Pure Cycle Q3 revenue rises 60% to $8.222M, net income $2.9M
Pure Cycle Corporation reported a 31% increase in Q3 net income to $2.9 million, with revenue rising 60% to $8.222 million. Growth was driven by accelerated land development at Sky Ranch and a 119% surge in water revenue from oil and gas demand. The company remains ahead of guidance and has scaled back its single-family rental plans to 70 units.
*this image is generated using AI for illustrative purposes only.
Pure Cycle Corporation reported net income of $2.9 million for the three months ended May 31, 2026, a 31% increase from the same period in 2025. Total revenue for the quarter grew 60% to $8.222 million, driven by accelerated development activity at Sky Ranch and higher demand from oil and gas customers. The company achieved a gross profit of $4.3 million, representing a 52% margin. For the nine months ended May 31, 2026, net income increased 23% to $8.6 million, while revenue rose 51% to $22.5 million.
The company’s diversified platform contributed to the results, with lot sales revenue increasing 19% for the quarter and 78% year to date. Water and wastewater segment revenue surged 119% for the quarter and 34% year to date, primarily due to increased oil and gas water demand. Earnings per fully diluted common share for the quarter were $0.12, up from $0.09 in the prior year.
Financial Highlights
| Metric | Three Months Ended May 31, 2026 | Three Months Ended May 31, 2025 | Nine Months Ended May 31, 2026 | Nine Months Ended May 31, 2025 |
|---|---|---|---|---|
| Total Revenue | $8.222 million | $5.140 million | $22.5 million | $14.9 million |
| Net Income | $2.9 million | $2.3 million | $8.6 million | $7.0 million |
| EBITDA | $4.7 million | $3.6 million | $13.6 million | $11.3 million |
| Earnings Per Share (Diluted) | $0.12 | $0.09 | $0.36 | $0.29 |
Operational Developments
Pure Cycle’s cash balance reflected the accelerated pace of land development at Sky Ranch, where an unseasonably mild winter allowed the company to advance its construction schedule. Phase 2D is approximately 84% complete, and Phase 2C is approximately 95% complete. The company expects to substantially complete Phase 2D by the end of fiscal 2026 and collect related contractual milestone and finished-lot payments. Construction activities have begun in Phase 2E, with approximately 159 lots expected to be completed in fiscal 2027.
The company reported cash and cash equivalents of $8.4 million as of May 31, 2026. Working capital totaled $5.4 million, with an undrawn capacity of $10.0 million under a working capital line of credit. Pure Cycle expects to receive approximately $14.8 million in milestone and finished lot payments from homebuilder customers over the next 12 months.
Strategic Updates
Management indicated that the company is ahead of schedule on its yearly guidance and remains optimistic about fiscal year-end results, with potential to exceed forecasts. The single-family rental segment adjusted its expansion plans due to regulatory considerations, scaling back from 100 units to approximately 70 units to better define the return on investment. The company continues to pursue commercial opportunities and aims to start commercial development in late 2027 after receiving necessary permits.
Board Transition
Pure Cycle announced that Daniel R. Kozlowski has resigned as a director of the company, effective July 7, 2026. The Board expressed appreciation for his contributions and stated it will conduct a search for a successor who brings a shareholder perspective.
How will the scaling back of the single-family rental segment from 100 to 70 units impact the company's long-term revenue diversification strategy?
Can the accelerated construction schedule at Sky Ranch be maintained into fiscal 2027 to support the completion of the 159 lots in Phase 2E?
What specific regulatory hurdles are delaying the commercial development timeline, and is the late 2027 start date still achievable?
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