Pure Cycle (PCYO) Q1 2026 earnings summary

Executive summary

• Achieved 26 consecutive profitable quarters, with Q1 net income rising 16% year-over-year to $4.6 million and EPS up 19% to $0.19, driven by strong land development and recurring utility and rental revenues.

• Q1 revenue reached a record $9.1 million, up 59% year-over-year, primarily from higher lot sales and tap fee revenue at Sky Ranch.

• Operating income rose 155% to $4.4 million, and gross profit increased to $6.3 million.

• Expanded builder portfolio to seven national builders and continued growth in single-family rentals, with 19 homes completed and plans to reach 100 homes in Phase 2.

• Early-year performance is ahead of forecasts, with 31% of full-year revenue and 37% of net income guidance already achieved.

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 pre-tax income of $6.0 million.

• Net income for Q1 2026 was $4.6 million, with EPS at $0.19, both up from the prior year.

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

• Fiscal year guidance remains $26–$30 million in revenue and $0.43–$0.52 EPS.

• ROE improved to 9.18% in 2026, and asset base continues to grow.

Outlook and guidance

• On track to meet or exceed fiscal year guidance, with strong lot deliveries and recurring revenue growth.

• Phase 2D expected to be substantially complete by end of fiscal 2026, with Phase 2E completion targeted for fiscal 2027 and 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.

• Management expects moderate to lower demand for new homes through 2026 due to affordability and macroeconomic uncertainty.

• Long-term plans include buildout to 5,000 connections and over 200 rental homes.