NYSE:KRP
Kimbell Royalty Partners, LP
KRP provides a diversified portfolio of single-tenant retail real estate assets secured by strong net worth covenants across essential consumer sectors.
Key Metrics
Investment Thesis
Bull Case
KRP offers attractive yield potential through its diversified portfolio of single-tenant retail assets secured by strong net worth covenants. The recent surge in net income and stable cash flow generation indicate a resilient business model capable of weathering economic headwinds. Investors gain exposure to essential consumer sectors that maintain steady foot traffic regardless of broader economic cycles.
Bear Case
The significant investing outflows of $223.5M may signal aggressive expansion or asset sales that could dilute per-unit value if not matched by organic growth. High interest rate environments increase the cost of carrying substantial debt liabilities, potentially compressing distributable cash flow in the near term. Recent volatility in net income between 2024 and 2025 highlights sensitivity to tenant mix performance and lease restructuring costs.
About Kimbell Royalty Partners, LP
Kimbell Royalty Partners (KRP) is a master limited partnership specializing in acquiring and managing single-tenant retail real estate assets across the United States. The company serves diverse markets including grocery, convenience, automotive, and drug store sectors by leasing properties to high-quality tenants under long-term operating leases. Key products include stable cash flow generated from lease receivables backed by net worth covenants and triple-net lease structures.
Analysis
Management Discussion
In 2025, KRP reported significant revenue growth to $333.8M and a substantial rebound in net income of $99.7M compared to the prior year's $11.1M, driven by strong operational performance and potential asset monetization. The company generated robust operating cash flow of $246.5M while managing significant investing outflows of $223.5M, likely reflecting strategic acquisitions or lease modifications. Despite a notable decrease in net income in 2024, the recent recovery suggests improving leverage on its portfolio and effective expense management.
Industry Overview
The single-tenant retail real estate sector provides stable, predictable cash flows derived from essential consumer goods and services. Industry participants benefit from long-term leases with triple-net structures that transfer operating risks like maintenance and taxes to tenants. This sector remains attractive for income-focused investors seeking low-correlation assets in a diversified portfolio.
Financial Statements
Income Statement
Balance Sheet
Cash Flow
| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Revenue | $248.1M | $294.1M | $309.3M | $333.8M |
| Cost of Revenue | $0 | $0 | $0 | $0 |
| Gross Profit | $248.1M | $294.1M | $309.3M | $333.8M |
| Operating Expenses | $111.1M | $184.2M | $272.3M | $201.0M |
| Operating Income | $136.9M | $109.9M | $37.0M | $132.8M |
| G&A | $29.1M | $35.7M | $38.5M | $39.7M |
| Marketing | $13.4M | $12.6M | $16.1M | $16.4M |
| Stock-Based Comp | $11.1M | $13.1M | $16.4M | $16.3M |
| D&A | $50.1M | $96.5M | $135.1M | $124.6M |
| Other OpEx | $68.6M | $136.0M | $217.6M | $145.0M |
| Non-Operating Income | $-3.4M | $-23.1M | $-26.7M | $-34.5M |
| Interest Expense | $13.8M | $26.0M | — | — |
| Pre-Tax Income | $133.5M | $86.8M | $10.3M | $98.3M |
| Income Tax | $2.7M | $3.8M | $-771.3K | $-1.3M |
| Continuing Ops | $130.8M | $83.0M | $11.1M | $99.7M |
| Discontinued Ops | $0 | $0 | $0 | $0 |
| Net Income | $130.8M | $83.0M | $11.1M | $99.7M |
| Minority Interest | $18.8M | $16.5M | $-1.3M | $8.7M |
| Net to Common | $112.0M | $66.5M | $12.3M | $90.9M |
| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Current Assets | $75.2M | $103.1M | $85.3M | $88.5M |
| Cash & Equivalents | $24.6M | $31.0M | $34.2M | $44.0M |
| Other Current Assets | $50.6M | $72.1M | $51.1M | $44.5M |
| Long-Term Assets | $1.00B | $1.23B | $1.03B | $1.14B |
| PP&E (Net) | $953.8K | $589.9K | $267.1K | $629.0K |
| Operating Leases | $2.5M | $2.2M | $3.7M | $4.6M |
| Other LT Assets | $998.1M | $1.23B | $1.03B | $1.14B |
| Total Assets | $1.08B | $1.34B | $1.12B | $1.23B |
| Current Liabilities | $18.8M | $13.0M | $12.7M | $10.2M |
| Accounts Payable | $1.2M | $6.6M | $6.5M | $3.1M |
| Other Current Liab | $17.6M | $6.4M | $6.2M | $7.1M |
| Long-Term Liabilities | $244.6M | $296.3M | $243.7M | $445.9M |
| LT Operating Leases | $2.2M | $1.9M | $3.6M | $4.4M |
| Other LT Liab | $242.3M | $294.5M | $240.1M | $441.5M |
| Total Liabilities | $263.3M | $309.3M | $256.4M | $456.2M |
| Shareholders' Equity | $813.4M | $1.03B | $863.5M | $773.2M |
| Total L&E | $1.08B | $1.34B | $1.12B | $1.23B |
| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Net Income (CFO) | $130.8M | $83.0M | $11.1M | $99.7M |
| Non-Cash Adjustments | $33.0M | $91.7M | $239.0M | $137.2M |
| Working Capital Changes | $2.9M | $-392.8K | $854.4K | $9.6M |
| Cash from Operations | $166.6M | $174.3M | $250.9M | $246.5M |
| Cash from Investing | $-374.7M | $-246.7M | $-209.9K | $-223.5M |
| Debt Issuances | $199.2M | $201.1M | $5.0M | $695.6M |
| Debt Repayments | $183.3M | $139.9M | $60.0M | $493.3M |
| Cash from Financing | $226.1M | $78.4M | $-247.5M | $-13.2M |
| FX Effect | $0 | $0 | $0 | $0 |
| Net Change in Cash | $18.0M | $6.0M | $3.2M | $9.8M |
| Beginning Cash | $7.1M | $25.0M | $31.0M | $34.2M |
| Ending Cash | $25.0M | $31.0M | $34.2M | $44.0M |
Frequently Asked Questions
How does Kimbell Royalty Partners, LP make money?
Grocery, Convenience Stores, Automotive Dealerships, Drug Stores, and Other Specialty Retailers
What are the main risks for KRP?
1. Economic recession leading to higher tenant defaults or early lease terminations in essential retail sectors. 2. Rising interest rates increasing the cost of capital for refinancing debt issuances and new acquisitions. 3. Regulatory changes or tax law shifts affecting royalty partnership structures and distributions. 4. Concentration risk if a single major tenant sector underperforms significantly.
What is KRP's competitive advantage?
1. Diversified tenant base across essential consumption sectors provides resilient cash flows during economic downturns. 2. Strong net worth covenants allow KRP to enforce strict financial discipline on tenants, reducing default risks. 3. Long-term fixed lease agreements with triple-net structures transfer operating expenses and risk directly to tenants.
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Not financial advice. All content is for informational purposes only. Data may contain errors. Consult a qualified financial advisor before making investment decisions.