Sitio Royalties (NYSE:STR), a U.S. oil and gas mineral and royalty firm, announced its second quarter 2025 financial results on August 4, 2025. The company delivered GAAP revenue above Wall Street expectations, posting $145.7 million in GAAP revenue compared to the analyst estimate of $141.4 million and earnings per share (EPS, GAAP) of $0.08 against a $0.05 consensus. Despite beating estimates, Sitio’s net income (GAAP) and discretionary cash flow (non-GAAP) each fell year over year, a result shaped by lower realized commodity prices compared to Q1 2025 and higher administrative costs. Operationally, average daily production grew 6.7% versus Q2 2024. The quarter saw continued shareholder capital returns, active portfolio management, and increased expenses tied in part to Sitio’s planned merger with Viper Energy. Overall, the period featured strong operational execution but highlighted earnings pressure due to lower oil and gas prices and rising costs.

Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in Q1 2025 earnings report.

Sitio Royalties holds mineral and royalty interests in several of the most active oil and gas basins in the United States. Rather than producing oil and gas itself, Sitio earns a share of revenue from production by energy companies operating on its land. Its business depends heavily on the productivity of its asset base, which spans the Delaware, Midland, DJ, Eagle Ford, and Williston basins. The quality and location of these assets, particularly in the Permian Basin, are at the heart of its ability to generate consistent cash flow.

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Source Fool.com