LandBridge's Q2 2025 Earnings Call: Unpacking Contradictions in Pore Space Strategy and Data Center Growth

Pore space capacity and land acquisition strategy, easements and resource sales performance, data center activity and timing in Permian Basin, pore space strategy and Devon deal connection are the key contradictions discussed in LandBridge's latest 2025Q2 earnings call.



Revenue and EBITDA Growth:
- LandBridge reported a 83% year-over-year increase in revenue and 81% year-over-year growth in adjusted EBITDA for Q2 2025.
- The growth was driven by its capital-light business model, which benefits from Permian Basin growth without significant operating and capital expenditures, and by the increase in land holdings by more than 50,000 acres over the past year.

Diversified Revenue Streams:
- Surface use royalties and revenue increased 31% sequentially, contributing significantly to the overall 94% of total revenues from fee-based arrangements.
- The diversification in revenue streams, including surface use royalties, resource sales, and royalties from oil and gas, reduces commodity risk and provides numerous growth opportunities.

Strategic Partnerships and Development Agreements:
- LandBridge executed a 10-year surface use and pore space reservation agreement with Devon Energy, securing 300,000 barrels a day of pore space capacity.
- The company also signed an option agreement with a large public IPP for a natural gas-fired CCGT plant, marking a pivotal step in meeting West Texas' growing power needs.

Regulatory Developments and Long-term Trends:
- LandBridge supports recently announced changes to Texas's regulations governing produced water handling facilities, which reflect its sustainable pore space management strategy.
- The company's relationship with WaterBridge and access to underutilized pore space are key strategic advantages for reliable revenue growth and superior visibility into long-term trends.