Core Insights - Pure Cycle reiterated its fiscal 2026 guidance range of $26 million to $30 million in revenue and $0.43 to $0.52 in earnings per share, with variability in industrial water sales to oil and gas operators being a significant factor [1][7] - The company reported a strong Q1, achieving approximately $9 million in revenue and about $6.2 million in gross profit, which is ahead of internal forecasts [3][4][7] Financial Performance - Pure Cycle achieved about a third of its fiscal-year revenue forecast and approximately 37% of its full-year guidance for net income and earnings per share through the first quarter [2][7] - The water utility business showed recurring growth with a 22% customer compound annual growth rate (CAGR), although industrial water revenue was softer this quarter due to timing issues related to oil and gas activity [5][11] Land Development Progress - The land development segment, particularly Phase 2D, is ahead of schedule, with roads approximately 80% complete, five to six months earlier than planned [6][8][9] - Phase 2E is planned to include about 159 lots, with grading expected to start in the spring [8][9] Water Utility Segment - The water utility segment includes recurring service revenues to residential customers and industrial water deliveries, primarily to oil and gas operators [11] - Despite a strong quarter, the water segment was described as "a little bit softer than normal" due to timing issues with building permits and oil and gas deliveries [12] Future Outlook - Management expects activity in the oil and gas sector to pick up later in the fiscal year, with wells drilled and completed expected to begin fracking soon [13] - The company anticipates that fiscal 2027 will not be a "breakout year," with more significant growth expected post-interchange development and commercial lot sales likely in 2028 and beyond [20] Strategic Initiatives - Pure Cycle is optimistic about strategic land acquisitions and is currently more aggressive in pursuing land than water acquisitions [21] - The company has engaged commercial and industrial brokers to explore potential commercial uses for Sky Ranch, leveraging its water assets and site readiness [19]

Financial Performance (Q2 2025) - Revenue reached $4.0 million, a 25% year-over-year increase[24, 28] - Gross profit was $1.5 million, with a 38% gross margin[24] - Net income increased to $0.8 million, a 586% year-over-year increase[24, 31] - EPS climbed to $0.03, up from $0 in the prior year[24, 31] Financial Performance (YTD 2025) - Revenue reached $9.7 million, representing 31.6% of the full-year 2025 guidance[24, 33] - Gross profit was $5.2 million, with a 53% gross margin, representing 21.9% of the full-year 2025 guidance[24, 33] - Net income totaled $4.7 million, or 37.8% of the full-year target[24, 35] - EPS reached $0.20, which is 38.5% of the 2025 EPS guidance[24, 35] Water Utilities - The company estimates its water rights portfolio can serve approximately 60,000 connections, generating approximately $2.3 billion in revenues based on current rates[70] - The current water system has a book value of $55.9 million and can produce over 3.4 million gallons of water per day[67] Land Development - Sky Ranch land acquisition cost was $3.7 million, with over $600 million in potential development revenue expected[88] - Total lot sales from completed phases reached $77 million, with a 79% gross margin[78]