Texas Pacific Land (NYSE: TPL) books record quarterly profit and royalties climb

Posted by Scott Moore on Nov 4th, 2026

What happened

Texas Pacific Land Corporation (NYSE: TPL) reported record third-quarter 2026 revenue, net income and free cash flow, led by oil and gas royalties.

For holders, the quarter shows the land-and-royalty model turning operator activity into cash. Revenue was $273.4 million. Net income was $167.4 million, or $2.42 per diluted share. Free cash flow, a non-GAAP measure, was $170.3 million.

Chief Executive Tyler Glover called the results the strongest in TPL's history. He said the royalty acreage benefited from development activity, elevated oil prices and improved gas realizations.

Against the second quarter, revenue rose from $246.1 million and net income climbed by $13.5 million from $153.9 million.

Key numbers

Metric	Latest	Change	Source
Consolidated revenue, Q3 2026 (change vs. Q2 2026)	$273.4 million	+11.1%	Calculated from SEC 8-K
Net income, Q3 2026 (change vs. Q2 2026)	$167.4 million	+8.8%	Calculated from SEC 8-K
Diluted EPS, Q3 2026 (change vs. Q2 2026)	$2.42	+8.5%	Calculated from SEC 8-K
Free cash flow, Q3 2026 (change vs. Q2 2026)	$170.3 million	+9.5%	Calculated from SEC 8-K
Oil and gas royalty revenue, Q3 2026 (change vs. Q2 2026)	$167.3 million	+14.9%	Calculated from SEC 8-K
Net income, nine months ended Sept. 30	$464.2 million	from $358.0 million, +29.7%	Calculated from SEC 8-K

Where the growth came from

Oil and gas royalties did most of the work. Royalty revenue was $167.3 million, up $21.7 million from the second quarter. TPL's share of production rose to 42.3 thousand barrels of oil equivalent (Boe) per day from 39.7 thousand. The average realized price rose to $44.97 per Boe from $42.17.

The price mix shifted underneath that total. Realized oil fell to $83.57 per barrel from $97.55. Natural gas rose to $2.40 per thousand cubic feet from $0.40. Gas royalties reached $15.6 million from $2.6 million. Oil royalties edged up to $125.9 million from $119.3 million as TPL's oil volumes rose to 1,578 thousand barrels from 1,280 thousand.

Surface and water royalties added more. Easements and other surface-related income rose $12.5 million. Glover said pipeline easement revenue was strong as operators expanded midstream infrastructure. Produced water royalties rose $4.3 million to $41.4 million as royalty volumes reached 5.5 million barrels per day.

Water sales were the exception. They fell $11.3 million to $28.4 million on lower average realized pricing, partly offset by higher volumes. Water Services and Operations segment revenue slipped to $71.8 million from $82.2 million. Segment net income fell to $33.6 million from $44.5 million.

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Margins, cash and reinvestment

Costs rose faster than revenue. Operating expenses increased 21.0% to $65.6 million from $54.2 million in the second quarter, while revenue grew 11.1%. TPL listed $6.2 million more depreciation, depletion and amortization, higher general and administrative expense and $2.2 million more water service-related expense.

Margins held anyway. The investor presentation shows adjusted EBITDA, another non-GAAP measure, of $238.4 million at an 87% margin, against 88% in the second quarter. The free cash flow margin was 62%, against 63%. TPL ended September with $369.6 million of cash and no debt.

Reinvestment is aimed at new lines of business. Over nine months TPL spent $122.7 million on land in Shackelford and Jones Counties, Texas, for its data center and power generation initiatives, and in Winkler and Reeves Counties. It also finished building the Phase 2B produced water desalination facility in Orla, Texas, and began commissioning it. Planned capacity is 10,000 inlet barrels per day.

TPL also announced an agreement with Chevron U.S.A. Inc. to provide land and brackish water for Project Kilby. Chevron is developing the large power generation facility to support a customer data center in Reeves County, Texas.

Why it matters

The nine-month figures show the quarter is part of a trend, not a one-off spike. Net income was $464.2 million, or $6.73 per diluted share, up 29.7% from $358.0 million in the same period of 2025. Revenue rose to $756.3 million from $586.6 million.

The largest piece of that revenue increase was $116.1 million of oil and gas royalties. Land sales added $20.2 million, and the filing's reconciliations deduct $20.9 million for a land sale with a financing arrangement. Part of the nine-month gain therefore comes from a one-time land sale, not royalty activity.

OptimistFi has argued that TPL is a Permian toll road. Its value rests on operator activity and royalty-like margins, not on TPL drilling wells. A quarter in which royalties and easements drove the gains while margins held supports that view.

The caveat comes from TPL itself. It says its revenue streams are directly affected by commodity prices and the development and operating decisions of its customers. Realized oil prices fell from the second quarter, so the royalty gain rested on volumes and a gas price recovery. Glover said TPL is still working to turn its data center, power and desalination efforts into meaningful commercial outcomes.

What's next

TPL holds its earnings call on Thursday, Nov. 5, at 9:30 a.m. Central Time, with a webcast on the Investors section of its website. As of Sept. 30, its royalty acreage had 5.7 net well permits, 8.6 net drilled but uncompleted wells and 2.5 net completed but not producing wells, totaling 16.8 net wells. That inventory feeds future royalty volumes, so the call is where holders can test whether operators keep converting it.

The board declared a quarterly dividend of $0.60 per share, payable Dec. 15 to stockholders of record at the close of business Dec. 1. The company paid $124.6 million of dividends through Sept. 30.