LandBridge Co LLC

Three Months Ended March 31, 2026 Compared to Three Months Ended March 31, 2025

Total revenues. Total revenues increased by $7.1 million. Please see our discussion below regarding comparative period variances in revenue sources.

Easements and other surface-related revenues. Easements and other surface-related revenues increased by $6.0 million. The increase was primarily attributable to oil and natural gas gathering and transportation pipelines and produced water handling infrastructure of $2.9 million, $2.6 million other surface income primarily related to a data center lease development agreement option period payment and $0.9 million related to road easements, partially offset by lower overhead electric easements of $0.2 million and surface and subsurface drilling location easements of $0.2 million for the three months ended March 31, 2026, as compared to the three months ended March 31, 2025.

Surface use royalties. Surface use royalties increased by $4.8 million. The increase was primarily attributable to increased produced water handling and associated skim oil royalties of $4.7 million and solid waste disposal and reclamation royalties of $0.1 million on our surface for the three months ended March 31, 2026, as compared to the three months ended March 31, 2025. The increase associated with produced water handling royalties is primarily driven by a significant increase in produced water handling volume of approximately 311 Mbbl/d. The volume and associated revenue increase was primarily attributable to the 1918 Acquisition in 2025 coupled with organic growth on our overall surface acreage.

Resource sales. Resource sales decreased by $1.9 million. Brackish water sales decreased $2.7 million for the three months ended March 31, 2026, as compared to the three months ended March 31, 2025. Brackish water sales volume decreased by 5.7 million barrels, or 47%, to 6.5 million barrels for the three months ended March 31, 2026, as compared to 12.2 million barrels for the three months ended March 31, 2025, partially offset by a per unit sales price increase of approximately 4%, primarily driven by the customer contract mix for the three months ended March 31, 2026, as compared to the three months ended March 31, 2025. Caliche sales increased $0.8 million for the same comparative period, primarily due to construction of energy infrastructure assets in the areas surrounding our surface acreage.

Resource royalties. Resource royalties decreased by $1.5 million. The decrease was primarily attributable to lower brackish water royalties of $1.2 million and sand mine royalties of $0.3 million primarily related to lower throughput volumes.

General and administrative expense. General and administrative expense, excluding share-based compensation expense, increased by $0.9 million. The increase was primarily attributable to increased professional services fees of $0.6 million primarily associated with legal expense related to commercial opportunities and personnel-related expenses of $0.3 million due to incremental personnel headcount for the three months ended March 31, 2026, as compared to the three months ended March 31, 2025.

Depreciation, depletion and amortization. Depreciation, depletion and amortization increased by $1.8 million. The increase was primarily attributable to amortization of intangibles acquired in the 1918 Acquisition during 2025.

Interest expense. Interest expense, increased by $1.5 million. The increase was primarily attributable to a higher weighted average debt balance during the three months ended March 31, 2026, as compared to borrowings under our then-existing debt instruments for the three months ended March 31, 2025 partially offset by lower interest on the Notes and 2025 Revolving Credit Facility.

Non-GAAP Financial Measures

We use certain non-GAAP performance measures to evaluate current and past performance and prospects for the future to supplement our financial information presented in accordance with GAAP. Although these non-GAAP financial and liquidity measures are important factors in assessing our operating results, profitability and performance they should not be considered in isolation or as a substitute for net income or gross margin or any other measures presented under GAAP.

Adjusted EBITDA and Adjusted EBITDA Margin

Adjusted EBITDA and Adjusted EBITDA Margin are used by our management and by external users of our financial statements, such as investors, research analysts and others, to assess the financial performance of our assets over the long term to generate sufficient cash to return capital to equity holders or service indebtedness. We define Adjusted EBITDA as net income (loss) before interest; taxes; depreciation, depletion and amortization; share-based compensation; non-recurring transaction-related expenses; litigation settlements and expenses incurred outside of the ordinary course of business; debt modification and extinguishment costs; gains or losses on disposal of assets; and other non-cash or non-recurring expenses. We define Adjusted EBITDA Margin as Adjusted EBITDA divided by total revenues.

We exclude the items listed above from net income (loss) in arriving at Adjusted EBITDA and Adjusted EBITDA Margin because these amounts can vary substantially from company to company within our industry depending upon accounting methods, book values of assets, capital structures and the method by which the assets were acquired.

The following table sets forth a reconciliation of net income as determined in accordance with GAAP to Adjusted EBITDA and Adjusted EBITDA Margin for the periods indicated.

Free Cash Flow and Free Cash Flow Margin

Free Cash Flow and Free Cash Flow Margin are used by our management and by external users of our financial statements, such as investors, research analysts and others, to assess our ability to repay our indebtedness, return capital to our shareholders and fund potential acquisitions without access to external sources of financing for such purposes. We define Free Cash Flow as cash flow from operating activities less investment in capital expenditures.

The following table sets forth a reconciliation of cash flows from operating activities determined in accordance with GAAP to Free Cash Flow and Free Cash Flow Margin, respectively, for the periods indicated.

(1)

Operating cash flow margin is calculated by dividing net cash provided by operating activities by total revenue.

Liquidity and Capital Resources

Overview

Our primary sources of liquidity are cash flows from operating activities and, if required, proceeds from borrowings under the 2025 Revolving Credit Facility. Our primary liquidity and capital requirements will be for our operating expenses, servicing of our debt, the payment of dividends to our shareholders, general company needs and investing in our business, including the potential acquisition of additional surface acreage. Although we believe that we will be able to partially or fully fund our short-term and long-term capital expenditures, working capital requirements and other capital needs with cash on hand and cash flows from operating activities, we may elect to use borrowings under the 2025 Revolving Credit Facility to finance our operating and investing activities. Refer to Note 7 —Debt within the notes to our Unaudited Condensed Consolidated Financial Statements for more information.

We strive to maintain financial flexibility and proactively monitor potential capital sources, including equity and debt financing, to meet our target liquidity and capital requirements. If market conditions were to change and our revenues were to decline significantly or operating costs were to increase, our cash flows and liquidity could be reduced and we could be required to seek alternative financing sources.

As of March 31, 2026, the Company had $500.0 million of principal debt related to our 6.25% fixed-rate senior unsecured notes due 2030 and $45.0 million of outstanding borrowings under the 2025 Revolving Credit Facility. As of March 31, 2026, the Company had $259.7 million of liquidity comprised of the $230.0 million of available borrowing capacity under the 2025 Revolving Credit Facility, and $29.7 million of cash and cash equivalents.

Dividends and Distributions

(1)

On May 5, 2026, our board of directors declared a dividend on our Class A shares of $0.12 per share, payable on June 18, 2026 to shareholders of record as of June 4, 2026, and a corresponding required cash distribution to OpCo unitholders.

On May 5, 2026, our board of directors approved a payment for tax distributions from OpCo to OpCo unitholders (other than the company) in the amount of $9.3 million. This amount is inclusive of OpCo unitholders’ (other than the Company) pro rata share of estimated federal income tax and an additional tax distribution in excess of the Company’s then-current income tax obligation as provided for under the OpCo LLC Agreement. This amount is expected to be paid during the second quarter of 2026.

Cash Flow

The following table summarizes our cash flow for the periods indicated:

Three Months Ended March 31, 2026 Compared to the Three Months Ended March 31, 2025

Net Cash Provided by Operating Activities. Net cash provided by operating activities increased $25.2 million. The increase was attributable to cash flow related to higher net income, net of adjustment items, of $4.3 million and an increase in cash flow attributable to working capital accounts of $20.9 million. The increase in net income, net of adjustment items, is primarily attributable to revenue growth related to continued commercialization of acreage, partially offset by higher adjustment items primarily related to higher intangibles amortization associated with the 1918 Acquisition in 2025. The increase in cash flow from working capital accounts is attributable to changes in accounts receivable primarily due to timing of acquisitions and higher interest expense accruals related to higher debt balances primarily as a result of funding acquisitions in 2025.

Net Cash Used in Investing Activities. Net cash used in investing activities decreased $15.7 million. The decrease was primarily attributable to lower acquisition and acquisition-related expenditures for the three months ended March 31, 2026 of $2.0 million as compared to $17.8 million for the three months ended March 31, 2025. See Note 4 —Asset Acquisitions within the notes to our Financial Statements.

Net Cash Used in Financing Activities. Net cash used in financing activities increased $19.9 million primarily attributable to an increase of $19.5 million in debt repayments net of borrowings. For the three months ended March 31, 2026, cash used in financing activities primarily consisted of $14.7 million of dividends, dividend equivalents and distributions paid to shareholders and $25.2 million of debt repayments. For the three months ended March 31, 2025, cash used in financing activities primarily consisted of $13.6 million of dividends, dividend equivalents and distributions paid to shareholders, $5.8 million of debt repayments net of borrowings, and $0.6 million in offering costs.

Capital Requirements

We focus our business model on entering into agreements under which our customers bear substantially all of the operating and capital expenditures related to their operations on our land, while minimizing our capital requirements for both current and future commercial opportunities, resulting in the ability to create significant Free Cash Flows. Our contracts generally include inflation escalators, which, when combined with our relatively low operating and capital expenditures, may assist in mitigating our exposure to broader inflationary pressures. As a landowner, we incur the initial cost to acquire our acreage, but thereafter we incur modest development capital expenditures and operating expenses as it relates to operations on our land or our mineral and royalty interests, as such expenses are borne primarily by our customers. As a result, we expect that additional significant capital expenditures would be related to our acquisition of additional surface acreage, should we elect to do so.

The amount and allocation of future acquisition-related capital expenditures will depend upon a number of factors, including the size of the acquisition opportunity, our cash flows from operating activities and our investing and financing activities. For the three months ended March 31, 2026 and 2025, we incurred $2.0 million and $17.8 million in acquisition-related capital expenditures, respectively.

We periodically assess changes in current and projected cash flows, acquisition and divestiture activities and other factors to determine the effects on our liquidity. We believe that our cash on hand and cash flow from operating activities will provide us with sufficient liquidity to execute our current strategy. However, our ability to generate cash is subject to a number of factors that may directly or indirectly affect us, many of which are beyond our control, including commodity prices and general economic, financial, competitive, legislative, regulatory and other factors. If we require additional capital for acquisitions or other reasons, we may seek such capital through traditional borrowings under our debt instruments, offerings of debt and equity securities or other means. If we are unable to obtain funds when needed or on acceptable terms, we may not be able to complete acquisitions that may be favorable to us.

As our board of directors declares cash dividends to our Class A shareholders, we expect the dividend to be paid from Free Cash Flow. We do not currently expect to borrow funds or to adjust planned capital expenditures to finance dividends on our Class A shares. The timing, amount and financing of dividends, if any, will be subject to the discretion of our board of directors from time to time.

Share Repurchase Program

On February 24, 2026, our board of directors approved a share repurchase program. The program permits the repurchase of up to $50 million of the Company’s Class A shares through December 2027. The shares may be repurchased from time to time in open market transactions, block trades, accelerated share repurchases, or privately negotiated transactions or by any combination of such methods. The timing, as well as the number and value of shares repurchased under the program, will be determined by the Company at its discretion and will depend on a variety of factors, including management's assessment of the intrinsic value of the Company’s Class A shares, the market price of the Company’s Class A shares, general market and economic conditions, available liquidity, compliance with the Company’s debt and other agreements, applicable legal requirements, and other considerations. The Company is not obligated to purchase any shares under the share repurchase program, and the program may be suspended, modified or discontinued at any time without prior notice.

Critical Accounting Estimates

The preparation of the Financial Statements in conformity with GAAP requires management to make certain estimates and assumptions that affect the amounts reported in the Financial Statements and the accompanying notes. There have been no significant changes to our critical accounting estimates from those disclosed in our 2025 Form 10-K.

Recently Issued Accounting Pronouncements Not Yet Adopted

For a summary of recently issued accounting pronouncements, refer to Note 2 —Summary of Significant Accounting Policies within the notes to our Unaudited Condensed Consolidated Financial Statements.

Off-Balance Sheet Arrangements

We currently have no material off-balance sheet arrangements.