Pure Cycle(US:PCYO)2021-07-06 22:53Financial Data and Key Metrics Changes - For the nine months ended, the company reported approximately $12 million in revenue, with gross margins around $7 million and net income reaching about $18 million [36][37] - The company recognized $36.7 million in lot revenues from Phase 1 and is nearing completion of tap fees, currently at $13.3 million with a target of $14.5 million [36][37] Business Segment Data and Key Metrics Changes - The Water Utility segment has a portfolio capable of serving about 60,000 connections, generating approximately $2 billion in top-line revenue with a 50% margin [11][12] - The Land Development segment has about 930 acres accommodating 3,400 residential lots, with $36.7 million in lot fee revenues recorded [15][18] - The Single-Family Rental segment forecasts rental income averaging $2,800 per unit, with significant appreciation in home values noted at nearly 26% [24][27] Market Data and Key Metrics Changes - The housing market in Colorado has seen a significant increase in average single-family home prices, moving from around $350,000 to approximately $480,000 - $500,000 [24] - Inventory levels have decreased from 9 weeks to 2 weeks year-over-year, indicating a robust demand in the starter home market [25] Company Strategy and Development Direction - The company is focused on acquiring additional land for future developments, leveraging its water rights to enhance its competitive position in the market [45] - The strategy includes a dual focus on land and utilities, which provides a unique advantage over competitors who do not have similar asset bases [46] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the growth potential of both the water utility and land segments, while also highlighting the recurring revenue from the single-family rental model [47] - The company is aware of the competitive landscape in the rental market but believes its integrated approach will yield significant cash flows [46] Other Important Information - The company plans to refresh its financial presentation with detailed metrics later in the week following a spreadsheet error [35] - An Investor Day is scheduled, providing an opportunity for stakeholders to see the company's developments and operations firsthand [52] Q&A Session Summary Question: Future land acquisition for rentals - Management confirmed they are actively seeking additional land for apartment and house rentals, with a focus on larger assemblages nearby [45] Question: Will recurring revenue become the largest part of the business? - Management indicated that while recurring revenue will be significant, the water utility and land segments will also continue to provide substantial growth opportunities [47]