Key Highlights

  • 78.5% was the adjusted EBITDA Margin for EagleRock Land (NYSE:EROK) in the third quarter of 2026, on adjusted EBITDA of USD 34.0 million and Revenue of USD 43.3 million.
  • USD 133 million to USD 137 million is the raised 2026 adjusted EBITDA guidance, with a midpoint up USD 4 million from the prior USD 131 million.
  • USD 31.8 million of free Cash Flow equaled 93% of adjusted EBITDA, helped by capital expenditures of only USD 1.1 million in the quarter.
  • 35,000 acres of new Midland Basin dedication were announced with Double Eagle V, alongside two bolt-on acquisitions of about 2,000 acres for USD 15.4 million.

Third Quarter Margin and the Raised Outlook

EagleRock Land (NYSE:EROK) announced third quarter 2026 results on November 3, 2026. Revenue was USD 43.3 million and Net Income was USD 11.3 million, of which USD 2.1 million belonged to the company's shareholders, or USD 0.08 per Class A share. Adjusted EBITDA, a non-GAAP measure, was USD 34.0 million. Full-year 2026 adjusted EBITDA guidance now sits at USD 133 million to USD 137 million, a USD 135 million midpoint against USD 131 million before. Management attributes about USD 2 million of the USD 4 million increase to the Intrepid Ranch Acquisition and about USD 2 million to organic growth. A conference call was scheduled for November 4, 2026 at 10:00 a.m. ET.

Water, Surface Use and a Capital-Light Model

EagleRock owns or controls about 288,000 acres in the Delaware and Midland sub-basins of the Permian Basin and earns fees from water, surface use and royalties tied to oil and gas development. Revenue split into resource sales of USD 12.7 million (29%), surface use revenue of USD 11.3 million (26%) and surface use royalties of USD 19.4 million (45%). Royalties reflected recycled water and produced water takeaway volumes. Capital spending of USD 1.1 million explains the high conversion of EBITDA into cash. The statements also show the profit gap: Depreciation and amortization reached USD 15.9 million, and nine-month net loss was USD 22.9 million after USD 90.8 million of general and administrative expense. The release does not explain that expense.

Customer Concentration, Debt and Comparability

About USD 20.5 million of third quarter revenue came from related parties (simple arithmetic on the statements, about 47% of the total), so the relationship with Double Eagle matters to results. The prior-year comparison, revenue of USD 17.5 million, is not like for like because the company has since been reshaped, and the release compares to second quarter normalized figures instead: normalized revenue of USD 46.8 million, so reported revenue fell sequentially. Total debt was USD 70 million and net debt USD 58 million, for net Leverage of 0.4x, after USD 78.3 million was paid for Intrepid Ranch mostly through a revolver. Management expects to put roughly USD 10 million a month toward debt reduction. Risks include Commodity price swings, customer concentration and drilling activity.

Where Things Stand

EagleRock Land (NYSE:EROK) raised guidance because the third quarter delivered a 78.5% adjusted EBITDA margin and strong cash conversion, while the Intrepid Ranch acquisition and some organic growth lifted the full-year outlook midpoint by USD 4 million. The evidence is positive on margin, cash flow and leverage, but sequential revenue declined against normalized second quarter figures, GAAP profit is much smaller than adjusted EBITDA, and a large share of revenue comes from related parties. Watch the Double Eagle V dedication, the sand mine lease, the New Mexico projects and debt paydown.