Pure Cycle Q3 2026 Earnings Call: Complete Transcript

Pure Cycle (NASDAQ: PCYO ) held its third-quarter earnings conference call on Thursday. Below is the complete transcript from the call. This transcript is brought to you APIs. For real-time access to our entire catalog, please visit for a consultation.

The full earnings call is available at Summary Pure Cycle Corporation reported strong Q3 results with $8.2 million in revenue and $4.3 million in gross profits, achieving a 52% profit margin. The company accelerated the development of phase 2D due to favorable weather, refreshing liquidity, and allowing early product delivery. Pure Cycle's water revenues strengthened, driven by increased industrial water sales and tap fees, with expectations for continued growth. The land development segment delivered approximately 430 lots in the last 18 months, and Phase 2E is underway with 159-160 lots.

Single-family rental segment adjusted its expansion plans due to regulatory considerations, scaling back to 70 units. Management remains optimistic about fiscal year-end results, with potential to exceed guidance, and plans to continue share repurchases. The company is diversifying revenue streams across water, land development, and rentals, ensuring stability across market conditions. Pure Cycle is actively pursuing commercial opportunities and aims to start commercial development in late 2027 after receiving necessary permits.

Full Transcript OPERATOR Good morning everyone and welcome to Pure Cycle Corporation's third quarter 2026 earnings presentation. We've started the presentation with everybody on mute as our CEO Mark Harding goes through our financial results. At the end of the presentation we will open up the lines for Q and A and with that I'll turn the mic over to our CEO Mark Harding. Mark Harding, President, CEO Thank you, Mark.

And I'll add my welcome as well. With me is Marc Spezialy, he's our CFO and he'll give you kind of the detail on some of the technology questions as we get into the Q&A portion of this. Also with me is our controller, Irina Finnegan. So if you guys have any drill-down questions on the accounting, I'll share the mic with her and have her walk through some of those.

As Mark sort of announced, this is our Q3 presentation and we're delighted to be able to bring you some very solid results here. As we start the presentation, we'll start with our forward-looking statement. I'm sure most of you are familiar with that, but statements that are not historical facts contained or incorporated by reference in this presentation are forward-looking statements. Continuing on, you know, it's my pleasure and really the company's benefit to continue to work with a great management team.

You know, a ton of experience on this team and really bringing value to the shareholders on a day-to-day basis at the board. Update on board composition. We have had a couple of resignations. Two board members are related to a 13B filer on the board that you've likely seen.

There's no drama with these. They represented an FPV vehicle which holds about 13% of the stock and are working really in the best interest of the limited partnerships for the FPV and then combining with the restrictions that come on with the board. So I think we'd like to acknowledge their service and their contributions and thank them for their efforts and wish them the very best. Taking a little bit on the overview, another great quarter and continued execution of our business.

Most notable really was refreshing of our liquidity. After accelerating the development timeline of our phase 2D. We had kind of two phases that we're kind of developing at the same time. And because of the mild winter, we really did continue to reinvest on that, accelerate that, deliver those lots a little bit early, allow a couple of our new builders to get a head start on what we were looking at on delivery of that product towards this summer.

So that really has seen a refresh on that and you'll continue to see that through year-end. But you know, we still have almost a little more than seven consecutive years of profitable quarter over quarter and really execution of monetizing our highly appreciated assets with on the balance sheet and carrying that through to the income statement. Let me dive right in on the Q3 results. Taking a look at revenue.

8.2 million in revenue, 4.3 million in gross profits. That takes a look at about a 52% margin on revenue to gross profit. So you know, we do have a real highly appreciated asset base that really continues to drive shareholder value, net income and earnings per share reflective of our percent complete revenue recognition and advance of phase two ahead of a typical seasonal schedule. So you do see very strong Q3 results that really are carrying that momentum from Q2.

And so this kind of is a bit more indicative of sort of an even flow revenue and earnings cycle, which is not all that typical for us just because of the seasonality of the construction schedules here in Colorado. Moving over to total revenue and total gross profit for year-end. And as that relates to our yearly guidance, we're a little ahead of our schedule on guidance as we would typically do. And that's really again to that seasonality issue.

But we really are optimistic and looking forward to a very strong year-end as well. So this gives you kind of a feel for where we're at year to date. Taking a look similarly with net income and earnings per share for yearly guidance, also favorable for the Q3 typical guidance and then also looking to finish the year strong and be able to deliver within forecast or maybe a wee bit more than what we were looking at on the forecast side with those as detailed on the quarters and certain