Pure Cycle (PCYO) Q1 2026 earnings summary

Executive summary

• Net income for Q1 2026 was $4.6 million, a 16% year-over-year increase, marking 26 consecutive profitable quarters, driven by strong land development and recurring revenue streams.

• Revenue rose 59% to $9.1 million, primarily from higher lot sales and tap fee revenue at Sky Ranch, with early-year results ahead of forecasts.

• Earnings per share increased 19% to $0.19, with gross profit reaching $6.3 million and operating income up 155% to $4.4 million.

• Expanded builder partnerships to seven national builders and continued growth in single-family rentals, with 19 homes leased and plans to reach 100 units.

• Completed delivery of finished lots in Phase 2C and advanced work in Phase 2D, supporting recurring revenue and future growth.

Financial highlights

• Q1 2026 revenue was $9.1 million, up from $5.4 million in Q1 2025, with gross profit of $6.3 million and net income of $4.6 million.

• EPS for Q1 2026 was $0.19, compared to $0.16 in Q1 2025, and pre-tax income reached $6.0 million.

• Cash and cash equivalents totaled $17.1 million, with working capital at $14.8 million and total assets at $168.1 million.

• Land development revenue grew 160% to $6.0 million, and water/wastewater tap fee revenue increased 14% to $1.7 million.

• Fiscal year 2026 guidance reaffirmed: revenue $26–$30 million, EPS $0.43–$0.52.

Outlook and guidance

• On track to exceed full-year guidance, with strong lot deliveries expected in Q2 and continued growth in recurring revenues.

• Phase 2D expected to be substantially complete by end of fiscal 2026; Phase 2E completion targeted for fiscal 2027, with 159 lots to begin development in summer 2026.

• Expects over $19 million in additional tap fee revenue from Phase 2 over the next three years.

• Commercial development and oil/gas water deliveries expected to boost future growth as fracking activity ramps up.

• Management anticipates moderate to lower new home demand through 2026 due to affordability and macroeconomic uncertainty.