Texas Pacific Land (TPL) Q1 2026 earnings summary

Executive summary

• Achieved record quarterly revenue of $236.8 million and net income of $142.9 million for Q1 2026, driven by strong oil and gas royalties, water sales, and a major land sale for a data center project.

• Oil and gas royalty production averaged 37,100 boe/d, up 19% year-over-year, with water segment posting the second-best volume numbers in company history.

• Entered a $43 million land sale agreement for a power generation and data center project, with $20.9 million recognized as revenue and a new water supply agreement.

• Maintains a unique position as a pure-play Permian Basin landowner with diversified, high-margin revenue streams from royalties, water, and surface operations.

• No debt and a strong cash position of $248 million as of March 31, 2026, supporting financial flexibility.

Financial highlights

• Q1 2026 revenues were $236.8 million, up 21% year-over-year, with net income of $142.9 million and operating income of $182.3 million.

• Adjusted EBITDA was $181.4 million, and free cash flow reached $136.4 million for the quarter.

• Oil and gas royalties contributed $118.2 million, water sales $46.9 million, and produced water royalties $33.5 million in Q1 2026.

• Operating income margin remained robust at 77% in Q1 2026.

• Free cash flow totaled $136 million, up 15% sequentially and 8% year-over-year.

Outlook and guidance

• Produced water desalination facility (10,000 bbl/day) nearing completion, with service expected in Q2 2026.

• Ongoing commercial discussions with hyperscalers, AI labs, and developers for large-scale power and compute projects in Texas.

• Management targets a cash balance of $700 million, with excess to be returned to shareholders via dividends or buybacks.

• Company remains fully unhedged, capturing full upside from commodity price increases.

• Permian Basin activity expected to remain strong, supporting future revenue and cash flow growth.