PCYO · Pure Cycle Corporation

Pure Cycle Corporation reported strong Q2 FY2026 results, with net income of $1.1 million, up 37% year-over-year, and $5.7 million year-to-date, up 20%, continuing a streak of 27 profitable quarters. Revenue surged 29% to $5.2 million in the quarter and 47% to $14.3 million year-to-date, primarily from the land development segment ($2.1 million Q2, $8.6 million YTD) due to accelerated lot deliveries at Sky Ranch amid an unseasonably mild Denver winter. This advanced Phase 2D to 78% complete and Phase 2C to 91%, with Phase 2D lots mostly delivered by quarter-end and full completion expected in Q3 FY2026, unlocking $13.4 million in remaining milestone payments. Water and wastewater revenues contributed steadily at $3.0 million Q2 and $5.4 million YTD, supported by 272 acre-feet delivered in Q2 (up from 64) driven by oil and gas demand, while single-family rentals added modest $0.2 million Q2 and $0.3 million YTD. EBITDA rose 23% to $2.2 million Q2 and 16% to $8.9 million YTD. CEO Mark Harding highlighted the mild winter's benefits for lot and high school construction, pacing deliveries to match builder absorption despite housing headwinds, and flexibility in SFR expansion amid regulatory uncertainty—19 homes fully leased at 95% pre-completion rate, with 39 more under construction self-financed at $5.0 million cost. Balance sheet remains solid with $4.8 million cash, $3.8 million working capital, $9.9 million undrawn line, and $18.9 million expected lot payments. FY2026 guidance projects $26-30 million gross revenue and $0.43-0.52 EPS, reflecting Phase 2D/2E progress and builder uptake. Management emphasizes liquidity for growth, share repurchases, and water infrastructure investments, including a new 1,635 acre-foot water right.