Pure Cycle Corporation · NASDAQ:PCYO
Pure Cycle — Q1 2025 Earnings Presentation
39 slides from Pure Cycle's earnings presentation, Jan 9, 2025
Slide 1: Earnings Presentation
PURE CYCLE CORPORATION Earnings Presentation F o r t h e T h r e e M o n t h s E n d e d N o v e m b e r 3 0 t h , 2 0 2 4 P r e s e n t e d b y M a r k H a r d i n g 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 RACHELLE SCOTT LEHMAN BEAUDRY DIRK LASHNITS President, CEO, and Director VP, CFO, Principal Accounting Vice Head President, of Marketing Engineering 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 DirectorManagement team Director 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 Director
Slide 5: Financials
PURE CYCLE CORPORATION LS FINANCIALS 5
Slide 6: Financial Performance Q1-2025 Results
Financial Performance Q1- 2025 Results In Q1 2025, we delivered revenue of $5,752M, gross profit of $3,666M with a 56% gross margin, and net income of $3,456M, translating to $0.14 EPS. These results demonstrate robust profitability and operational efficiency, reinforcing our focus on driving shareh
Slide 7: Financial Performance QoQ: Revenue and Gross Profit
Financial Performance QoQ In Q1 2025, we achieved revenue of $5,752M, a 6.8% increase year-over-year, and gross profit of $3,666M, up 9.7% from Q1 2024. This growth highlights our consistent performance and focus on operational efficiency, driving profitability and long-term value Figures in Thousan
Slide 8: Financial Performance QoQ: Net Income and EPS
Financial Performance QoQ In Q1 2025, net income rose to $3,937M, a 90.7% year-over-year increase from Q1 2024, while EPS climbed to $0.16, up from $0.09 in the prior year. This strong growth reflects enhanced profitability and value creation for shareholders, supported by disciplined operational ex
Slide 9: Financial Performance YTD: Revenue and Gross Profit
Financial Performance YTD Year-to-date results for Q1-2025 demonstrate solid progress toward our annual goals. We have achieved $5.75 million in revenue and $3.67 million in gross profit, representing 18.6% and 15.4% of our full-year 2025 guidance, respectively. While overall revenue came in below b
Slide 10: Financial Performance YTD: Net Income and EPS
Financial Performance YTD Net income for the quarter totaled $3.93 million, or 31.2% of our full-year target, while earnings per share reached $0.16, which is 30.7% of our 2025 EPS guidance. Notably, net income was positively impacted by royalty income in Q1-2025. Figures in Thousands NET INCOME EPS
Slide 11: Water Utilities Financial Performance
Financial Performance Figures in Thousands Water Revenues by Type (000s) Water Utility Customer Growth $3,500 4,500 $3,024 $3,000 4,000 $2,799 $581 3,500 $2,500 3,000 WATER UTILITIES $2,000 $1,466 21% Customer CAGR 2,500 Avg Customer Annual Revenue 2,000 $1,500 $1,500 $1,988 1,500 $1,000 $763 1,000
Slide 12: We Provide Raw Water to O&G Operators for Drilling
WE PROVIDE RAW WATER TO O&G OPERATORS FOR DRILLING With existing systems, we provide water to Revenue By Quarter (000s) O&G operators. We have also made strategic investments in FY 2025 our system to further our ability to provide water when it is needed, where it is needed in the future. FY 2024 OI
Slide 13: Water Utilities Sector Performance
Sector Performance Pure Cycle’s water utilities gross margin of 54% aligns well with industry averages, reflecting efficient management and revenue generation. While Return on Assets(ROA) is above peers. We are also able to grow up to 60,000 connections, of which only about 5% is currently utilized.
Slide 14: Land Development Financial Performance
Financial Performance Phase Lots SFR Lots Progress Phase 1 505 4 100% Phase 2A 219 10 99% Revenue Contribution by Phase Q1-2025 Phase 2B 194 17 92% (000s) Phase 2C 188 40 27% $1,171 Phase 2D 180 27 18% LAND DEVELOPMENT $2,680 1286 98 Land Development Revenue YoY (000s) $3,500 $3,193 $3,000 $12,147 $
Slide 15: Land Development Sector Performance
Sector Performance Thanks to our well-timed purchase of Sky Ranch, our capital investment in the land remains significantly lower than that of our peers. These figures reflect Pure Cycle's solid operational performance and its potential as a robust investment in the land development and water resour
Slide 16: Single Family Rentals Financial Performance
Financial Performance QUARTERLY RENT COMPLETED GROS S REVENUE HOMES MARGIN $ 12 4 k 14 64% Single-family rentals Appreciating Assets $150 $8,000 $124 SINGLE FAMILY RENTALS $109 $100 $6,000 $4,000 $25 $50 $8 $2,000 $- Q1 2022 Q1 2023 Q1 2024 Q1 2025 $- Single-family rentals FY 2022 FY 2023 FY 2024 Bo
Slide 17: Single Family Rentals Sector Performance
Sector Performance Since PCYO's real estate segment is newer and has less operational history in comparison, its margin performance is particularly impressive. It suggests efficient management of initial costs and potentially lucrative strategies in its real estate approach, even as it scales its op
Slide 18: Overview
PURE CYCLE CORPORATION ER OVERVIEW LA 18
Slide 19: 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 WE OPERATE (surface and ground water) attractive and easily accessible I-70 Denver metro area in neighborhoods we are developing
Slide 20: New Water
PURE CYCLE CORPORATION EW WATER LA 20
Slide 21: Water Segment
WATER SEGMENT W ATER SYSTEMS Our water rights portfolio can W ASTEW ATER provide water to as many as SYSTEMS 60,000 connections. This would allow ample room for W ATER RIGHTS growth within our current PORTFOLIO water system, which $65 M presently supports roughly 2,500 connections. TOTAL WATER ASSET
Slide 22: Water Utilities System Capacity
CURRENT SYSTEM CAPACITY TAP FEES-PORTFOLIO CAPACITY (60,000) ACRE-FOOT PRODUCTION PER YEAR AMOUNT AF Used AF Available 1,176 WATER UTILITIES 301 Quarter Ended 11/30/24 At Buildout Current Remaining Capacity Sold To Date We continue to invest in our systems with a current book value of We estimate ou
Slide 23: Land Development
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Slide 24: History & Strategy
History & Strategy 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 integrated communities. Initially focused on water Phases utility services, the company recognized the LAND D
Slide 25: Land Development Phases 2A-2D
PHASE 2A PHASE 2B 229 Lots 211 Lots Land development is All pa ving is comple te , a nd substantially complete. home builde rs ha ve be gun cons truction on home s . La nd Out of 229 homes, 215 de ve lopme nt is e s tima te d to are finished and be comple te d by s umme r of occupied. 2A 2B 2025. LA
Slide 26: Sky Ranch Capacity Projections (Updated)
SKY RANCH CAPACITY PROJECTIONS (UPDATED) Remaining 18% Sold Not Started Under Construction Pure Cyc le ’s re m a ining la nd to Completed d e ve lo p is re c o rd e d a t a b o o k Lot Revenue (000s) LAND DEVELOPMENT va lue o f $ 3 .7 m illio n, b ut with 0% o ve r $ 6 0 0 m illio n in p o te ntia l
Slide 27: Single-Family Rentals
PURE CYCLE CORPORATION EV RENTALS FIN 27
Slide 28: Single-Family Rental Overview of Operations
OVERVIEW OF OPERATIONS Pure Cycle Corporation 1 Maximizing Land Development Opportunities: By developing single-family homes for rent on these properties, the company can enhance the value of its landholdings and generate entered the single -family consistent income. 2 - FAMILY RENTAL rental (SFR) m
Slide 29: Single Family Rentals
SINGLE FAMILY RENTALS COMPLETED Pure Cycle contracts to build HOMES single -family homes in its Sky Ranch Master Planned Community to hold for rentals. HOMES UNDER Lot development costs fully CONSTRUCTION recovered (horizontal costs and tap fees) Each unit covers $7.6 M financing costs and provides
Slide 30: Single-Family Rental Financial Performance
Financial Performance 98 - FAMILY RENTAL SINGLE 30
Slide 31: Liquidity
LIQUIDITY CASH AND ST Pure Cycle has a strong balance INVESTMENT 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 32: Outlook
PURE CYCLE CORPORATION EW OUTLOOK LA 32
Slide 33: 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 an
Slide 34: 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 valua
Slide 35: 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 • Increased efficiencies as segment continues to scale SINGLE • Sustained population growth, particularly in suburban areas, FAMILY will drive continued demand for single-family rentals RENTA
Slide 36: Profitability Trends
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 37: 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 Rec
Slide 38: 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 will continue to be in the market repurchasing shares opportunistically. We co
Slide 39: Q&A
PURE CYCLE CORPORATION Earnings Presentation Q&A www.purecyclewater.com