Texas Pacific Land Corporation (TPL) Q2 2022 Earnings Call Transcript

For the period ending June 30, 2022

August 4, 2022 8:30 a.m. ET

Prepared Remarks

Questions and Answers

Call Participants

Prepared Remarks:

Operator

Pacific Land Corporation's Second Quarter 2022 Earnings Conference Call. This conference call is being recorded. I would now like to introduce your host for today's call, Shawn Amini, Vice President, Finance and Investor Relations. Please go ahead.

Shawn Amini

Good morning. Thank you for joining us today for Texas Pacific Land Corporation's Second Quarter 2022 Earnings Conference Call. Yesterday afternoon, the company released its financial results and filed its Form 10-Q with the Securities and Exchange Commission that's available on the Investors section of the company's website at www.texaspacific.com.

As a reminder, remarks made on today's conference call may include forward-looking statements. Forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those discussed today. We do not undertake any obligation to update our forward-looking statements in light of new information or future events. For a more detailed discussion of the factors that may affect the company's results, please refer to our earnings release for this quarter and to our most recent SEC filings.

During this call, we will also be discussing certain non-GAAP financial measures. More information and reconciliations about these non-GAAP financial measures are contained in our earnings release and SEC filings. Please also note, we may at times refer to our company by stock ticker, TPL.

This morning's conference call is hosted by TPL's Chief Executive Officer, Ty Glover; and Chief Financial Officer, Chris Steddum. Management will make some prepared comments, after which we will open the call for questions.

Now I will turn the call over to Ty.

Ty Glover

Thank you, Shawn. Good morning, everyone, and thank you for joining us today. Second quarter 2022 results demonstrate a business operating at a high level. All of TPL's major revenue streams reported double-digit percentage growth on a sequential quarter-over-quarter basis, the total consolidated revenue growing 20%. Adjusted EBITDA of $158 million represents a new corporate record, and our adjusted EBITDA margin of 90% demonstrates our continued focus on maintaining a lean cost structure in generating high margins.

During this most recent quarter alone, we returned over $200 million back to our shareholders in the form of dividends and share buybacks while still maintaining a balance sheet with 0 debt, retaining nearly $400 million of cash. Although our royalty production came in slightly lower sequentially, this quarter is a great example of the resiliency and the numerous high-quality revenue streams the company benefits from beyond just oil and gas royalties.