Pure Cycle (PCYO) Q4 2024 earnings summary

Executive summary

• Fiscal year 2024 delivered record revenue of $28.7 million and net income of $11.6 million, with EPS of $0.48, driven by strong performance across water utilities, land development, and single-family rentals.

• Gross profit reached $20 million, with gross margins near 70%, and recurring revenue streams showed significant growth.

• Sky Ranch development advanced with accelerated lot deliveries, Phases 2A and 2B nearly complete, and rental segment expanding.

• Strategic investments in water rights, land, and rental properties, along with disciplined capital allocation, support long-term value.

• Maintains strong liquidity, with $57.6 million in total liquidity and ongoing share repurchase program.

Financial highlights

• FY 2024 revenue was $28.7 million, up from $14.6 million in FY 2023, with Q4 revenue at $12.6 million and gross profit at $19.8 million.

• Net income for FY 2024 was $11.6 million, or $0.48 per share, a 147% increase year-over-year.

• Pre-tax income reached $15.6 million, and EBITDA was $18.2 million, both more than doubling year-over-year.

• Water utility segment generated $11.6 million, with a 21% CAGR in utility customers and average annual revenue per customer of $1,500.

• Single-family rental segment annual revenue reached $500,000, with 14 units completed and plans to scale to 200 units.

Outlook and guidance

• Fiscal 2025 revenue is forecasted at nearly $31 million, with gross profit projected to reach $23.8 million and net income of $12.5 million.

• Plans to double lots under production at Sky Ranch over the next 18 months, with commercial development yet to begin.

• Recurring revenue expected to rise from $2.5 million to $15 million as Sky Ranch builds out, and long-term asset growth projected from $150 million to $700 million.

• Water utilities expect customer growth to 2,500 accounts in the next 3-5 years, with annual tap fee increases of 3%.

• Single-family rentals segment aims to expand to over 100 homes in 5 years and 200 homes at Sky Ranch buildout.