Texas Pacific Land Corporation (NYSE: TPL) achieves record annual revenue, net income, and free cash flow while expanding its Midland Basin footprint and entering the data infrastructure sector. A 12.5% dividend increase and a recent three-for-one stock split highlight management’s focus on shareholder returns.
The company reports record fiscal year consolidated revenues, net income, and free cash flow for 2025. The company announces a 12.5% increase to its regular quarterly dividend and reports record quarterly production in oil and gas royalties, water sales, and produced water royalties. These results occur despite headwinds from lower commodity prices throughout the year.
Key Development
The company acquired 17,306 net royalty acres in the Midland Basin during the fourth quarter of 2025 for an aggregate cash price of $450.7 million. This acquisition targets core Permian Basin assets to expand the company’s existing royalty base. Additionally, the company completed a three-for-one stock split on December 22, 2025, and established a new $500 million revolving credit facility.
Product Highlights
TPL is diversifying its revenue streams through “next-generation” business lines. The company invested $50.0 million in Bolt Data & Energy, Inc. to facilitate the development of large-scale data center campuses and supporting infrastructure on TPL-owned land. Management is also advancing commercialization efforts for produced water desalination technology. The company continues to provide surface access, sourced water, and saltwater disposal services across its 882,000 acres in West Texas.
Financial Performance
For the fourth quarter of 2025, TPL generates $211.6 million in total revenue, an increase from $203.1 million in the third quarter of 2025. Quarterly net income reaches $123.3 million, or $1.79 per diluted share. Adjusted EBITDA for the quarter is $178.1 million, with free cash flow of $118.9 million.
Full-year 2025 results show total revenue of $798.2 million, up 13.1% from $705.8 million in 2024. Annual net income rises to 481.4million (6.97 per diluted share) from 454.0 million (6.57 per diluted share) in the prior year. Total operating expenses for 2025 increase to $206.0 million from $166.7 million, primarily driven by a $33.0 million increase in depletion expense related to acquired royalty interests. As of December 31, 2025, the company maintains a net cash position and its $500 million credit facility remains fully undrawn.
Investment Thesis: (Bull vs. Bear)
Bull Thesis:
TPL demonstrates high-margin growth with record production volumes across its royalty and water segments.
The company’s move into data center infrastructure provides a growth catalyst independent of traditional energy production.
A strong balance sheet with no debt and high free cash flow supports continued dividend growth and strategic acquisitions.
Bear Thesis:
Company’s revenue streams are directly impacted by volatile oil and gas prices and the capital expenditure decisions of its customers.
Realized prices for equivalents declined significantly in 2025.
Rising operating expenses, particularly depletion and water-service related costs, may pressure margins if commodity prices continue to face headwinds.
Capital Allocation
Management continues to prioritize long-term intrinsic value per share by balancing development of legacy royalty, land, and water assets with selective investment in emerging technology-driven initiatives. Capital allocation remains countercyclical across core operating segments, with an emphasis on preserving balance-sheet strength while funding opportunities that can enhance long-duration cash flow and asset productivity.
During 2025, the company returned $156.2 million to shareholders through a combination of $147.8 million in dividends and $8.4 million in common-stock repurchases. The board also set a new quarterly dividend of $0.60 per share, reinforcing a capital-return framework that combines steady distributions with opportunistic buybacks alongside continued reinvestment in core and adjacent growth initiatives.
Strategic Diversification
Texas Pacific Land Corporation has partnered with Bolt Data & Energy, Inc. to monetize its ~882,000-acre surface footprint through next-generation infrastructure opportunities, including data center campuses and related energy development. The strategy seeks to diversify revenue beyond TPL’s core oil-and-gas royalty and water services segments by leveraging its land position for higher-value commercial uses. As part of a $50 million investment, TPL secured a right of first refusal to supply water to Bolt-affiliated projects, linking the initiative to its existing Water Services and Operations segment and enabling integrated project economics across land, water, and infrastructure.
The agreement also allows TPL to contribute land in exchange for additional equity, supporting capital-efficient growth consistent with its high-margin, low-capex model. By aligning with Bolt, co-founded and chaired by former Eric Schmidt, TPL gains access to industrial and technology expertise aimed at advancing large-scale data center development on its acreage. Management views the partnership as a long-term value-creation lever, though the minority-investment structure introduces typical risks, including limited operational control and the potential for commercial outcomes to fall short of expectations.
Sector and Macro Context
The company’s performance remains sensitive to broader energy market conditions. While TPL increased its share of production to 34.6 thousand barrels of oil equivalent (Boe) per day in 2025 from 26.8 thousand Boe per day in 2024, the average realized price fell 14.3% year-over-year to $34.18 per Boe. Revenue growth is supported by increased volumes in water sales and produced water royalties, which offset the impact of declining commodity prices.
Technical Evaluation
Short-Term: The December 2025 three-for-one stock split tripled the number of outstanding shares, affecting nominal price levels and liquidity. Recent dividend increases of 12.5% provide a yield-based incentive for investors.
Long-Term: The company has transitioned to a corporate structure that emphasizes consistent capital returns, as evidenced by $147.8 million in total 2025 dividends and ongoing share buybacks. The addition of 17,306 net royalty acres and the diversification into data infrastructure represent long-term shifts in the company’s asset composition.
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