TPL Q3 2025 Earnings: Production Volume Surge Drives 17% Revenue Growth

Texas Pacific Land Corp. (TPL), one of the largest landowners in the Permian Basin, recently released its financial results for the third quarter of 2025. For investors following the energy sector, TPL offers a unique business model, generating revenue from oil and gas royalties, water services, and surface rights rather than direct exploration and production. Let's dive into their latest Form 10-Q filing to see how the company is performing.

Strong Revenue Growth Across the Board

TPL reported total revenues of $203.1 million for the third quarter, a solid 17% increase from the $173.6 million recorded in the same period last year. This growth was driven by positive performance in all of its primary revenue streams.

• Oil and Gas Royalties: $108.7 million, up 15% year-over-year.
• Water Sales: $44.6 million, up 23% year-over-year.
• Produced Water Royalties: $32.3 million, up 16% year-over-year.
• Easements and Other Income: $16.7 million, up 17% year-over-year.

The following flow diagram provides a visual breakdown of how TPL's revenue streams contributed to its bottom line for the quarter.

A Tale of Volume Over Price

A closer look at the company's core Land and Resource Management (LRM) segment reveals a key insight: the impressive 15% growth in oil and gas royalty revenue was driven entirely by higher production volumes, which successfully offset a decline in realized oil prices.

TPL's share of oil production from its lands surged nearly 23% to 1.28 million barrels. Natural gas production volumes were even more impressive, jumping 32% to 6,142 million cubic feet. This substantial increase in output demonstrates the high level of drilling and development activity by operators on TPL's acreage.

This volume growth was crucial because the average price TPL realized for its oil fell to $65.14 per barrel, down from $75.53 last year. A significant bright spot was the realized price for natural gas, which more than doubled to $2.01 per thousand cubic feet, helping to bolster the segment's revenue. This performance highlights the strength of TPL's asset base in the Permian, which continues to attract robust operator activity.

Expanding Water Business and Healthy Profits

TPL's Water Services and Operations (WSO) segment, which provides water sourcing and produced water management for oil and gas operators, also delivered strong results. The segment's revenues grew by 21% to $80.8 million, leading to an operating income of $50.6 million.

On a consolidated basis, TPL's profitability remained strong.

• Operating income climbed 17% to $149.1 million.
• Net income rose 14% to $121.2 million, or $5.27 per diluted share, up from $106.6 million, or $4.63 per diluted share, in the third quarter of 2024.

The company's balance sheet is exceptionally healthy, with cash and cash equivalents standing at $531.8 million as of September 30, 2025. This financial strength allows TPL to continue investing in growth, such as the September acquisition of approximately 8,147 acres in Martin County, Texas, for $31.4 million, while also returning significant capital to shareholders. The company declared a quarterly dividend of $1.60 per share subsequent to the quarter's end.

In conclusion, Texas Pacific Land Corp.'s third-quarter results paint a picture of a company capitalizing on the sustained activity in the Permian Basin. By focusing on its role as a landowner and service provider, TPL has successfully translated higher production volumes on its properties into robust revenue and profit growth, demonstrating the resilience of its business model even in a mixed commodity price environment.