Texas Pacific Land (TPL) Q2 2026 earnings summary

Executive summary

• Achieved record quarterly and FY 2025 revenues and net income, driven by strong oil and gas royalty production, produced water royalty volumes, and diversified revenue streams including water sales and surface income.

• Oil and gas royalty production averaged 39,700 BOE/day in Q2 2026, up 7% sequentially and 20% year-over-year, with realized prices rising 28%.

• Expanded strategic initiatives in data center and power generation, including Project Kilby and major land acquisitions in Texas.

• Completed construction and commissioning of a produced water desalination facility in Orla, Texas, supporting sustainable water reuse.

• Maintained 100% Permian Basin exposure with ~894,000 surface acres and ~28,000 net royalty acres, supporting robust production and cash flow.

Financial highlights

• Q2 2026 consolidated revenues were $246.1 million, up 31% year-over-year; net income was $153.9 million ($2.23 per diluted share).

• Adjusted EBITDA for Q2 2026 was $215.6 million (87.6% margin); free cash flow was $155.5 million.

• FY 2025 Adjusted EBITDA reached $687 million (86% margin), and free cash flow was $498 million (62% margin).

• Water sales revenue for Q2 was $39.7 million; produced water royalties were $37.1 million.

• No debt and a strong cash position of $249 million as of June 30, 2026; $500 million credit facility undrawn.

Outlook and guidance

• Capital expenditures for the year reaffirmed at $65–$75 million, including investments in desalination and co-location cooling.

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

• Ongoing investments in water infrastructure, desalination technology, and technology to support long-term scalability and growth.

• Expectation for improved water sales volumes as new gas pipeline capacity comes online and basin mix shifts.

• Anticipate at least one or more major definitive agreements with hyperscalers, AI labs, or power generators in the near term.