Texas Pacific Land 10-Q 2026-03-31

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2026

or

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ______ to ______

Commission File Number: 1-39804

Exact name of registrant as specified in its charter:

Texas Pacific Land Corporation

Address of principal executive offices:

2699 Howell Street, Suite 800 Dallas, Texas 75204

Registrant’s telephone number, including area code:

(214) 969-5530

Securities registered pursuant to Section 12(b) of the Act:

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐ No ☑

As of April 30, 2026, there were 68,974,429 shares of the registrant’s common stock, par value $0.01 per share, outstanding.

TEXAS PACIFIC LAND CORPORATION

Form 10-Q

For the Quarter Ended March 31, 2026

Table of Contents

PART I. FINANCIAL INFORMATION

TEXAS PACIFIC LAND CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except shares and per share amounts)

(Unaudited)

See accompanying notes to condensed consolidated financial statements.

TEXAS PACIFIC LAND CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND TOTAL COMPREHENSIVE INCOME

(in thousands, except shares and per share amounts)

(Unaudited)

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Cautionary Statement Regarding Forward-Looking Statements

Statements in this Quarterly Report on Form 10-Q (this “Quarterly Report”) that are not purely historical are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), including statements regarding management’s expectations, hopes, intentions or strategies regarding the future. Words or phrases such as “anticipates,” “believes,” “could,” “expects,” “intends,” “may,” “might,” “plan,” “potential,” “should,” “will,” and “would” or similar expressions or the negative of such terms, when used in this Quarterly Report or other filings with the Securities and Exchange Commission (the “SEC”), are intended to identify “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include, but are not limited to, statements regarding the Company’s future operations and prospects, the markets for real estate in the areas in which the Company owns real estate, applicable zoning regulations, the markets for oil and gas including actions of other oil and gas producers or consortiums worldwide such as the Organization of Petroleum Exporting Countries (“OPEC”) and Russia (collectively referred to as “OPEC+”), expected competition, management’s intent, beliefs or current expectations with respect to the Company’s future financial performance and other matters. All forward-looking statements in this Quarterly Report are based on information available to us, and speak only, as of the date this Quarterly Report is filed with the SEC, and we assume no responsibility to update any such forward-looking statements, except as required by law. All forward-looking statements are subject to a number of risks, uncertainties and other factors that could cause our actual results, performance, prospects or opportunities to differ materially from those expressed in, or implied by, these forward-looking statements. These risks, uncertainties and other factors include, but are not limited to, the factors discussed in Part I, Item 1A. “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2025 (the “2025 Annual Report”), and in Part I, Item 2. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and Part II, Item 1A. “Risk Factors” of this Quarterly Report.

The following discussion and analysis should be read in conjunction with our 2025 Annual Report filed with the SEC on February 18, 2026 and the condensed consolidated financial statements and accompanying notes included in Part I, Item 1 of this Quarterly Report. Period-to-period comparisons of financial data are not necessarily indicative, and therefore, should not be relied upon as indicators, of the Company’s future performance.

Overview

Texas Pacific Land Corporation (which, together with its subsidiaries as the context requires, may be referred to as “TPL”, the “Company”, “our”, “we” or “us”) is a Delaware corporation and one of the largest landowners in the State of Texas with approximately 881,000 surface acres of land, principally concentrated in the Permian Basin. Additionally, we own a 1/128th nonparticipating perpetual oil and gas royalty interest (“NPRI”) under approximately 85,000 acres of land, a 1/16th NPRI under approximately 371,000 acres of land, and approximately 33,000 additional net royalty acres (normalized to 1/8th) (“NRA”), for a collective total of approximately 224,000 NRA, principally concentrated in the Permian Basin.

The Company was originally organized under a Declaration of Trust, dated February 1, 1888, to receive and hold title to extensive tracts of land in the State of Texas, previously the property of the Texas and Pacific Railway Company. We completed our reorganization on January 11, 2021 from a business trust, Texas Pacific Land Trust, into Texas Pacific Land Corporation.

We are not an oil and gas producer. Our business activity is generated from our surface and royalty interest ownership, primarily in the Permian Basin. Our revenues are derived from oil and gas royalties, water sales, produced water royalties, easements and other surface-related income and land sales. Due to the nature of our operations and concentration of our ownership in one geographic location, our revenue and net income are subject to substantial fluctuations from quarter to quarter and year to year. In addition to fluctuations in response to changes in the market price for oil and gas, our financial results are subject to decisions by not only the owners and operators of oil and gas wells to which our oil and gas royalty interests relate, but also to other owners and operators in the Permian Basin as it relates to our other revenue streams, principally water sales, produced water royalties, easements, and other surface-related revenue.

For a detailed overview of our business and business segments, see Part I, Item 1. “Business — General” in our 2025 Annual Report.

Common Stock Split

On December 22, 2025, we effected a three-for-one stock split of our common stock, par value $0.01 per share (“Common Stock”), and trading began on a stock split adjusted basis on December 23, 2025. Unless the context otherwise requires, all share and per share information (including information regarding treasury shares, restricted stock awards (“RSAs”), restricted stock units (“RSUs”), and performance stock units (“PSUs”)) has been retroactively adjusted to reflect the stock split. The par value of Common Stock was not affected by the stock split and remains at $0.01 per share. Accordingly, an amount equal to the par value of the increased shares resulting from the stock split was reclassified from “Additional paid-in capital” to “Common Stock” on our consolidated balance sheets.

Market Conditions

Average West Texas Intermediate (“WTI”) oil prices for the three months ended March 31, 2026 increased slightly compared to average WTI oil prices during the same period last year. Oil prices are impacted by certain actions by OPEC+, geopolitics, and evolving global supply and demand trends, among other factors. In February 2026, an escalating military conflict in Iran led to attacks on energy infrastructure in the broader Middle East and caused major disruptions to the Strait of Hormuz, a critical shipping channel where a significant portion of global oil and liquefied natural gas supply transits through daily. As a result, global oil prices increased to over $90 per barrel during parts of March and April 2026. The impact to oil prices for the balance of 2026 and beyond are uncertain and, in part, dependent on the duration of the conflict in Iran, the extent of damage to energy infrastructure and the ramifications of a prolonged closure of the Strait of Hormuz. Average Henry Hub natural gas prices during 2026 increased approximately 14% compared to average prior year period natural gas prices. Global and domestic natural gas markets benefited in 2026 from improved supply-demand balances, including tailwinds from expanded liquefied natural gas capacity and improved industrial and power demand, among other factors. Since mid-2022, the Waha Hub located in Pecos County, Texas has at times experienced significant negative price differentials relative to Henry Hub, located in Erath, Louisiana, due in part to growing local Permian Basin natural gas production and limited natural gas pipeline takeaway capacity. Midstream infrastructure is currently being developed by operators to provide additional takeaway capacity, though the impact on future basis differentials will be dependent on future natural gas production and other factors. Changes in global and domestic macro-economic conditions could result in additional shifts in oil and gas supply and demand in future periods. Although our revenues are directly and indirectly impacted by oil and natural gas prices, we believe our royalty interests (which require no capital expenditures or operating expense burden from us for well development), strong balance sheet, and liquidity position will help us navigate through potential commodity price volatility.

As the largest oil producing shale basin in the world, the Permian Basin depends on large-scale water solutions related to well development and produced water disposal. For oil and gas well development, hundreds of thousands of barrels of water are often required per well completion. To enhance productivity and drilling economics, oil and gas operators have generally expanded the amount of water per well completion and reduced the time to complete a well. These factors have led to intensifying demands for completion water delivery and assurance, which generally benefits completion water providers with larger size and scale. We believe we have a competitive advantage in this market with our significant surface footprint and a large network of owned and operated water wells, storage ponds, recycling assets, and pipelines that can source and deliver water to customers throughout the Permian Basin.

Permian Basin produced water volumes have grown commensurately with overall Permian Basin oil production. Though some produced water is reused and recycled for completion activities, the majority of Permian Basin produced water is injected into subsurface pore space via saltwater disposal wells. Saltwater disposal availability varies throughout the Permian Basin depending on regulations, permitted injected rates, and the availability of pore space and infrastructure. Our extensive land holdings contain and are adjacent to extensive pore space, and, through various commercial agreements, we allow produced water operators to transport and dispose of produced water across our surface footprint. Furthermore, as discussed below, our desalination project could potentially provide an additional solution for produced water by reducing the amount of water required to be injected subsurface.

Permian Basin Activity

The Permian Basin is one of the oldest and most well-known hydrocarbon-producing areas and currently accounts for a substantial portion of oil and gas production in the United States, covering approximately 86,000 square miles across southeastern New Mexico and western Texas. Exploration and production (“E&P”) companies operating in the Permian Basin continue to maintain robust drilling and development activity. Per the U.S. Energy Information Administration, Permian Basin production is currently in excess of 6.5 million barrels per day.

Due to our ownership concentration in the Permian Basin, our revenues are directly impacted by oil and gas pricing and drilling activity in the Permian Basin. The metrics below show selected domestic benchmark oil and natural gas prices and approximate activity levels in the Permian Basin for the three months ended March 31, 2026 and 2025:

(1) Commonly used definitions in the oil and gas industry: “WTI Cushing” represents West Texas Intermediate. “Bbl” represents one barrel of 42 U.S. gallons of crude oil, condensate or NGLs. “Mmbtu” represents one million British thermal units, a measurement used for natural gas. “DUCs” represent drilled but uncompleted wells. DUC classification is based on well data and date stamps provided by Enverus. DUCs is based on wells that have a drilled/spud date stamp but do not have a completed or first production date stamp. Excludes wells that have been labeled plugged and abandoned or permit expired and wells drilled/spud more than five years ago.

(2) Permian Basin specific information per Enverus analytics. U.S. weekly horizontal rig counts per Baker Hughes United States Rotary Rig Count for horizontal rigs. Statistics for similar data are also available from other sources. The comparability between these other sources and the sources used by the Company may differ.

Average WTI Cushing oil and Henry Hub natural gas prices for the three months ended March 31, 2026 increased compared to the same period in 2025. E&P companies broadly have continued to deploy capital towards drilling and development activities in the Permian Basin at a measured pace. Although average rig counts during the three months ended March 31, 2026 were lower compared to the same period in 2025, increased drilling and completion efficiencies have allowed operators, in aggregate, to grow Permian Basin production. As we are a significant landowner in the Permian Basin and not an oil and gas producer, our revenue is affected by the development decisions made by companies that operate in the areas where we own royalty interests and land. Accordingly, these decisions made by others affect, both directly and indirectly, our oil and gas royalties, produced water royalties, water sales, and other surface-related income.

Liquidity and Capital Resources

Overview

Our principal sources of liquidity are cash and cash flows generated from our operations and our $500 million revolving credit agreement (the “Credit Facility”). See further discussion of our Credit Facility in Note 7, “Credit Facility” in the notes to the condensed consolidated financial statements in this Quarterly Report. Our primary liquidity and capital requirements are for acquisitions, purchases of fixed assets related to our Water Services and Operations segment (the extent and timing of which are under our control), working capital, and general business needs.

We continuously review our levels of liquidity and capital resources. If market conditions were to change and our revenues were to decline significantly or our operating costs were to increase significantly, our cash flows and liquidity could be reduced. Should this occur, we could draw on our Credit Facility or seek alternative sources of funding. As of March 31, 2026, we had no off-balance sheet arrangements that require us to provide funding, guarantees, or other forms of financial support. The Credit Facility remains undrawn, and the Company is in compliance with all covenants under the Credit Facility as of March 31, 2026.

As we evaluate our current capital structure, capital allocation priorities, business fundamentals, and investment opportunities, we have set a target cash and cash equivalents balance of approximately $700 million. Above this target, we will seek to deploy the majority of our free cash flow towards returning capital to our stockholders in the form of special dividends and/or share repurchases. As of March 31, 2026, we had cash and cash equivalents of $247.6 million that we expect to utilize, along with cash flow from operations, to provide capital to support our business, to pay regular dividends, subject to the discretion of our board of directors (the “Board”), to, subject to market conditions, repurchase shares of our Common Stock, for potential acquisitions and for general corporate purposes. We believe that our cash from operations and our cash and cash equivalents balance, together with our revolving Credit Facility will be sufficient to meet ongoing capital expenditures, working capital requirements, and other cash needs and allow for opportunistic transactions for at least the next 12 months.

Land Sale

During the three months ended March 31, 2026, we entered into an arrangement with a developer of a power generation plant to support data center operations. In conjunction with this arrangement, we sold land for aggregate consideration of $42.5 million. The consideration consisted of a nominal cash payment received at closing and annual payments due to us through 2046.

This arrangement also provides for a put option held by the developer and a call option held by us regarding our repurchase of the land if certain development milestones are not achieved. Additionally, we entered into a separate agreement to supply water to the project.

We recognized land sale revenue of $20.9 million at closing and recorded a financing receivable for the deferred consideration. The financing receivable was recorded at its present value of $20.9 million, which represents the contractual payments of $42.4 million discounted at an effective interest rate of 7.5%.

Return of Capital to Stockholders

During the three months ended March 31, 2026, we paid $41.8 million in dividends to our stockholders. There were no repurchases of shares of our Common Stock during the three months ended March 31, 2026.

Development of New Solutions for Produced Water and Capital Expenditures

In 2024, we announced our progress towards developing a patented, energy-efficient, desalination and treatment process and associated equipment that can recycle produced water into fresh water with quality standards appropriate for surface discharge and beneficial reuse. With the Permian Basin generating over 20 million barrels of produced water per day, this technology provides an attractive and critical alternative to subsurface injection. Construction of our facility, which will have an initial capacity of 10,000 barrels of water per day, is underway with an estimated service date during the second quarter of 2026. Cumulatively through March 31, 2026, we have spent $48.3 million ($2.8 million during the three months ended March 31, 2026) on this new energy-efficient desalination and treatment process and equipment, of which $41.3 million has been capitalized as of March 31, 2026.

Additionally, during the three months ended March 31, 2026, we invested approximately $4.2 million to enhance our water sourcing assets.

Cash Flows from Operating Activities

Our cash flows provided by operating activities are primarily from oil, gas, produced water royalties, water and land sales, easements, and other surface-related income. Cash flows used in operations generally consist of operating expenses associated with our revenue streams, general and administrative expenses, and income taxes.

For the three months ended March 31, 2026 and 2025, cash provided by operating activities was $162.0 million and $156.7 million, respectively. The increase in cash flows provided by operating activities for the three months ended March 31, 2026 compared to the same period of 2025 was primarily driven by an increase in operating income and changes in working capital requirements during 2026 as compared to 2025.

Cash Flows Used in Investing Activities

Our cash flows used in investing activities are primarily related to acquisitions and purchases of fixed assets primarily related to our Water Services and Operations segment. Our acquisitions may include land, royalty interests, and other similar

tangible and intangible assets. Purchases of fixed assets principally relate to enhancing our water sourcing assets and the development of desalination equipment discussed further above.

For the three months ended March 31, 2026 and 2025, cash used in investing activities was $8.4 million and $12.5 million, respectively. For the three months ended March 31, 2026 and 2025, cash used for acquisitions totaled $1.0 million (including a deposit for an acquisition) and $3.6 million, respectively. Purchases of fixed assets for the three months ended March 31, 2026 and 2025 were $7.3 million and $9.0 million, respectively.

Cash Flows Used in Financing Activities

Our cash flows used in financing activities primarily consist of activities that return capital to our stockholders, such as payments of dividends and repurchases of our Common Stock.

For the three months ended March 31, 2026 and 2025, cash used in financing activities was $50.9 million and $51.8 million, respectively. During the three months ended March 31, 2026 and 2025, we paid total dividends of $41.8 million and $37.4 million, respectively. During the three months ended March 31, 2026 and 2025, employees surrendered $9.1 million and $14.3 million in shares, respectively, to the Company to settle tax withholdings related to stock vesting.

Results of Operations

The following table shows our consolidated results of operations and our results of operations by reportable segment for Land and Resource Management (“LRM”) and Water Service and Operations (“WSO”) for the three months ended March 31, 2026 and 2025 (in thousands):

Interest income by segment is included in other income, net in the table above.

Consolidated Results of Operations

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

Total revenues were $236.8 million for the three months ended March 31, 2026 compared to $196.0 million for the three months ended March 31, 2025. Total operating expenses were $54.5 million for the three months ended March 31, 2026 compared to $45.9 million for the three months ended March 31, 2025. Net income was $142.9 million for the three months ended March 31, 2026 compared to $120.7 million for the three months ended March 31, 2025. Individual revenue and expense line items are discussed below under “Segment Results of Operations.”

Segment Results of Operations

We operate our business in two reportable segments: Land and Resource Management and Water Services and Operations. We eliminate any inter-segment revenues and expenses, if any, upon consolidation.

We evaluate the performance of our operating segments separately to monitor the different factors affecting financial results. The reportable segments presented are consistent with our reportable segments discussed in Note 14, “Business Segment Reporting” in the notes to the condensed consolidated financial statements in this Quarterly Report. We monitor our reporting segments based upon net income calculated in accordance with accounting principles generally accepted in the United States of America (“GAAP”).

As discussed in “Market Conditions” and “Permian Basin Activity” above, our segment revenues are directly influenced by development decisions made by our customers, the overall activity level in the Permian Basin and commodity

prices. Accordingly, our segment revenues, sales volumes and associated expenses, as further discussed below, fluctuate from period to period based upon those decisions, activity levels and commodity prices.

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

Land and Resource Management

Oil and gas royalties. Oil and gas royalty revenue was $118.2 million for the three months ended March 31, 2026 compared to $111.2 million for the three months ended March 31, 2025, an increase of 6.2%. Our share of production increased to 37.1 thousand barrels of oil equivalent (“Boe”) per day for the three months ended March 31, 2026 compared to 31.1 thousand Boe per day for the same period of 2025. The average realized price decreased 10.9% to $37.06 per Boe for the three months ended March 31, 2026 from $41.58 per Boe for the three months ended March 31, 2025.

The financial and operational data by royalty stream is presented in the table below for the three months ended March 31, 2026 and 2025:

*(1)*Commonly used definitions in the oil and gas industry: “Bbl” represents one barrel of 42 U.S. gallons of crude oil, condensate or NGLs. “Boe” represents barrels of oil equivalent. “NGL” represents natural gas liquid. “MBbls” represents one thousand barrels of crude oil, condensate or NGLs. “Mcf” represents one thousand cubic feet of natural gas. “MMcf” represents one million cubic feet of natural gas. “MBoe” represents one thousand Boe. “MBoe/d” represents one thousand Boe per day.

Easements and other surface-related income. Easements and other surface-related income was $14.4 million for the three months ended March 31, 2026, compared to $15.3 million for the three months ended March 31, 2025. Easements and other surface-related income includes revenue related to the use and crossing of our land for oil and gas E&P, renewable energy, and agricultural operations. The decrease in easements and other surface-related income was principally related to decreases of $1.1 million in material sales and $0.9 million in damages revenue, partially offset by an increase in lease bonuses associated with acquired royalty interests for the three months ended March 31, 2026 compared to the same period of 2025. Easements and other surface-related income is dependent on development decisions made by companies that operate in the areas where we own land and is, therefore, unpredictable and may vary significantly from period to period. See “Market Conditions” and “Permian Basin Activity” above for additional discussion of development activity in the Permian Basin during the three months ended March 31, 2026.

Land Sale. Land sale revenue was $20.9 million during the three months ended March 31, 2026 relating to the sale of land as discussed in Note 4, “Real Estate Activity” in the notes to the condensed consolidated financial statements in this Quarterly Report. There was no land sale revenue for the comparable period of 2025.

General and administrative expenses. General and administrative expenses were $5.5 million for the three months ended March 31, 2026 compared to $3.3 million for the comparable period of 2025. The increase in general and administrative expenses was primarily due to an increase in legal and professional fees of $0.9 million and an increase in rent and office-related expenses of $0.6 million compared to the same period of 2025.

Depreciation, depletion and amortization. Depreciation, depletion and amortization was $9.2 million for the three months ended March 31, 2026 compared to $7.7 million for the comparable period of 2025. The increase in depreciation, depletion and amortization was principally due to depletion expense associated with royalty interests acquired during the second half of 2025.

Interest expense. Interest expense was $0.8 million for the three months ended March 31, 2026 related to the Credit Facility entered into during the fourth quarter of 2025. There was no interest expense incurred during the three months ended March 31, 2025.

Other income, net. Other income, net was $1.6 million for the three months ended March 31, 2026 compared to $3.4 million for the same period of 2025. Lower cash balances and investment yields during the three months ended March 31, 2026 compared to the same period of 2025 resulted in a decrease in interest income.

Income tax expense. Income tax expense was $28.6 million for the three months ended March 31, 2026 compared to $23.9 million for the comparable period of 2025. The increase in income tax expense is directly attributable to the increase in operating income for the three months ended March 31, 2026 compared to the same period of 2025.

Water Services and Operations

Water sales. Water sales revenue increased $8.1 million to $46.9 million for the three months ended March 31, 2026, compared to $38.8 million for the same period of 2025. The increase in water sales was principally due to increases of 16.7% in pricing and 3.5% in volumes for the three months ended March 31, 2026, compared to the same period of 2025. Water sales volumes are dependent upon customer demand in the areas in which we provide water to customers and may fluctuate from period to period.

Produced water royalties. Produced water royalties are received from the transfer or disposal of produced water on our land and are contractual and not paid as a matter of right. Produced water royalties are also fee based and not directly impacted by lower commodity prices. However, indirectly, volumes may vary from period to period depending upon development activity levels and operator decisions involving recycling versus disposal of produced water. We do not operate any saltwater disposal wells. Produced water royalties increased to $33.5 million for the three months ended March 31, 2026 compared to $27.7 million for the same period in 2025. This increase was principally due to a 23.5% increase in produced water volumes for the three months ended March 31, 2026 compared to the same period of 2025.

The table below provides financial and operational data by water revenue type for the three months ended March 31, 2026 and 2025:

(1) MBbl = 1 thousand barrels of water.

(2) MBbl/d = 1 thousand barrels of water per day.

Water service-related expenses. Water service-related expenses increased $3.2 million to $14.3 million for the three months ended March 31, 2026 compared to the same period of 2025. Certain types of water-related expenses, including, but not limited to, treatment, transfer, water purchases, repairs and maintenance, equipment rental, and fuel costs, vary from period to period as our customers’ needs and requirements change. Right of way and other expenses also vary from period to period depending upon location of customer delivery. The increase in water service-related expenses for the three months ended March 31, 2026 compared to the same period of 2025 was principally related to a 3.5% increase in water sales volumes.

Income tax expense. Income tax expense was $12.0 million for the three months ended March 31, 2026 compared to $9.9 million for the same period of 2025. The increase in income tax expense was directly attributable to the increase in operating income for the three months ended March 31, 2026 compared to the same period of 2025.

Non-GAAP Performance Measures

In addition to amounts presented in accordance with GAAP, we also present certain supplemental non-GAAP performance measurements. These measurements are not to be considered more relevant or accurate than the measurements presented in accordance with GAAP. In compliance with the requirements of the SEC, our non-GAAP measurements are reconciled to net income, the most directly comparable GAAP performance measure. For all non-GAAP measurements, neither the SEC nor any other regulatory body has passed judgment on these non-GAAP measurements.

EBITDA, Adjusted EBITDA, and Free Cash Flow

EBITDA is a non-GAAP financial measurement of earnings before interest expense, taxes, depreciation, depletion and amortization. The purpose of presenting EBITDA is to highlight earnings without finance, taxes, and depreciation, depletion and amortization expense, and its use is limited to specialized analysis.

The purpose of presenting Adjusted EBITDA is to highlight earnings without non-cash activity such as share-based compensation and other non-recurring or unusual items, if applicable. Additionally, Adjusted EBITDA is a metric used by our compensation committee to evaluate our performance in determining the short-term and long-term incentive compensation of our executive officers on an annual basis. We calculate Adjusted EBITDA as EBITDA plus employee share-based compensation, less land sale with financing arrangement and pension curtailment and settlement gain, as applicable to the periods presented.

The purpose of presenting free cash flow is to provide investors a metric to measure the funds available for investing in future acquisitions and returning capital to our stockholders through dividends and share repurchases after current income tax expense and purchases of fixed assets. Additionally, free cash flow is a metric used by the compensation committee of our

Board to evaluate our performance in determining the short-term and long-term incentive compensation of our executive officers. To calculate free cash flow, net income is adjusted by adding back income tax expense, depreciation, depletion and amortization and employee share-based compensation, less the cash outflows of current income tax expenses, land sale with financing arrangement, purchases of fixed assets, and pension curtailment and settlement gain, as applicable to the periods presented.

We have presented EBITDA, Adjusted EBITDA, and free cash flow because we believe that these metrics are useful supplements to net income in analyzing our operating performance, ability to fund future acquisitions, ability to return capital to our stockholders and explaining how our executive officers are compensated. Our definitions of EBITDA, Adjusted EBITDA, and free cash flow may differ from computations of similarly titled measures of other companies.

The following table presents a reconciliation of net income to EBITDA and Adjusted EBITDA for the three months ended March 31, 2026 and 2025 (in thousands):

The following table presents a reconciliation of net income to free cash flow for the three months ended March 31, 2026 and 2025 (in thousands):

Critical Accounting Policies and Estimates

This discussion and analysis of our financial condition and results of operations is based on our condensed consolidated financial statements, which have been prepared in accordance with GAAP. The preparation of these financial statements requires us to make judgments, estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, expenses and disclosures of contingent assets and liabilities. For a full discussion of our accounting policies refer to Note 2 to the consolidated financial statements included in our 2025 Annual Report.

There have been no material changes to our critical accounting policies or in the estimates and assumptions underlying those policies, from those provided in Part II, Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in our 2025 Annual Report.

Recent Accounting Pronouncements

For further information regarding recently issued accounting pronouncements, see Note 2, “Summary of Significant Accounting Policies” in the notes to the condensed consolidated financial statements included in Part I, Item 1. “Financial Statements” in this Quarterly Report.

There have been no material changes in the information related to market risk of the Company disclosed in Part II, Item 7A. “Quantitative and Qualitative Disclosures about Market Risk” set forth in the 2025 Annual Report.

Evaluation of Disclosure Controls and Procedures

Our management, under the supervision and with the participation of the Company’s Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), performed an evaluation of the effectiveness of the Company’s disclosure controls and procedures (as defined in Rules 13a-15 under the Exchange Act) as of the end of the period covered by this Quarterly Report. Based upon that evaluation, our CEO and CFO have concluded that the Company’s disclosure controls and procedures were effective as of March 31, 2026.

Changes in Internal Control over Financial Reporting

There have been no changes during the quarter ended March 31, 2026 in the Company’s internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II

OTHER INFORMATION

Item 1. Legal Proceedings.

There are no material pending legal proceedings to which we are a party or of which any of our property is the subject.

There have been no material changes in the risk factors previously disclosed in response to Part I, Item 1A. “Risk Factors” set forth in the 2025 Annual Report.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

The Company did not repurchase any shares of Common Stock during the three months ended March 31, 2026.

Item 3. Defaults Upon Senior Securities.

Not applicable.

Item 4. Mine Safety Disclosures.

Not applicable.

(c) Rule 10b5-1 Trading Arrangements

On February 24, 2026, Murray Stahl, who was then serving as a director, on behalf of himself and accounts managed by Horizon Kinetics Asset Management LLC, adopted a “Rule 10b5-1 trading arrangement,” as defined in Item 408 of Regulation S-K that was intended to satisfy the affirmative defense of Rule 10b5-1(c) promulgated under the Exchange Act, for the purchase of up to 1,161 shares of Common Stock. This Rule 10b5-1 trading arrangement was scheduled to begin May 26, 2026 and was scheduled to expire on the earlier of (i) December 1, 2026 or (ii) the purchase of 1,161 shares of Common Stock. This trading arrangement automatically terminated upon Mr. Stahl's death on April 7, 2026.

On March 5, 2026, Chris Steddum, our Chief Financial Officer, on behalf of himself and his spouse, adopted a “Rule 10b5-1 trading arrangement,” as defined in Item 408 of Regulation S-K that is intended to satisfy the affirmative defense of Rule 10b5-1(c) promulgated under the Exchange Act, for the sale of up to 4,000 shares of Common Stock. This Rule 10b5-1 trading arrangement begins June 5, 2026 and is scheduled to expire on the earlier of (i) December 4, 2026 or (ii) the sale of 4,000 shares of Common Stock.

EXHIBIT INDEX

• Filed herewith.

** The certifications attached as Exhibit 32.1 and Exhibit 32.2 are not deemed “filed” with the SEC and are not to be incorporated by reference into any filing of Texas Pacific Land Corporation under the Securities Act, or the Exchange Act, whether made before or after the date of this Quarterly Report, irrespective of any general incorporation language contained in such filing.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.