Pure Cycle (PCYO) Q3 2025 earnings summary

Executive summary

• Q3 2025 revenue was $5.1 million with a 63% gross margin and net income of $2.3 million ($0.09 EPS); year-to-date net income totaled $7.0 million ($0.29 EPS), marking 24 consecutive profitable quarters.

• Year-to-date results represent 48% of full-year revenue guidance and 56% of net income and EPS targets, with acceleration expected in Q4 as lot deliveries increase.

• Despite a 32% year-over-year revenue decline, profitability was supported by higher tap sales and oil and gas royalty income.

• Ongoing development at Sky Ranch continues, with Phases 2A complete, 2B nearly finished, and active work on Phases 2C–2E.

• Maintained strong balance sheet and working capital of $18.1 million, including $14.4 million in cash.

Financial highlights

• Q3 2025 revenue was $5.1 million (down from $7.6 million year-over-year); year-to-date revenue was $14.9 million (down from $16.2 million).

• Q3 2025 net income was $2.3 million (down 20% year-over-year); year-to-date net income was $7.0 million (up 40%).

• Q3 2025 gross profit was $3.3 million (63% margin); year-to-date gross profit was $8.5 million (57% margin).

• Cash and cash equivalents at quarter-end were $14.4 million; total liquidity, including receivables, was $61.1 million.

• Royalty income for Q3 was $1.1 million; year-to-date royalty income was $5.9 million.

Outlook and guidance

• Revenues and profits are expected to accelerate in Q4 2025 as Phase 2C lot deliveries ramp up.

• Finished lots in Phase 2C are expected by fiscal year-end, Phase 2D in first half of fiscal 2026, and Phase 2E by end of calendar 2026.

• Water utilities segment targets 2,500 customer accounts in 3–5 years, with long-term buildout to 5,000 connections at Sky Ranch.

• Single-family rentals segment aims to expand to over 100 homes in 5 years and 200+ homes at buildout, leveraging strong market demand.

• Sufficient working capital is expected to fund operations and planned infrastructure spending for the next 12 months.