Pure Cycle Corporation Reports 25% Revenue Growth in Q2 Fiscal 2025

Pure Cycle Corporation reported a significant increase in financial performance for the second quarter of fiscal 2025, with total revenues reaching $3.995 million, a 25% increase from $3.197 million in the same period last year. For the six months ending February 28, 2025, revenues totaled $9.747 million, up 14% from $8.583 million in the prior year. The company achieved a net income of $809,000 for the quarter, compared to $118,000 in the previous year, and a net income of $4.746 million for the six-month period, a 117% increase from $2.183 million in the same timeframe last year. This growth was primarily driven by increased water and wastewater tap fee revenues and oil and gas royalty income.

The company experienced notable changes in its revenue streams, particularly in water and wastewater tap fees, which generated $2.126 million in the latest quarter, a significant increase from zero in the same quarter last year. Additionally, project management fees rose to $116,000 from $41,000 year-over-year. However, lot sales revenue slightly decreased to $1.136 million from $1.215 million, attributed to increased costs associated with the ongoing development of Phase 2B at the Sky Ranch project. The overall cost of revenues also increased, reflecting higher expenses related to land development and property taxes due to the accelerated development schedule.

Operationally, Pure Cycle continues to expand its footprint, particularly in the Sky Ranch Master Planned Community, where it is actively developing multiple phases. As of February 28, 2025, the company has completed Phase 2A and is nearing completion of Phase 2B, with ongoing work in Phases 2C and 2D. The company has retained 94 lots for its single-family rental business, with plans to construct 17 additional rental homes in Phase 2B, which are expected to be available for rent in calendar 2025. The total number of single-family rentals is projected to reach 98 over the next few years.

Looking ahead, Pure Cycle remains optimistic about its growth prospects despite current market uncertainties, including rising interest rates and inflation. The company plans to continue monitoring market dynamics and adjust its construction expenditures accordingly. Management believes that the favorable demographics and the ongoing demand for entry-level housing in the Denver area will support its long-term growth strategy. The company anticipates that its diversified portfolio of water rights, land interests, and rental properties will provide a sustainable revenue stream moving forward.