LandBridge Company (LB) Q3 2024 earnings summary

Executive summary

• Achieved 60% year-over-year revenue growth and 62% year-over-year Adjusted EBITDA growth in Q3 2024, with an 88% margin, driven by diversified revenue streams and recent acquisitions.

• Net loss was $2.8 million in Q3 2024, primarily due to higher expenses and $11.6 million in non-cash share-based compensation.

• 90% of revenues now come from fee-based or non-oil and gas royalty streams, reducing exposure to commodity price fluctuations.

• Expanded land holdings with acquisitions in Winkler County, TX (1,280 acres), and a pending purchase in Lea County, NM (5,800 acres), increasing total surface owned to ~227,000 acres.

• Executed a lease development agreement for a 2,000-acre data center project in Reeves County, TX, enhancing non-oil and gas revenue opportunities.

Financial highlights

• Q3 2024 revenues reached $28.5 million, up 9.8% sequentially and 60% year-over-year.

• Adjusted EBITDA was $25.0 million, up 6.8% sequentially and 62% year-over-year, with an 88% margin.

• Free cash flow was $7.1 million, with a 25% margin, impacted by $11.1 million in non-recurring IPO and lease termination costs.

• Net loss margin was -10% in Q3 2024, compared to a 93% net income margin in Q3 2023.

• Total liquidity at Q3 2024 was $74.4 million, including $14.4 million cash and $60 million available under the revolver.

Outlook and guidance

• FY24 Adjusted EBITDA guidance is $95–$100 million, reflecting higher surface use royalties and data center lease deposit.

• FY25 Adjusted EBITDA guidance is $140–$160 million, driven by new acquisitions, solar facility contributions, and increased water volumes.

• Targeting a net leverage ratio of 2.0–2.5x by mid-2025 to maintain financial flexibility.

• Ongoing focus on expanding non-oil and gas revenue streams, including data center and renewable energy developments.

• Expectation of continued double-digit growth profile over the near to medium term.