Pure Cycle Corporation · NASDAQ:PCYO
Pure Cycle — Q2 2025 Earnings Presentation
36 slides from Pure Cycle's earnings presentation, Apr 10, 2025
Slide 1: Earnings Presentation
,-- PURE CYCLE CORPORATION Earnings Presentation For the Six Months Ended February 28th, 2025 Presented by Mark Harding www.purecyclewater.com
Slide 2: Forward-Looking Statements
Forward-Looking Statements Statements that are not historical facts contained or incorporated by reference in this presentation are “forward-looking statements” (“FLS”) within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 2
Slide 3: Leadership Team
Leadership Team MARK W. HARDING MARC SPEZIALY SCOTT LEHMAN RACHELLE BEAUDRY DIRK LASHNITS President, CEO, and Director VP, CFO, Principal Accounting Vice Head President, Engineering of Marketing Vice President, Land Development Officer, Principal Financial Officer Mark is an exceptional leader who h
Slide 4: Board of Directors
Board of Directors Mark W. Harding Jeffrey G. Sheets Fredrick A. Fendel III President and CEO Director Director Management team Patrick J. Beirne Susan Heitmann Chair of the Board Director and Chair of the Audit Committee Wanda J. Abel Daniel R. Kozlowski Director and Chair of the Nominating Directo
Slide 5: Financials
PURE CYCLE CORPORATION LS FINANCIALS 5
Slide 6: Consolidated Financial Performance Results
Financial Performance Results In Q2 2025, we delivered revenue of $4.0M, gross profit of $1.5M with a 38% gross margin, and net income of $0.8M, translating to $0.03 EPS. METRICS YTD 2025, we delivered revenue of $9.7M, gross profit of $5.2M with a 53% gross margin, and net income of $4.7M, translat
Slide 7: Financial Performance QoQ: Revenue and Gross Profit
Financial Performance QoQ METRICS In Q2 2025, we reported revenue of $4.0M, reflecting a 25% year-over-year increase. Gross profit totaled $1.5M, marking a 14% decline compared to Q2 2024. The growth in overall revenue was primarily driven by strong performance in water taps. However, land developme
Slide 8: Financial Performance QoQ: Net Income and EPS
Financial Performance QoQ In Q2 2025, net income rose to $0.8M, a 586% year-over-year increase from Q2 2024, while EPS climbed to $0.03, up from $0 in the prior METRICS year. This continued growth reflects enhanced profitability and value creation for shareholders, supported by disciplined operation
Slide 9: Financial Performance YTD: Revenue and Gross Profit
Financial Performance YTD Year-to-date results for Q2-2025 demonstrate solid progress toward our annual goals. We have achieved $9.7M in revenue and $5.2M in METRICS gross profit, representing 31.6% and 21.9% of our full-year 2025 guidance, respectively. Overall revenues came in above our trailing 3
Slide 10: Financial Performance YTD: Net Income and EPS
Financial Performance YTD METRICS Net income year-to-date totaled $4.7M, or 37.8% of our full-year target, while earnings per share reached $0.20, which is 38.5% of our 2025 EPS guidance. Notably, net income was positively impacted by royalty income YTD. Figures in Thousands NET INCOME EPS Actual To
Slide 11: Utilities Financial Performance (QTD)
Financial Performance (QTD) Figures in Thousands UTILITIES Water Revenues By Type (000s) Water Utility Customer Growth $3,000 4,500 $2,509 4,000 $2,500 3,500 $2,000 3,000 $1,679 2,500 22% Customer CAGR $1,500 $2,126 Avg Cus to m e r Annua l Re ve nue $1,134 2,000 $ 1,5 0 0 $1,000 1,500 $1,481 $994 1
Slide 12: We Provide Raw Water to O&G Operators for Drilling
WE PROVIDE RAW WATER TO O&G OPERATORS FOR DRILLING Oil and Gas Water Sales by Quarter With existing systems, we provide water to O&G operators. FY 2025 $851 $36 We have also made strategic investments in our system to further our ability to provide water when it is needed, where it is needed in the
Slide 13: Development Financial Performance (YTD)
Financial Performance (YTD) DEVELOPMENT Phase Lots SFR Lots Progress Revenue Contribution by Phase YTD Phase 1 505 4 100% 2025 (000s) Phase 2A 219 10 100% $121 Phase 2B 194 17 95% Phase 2C 188 40 48% $766 $448 Phase 2D 191 27 18% 1297 98 QoQ Land Development Revenue $2,120 $1,747 $1,256 $1,252 LAND
Slide 14: Rentals Financial Performance (QTD)
Financial Performance (QTD) R E N T A L S QUARTERLY RENT COMPLETED GROSS REVENUE HOMES MARGIN $118k 14 79% QoQ Rent 140 Appreciating Assets S I N G L E - FA M I LY $125 $118 $8,000 120 100 $6,000 80 $4,000 60 40 $31 $2,000 20 $- 0 Q2 2023 Q2 2024 Q2 2025 FY 2022 FY 2023 FY 2024 Rent Net Book Assets
Slide 15: Water Overview
PURE CYCLE CORPORATION ER OVERVIEW LA 15
Slide 16: Water & Wastewater, Land Development, Single-Family Rentals
SINGLE- WATER & LAND FAMILY WASTEWATER DEVELOPMENT RENTALS Build single-family homes in the Own over 30K acre-feet of water rights Own highly-appreciated property in W E O P E R AT E Denver metro area in (surface and ground water) attractive and easily accessible I-70 neighborhoods we are deve
Slide 17: New Water Section
PURE CYCLE CORPORATION EW WATER LA 17
Slide 18: Water Segment
WATER SEGMENT WATER SYSTEMS Our water rights portfolio can provide water to as WASTEWATER many as 60,000 SYSTEMS connections. This would allow ample room for WATER RIGHTS PORTFOLIO growth within our current water system, which $64.8 M presently supports roughly TOTA L W AT E R A S S E T S 2,500 conn
Slide 19: Utilities System Capacity and Tap Fees
CURRENT SYSTEM CAPACITY TAP FEES - PORTFOLIO CAPACITY (60,000) ACRE-FOOT PRODUCTION PER YEAR AMOUNT AF Used AF Available UTILITIES 2,627 367 YTD 2/28/25 At Buildout Current Remaining Capacity Sold To Date WATER We continue to invest in our systems with a current book value of We estimate our portfol
Slide 20: Land Development Review
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Slide 21: Development History & Strategy
History & Strategy DEVELOPMENT Pure Cycle Corporation has a strategic history of entering the land development industry, driven by its Metrics of Completed vision to enhance shareholder value and create Phases integrated communities. Initially focused on water utility services, the company recognize
Slide 22: Development Phases 2A-2D
PHASE 2A PHASE 2B DEVELOPMENT 229 Lots 211 Lots Land development is All paving is complete, and substantially complete. homebuilders have begun construction on homes. Land Out of 229 homes, 223 development is estimated to are finished and be completed by summer of occupied. 2A 2B 2025. 2C 2D PHASE 2
Slide 23: Sky Ranch Capacity Projections
SKY RANCH CAPACITY PROJECTIONS DEVELOPMENT Remaining 18% Pure Cycle’s land Sold Not Started Under Construction acquisition cost for Sky Completed Ranch was $3.7 million, Lot Revenue (000s) but with over $600 million in potential development 0% $617,250 revenue expected in the 22% coming years, it hi
Slide 24: Rentals Overview
PURE CYCLE CORPORATION EV RENTALS FIN 24
Slide 25: Overview of Operations: Single-Family Rentals
OVERVIEW OF OPERATIONS 1 Maximizing Land Development Opportunities: By R E N T A L S Pure Cycle Corporation developing single-family homes for rent on these properties, the company can enhance the value of its entered the single-family landholdings and generate consistent income. rental (SFR) market
Slide 26: Single-Family Rentals
SINGLE-FAMILY RENTALS COMPLETED Pure Cycle contracts to build HOMES single-family homes in its Sky Ranch Master Planned HOMES UNDER Community to hold for rentals. CONSTRUCTION Lot development costs fully recovered (horizontal costs and tap fees) Each unit covers $7.4 M financing costs and provides p
Slide 27: SFR Portfolio Homes
SFR Portfolio 100 Homes $3M Rent/Yr Sky Ranch Phase 1 & 2 $35M Assets M e t r i c s $52.5M FMV 71 Homes $2.1M Rent/Yr 29 $24.9M Assets $37.3M FMV Added in Phase Prior Phases C u m u l a t i v e 31 Homes 40 $930K Rent/Yr $10.9M Assets 14 Homes $16.3M FMV 71 $420K Rent/Yr 4 Homes $5.3M Assets 17 $120K
Slide 28: Liquidity
LIQUIDITY CASH AND ST INVESTMENT Pure Cycle has a strong balance sheet with liquidity to support our business segments. Pure Cycle RESTRICTED CASH maintains a significant cash position as well as a receivable from the Sky Ranch CAB for approved RECEIVABLE reimbursements for public FROM CAB improveme
Slide 29: Outlook
PURE CYCLE CORPORATION EW OUTLOOK LA 29
Slide 30: Company Outlook: Water Utilities
COMPANY OUTLOOK SHORT TERM OUTLOOK (3-5 YEARS) • Customer growth to 2,500 accounts • Consistent tap sales over the remaining phases adding to the recurring customer base WATER • Annual tap fee increases at 3% UTILITIES LONG TERM OUTLOOK (SR Buildout) • Buildout of Sky Ranch 5,000 total residential a
Slide 31: Company Outlook: Land Development
COMPANY OUTLOOK SHORT TERM OUTLOOK (3-5 YEARS) • Steady lot sales over the next 5 years through the completion of Sky Ranch with opportunities to expand portfolio • Increasing lot margins as lot costs are expected to remain LAND consistent through the remainder of Sky Ranch Development • Most valuab
Slide 32: Company Outlook: Single Family Rentals
COMPANY OUTLOOK SHORT TERM OUTLOOK (3-5 YEARS) • Expansion of segment to over 100 homes in the next 5 years SINGLE • Increased efficiencies as segment continues to scale • Sustained population growth, particularly in suburban areas, FAMILY will drive continued demand for single-family rentals RENTAL
Slide 33: Profitability Trends: Recurring Revenue
Profitability Trends Water Taps & O&G Land Development Recurring Revenue PROJECTED $60,000 62,313 $6,000 $5,174 $50,000 $5,000 Recurring Revenue $40,000 $4,000 Gross Revenue $30,000 30,988 $3,000 28,266 $2,157 $2,251 $20,000 $2,000 14,421 $1,383 $43,063 $16,705 $20,414 $10,000 $7,098 $1,000 $5,940 $
Slide 34: Shareholder Value
Shareholder Value Pure Cycle has shown consistent growth in both recurring revenue (with contributions from water services and an increasing SFR component) and total assets over recent years, suggesting a strong financial position for continued expansion and growing returns on investments. Annual Re
Slide 35: Stock Repurchase Program Update
Stock Repurchase Program Update The Company continues to invest in itself, through its approved stock repurchase program. We believe our shares remain considerably undervalued – maybe more than ever given our momentum and we will continue to be in the market repurchasing shares opportunistically. We
Slide 36: Q&A
----- PURE CYCLE CORPORATION Earnings Presentation Q&A www.purecyclewater.com