Pure Cycle Posts 59% Revenue Growth to $9.1M and 16% Net Income Rise
Pure Cycle reported Q1 2026 net income of $4.5 million, a 16% year-over-year increase, and revenue grew 59% to $9.1 million driven by land development at Sky Ranch. The company expanded partnerships with seven national homebuilders, began construction on a charter high school, and held $17.1 million in cash.
1. Q1 2026 Financial Results
Pure Cycle Corporation reported net income of $4.5 million for the quarter ended November 30, 2025, a 16% increase over Q1 2025, marking the twenty-sixth consecutive profitable quarter. Revenue climbed 59% year-over-year to $9.1 million, driven by land development sales at Sky Ranch. Fully diluted earnings per share rose 19% to $0.19. Pre-tax income increased to $6.0 million, while EBITDA was $6.7 million, reflecting investments in new infrastructure and lower non-cash depreciation expenses compared with the prior period.
2. Sky Ranch Development Update
During Q1, Pure Cycle completed delivery of all remaining finished lots in Phase 2C (228 lots) and closed the initial plat payment for Phase 2D, where national homebuilder partners have commenced construction. Phase 2D (204 lots) is on track for substantial completion in fiscal 2026, and Phase 2E (159 lots) platting has begun, with lot deliveries expected in fiscal 2027. The company now partners with seven national homebuilders, including Pulte Group and Oakwood, and has sold 1,016 water and wastewater taps across five sub-phases at Sky Ranch, projecting over $19 million more in tap fees over the next three years.
3. Water and Wastewater Operations
Water and wastewater segment revenue was $2.5 million, with 51 taps sold versus 38 in the prior-year quarter. Residential deliveries totaled 103 acre-feet, up from 93, offsetting a decline in oil and gas water sales to 147 acre-feet due to reduced drilling activity. Pure Cycle maintains an average tap price of approximately $42,000 and expects growing residential demand as Sky Ranch phases advance. Management forecasts stable tap sales tied to homebuilder construction schedules rather than fixed contracts.
4. Capital Management and Outlook
As of November 30, 2025, cash and cash equivalents stood at $17.1 million, and working capital was $14.8 million. The company continues its share repurchase program while reserving liquidity for strategic land acquisitions and infrastructure projects, including the planned I-70 interchange at Sky Ranch. Construction has begun on a new charter high school campus scheduled to open fall 2026, enhancing community amenities. Management expects continued lot sales momentum in fiscal 2026 and remains focused on balancing growth investments with shareholder returns.