Pure Cycle (PCYO) Q1 2026 earnings summary

Executive summary

• Net income for Q1 2026 rose 16% year-over-year to $4.6 million, marking 26 consecutive profitable quarters, driven by strong land development revenue and recurring utility income, despite a decline in water sales to oil and gas operators.

• Revenue increased 59% to $9.1 million, primarily due to higher lot sales and tap fee revenue from ongoing Sky Ranch development.

• Earnings per diluted share increased 19% to $0.19, with operating income up 155% to $4.4 million.

• Completed delivery of finished lots in Phase 2C and advanced Phase 2D ahead of schedule, with new homebuilder partners added.

• Continued expansion of single-family rental business, with 19 homes available and plans to reach 100 homes in Phase 2.

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.

• Basic and diluted EPS were $0.19, up from $0.16 year-over-year.

• Cash and cash equivalents totaled $17.1 million at quarter-end, with working capital of $14.8 million.

• Lot sales revenue increased to $6.0 million, with land development segment profit up 165% to $4.8 million.

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

Outlook and guidance

• On track to meet or exceed fiscal 2026 guidance, with strong early performance and accelerated lot deliveries.

• Phase 2D of Sky Ranch expected to be substantially complete by end of fiscal 2026; Phase 2E completion targeted for fiscal 2027.

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

• Commercial development and interchange completion expected to drive significant revenue growth from 2028 onward.

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