Texas Pacific Land Corp. (NYSE:TPL)

The quarterly financial data exhibits several noteworthy trends in income, expenses, operating assets and liabilities, cash flows, and investing and financing activities over the analyzed periods.

Net Income

Net income shows considerable fluctuation but an overall upward trajectory from early 2019 through mid-2024. Starting around $140 million in Q1 2019, it declined sharply in mid-2019 before recovering gradually, reaching peaks above $129 million in late 2022. The most recent reported quarters reflect a stabilization in the $106-114 million range, indicating relatively stable profitability.

Depreciation, Depletion, and Amortization

These non-cash expenses generally increased over time, starting near $1.2 million in early 2019 and reaching $5.7 million by Q3 2024. The upward trend suggests growing capital expenditures being recognized as expense, reflecting ongoing asset base changes or acquisitions.

Share-based Compensation

This expense emerged in late 2021, starting relatively low then increasing steadily through 2024. This indicates the company has recently expanded equity incentive programs, which may impact operating costs going forward.

Deferred Taxes

Deferred tax amounts fluctuate between positive and negative values without a clear directional trend, indicating variability in timing differences between accounting and tax treatments. These changes suggest dynamic tax planning or asset and liability revaluations occurring intermittently.

Land Sales Revenue Recognized on Land Exchange

There is a one-off negative entry in Q4 2019 and small negative amounts in mid-2020, indicating some gain reversals or adjustments related to land sales, but these events are isolated.

Operating Assets and Liabilities (Excluding Income Taxes)

Operating assets exhibit marked volatility with both positive and negative swings, notably a large positive spike in Q4 2022 and variable declines in other quarters, suggesting fluctuating asset utilization or investment activity. Operating liabilities also vary, with large negative to positive swings, particularly sharp increases in Q2 2022 and Q3 2023, implying changes in vendor payables or accrued expenses in certain periods.

Income Taxes Payable and Prepaid Income Taxes

Income taxes payable show substantial oscillations, with some quarters recording high payables followed by significant reductions or reversals, indicative of volatile tax liabilities possibly driven by changes in earnings or tax strategies. Prepaid income taxes appear intermittently negative or positive, with few data points but pointing to some prepayment activity affecting tax expense timing.

Changes in Operating Assets and Liabilities

These changes oscillate significantly with large positive and negative values, reflecting active working capital management. Large negative adjustments in Q2 2021 and Q2 2022 contrast with positive swings in surrounding quarters, revealing fluctuating operational cash flow impacts.

Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities

Adjustments are highly variable, alternating between positive and negative values. This volatility suggests unusual or non-recurring items impacting cash flow conversions, including working capital shifts and other reconciling entries.

Cash Provided by Operating Activities

Cash flow from operations remains robust throughout, generally tracking with net income but showing less volatility. Except for a dip in mid-2024, operational cash flow stays consistently strong, peaking over $147 million in early 2024, indicating strong underlying cash-generating capability.

Investing Activities

Cash used in investing activities fluctuates, with large outflows in Q1 2019 and unusually high outflows in Q3 2024 exceeding $216 million, driven by acquisitions, intangible asset purchases, and real estate investments. Notable spikes in acquisition-related cash outflows occur in late 2023 and 2024, evidencing aggressive expansion or strategic investment moves during these periods. Regular fixed asset purchases also contribute to ongoing investing cash outflows.

Financing Activities

Financing cash flows are predominantly outflows with major items including dividends and common stock repurchases. Dividends show irregular but significant outflows increasing markedly in 2021 and 2022, exceeding $230 million in some quarters. Stock repurchases also show significant activity from late 2020 onwards. The increased financing outflows in late 2023 and 2024 indicate continued capital return to shareholders and perhaps debt servicing or equity transactions, supported by the settlement of common stock repurchases and occasional share exchanges for tax withholdings.

Net Increase (Decrease) in Cash, Cash Equivalents, and Restricted Cash

Cash levels fluctuate considerably, reflecting the interaction between operating cash inflows and investing and financing outflows. Positive net increases occur frequently, especially during periods of strong operating cash flow and limited investing outflows (e.g., Q1 2019, Q4 2021, and early 2024). Negative net changes appear mainly when large investing or financing outflows occur, such as Q1 2020 and Q3 2024, indicating significant cash deployment for acquisitions and capital returns.