01—Abstract
Summary
Summary of the 10-Q filed May 6, 2026. Cited figures are marked; the original filing is the authoritative source.
Texas Pacific Land Corporation reported net income of $142.9 milliona for the three months ended March 31, 2026, up from $120.7 million a year earlier, and diluted earnings per share of $2.07 compared with $1.75.
Total revenues rose to $236.8 millionb from $196.0 million. Oil and gas royalty revenue increased 6.2% to $118.2 million on higher production of 37.1 thousand Boe per day, although the average realized price fell 10.9% to $37.06 per Boe. Water sales increased to $46.9 million, with pricing up 16.7% and volumes up 3.5%, and produced water royalties rose to $33.5 million on a 23.5% increase in volumes.
The quarter included a $20.9 millionc land sale recognized at closing in connection with an arrangement with a developer of a power generation plant supporting data center operations. The sale carries aggregate consideration of $42.5 million, paid mostly through annual payments through 2046, and is recorded as a financing receivable. Cash and cash equivalents were $247.6 million at quarter-end, up from $144.8 million at December 31, 2025, and the $500 million Credit Facility remained undrawn.
Free cash flow, as defined by the company, was $136.4 milliond compared with $126.6 million in the prior-year quarter. The Board declared a quarterly cash dividend of $0.60 per share on May 5, 2026, payable June 15, 2026. No shares were repurchased in the quarter, with $170.2 million remaining under the stock repurchase authorization.
The company stated that its target cash balance is approximately $700 million and that it would return excess free cash flow to stockholders through special dividends and/or share repurchases. The Permian desalination facility, with an initial capacity of 10,000 barrels of water per day, was under construction with an estimated service date in the second quarter of 2026.
02—Key points
Key Highlights
- Net income rose to $142.9 million ($2.07 diluted EPS) from $120.7 million ($1.75 diluted EPS) in the prior-year quarter.
- Total revenues increased to $236.8 million from $196.0 million, including a $20.9 million land sale recognized at closing.
- Oil and gas royalties grew 6.2% to $118.2 million on production of 37.1 thousand Boe per day, while the average realized price declined 10.9% to $37.06 per Boe.
- Water sales reached $46.9 million, with pricing up 16.7% and volumes up 3.5%; produced water royalties increased to $33.5 million on a 23.5% rise in volumes.
- A land sale to a power generation plant developer supporting data center operations carries aggregate consideration of $42.5 million, with payments due through 2046.
- Cash and cash equivalents rose to $247.6 million, and the $500 million Credit Facility remained undrawn with covenants in compliance.
- The Board declared a $0.60 per share quarterly dividend payable June 15, 2026, and no shares were repurchased during the quarter.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-QQ1 FY2026filed May 6, 2026Financial Statements
Q1 FY2026 against Q1 FY2025
| Line item | Q1 FY2026Q1 FY2025 | Change |
|---|---|---|
| Revenue | $236.82M$195.98M | +20.8% |
| Operating Expenses | $54.49M$45.91M | +18.7% |
| Operating Income | $182.33M$150.07M | +21.5% |
| Net Income | $142.90M$120.65M | +18.4% |
| EPS (Basic) | $2.07$1.75 | +18.3% |
| EPS (Diluted) | $2.07$1.75 | +18.3% |
| Shares Outstanding (Basic) | 68.96M68.94M | 0.0% |
| Shares Outstanding (Diluted) | 69.01M69.02M | 0.0% |
05—Questions
Frequently Asked Questions
What drove the increase in net income this quarter?
Net income increased to $142.9 million from $120.7 million, driven by higher total revenues of $236.8 million versus $196.0 million. Growth came from oil and gas royalties, water sales, produced water royalties and the $20.9 million land sale, partly offset by higher operating expenses of $54.5 million versus $45.9 million and higher income tax expense.
How is the land sale accounted for and what are its terms?
The company sold land for aggregate consideration of $42.5 million, with a nominal cash payment at closing and annual payments through 2046. Land sale revenue of $20.9 million was recognized at closing, and the deferred consideration was recorded as a financing receivable at its present value, with a carrying value of $21.0 million at March 31, 2026. The arrangement includes a developer put option and a company call option tied to development milestones, and a separate agreement to supply water to the project.
Why did oil and gas royalty revenue rise while realized prices fell?
Royalty revenue increased 6.2% to $118.2 million because production rose to 37.1 thousand Boe per day from 31.1 thousand. The average realized price fell 10.9% to $37.06 per Boe from $41.58, reflecting lower natural gas and NGL prices, with realized natural gas at $1.83 per Mcf versus $3.63 and NGL at $18.65 per Bbl versus $23.46.
What is the company's capital return and liquidity position?
The company paid $41.8 million in dividends during the quarter and declared a $0.60 per share dividend payable June 15, 2026. Cash and cash equivalents were $247.6 million, below the approximately $700 million target balance the company has set, above which it intends to return most free cash flow through special dividends and/or share repurchases. Operating cash flow was $162.0 million, and $170.2 million remained under the stock repurchase authorization.
What is the status of the desalination project?
The company is building a patented desalination and treatment facility with an initial capacity of 10,000 barrels of water per day, with an estimated service date in the second quarter of 2026. Cumulative spending through March 31, 2026 was $48.3 million, of which $41.3 million has been capitalized, including $2.8 million spent during the quarter.
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