Kimbell Royalty Partners, LP (KRP) Income Statement

The 46.6% revenue growth in 2026Q2 is the strongest in the ten-quarter series, following a -6.7% dip in 2026Q1. This suggests a step-change in production or pricing, likely benefiting from higher commodity prices and increased operator activity on KRP's acreage. The breadth of record metrics across all commodity streams indicates that growth is not reliant on a single basin or product, reinforcing the durability of the diversified royalty model.

The extreme gross margin fluctuations are largely due to timing differences in revenue recognition and non-cash items, as evidenced by negative COGS in 2025Q4. Excluding these anomalies, KRP's gross margin consistently exceeds 90% in normal quarters, far above peers like VNOM (47.9%) and DMLP (46.2%). This confirms the low-cost royalty structure, where the primary costs are taxes and G&A, not production expenses.

The 46.6% revenue increase in 2026Q2 translated into a 73% jump in operating income, indicating that SG&A costs are largely fixed. This is a hallmark of the royalty model, where G&A supports the administrative infrastructure but does not scale with production. The operating margin of 47.0% is among the highest in the peer group, trailing only TPL's 74.2%, and suggests that KRP can convert incremental revenue into profit at a high rate.

The flat SG&A in absolute terms, combined with rising revenue, drove the operating margin to 47.0% from 40.9% in the prior quarter. This indicates that management is effectively leveraging its existing administrative infrastructure to handle higher production volumes without proportional cost increases. The low debt-to-equity ratio of 0.58% also keeps interest costs minimal, further supporting bottom-line profitability.