LandBridge Company (LB) Q2 2024 earnings summary

Executive summary

• Achieved 20% year-over-year revenue growth to $26.0 million in Q2 2024, with adjusted EBITDA up 24% to $23.4 million and a 90% margin, despite a $57.7 million net loss due to a $71.8 million non-cash share-based compensation expense.

• Completed major ranch acquisitions, expanding total surface ownership to 220,000 acres in the Delaware and Permian Basins.

• Completed IPO and private placement in July 2024, raising $270.9 million in net proceeds, with $100 million used to pay down debt and $170.9 million distributed to legacy shareholders.

• Entered a non-binding LOI for data center development in Reeves County, Texas, with ground lease expected by year-end.

• Business model leverages diversified revenue streams from oil, gas, water, renewables, and digital infrastructure.

Financial highlights

• Q2 2024 revenue was $26.0 million, up from $19.0 million in Q1 2024 and $21.7 million in Q2 2023.

• Adjusted EBITDA was $23.4 million, with a 90% margin; free cash flow was $15.7 million, with a 60% margin.

• Cash flow from operating activities was $16.0 million, up 29% year-over-year.

• Non-oil and gas royalty revenue accounted for 83% of total revenues in Q2 2024, up from 64% in Q3 2023.

• Net loss margin was -222%, primarily due to non-cash share-based compensation expense.

Outlook and guidance

• Management expects continued growth in fee-based revenues, with long-term expansion from water handling, renewables, and data centers.

• Annual guidance will be provided after Q3, following the first full quarter as a public company.

• Targeting a net leverage ratio of 2.0x by mid-2025, with plans to initiate dividends and consider share repurchases.