PCYO - Earnings call transcript Q1 2025

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Mark Harding

Good morning. I'd like to welcome you all to Pure Cycle Corporation's earnings presentation for the 3 months ended November 30, 2024. We're doing a little bit different format for this particular call through our Teams meeting. And what we wanted to do is allow us to go ahead and have all of you participate. And then as we go through the presentation, there's a slide deck for this for those of you who have dialed in and are not on the call through our Teams through the website, you can see this presentation deck if you log into purecyclewater.com, and you go to the opening page there, there will be a link that will allow you to join us and see both the slide deck for this and then we will have a camera that we'll turn on after the presentation, and then we'll handle that through a visual format through a Q&A session.

us you a for allow interactive bit will with presentation this it to little have more So earnings call. is these accurately today sure me our Panega, Saria With who that all fairly. numbers and presented get controller, make And CFO. also our with Marc who's is me Spezialy, X us and our then a joining Kozlowski, is be will And shareholders. Dan also who Director of And as year-end our presentation. did we with for our annual presentation more and forward. of kind of we'd to had format that, an We for that like carry interactive shareholders from about format. a lot feedback Got good that of

So we'd forward be like to carry and in a that interactive more presentation little bit with that.

Act, go and within all our statements by statements forward-looking I'll that, with familiar do incorporates that We reference the the have meaning So with statement statements you're that that. ahead Exchange on start of forward-looking presentation. the are forward-looking and Securities

move I'll So out lawyers and the room. forward of the get

acknowledge business experience continue to professionals team. I decades professionals our executing work to environment industry success. work experience who privilege with work have long, an these are to my get every that outstanding to with want our bring team of that It's really they with pleasure the are to day. and a that leadership to great really It's

employees of is the the happen So success true people really and by that day. company the the each it make

to I also our acknowledge Board want of Directors.

it's have doing, governance experience. development, provide We water it the continue them to where their and leadership it's that in is whether SEC experience terrific just who the corporate elements whether it's land an our for And key weight just Board punch what careers of rights, industry in above they've outstanding of company. in each we're whether on doing spent

team to with work So great of pleasure professionals. a

and dive business we're execution the XXXX on to into the want just again, that the about We'll this. a quarterly model. I fiscal of momentum we year-end continuing our performance. doing with terrific And financials had talk the So right

quarter. first for record we had again So our revenues

So margin operating legacy about a an We've driving of And a $X.X segments. outstanding gross and of revenues looking business that value increase tremendous these really that. seen profit, on assets purchased assets. at from these revenue sort on really they're number we million. in Gross got have

So a stuff this gross and on we're these great execution really having all margins. seeing great

$X.XX terms We gross about royalty So million, margin. an had quarter XX% outstanding in income. of

gas And so these here call numbers particular $X.X I'll we about is, a earned and give on what royalties. that because million in out oil

that interests associated So we the do of mineral some have with acquired. we was interest land that

for at the that Sky have So play our oil we interest Ranch. mineral

drilled had so an that X interest And in mineral pooled additional some that. wells we were in with that formation other

revenue margins gross to really So those income and is royalties on starting quarterly that. are aiding And then produce net-net in our also there. our

almost share. the comparing this net income And or on revenue kind of the $X.XX Continuing quarter, quarter-over-quarter. for per then great with million $X picture really

up are almost revenues Gross almost quarter-over-quarter X%, profits Our $X.X XXXX. XX% up from from million.

to carry in that metrics. Our momentum continues all forward

executing So and really how with that's pleased we're quarter-over-quarter year-over-year.

sorry. income, some net -- doubled 'XX a almost 'XX, on income, over other numbers, Quarter-over-quarter we into the performance down here, a look the of metrics taking Drilling that. at taking net look at for those

as in increase share. well buster getting as earnings per income So net

when about you look on in So basis. we per earnings XX% had that a share increase period-over-period at take a

we're of at rolling we basis, forward. Taking we're XX-month year-over-year, this sort up record here key at a look a taking putting really on rolling over really, XX-month drivers XX-month some again, guidance then where in this how hitting gave look a rolling that And rolling average, average average. revenue

on pace to XXXX, for continue to compared our that guidance. results XXXX we So to on perform guidance our are

revenue. guidance right see and continue forward. in total really that our to We on $XX to roll going that is you're performance gave what million So positive around

about got or million right $XX for we million. around so first million, that $X.X -- Gross quarter. that the in $XX profit So

on fiscal as guys we'll and you keep quarterly a metrics. that basis our year-end. for demonstrate to continue to how to So appraised meet we those want

metrics we to and a quarter Again, had a earnings for year in share. We the $X.XX and fiscal deliver out on on income record net performance and that for start that a year. year-end. forecast a off share $X.XX per share Those us gets for $X.XX first last continuing great execute

how perspective our gives to of to guidance. you as year how as a that it So compares that previous well compares

break the a it each segments. bit little terms down to of in of Want individual

here, trade-off we've still So between Water this be Ranch of attributable think new weaker our which strong a monetizing primarily little the that. is to to got that. guidance an analysis bit water for on fees, utility growth And tap continued Sky very I a are segment. the will connections adding and but of our That's segment

at we've phases Ranch the X as So about, got talked oil and revenues. Sky we've under and gas development then

weaker permitted their working there. pad expanding at really bit primarily little of next that, permits is oil on a tremendous set revenues, been a we gas and they've that getting and coverage over on look weaker the which That's They've bit We the about forecast when sites year. we're infrastructure so this our gas oil take Lowry expanding number got and what of to they're And the and are a XXX on permits. did anticipated. little got because Ranch, which you their they've a structured wells operators

that in XXXX. going you're little bit to a more through XXXX into see XXXX activity so and of late And

So forecasted kind a was of area. that

that's Sky because We did the a number see uptick the connections in significant rash. new of of and

and fees with area customer base XX% a tap revenues on that. continuing customer are about recurring in our increase that growth XXX% in in our then up So about

continue proven a to to very looking highlight the that they've 'XX bit on continue for amount anticipate to outlook little 'XX a gas. this, and a be bit develop tremendous because the very that look a of did but weaker, Just We oil pedal strong a got to of they're through field.

right continued tracking area we're for continued field very water efficient service where have supplies well optimistic within delivering that they So very for enhancement. on our those a drilling and runway

year-end is on the things performance. give carryforward of in this. This presentation. to little from we a of our more on each to -- wanted how you a of are we kind of these one sector executing guys A peers is our we like models perspective And do to bit business compared

And so what very And on a peers this, at really larger performers competitive how this to performed we're when to best-in-class compared of our our you that. business be take segments considered look segments. each can much EV in describes

see, And gross have. margins assets of on our really you of and in you return that category good we're the in assets shows can margins that this deliveries with delivering So Water our segment. we

is The So do assets. really continue the we that. still really just to call the just started. water We're utilization. only utilizing of We're utility out sector getting in about our biggest X%

land tremendous continue developing, in only segment, our this as service well that our serving areas opportunity to other got grow but land areas area. as not to we've So we're and around area

excited opportunity. really that about we're So

a land development. look at Taking our

If got take to there, you as X we've look under want a we development. at currently outs phases call mentioned,

X, total X sub and about which in really got Phase a units we've phases. XXX is of So is that

got last we've and IIb. first completed, occupied. The end and delivered they're of fully Phase -- is constructed summer. all homes We Phase IIa and last sold

what vertical of so construction on see that. will And you kind be to is able

vertical homes probably about we've in XX got IIb. Phase so And

on. we're Phase IIc is active what most

for Phase homes those the got grading that to will vertical Xc. we the able So about the of XXX about move curb we on building for are about a be strengthening reserve on units lots X. that XX% single-family sale another that and finished from then utilities, to We're lots, segment where we've where those deliver and us be then rental Phase got there on gutter That's and for to on going in complete XX go utilities of we're pavement base. that to XXX we've permits on our real and

And which we currently grading. then Phase Xd, are

got land of about a development. we is comparison that of through at of some we've a up grading -- look as to So the taking This peer we're stack halfway how performers and well. segment the

this tremendous high value testament execution. And to a so we that is the again, land. Really, have in equity the

construction, and metropolitan area, Denver which which that really at our different advantage pleased point, of is in because strategic is the horizontal and efficient the price very just the delivering -- itself entry-level competitive that most affordability. lots So no in acquisition our does these challenge we're major we're here through execution other master it of most areas. community planned It than

area master-planned paired in home communities we're of metropolitan and Denver lots product we're and the buy cases, the and on townhomes. a you And the actually some where then duplexes in can in delivering most sub-$XXX,XXX one the and affordable probably

products those sub-XXX,XXX. of you Some deliver can

for advantageous market in this us very segment. So

continued growth at look also rental then our taking segment. And a in single-family

We've continue about rental We incomes, up those. to got improve XX%.

And combination a this segment as recurring strengthening from for not of the well also only the new as And that because It also portfolio. in asset bringing revenue units. provide rents then that's us very for it growth so has us. attractive does is on

community. position value have of the that have the we're equity we we horizontal equity the a of strong the So because there in land development as keeping as well

those each continue to the rent appreciation individual as to on well are of out. forward so ability as rolling the And those home

lessees higher got we've so our that. rate of a on renewal XX% And than

particular And space. again, year-end carryforward customer compares presentation, have this in a we single-family on great this of are So which our operating larger segment to the kind groups the a us rental. experience for this from is that

we comparisons to best in those you that so class. very have see, can And are favorable of as some

great or give summary of company's I for quarter with overview again, positioning record up just great feet of values. learning of kind So what really And gives a familiar just strategic few our really here. another take this you Maybe the quarter for you you the asset that about that of is those and how us, do for these went. company the get to this, of really are an kind want a a of delivery experience

X operate We in business segments. different

a That what be also that be land. water bring and able be to of allows water participate of and otherwise change We us the have composition land that water to develop does. utility appreciation water-short not only able segment, able to really rights own and service to could allows water which area but the water, value in us in not to wastewater to

elements that. a And vertical so we on look all participating on scale of at

land segment. segment this the into entry our probably development to led We've that for in been X so years. And

done job the the submarket an we're as developing the I delivering marketplace. a We're good here, where out product of that very affordable of that really entering very we're right they're house. our money execute go in vertical to think to segmentation we've comes a partners and in rates, competitive able on really our are when when homebuilder their from compress time builder partners at line able own their to land, to

so that's very for And important them.

out things where have they delivering that we're for of the as we're when on and be not are those on strong of with strategic those absorption that That's much them. be homes. to homes, to And of on And lots able that in qualifying that reasons. really and marketplace And to in. applying we're and segment, again, able opportunities forward velocity one some doing and carry partners rental $XXX,XXX bringing really, of we market, carry brand-new some holding land able equity into rent can our our is most able rent this homebuilder our of fair -- a of infrastructure. at lot just that, the The market go of for forward rent home on each we're time for acquisition coming this sales. inventory key partnership where a value seeing see is then partnering to renters model where single-family And as back horizontal costs individual those. metrics folks lots. and the those are are those overburdening each We're we're them segment to where choosing are very the be those for vertical of in of recent deliver competitive carrying some value, we're we're we're to to These various

we're very portfolio a of got we've so continuing that, to And grow and that. strong

these some water to million these $XX imagine, revenues, that million, of $XX tremendous some of because value you look each on are segment. you at have in We've get seems that. the year, real basis can a start just assets from And you company disconnect, right? years got specifics, segment. at metrics that and you If can significantly take of a We some of does we look has we're a that. have here, in a the how about the These a here here low if take want year-over-year of serve our water at the segment look our in generating revenue a in connections ago. to We've Water market. take what there million be asset and X $XX it's total value the say, from and these in You XX,XXX we appreciated assets this to assets XX million, $XX revenues that. generate really acquired water

a get is a that, system sewer. charge, that's We $XX,XXX and [indiscernible] development from water which combined about

delivering right? And so over connections, water then we have a and continuing that, That's fees. billion revenue. have We when large about service we're a you monthly to customer connect $X.X and us. a XX% very for there the that's perpetual business line that margin water that's And revenue, XX,XXX wastewater where on worth almost of revenues top

around margin are the side. water $X,XXX and utility on per connection a that's business about XX% fees Those

for So the ago. note recognition number also really a value A it's early business particular particular by driven and of this a of very utilization. of segment segment the us is percent water in attractive years

So on that. early we're very in still

you capacity see, delivering. can As that we're our

XX% say another We capacity. have about I'd

we the acre continue foot use using partnering then customers capacity have water utilization the oil We customers. in done here, expense the but ferry. for our that this year-end, our deliver excess water, relationship and to come do our capacity does other base. we shows that to we which the first customer where XX% about it's capacity, production And gas a shows excess for not reallocate permanent have This that a they're and on to of existing of and to their at quarter, when good of

perpetuity customers online invest us system continuing places. So have for for there's in that to those expand in to the Sky delivering come that a as and investment residential of very relationship current value Ranch system capacity good utility our then customer other our at and and our

land Really our development highlighting segment.

really saw to recession, is act able in water an the real historically, strategically back So a basis piece opportunity the the in this is could we particular service of very, the which strategic were deliver of to property, company our opportunity very the depths land and where we purchase low.

and on where infrastructure basis a land rare. the we're lot getting then forward that to And land than into less development, then We $X,XXX have lot. a is with very that to able executing a carry and finished the bringing delivering utilities horizontal that's it we're

you're investments, the that inventory. in in to the is is as locally of of development. of that What as just manage those phases it's that well utilities area because seeing in very water who complexity both that, land all marketplace investment other of the Denver and here difficult all the the carries

work mostly relationship the actually the because partners of with segment. we do so And that one homebuilder we're have is few outstanding, our that that this do market in

million $XX in margins seen in great lot almost we've date. to So gross We've there. got sales

we're and how real-time we so homebuilders don't basis inventory then that carry inventory that carry the have aspects too on both all that executing well. to as of much we're delivering a don't So on

those well for bit of of little working how we're is This both So executing. are us. very a

we XXX So are looking per typically lots at phase. about

the basis the really And you our and that land the that delivery our on partners. do will real-time entry-level is with home controlling And because a of We're so in market market we're opportunity seeing this utilities the show investment a able is and capacity. what builder together of basis. really the entry-level annual strengthening we're to because on

on got and Xb, and built the fairly a talked far. progress mild Phase occupied. Xa, this we had some so will out Phase that. winter of there so you is we've a vertical We've about that of And going fully which give

Phase are continuing out the finishing side the to the go So We're Xc and on builders pour there that Phase and of utility grading foundations vertical Xd. then up Xb. Phase of

all to of little really would good our of So capacity a you sell kind bit this it for existing of And of through give both as does continuing well that. as of sort give the of opportunities those homebuilders. a phases inventory

big some Ranch, total X,XXX units. units It will fairly X,XXX Sky a was residential acres and about out project. started as metropolitan It -- most take the land to located single-family a about have X,XXX then Denver the in We're the of a along you area, of privileged commercial. I-XX which look and able we're really originally active When at be be the to very submarket is corridor.

property. We improving an We're right interchange our interchange. at have that

lots about utility to X,XXX to have to connections yet attributable and X,XXX really that water start. which we'll commercial, so is And

when with XX% and done project side total, whole. as XX% done over residential the the about with We're to you that add the a

we -- and a go most to really climate favorable looking we're so build. hard [indiscernible] the of off-site And got this of very we've got infrastructure still at because

than that So lot is of out the coming ground. expanding easier a

drill Lastly, this for build bring schools partner us our opportunity at great on if charter great ultimately, with space then rentals, development bit the work and the We've a to carrying Academy out and forward National Ranch we little school got an down commercial. we're good a to hard Sky forward out carrying really land the the parks, single-family all a community, where opportunities maximize the there. school a really on Heritage open is

also of us to the commercial we're in regional to retail only those. And not bringing the on Sky live that opportunity demand market really at residents leverage it that Ranch, that area. So that some but allows

rental segments. So good return single-family on investment through

equity in the what there we've to about look constructed. you homes. really take that's another have of at those And a million we got when you on then $X in about worth that, the XX% you -- us when margin equity. value the on at build are look numbers And that, cost If it that homes

at value on within the of seeing value, to million to we're So monthly what because on $X.X then just continue itself and that generating that revenues rise us fair community the market we're that. recurring creating it's

good segment a continued for that. execution and us on So very

kind of how out. concept add nearly going that. with to of we started Phase Just a proof of we're Phase just foreshadow a X units this with And in, to out really another give thing We X when X look rolls at you phasing units. then on to

with actually to model -- and to homebuilder they them, been has partners product so start. able and before out that that not we're execute our with we've they well, that sold proven So competing very partner even on giving them we're

go each these -- to able each are they that as be phases, of sold deliver they've got into market us contracted to So they to units. demonstrate able these rental the to with units

continuing We're be to market can others finished to shares is a what of to optimize help the not shareholder Lastly, to stewardship We've have do to we're to what sheet, of X-phase of really continuing continue very the great deliver we And do is lot want what got a to accelerate really development liquidity of highlight models. us and the then some some that with our acquisitions. and on all the cannot, that really business I these we appreciating business we're to repurchasing fronts is to value transfer grow homebuilders. we're And liquidity allows that the company. on may fully ability execute face by of Ranch the balance the some yet. strong to really through liquidity what doing Sky using which continue able

like then the model build-out. And good outlook, the how this and balance allowed have. that of a the A at carryforward, be business sheet kind the So some to bit little of where us that little stewards we will of through Sky add of over really does this invested we Ranch capital look continue again, that be on look to to you've term. short bit

have accounts add growth into X,XXX short-term Ranch, Pointe we'll at period customer areas. that Sky where Wild in We about other accounts continue to and

increases tapping Our modest. are very

in We built yearly those basis. a have on

the the the then see the between the what seeing total growth of value build-out of that, residential commercial connections you the in a commercial. at opportunities. only on to long-term monetize look look take at are continued those lots, not that, but And there's also continuing residential Sky So in increasing Ranch, of And X%. and value we X,XXX we're and

to the a sales range, might We see next land in be we'll Taking with over a years it's look lot don't of within X X-year future. steady development, certainly Ranch. Build-out expect that completion but at foreseeable Sky build-out. the X-

you than the sheet. worth when so of our maybe at Sky into balance what for generating through look at is. probably baked Sky Ranch And revenue We've alone twice revenue market potential at million build-out. Ranch cap tremendous There's more already looking got There's $XXX us.

to -- continue there. want that value on So we shareholder to really our continue deliver and keep focus opportunity

to million that per we're And excess going then for of somewhere that. $XX,XXX that to look the value. XXX asset somewhere be again, and revenue million in get rentals, to then we where to that XXX And that's single-family around $XXX unit. generating again, to on year between recurring And of homes a close $XXX somewhere

kind And tangible for that This again, our recurring so of compared not more on what tremendous looks for for how will that's, company. the of a a doing we're XXXX to like, driver into fiscal kind picture XXXX. translated only of growth revenue

from short-term be through we're 'XX into a in this growth will also that 'XX you frame. we of XXXX then potential to the -- where So kind projection, in it and time a going that X-year up shows give comparison think growing

of continued $XX million 'XX that performance you that term. from revenues to give of acceleration So over up will strong short in moving a in very the modest

then both terms And ultimate in of term Ranch. then and build-out recurring into short how translates that the revenue, Sky of

here. control gives kind built-in for a you that the our project this value have within we our flavor really of within and what's So own

looking just in we continuing asset current that purchase market currently company X.Xx be almost our from looking to this portfolio. continue shares. market, cap is the the what So in to Again, growth, at at we're got

continue opportunity between then what to the share going see value deliver to reducing count. we by So you're is value in the on believe to our company's continue to disconnect the also us shareholder denominator and there be the in

Okay.

kind -- So with kind and more a institutions, our that of to is an with from give most perspective. a He's into really it do with got like number observations great career show and we'd he up shareholder stop over analyst is let from Janus, worked as open converted managing retired we'll some Janus you get to independent to That And in where that, equity a really an and then we maybe of Great. what out. room. up where of director Q&A questions. this you the a collaborative a format open if sharing smiling team's but recently, our faces and me it presentation portfolio, can it for see can see our conference

So with that...

Unknown Executive

begin This presentation. now Q&A our the will of

to as know, quarter using Instructions] interactive more the experience kind have this investor So base. we're a of with you teams [Operator

Unknown Analyst

sort the those was showed on the where and of -- I you what more latter guess, you I the of I Slide represent? one slides, asset think arrive does what detail projected do are on Question curious it value. how a -- XX that was little

Mark Harding

show XX say and that... we'll yes, So we

Unknown Analyst

Actually, have XX. been might it

Mark Harding

fairly remaining the homebuilders in Okay. on take modest, of what Yes, then whether of each I that at we -- land have the asset from selling what and that of lots number lot and the on was have land But when that making was you to the reimbursables. we're just been the and between going XX shows which sale our to opportunities actually lots to going that what road, a might still be look inventory is that's is from yes, segments, the we the homebuilders, we're an the development. development and make say

of that's we for improvements the in you tax we sheet, on get that for And from that. As do sheet. we that. public see reimbursables receipts balance paid on our back And get back the we balance growth really a with all the have continued the paid

periodically, we'll continued so we'll forward homes. bond and of And growth the go

And fees so that's on phase then is base homes back homes. together value, that a then to tax And times the value new and then of how with adds the the we water money gets each the the get which of the single-family tap that. home assessed that and set

mathematic Sky So a and core Ranch of Sky that's really only just computation Ranch.

It Lowry things what's connections development all the area that we on serve interests XX,XXX have of those we available service own. Ranch the on This is that our does to serve within other account the opportunities. or of or balance take just not any land other at into sheet inventory

Unknown Executive

All with code next is from -- question take our XXX. right. a We'll caller area

line open. is your So

Mark Harding

And you're muted. Yes.

you question, -- were who had a has XXXX, raise hand. but muted, If you to else up if ending have have if allowed hand you're question. you anybody there's still your if And you're talk please -- your in a

Unknown Executive

Okay.

outside the seen Dan how While we're queuing can we to have valuations terms still on quarter-over-quarter, as . of what your it to do you questions both kind open what on maybe maturing the but and Board, that. looking at in it of thing little the not as and Maybe see as year-over-year. on sort of perspective, only up up you a this since of turn well give you've Board some of someone is participation perspective kind over a bit of

Mark Harding

on be the to We've again Good call. the a pretty good last got call of Mark. feedback from year-end today. the Thanks, call kind

to decided we again. Mark lot a do from and So hear a the to but interesting with seen, something collaboratively was member, it It Board was it calls as of a management well Mark shareholder. received both as working large phone have I saying and team not people

XX% own fully of I'm company, all we've and this. been over the We vested know, in So you pretty active. as

I to that And pretty a was so want say good quarter again.

sleep base allowed the books. us You on the to but in a with resource earnings more followed power stack EPS up typical more some

based I it, at look done I we as So had coming $X.XX. think on today, year-end into numbers,

rolling the X quarters or rolling run rate. $X.XX earnings months Now a last is XX

this couple all-time think look was years -- a If X an onetime accounting if future, Mark back continues catch-up comparison, particular a for kind reimbursables, softly of rolling -- ago, point progress sort that's look apples-to-apples of to it so a true-up record. of think of and just EPS But accurately, now for we I the I forward earnings year record really, in at that there for was So to like-for-like you next and quarter. we up an on historically is to the at spiked has number new, least given direction as a continue to sort guided right.

and on months? run Just comment higher XX, next rates that? you And over any feel Marc, sustainability of the XX the how hitting about So earnings. the

Marc Spezialy

made each and investments in segments Yes, here to proof these able of in it's producing them think the we're individually. that I the all pudding get strategic time. at same We really is the

fracking segment within revenue so see investment see assets invest capacity these the we've investments make system. that amortized. gas new and to as money the to getting transfer that. system. that is from. money that that but that we then that of assets. to already that That's into because over our the investing only into And not water development being We've we're taking you made the add basis, accounts, the We're able some we've year-over-year grown And and excess how acquired, land you oil then And investments where connections in we water

revenue the we're we land We And invest segments, revenue then where recurring the is in monetize segment. improves knew we we that's value. appreciate. quarter continuing and single-family we it infrastructure, the biggest of itself homes from this to get finally, in And was that and gotten. get right? it But land were increases which that rental individual online, the the public -- that development And coming we to We revenues. community equity we've the rentals value continue X parks, did surprises adds that from another the that the then that that remade on into just key land schools, in acquiring and strategic to seeing an investment income Sky and is had open which surprise. development the that in auto when in space, We Ranch new get segment, were so that the have margins the back, back that wells coming royalty

the royalty on the revenue. is, the it doing we're the alone the water revenue Just from land monetizing utilities, what utilities, single-family let from

to the that. all partnering in love able market. we're looking that questions. so we're national to company in experiential market Sky there. do and this, we're into at enthusiasm. us great It's And with to to of on net beyond that assets that continue this these do it's able Ranch, who want They're all we right? basis in It's We're expanding once, So a do couple driving thrilling. right, this are at do that That's homebuilders reinvest an that expand great really like, that that to

you your you unmute Let computer? want second can you hear this me interaction your to open a get is and I and with. Dr. pause if see for Anderson, line you.

Unknown Analyst

Mark. I Once you time, up how learn long do you screen Fantastic. to Welcome. I've for a know this, with been get to you Well,

So long-term I was of I have couple a you questions. told I investor. a

the price is the oil dependent partially the and on more there gas. we But that, gradual what outlook Are fracking royalties gas, look for oil Obviously, decline now how are on going more done? curve continuing First, the on royalties? of excluding a Are do forward? wells? wells and to potential we and for on be

Mark Harding

avenues kind X a different good And question. there. That's of really

first. to speak me the royalty Let

oil have pretty X on. delivers The you get wells were returns coming very And decline high they in early a shale that Ranch. So drilled very, right? play new very Sky we And steep in upfront, have those royalties curves. typically,

you're development then about the years as month been X fiscal and went decline. for this through getting we're likely really wells. in. continued initial X would to have little wells a and an say that high is was -- I looking performance year and now We still what for a of a X, that see And years, of initial get $XX,XXX bit So

that interest mineral field. trend in. been online looks that wells will in have the allow working we That trend. us have they these probably longer-term at they coming developing those and online, support is when you They've in wells opportunity them big bringing favorable frac wells When X continue for that on very to and and side. they're of a new that our a say, oil years. good the a on for, But get permitting got service the to tail that the hundreds, do look partners around so a take and continuing hundreds revenue next area our And you have first don't the for pop gas

X from oil of years revenue think that significant That period us. that it's for So like can in to record can to million 'XX beyond. I and be from period around And time. segment. still looks a a gas 'XX sales. through that $X from water year, in that that close last And of to even grow years had can revenue and year We be of time, somewhere there

outlooks those So favorable. very look

Unknown Analyst

And because in question continue investing what's about incentives mortgage second their the at them, give of to that buy-downs. what having level? specifically level Denver is to do may to having to builders this rates of to get I'm interest or calls talk to the sort the listened there? The Could sales and sales your homebuilders I continue area of several to happening be to, you most get

Mark Harding

had Interesting with the because like Sky one have And significantly they in price are do they you asked to other than buy Ranch Ranch I downs conversation points. more this us very because of less recently. builders at our really Sky

$XXX,XXX you're may and starter point So in do if Colorado, the high that but the incentives, buy-down the marketplace it problem. market, an seeing $XXX,XXX XXXs, mean, here of we as they'll you about that doing are incentive point boggles they So they it Ranch. what which is like have and this average entry-level just it, market And markets saying, price consider many price of anything than here home is major affordability is be your that, less metropolitan may level taconite I is we right? in having a compare mind extraordinary. $XX,XXX our Sky they're in entry what at have, what an is

so point price level hold And if at is point. price entry their that right? when home, that in a They've can they that is their margins you the $XXX,XXX, incentive gone, liquefied compare where your $XXX,XXX margins price on relative it basis, point

of looking that's mortgage ago. demand hard X.X% years that sort where move-up they're bulk because So rate in at walk buyer that It's of is. they locked for the it's opportunity of very away from saying, a to Ranch right X difficult buyer Sky now the

entry homebuilders going the that entry strength really and being continue to the see you're be that so the level. incentives smallest level to at And for the at

conversation So that's lots to in that's these price -- continuing this understand rate that that to how I us deliver led would in how the interest point market. importance of

Unknown Analyst

philosophical the very earnings, want value And the may that. about may rental to as would that the But how reported or quarters and on. which The congratulate continued think I'd your you call in question earnings, important that? as pointed of to like chart us you the creation? comment ability you're extra getting which you team reported your of give How as your a to appreciation may on That's not progress you balancing out, to I that. like versus always about the out to First, show things members equate creation few and more just last on value think is like what sort really does in not are homes team how creation And other attempt coincide helpful. the last works question and you value lay stuff

Mark Harding

crush and right. equity value see we're these on that delivering not translates of at Dan, that's a continue segments And the not we you've to these that question development see that just one lot going through And per to that that, how we're earlier the the to inventory. seen take see going can express balance that right? your how start And in forward year-over-year $XXX and right equity each how gross that the water they PJ's struggle in question kind we That's really that We tremendous us hoping of board that your is a is on there. and we've you're asset So that's and because into level. equity that the balance -- get value we the million. earnings to going in in returns seen of you value. value is assets, and gross margin carrying done margins you're demonstrate share. that it's you've land you're and what really assets it that we rental with what such and we the demonstrate now that And what when equate asset see to see we great that only one the just the to margins really do talk I be that that then market segment, see then that sheet. career, don't year-over-year The lot was we only -- million $XXX out companies the know, how this a value. have and to equity that's can to about

Daniel Kozlowski

this mean -- what assets put the it's year of about on water these I bulk water were bit, call -- Yes. little the Mark, we purchased. rights a talked the last was we

Mark Harding

to XXth to year. is this Again, back XX. go going You're my almost

think XX I more it in, years. so X than So years bought I

Daniel Kozlowski

water not many perfectly to of stories. They about out they talk to we a and the to And out municipality water. in excited. mean come stories try I working years. there's that They some get to people been XX flip than more try So who other market, here Colorado there's and buy places. it

And so were it something to buying the it of This rights with trying different years a key embedded is flipping effectively is and market XX do appreciation water an situation. very not easy and This is water of purchased. thing. that

I And was the for what of just bulk the to paid so valuation. the and recall, to price about way X know what you're worth. it, trying exactly water We is something Marc? think triangulate never But

Marc Spezialy

recent The more acquisitions?

Daniel Kozlowski

ago. time No the long X

million. that $XX Our is about in capital basis

Marc Spezialy

million. $XX So

X%, take using on spreadsheet. that your rule in your discount So and on think XX this rate years now X%, X%, the the XX or another I mean $XX ways, million of you it. smaller, appreciation of pick of something and compounding some is do right if about

they point got right? end ways, -- And it's with to so Yes, a the cycle. it's deal, not to some but a So the about to effectively money. reasonable be that, state per day, of that of would -- what exactly that's landlord really time worth value that talk say a the in sold starting it. that And at good today, the

Cycle Pure did of XX So monetize it years. kind worked But that PureCycle for out.

why what in Mike starting appreciated levels. value an it's at future. -- worth that's reasonable probably sheet we balance it's compounded could has So today's years today, say West historical that and grown the a quite asset. but the on was to million and better in point are, than ago. here $XX be XX should that it inflation XX has we're and water in returns would into dollars or not years, points That's over good assumption over increasing be the was going the pretty Again, out, these be

that a number kind than is of bigger big you take. number -- So

thought I about this, one. different and way ways X it, or one that's but think So to there's that's X about

the creating but of the the asked that at sometimes part value of of X tug value Mark posting and you the job In per did years. And question, terms think cycle creating I you a earnings great over long war was Tucker, between And I -- of lot can value a think the term. portfolio last base, the of lot were put or see where adding years on looking quarters didn't the asset a ago, years we and back the it X show necessarily to last didn't we had to up. board EPS we ago, X, X

longer sales. all now. We're But can the we're is through to namely, really same to investments. time, oil for to I do I investments earnings no it's opportunities things gotten think the reality single-family point to never rentals. But gas, longer looking earning the at Sky now the -- all doing in just things. -- are no it's build We're water future. commercial and land the investments, we're opportunities we've where is, those those at the suppressed portfolio, and those what mean for water continuing portfolio. those Ranch, power prior by the build looking the those

have think just we're what It's We to do to for we both. earnings do doing there? through, And we're future. Anything do both, and getting. add to we resources flowing so and continue the we the the power

Daniel Kozlowski

think I great. that's No,

I You know what mean.

Unknown Analyst

the I back back, go a those go of back stock as but long comment things. value continue you and buying he which including just to I of sort getting will your in lot an and used commitments area very on this to economic listed. and I'm stockholder base interested they long-term older the does, to do sort that shareholder sense, I company. make are long-term way, excellent Sky earnings making of even clearly who am as a a let before sort that fall reasonable Darko, that I aligned where may return And things people a I than within to don't for be quite would build happier much though I've you're And way that be, as I make with far say way, what

just So Marc. keep up good work, the

Marc Spezialy

Thank you. you, Thank Tucker.

Mark Harding

in line which we'll your XXX, open. -- XXXX, so code is area take take -- we'll #X, ends is So

your phone If phone, X number. unmute of and to X, in line runs have X-year if on your you're phone But this fund a you'll is computer the coming because a is X open. on through

Unknown Analyst

to is now, amazed Scott. in see XX you, I'm the continue Jeff from it out drove I right telluride be through -- progress this days I Mark, ago, and Jeff. I about you at Are but there. no,

to competitive on level the would think at When million of you political and XXs. are this, combined the you waste yet, -- low in if And or get not XX what starting the to pushback. said kind kind started expect you're question. call And that First we tap you of get I some pushback. fees any were they're now

Mark Harding

in this try it with these deck. consistent have deck, is that And question. where we do what market year-end And in slide keep states. the is do but to for I have didn't Great I the

these are is are tap at at regionally which market. But most neighbor, there We And so $XX,XXX you water than meat going less Aurora tapes whose when just overall a the our city and right City look the we're of when look at is in providers staff a are the be look reaching of which our you connection. that, fees, take Aurora, tapes. the competitor, of to slightly

it really cost with cost needs system. your so what -- in -- the system. get appreciation costs to the is develop incremental that of that water capital you carrying play together how forward assets what and it and of the between a of market And the to developed amount those next

not to about so what gas hearing say bulk And you're able pushback the doing to we've up market that and . any the with oil would to drive continue of we're opportunity been the and in forward. be I'm So SP-XX yet. very I seeing monetize good to is that going that keeping having investments

Marc Spezialy

No. No.

-- and right? the think that, want Mark. in stay We of I meat intentionally, to

Okay.

we terms -- kind in side, On . at the development? initial commercial looking are of for of what timing

Mark Harding

question. Great

for We but our they end want users, commercial, folks want There's integrate much to And sort to to people of end conversations is want commercial development done like user to user. those have some for a those the for really of to they want that got We've right? our buy that of with right? developer we're end lot develop commercial with or and continue And the want of a demand we've to they to there that to come some then lot land. looking and of commercial ourselves, vertically with right? in the residentials flip commercial users, either it that I for they philosophy our a not in participate think

pad the role and they're then around Walmart, for site them we X,XXX facilitate Depot, forward. for folks is a looking carry have can delivering on I'm looking for I'm Home that looking probably Kroger. looking homes. And the what that for I'm actually that a

we have under We have XXX about construction. XXX now, and

to they and then another XX, we as carry forward their opportunity. on. very threshold the to where close upgrades working that we're That to us number And interchange that to that like of economic see year-end. the that XXX interstate of probably so And the year-end another, deliver our through fiscal homes puts rooftops at by calendar homes to really we're XXX our say, going XXX then

using county have mill that project start levies bond able be particular reserve that that in that to on construction to working the project. that looks last we for been with XXXX, some the for a We we'll CDO the of that. years to where with be X

see things So start the coming to here all of those then you'll in, lot together XX to that are months. say, activity. And commercial next a XX

Unknown Analyst

like we're end 'XX looking So something 'XX, of that? or calendar

Mark Harding

time I in -- of little get of 'XX that the then our what to which a that's in the the in that you 'XX just time frame. see bit When we'll some It's the to entrance, and start show monetization a a I forecast. start think in bit time good kind in codified of really commercial really We'll lot that frame frame, of that. little real forecast, is that transactions start just XXXX a time frame.

Unknown Analyst

question. your do track Completely of house the Okay. metric is? each on Of the market, how different days you homebuilders, many

Mark Harding

they I do. don't know

Unknown Analyst

all? up know I it at Has gone they do.

Mark Harding

were didn't have right? start homes sold to taking preorders. they a like What much we've interest And That's X they it Ranch and They is to pretty they they -- they're they until like were -- at not or house do usually -- what home built. when model Sky they was it don't X%, good question. seen -- X at they have quite a like rates a is they and so have

them a say, X of basis, at phases months. they So today. in that home they various home I if a in "I own stages today, to walks of here's your a they today, in X "I they in need can don't home And where a I want various home or says, completion weeks real-time need have have development. need be somebody then And and

unit. will addresses So say, they months. it's, address, months, in this X X from these you this okay, pick be or it X oh, I need particular at that can If

in that months. Okay, delivering be will great. There's the these X addresses

close And what So is. they're real number managing are as inventory know time that that people walking I to in. as don't the that

Unknown Analyst

hasn't change XX the any so? last or months there But been over Okay. appreciable

Mark Harding

No, it At us. phase how No. think that's I least they for to that's model. their try

Now that on too. builders, depends

of we want our the just we'll bigger and under builders homes, to . I'm some I'm all We're X start okay, at are to and be say, to cycle. XX completion construction going each once going start going so are going that with want week, over full start builders, XX -- them that a inventory. just we look, homes X, sales phasing to they're Some saying,

Unknown Analyst

Okay.

that Where of Ranch. Lowery The development That Another in of topic. requires parts time come moving lot of together. you kind a a completely do see different to scale?

Mark Harding

it. area good a has That's it. Certainly, different And on of the options question. a is state out to grown evaluating number metropolitan the

a they So lessor a it they're what can at standpoint, in they from looking what development, partners partners use from they bring partners can for can in what in bring conservation bring land it standpoint. it

many and an as the is And involved, you party tried ahead makes can have that every sometimes years think fruition. give those at because complicated than since I have, have guidance Certainly, a I've of going just I that in options it, all the last the the times you metropolitan time. there's what is do. absolute being come what a as to too perfect But it of maturation over to in record it XX wrong when of third we've to been the of options shorter seen look area. growth we've the some things as many making you road I lot to

Unknown Analyst

Well, less have or? decade that. talking we or about or we Are more a all

Mark Harding

the close commercial. put X-year Pretty I to to X- in time that the frame.

Unknown Analyst

make in seeing actually terms momentum you're of to some willingness So decisions?

Mark Harding

question. X-year for in time I X-year market would love a might would to frame, in and That's be time land just the the different them be frame. I say the board the

Unknown Analyst

the have a still school system, mandate they? don't They for

Mark Harding

valuable is or do on are and generating they with -- to school trust that number most opportunities their the they ranch. from for lessees the have No, And asset. to for it, recurring generating ranch they're single education things the generating cognizant on very Yes. of revenue opportunities revenue This right? that, of the great

really education. for All the of the is and K-XX are for benefit them, public those of opportunities it

Unknown Executive

go first We'll area in to right. code caller, back XXXX. the All ends XXX

open. unmute able to is you're unmute, your If line to

leave I'll open. we're While -- line waiting your

the there click common might You waiting -- unmute chat quarter. you in have have your we're update dividend? question if depending Mark, as the a you're or reoccurring we phone, how every was on on Do a revenue connected. while on computer your any for any on But question that,

Mark Harding

a Yes. to -- No, the recurring Board level we well continue corporate both as won that's level. monitor at good the we our that at revenue.

of And that's we're that XX So growth really to see delivering XXX terms overhead. our units accounts then rental that this homes growth time sort of another, adding happening connections in frame I in annual water nut of as our another to say, well XX as and meet in the single-family where rental that.

continues and understand to put Board to active level that. that that So close at the is at conversation up to we each continue for the more our meeting, window metrics Board Board

really than it sooner pressing a than be at I very right that of questions know pedal to are some And There's see -- it rather number rather it's so later. forefront. now. to of that a the Great. bit is -- sooner it's likely you are like later and

So.

Marc Spezialy

quite to listening to Q&A don't the this how on if goes. they any didn't a this very in if on you want up, listen comes to . Okay. you closing accessible happy of and that thing or give Dan, on We're were do have this, weigh you Well, rebroadcast call. to us a and to give something hesitate color you any remarks? session

Daniel Kozlowski

No.

I QX. continued into the the through put always goal. and shares we've the That's earnings a results, stock for equity to here think we're that the the we've well we're after reacted progress just to follow looking perspective, looking from up. year-end follow And

into the took and of, providing rest of year think a the again, next for step I in direction sort year. Mark big

hopefully, the -- is share really take what up somewhat tied price the then we continue we to as trying -- steps put so the to coordinate progress think the And we're well. numbers to to that's and do

So you generated a we rewarded should the team the shareholders has know be is management deserve and And to earnings years. bright. very, signaled lot been some team, in XX very and of the that the future for rewarded with have has that these operating equity, be

highly quarter, a great be Mark it Mark, great should and and job everything So and is year. nice -- functional we're really

So thank you.

Mark Harding

last various a I and get through traveling to And NASDAQ the market, we're to do also, markets. coordinate little this is campaign what going at were we much will the foreshadow one-on-one year of a we on do Get try then out lunch in out like kind did IR to and meetings and maybe either more New to some where or in able office various markets. York

out So We'll Coast some periods sending notifications be York, reaching of be be the West in that going we're in New Chicago, out. as to some well. we'll time in

you in hometown Dodge opportunities haven't if these they're your what out doing to of in various And all kind say, they're want carive an going be an be it's get to so to heard of for you will see hour to as exciting. to and guys, you "Hey, areas as for know and us that well might opportunity because you pretty

I'll So And all a New I you great be for with lookout wish Happy that, that. guess, year. on the

contributions, to to humanity to and for but do to acknowledge this, Carter his only the want but with meant President to want I as do recognition of day our I -- whole. lead country, a not I

a structure all to to to have we contributions calls -- his did that. do sequencing and didn't acknowledge win -- of for time. as X we want these want earnings scheduled was respect our over of So such, It We us. period but to you

better off for his So we're presence.

you all, I'll that, and Thank Year. New with close. So happy

Pure Cycle (PCYO) 9 Jan 252025 Q1 Earnings call transcript