversary of our initial public offering or such earlier time that we are no longer an emerging growth company. We would cease to be an emerging growth company if we have more than $1.235 billion in annual revenue, we have more than $700.0 million in market value of our stock held by non-affiliates (and we have been a public company for at least 12 months and have filed one annual report on Form 10-K) or we issue more than $1.0 billion of non-convertible debt securities over a three-year period.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
We are exposed to market risks, which include the effects of adverse changes in commodity prices and counterparty and customer credit risks and interest rate risk as described below. The primary objective of the following information is to provide quantitative and qualitative information about our potential exposure to market risks. The term “market risk” refers to the risk of loss arising from adverse changes in commodity prices and counterparty and customer credit and interest rate risk. The disclosures are not meant to be precise indicators of expected future losses, but rather indicators of reasonably possible losses. This forward-looking information provides indicators of how we view and manage our ongoing market risk exposures.
Interest Rate Risks
Our ability to borrow and the rates offered by lenders can be adversely affected by deterioration in the credit markets and/or deterioration of our credit profile rating. We may elect for outstanding borrowings under our credit facilities to accrue interest at a rate based on either the Term SOFR, or the base rate, plus an applicable margin, which exposes us to interest rate risk to the extent we have borrowings outstanding under our credit facilities.
As of September 30, 2025, we had $369.3 million of outstanding borrowings consisting of $20.0 million of revolving credit borrowings and $349.3 million of term loan borrowings. The weighted average interest rate on the borrowings outstanding under our Credit Facilities for the three months ended September 30, 2025 was 7.60% in the case of revolving credit borrowings, and 7.49% in the case of term loan borrowings. The weighted average interest rate for the nine months ended September 30, 2025 was 7.70% in the case of revolving credit borrowings, and 7.62% in the case of term loan borrowings. Assuming no change in the amount outstanding, the impact on interest expense of a 1.0% increase or decrease in the weighted average interest rate would be $3.7 million per year. We do not currently have or intend to enter into any derivative hedge contracts to protect against fluctuations in interest rates applicable to our outstanding indebtedness. See “— Debt Instruments — Credit Facilities.”
Item 4. Controls and Procedures
Disclosure Controls and Procedures
Under the supervision and with the participation of our management, our principal executive officer and principal financial officer have evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this Quarterly Report. Our disclosure controls and procedures are designed to ensure that the information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC, and to ensure that the information we are required to disclose in reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure. Based on such evaluation, our principal executive officer and principal financial officer have concluded that our disclosure controls and procedures were effective as of September 30, 2025.
In designing and evaluating our disclosure controls and procedures, management recognizes that disclosure controls and procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the disclosure controls and procedures are met. Additionally, in designing disclosure controls and procedures, our management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible disclosure controls and procedures. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions; over time, controls may become inadequate because of changes in conditions, or the degree of compliance with policies or procedures may deteriorate. Because of the inherent limitations in a control system, misstatements due to error or fraud may occur and not be detected.
Internal Control over Financial Reporting
There were no other changes in our internal control over financial reporting identified in management’s evaluation pursuant to Rules 13a-15(d) or 15d-15(d) of the Exchange Act during the quarter ended September 30, 2025 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
PART II – OTHER INFORMATION
Item 1. Legal Proceedings
We are periodically party to proceedings and claims incidental to our business. While many of these other matters may not be predicted with certainty, we believe that the liability, if any, ultimately incurred with respect to such other proceedings and claims will not have a material adverse effect on our financial position or on our liquidity, capital resources, future results of operations or cash flows. We will continue to evaluate proceedings and claims involving us on a regular basis and will establish and adjust any estimated reserves as appropriate to reflect our assessment of the then current status of the matters.
Item 1A. Risk Factors
This Quarterly Report on Form 10-Q should be read in conjunction with the risk factors disclosed under the heading “Risk Factors” in the 2024 Form 10-K. There have been no material changes to the risk factors disclosed under the heading “Risk Factors” in the 2024 Form 10-K.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
None.
Issuer Purchases of Equity Securities
Neither we nor any affiliated purchaser repurchased any of our equity securities during the period covered by this Quarterly Report on Form 10-Q.
Item 3. Defaults Upon Senior Securities
Item 4. Mine Safety Disclosures
Not applicable.
Item 5. Other Information
(a) Disclosure in lieu of reporting on a Current Report on Form 8-K.
(b) Material changes to the procedures by which security holders may recommend nominees to the board of directors.
(c) Trading Arrangements and policies.
During the three months ended September 30, 2025, none of our officers (as defined in Rule 16a-1(f) under the Exchange Act) or directors adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(c) of Regulation S-K.
Item 6. Exhibits
Exhibit Number
Description
2.1*#+
Purchase, Sale and Contribution Agreement, dated October 3, 2025, by and among LandBridge Company LLC, DBR Land Holdings LLC, 1918 Ranch & Royalty, LLC and the other parties thereto.
3.1
Certificate of Formation of LandBridge Company LLC (incorporated by reference to Exhibit 3.1 to the Company’s Registration Statement on Form S-1 (File No. 333-279893) filed with the SEC on May 31, 2024).
3.2
Amended and Restated Limited Liability Company Agreement of LandBridge Company LLC, dated as of July 1, 2024 (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K (File No. 001-42150) filed with the SEC on July 3, 2024).
10.1*#+
Third Amendment to Credit Agreement, dated October 3, 2025, by and among DBR Land LLC, as borrower, Texas Capital Bank, as administrative agent and letter of credit issuer, the guarantors party therein and the lenders identified therein.
31.1*
Certification of Chief Executive Officer of LandBridge Company LLC pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*
Certification of Chief Financial Officer of LandBridge Company LLC pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1**
Certification of Chief Executive Officer of LandBridge Company LLC pursuant to 18 U.S.C. § 1350, as adopted pursuant to the Sarbanes-Oxley Act of 2002.
32.2**
Certification of Chief Financial Officer of LandBridge Company LLC pursuant to 18 U.S.C. § 1350, as adopted pursuant to the Sarbanes-Oxley Act of 2002.
101.INS*
XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCH*
Inline XBRL Taxonomy Extension Schema With Embedded Linkbase Documents.
104*
Cover Page Interactive Data File (embedded within the Inline XBRL document).
*
Filed herewith.
**
Furnished herewith.
#
Certain schedules and exhibits to this agreement have been omitted in accordance with Item 601(a)(5) of Regulation S-K. A copy of any omitted schedule and/or exhibit will be furnished to the U.S. Securities and Exchange Commission on request.
+
Certain portions of this exhibit (indicated by “[***]”) have been omitted pursuant to Item 601(b)(2) of Regulation S-K. The Company agrees to furnish supplementally a copy of any omitted information to the U.S. Securities and Exchange Commission or its staff upon request.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
Date:
November 12, 2025
By:
/s/ Jason Long
Jason Long
Chief Executive Officer