LandBridge Company LLC (LB) | The Buildout — AI Infrastructure
The Verdict
LandBridge owns fee-surface land in the Delaware Basin and monetizes it through surface use fees, resource sales, and oil and gas royalties. In the AI buildout, it sits at the physical siting layer: data-center and power developers need large contiguous land, water, and pore space, and LandBridge supplies those inputs while customers fund and operate the infrastructure.
| Market Cap | — |
| Revenue (TTM) | $206M |
| Revenue Growth | +52.7% |
| EBITDA Margin (TTM) | 68.8% |
| Net Debt | $506M |
| Earnings Beats | 0 of 7 |
| P/E (TTM) | — |
| EV/EBITDA (TTM) | — |
What We Like
- Owns or manages more than 325,000 surface acres across the Stateline, Northern, and Southern positions as of the Q2 2026 call.
- FY2026 adjusted EBITDA guidance of $210M–$230M was raised in Q1 and reaffirmed in Q2.
- Q2 adjusted EBITDA margin was 89% on $59.8M, with capex of only $1.1M.
- Speedway Phase 1 comes online summer 2026 and ramps through 2028; new-facility produced water royalty rate is $0.15/bbl with room seen to rise.
- Seven power and digital infrastructure counterparties represent more than 10 GW of potential, and management says the actual queue is larger.
What We’re Watching
- The digital pipeline is non-binding: the only signed digital agreement is PowerBridge's $2.6M, one-year option.
- Concentrated customer set: WaterBridge was 25% of FY2025 revenue, and top three customers accounted for 25%, 12%, and 10%.
- About 33,000 Northern Position acres are year-to-year BLM/State of New Mexico leases, not fee-simple.
- Samsung, NRG, and ONEOK partnerships were not mentioned on Q1 or Q2 2026 calls — a disclosure gap, not confirmed cancellation.
The thesis is intact and strengthening on the core: record Q2 revenue, producing-water volume acceleration, reaffirmed guidance, and leverage down to 2.5x. The digital layer has moved from one option to a quantified seven-party, >10 GW pipeline, but it is still not contracted. The key open question is whether multiple LOIs/options become firm leases with disclosed economics by the end of next year.
Earnings
Q2 2026 revenue was a record $66.8 million, up 41% year over year and 31% sequentially. Adjusted EBITDA was $59.8 million, up 41% year over year, at an 89% margin. Net income rose 68% year over year to $31.0 million, and free cash flow was $40.2 million, up 11% year over year.
| Metric | Q1 FY2026 | Q4 FY2025 | Q1 FY2025 | YoY |
|---|---|---|---|---|
| Revenue | $51M | $57M | $44M | +15.9% |
| Gross margin | 88.1% | 90.2% | 93.0% | -490bps |
| EBITDA | $34M | $44M | $28M | +21.7% |
| EPS | $0.64 | $0.29 | $0.08 | +657.8% |
| Free cash flow margin | 60% | 80% | 76% | −21.1% |
Revenue in the second quarter was a record $66.8 million, representing growth of 41% year-over-year and 31% sequentially.— , August 6, 2026
Management tone: Management shifted from thesis-building to commercial acceleration and measured confidence. In Q2, management quantified the pipeline, reaffirmed guidance, gave direct numeric answers on the option and royalty rate, and declined to disclose counterparty names or lease economics.
Management Guidance
Management reaffirmed FY2026 adjusted EBITDA guidance of $210M–$230M on the August 6, 2026 call. The range was raised at Q1 from the initial $205M–$225M guide, an increase of $5M at both ends. No FY2027 guidance was issued.
Trajectory
Revenue went from $51.0M in Q1 2026 to a record $66.8M in Q2, up 31% sequentially and 41% year over year. The driver is surface use: that line rose 41% sequentially on produced-water handling volumes, which grew about 15% sequentially versus a roughly 5% expectation. Adjusted EBITDA margins held at 88% in Q1 and 89% in Q2, and capex stayed minimal. Trailing sequential growth had decelerated into Q1 before Q2's rebound, so the record quarter is also a test of whether the produced-water and Speedway ramp can sustain the pace.
The Model
The model's locked projections are FY+1 revenue of $245M and EBITDA of $172M (70.2% margin), and FY+2 revenue of $295M with EBITDA of $217M (73.5% margin). The near-term projection is anchored by produced-water volume growth and the Speedway ramp; FY+2 reflects continued surface-use expansion plus partial conversion of the digital pipeline, without relying on disclosed lease economics.
| Metric | FY2025 | Next FY (E) | Following FY (E) |
|---|---|---|---|
| Revenue | $199M | $245M | $295M |
| YoY Growth | — | +23.1% | +20.4% |
| EBITDA | $136M | $172M | $217M |
| EBITDA Margin | 68.2% | 70.2% | 73.5% |
Projections are the median of 5 independent model runs. The model’s revenue sits 20.2% above analyst consensus.
Management reaffirmed FY2026 adjusted EBITDA guidance of $210M–$230M on the August 6, 2026 call. The range was raised at Q1 from the initial $205M–$225M guide, an increase of $5M at both ends. No FY2027 guidance was issued.
What Could Go Right — and Wrong
- One or more of the seven LOIs/options converts into a publicly announced firm lease with disclosed economics.
- Digital-infrastructure revenue begins flowing from multiple leases by the end of 2027, as management says is realistic.
- Produced-water royalty rates move above $0.15/bbl as state-line pore space tightens.
- Speedway Phase 2 is sanctioned and added to future guidance.
- A larger acreage M&A deal closes in the back half of 2026.
- The PowerBridge one-year option expires without conversion to a lease.
- The seven-counterparty pipeline stalls on power availability, interconnection, ERCOT review, or diligence failure.
- Produced-water volumes or royalty rates plateau, slowing the core surface engine.
- The BLM/State of New Mexico year-to-year leases are repriced or lost.
- Delaware Basin E&P activity weakens, hitting surface use and resource sales.
Looking Ahead
The next twelve months are framed by conversion: management expects multiple LOIs and options to flip to firm leases with revenues kicking on by the end of next year. Speedway Phase 1 ramps from summer 2026 through 2028, management signaled potentially larger M&A in the back half of 2026, and the Texas corporation conversion remains pending with timing not specified.
- Q3 2026Produced-water volume print — Shows whether Q2's roughly 15% sequential acceleration was sustainable or pull-forward.
- Next few monthsPipeline counterparty additions — Management sees room to add to the seven-counterparty, >10 GW pipeline.
- Back half 2026Potentially larger M&A — Management signaled larger surface-acreage opportunities; tests acquisition follow-through.
- End of 2027Firm digital lease conversions — Tests whether LOIs and options become leases with revenue, as management expects.
- Late 2027PowerBridge first power — First power at Alpha Digital campus; tests execution beyond option.
- 2028PowerBridge large-scale generation — Generation phase completes; tests scale of the first gigascale project.
Financials
Annual Summary
| Metric | FY2024 | FY2025 | TTM | YoY |
|---|---|---|---|---|
| Revenue | $110M | $199M | $206M | +81.0% |
| Gross Margin | 89.5% | 92.2% | 90.9% | +270bps |
| EBITDA | −$8M | $136M | $265M | +1863.6% |
| EBITDA Margin | -7.0% | 68.2% | 68.8% | +7,521bps |
| Net Income | −$42M | $30M | $41M | +171.9% |
| Free Cash Flow | $67M | $141M | $308M | — |
| Net Cash | — | — | — | — |
Key Ratios (Trailing)
- P/E TTM—
- EV/EBITDA TTM—
- EV/Revenue TTM—
- Price/FCF TTM—
- Gross Margin (TTM)90.9%
- EBITDA Margin (TTM)68.8%
- Net Margin (TTM)20.1%
- ROIC11.9%
- FCF Conversion115.5%
- SBC / Revenue10.9%
The Company
LandBridge owns fee-surface land in the Delaware Basin and actively manages it. As of the Q2 2026 call it owned or managed more than 325,000 surface acres across the Stateline, Northern, and Southern positions. It monetizes land through surface use royalties and revenues, resource sales and royalties, and oil and gas royalties from about 4,400 gross mineral acres, about 96% of which underlie its surface acreage.
The model is capital-light and built around land ownership rather than operating infrastructure. Customers fund most infrastructure, and LandBridge captures royalties, lease payments, and service fees; Q1 2026 capex was $0.2 million and Q2 capex was $1.1 million. Its acres are a mix of fee-owned land and about 33,000 acres leased from BLM and the State of New Mexico on a year-to-year basis.
Business Segments
Competitive Landscape
LandBridge competes with other Permian landowners to provide attractive development sites for a limited number of potential customers; the 10-K flags geographic concentration risk. Texas Pacific Land Corporation is both partner and competitor, with reciprocal crossing rights and produced water royalty/revenue sharing across an area of mutual interest. A criticality assessment included in the source says the AI buildout would not slow if LandBridge's products disappeared, because other Permian landowners and alternative sites could provide comparable land and energy solutions with minimal delay.
- Texas Pacific Land Corporation (TPL)Named in the 10-K as one of the largest landowners in Texas; also a customer/partner through reciprocal crossing and produced-water royalty/revenue sharing across an area of mutual interest.
Supply Chain
LandBridge sits at the physical siting layer for both produced-water midstream and digital infrastructure. It supplies surface acreage, water, pore space, and easements while customers fund and operate the infrastructure. No supplied neighbor disclosure is documented as naming LandBridge directly.
More on LB: Earnings recap